Exhibit 10.13
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT dated as of February 5,
1998 between PRIMEDIA Inc., a Delaware corporation ("PRIMEDIA")
and KKR 1996 Fund L.P., a Delaware limited partnership ("KKR 2996")
I. STOCK SALE TO KKR 1996
1.1 Purchase of Common Stock.
Subject to all of the terms and conditions of this Agreement, KKR
1996 hereby agrees to purchase from PRIMEDIA, and PRIMEDIA agrees to sell to KKR
1996, 16,666,667 shares of PRIMEDIA common stock, par value $.01 per share ("KKR
1996 Shares"), for $12 per share, for an aggregate purchase price of
$200,000,004 (the "Purchase Price"). Such purchase shall be made 20 days after
an information statement regarding the purchase has been sent to the
stockholders of PRIMEDIA pursuant to Rule 14c-2 promulgated under the Securities
Exchange Act of 1934, as amended, or the earliest business day thereafter upon
which PRIMEDIA receives clearance of the purchase under the Hart-Scott-Rodino
Antitrust Improvements Act. The closing of the purchase will take place at the
offices of Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York
10017. At the closing KKR 1996 will pay to PRIMEDIA the Purchase Price, in
immediately available funds, against its receipt of duly executed stock
certificates, representing the KKR 1996 Shares, registered in the name of KKR
1996 on the books of Primedia.
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1.2 Management Rights. After the Closing and for so long as the
purchaser owns any equity or debt securities of PRIMEDIA, KKR 1996 shall have
the right to elect at least one member of the Board of Directors to PRIMEDIA.
KKR 1996 shall also have at all times after the closing the right to (i) inspect
and copy books and records of PRIMEDIA; (ii) visit and inspect the PRIMEDIA
properties; (iii) receive financial statements, operating reports and budgets of
PRIMEDIA; (iv) receive materials sent to the PRIMEDIA Board of Directors; and
(v) consult with and provide non-binding advice to PRIMEDIA management on
significant corporate actions.
II. PURCHASER'S REPRESENTATIONS, WARRANTIES AND AGREEMENTS
2.1 Investment Intention. KKR 1996 represents and warrants that it
is purchasing the KKR 1996 Shares solely for its own account for the purpose of
investment and not with a view to or for sale in connection with any
distribution of any thereof. KKR 1996 agrees that it will not, directly or
indirectly, offer, transfer, sell, pledge, hypothecate or otherwise dispose of
any of the KKR 1996 Shares (or solicit any offers to buy, purchase, or otherwise
acquire or take a pledge of any of the Shares), except in compliance with the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
thereunder.
2.2 Legends. The certificate (or certificates) representing the KKR
1996 Shares shall bear the following legend (until such time as subsequent
transfers thereof are no longer restricted in accordance with the Act):
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"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE, AND MAY NOT BE TRANSFERRED IN
VIOLATION OF SUCH ACT OR LAWS OR THE RULES AND REGULATIONS
THEREUNDER."
2.3 Federal Securities Laws Matters. KKR 1996 represents that it is
familiar with Release No. 5226 issued by the Securities and Exchange Commission
(the "SEC") under the Act, it has consulted with its counsel with regard
thereto, and it is fully aware of the position of the SEC limiting the resale to
the public of any of the KKR 1996 Shares.
2.4 Compliance with Rule 144. If any of the KKR 1996 Shares are
disposed of in accordance with Rule 144 under the Act, KKR 1996 shall deliver to
PRIMEDIA at or prior to the time of such disposition an executed copy of Form
144 (if required by Rule 144) and such other documentation as PRIMEDIA may
reasonably require in connection with such sale.
2.5 Ability to Bear Risk. KKR 1996 represents and warrants that (a)
the financial situation of KKR 1996 is such that it can afford to bear the
economic risk of holding the unregistered KKR 1996 Shares for an indefinite
period and (b) it can afford to suffer the complete loss of its investment in
the KKR 1996 Shares.
2.6 Access to Information; Evaluation of Risks. KKR
1996 represents and warrants that (a) it understands and has taken cognizance of
all the risk factors related to the purchase of the KKR 1996 Shares, (b) it has
received and carefully reviewed information regarding the business of PRIMEDIA
and has been granted the opportunity to ask questions of, and receive
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answers from, representatives of PRIMEDIA concerning the terms and conditions of
the purchase of the KKR 1996 Shares and to obtain any additional information
which it deems necessary to verify the accuracy or completeness of the
information furnished to it and (c) its knowledge and experience in financial
and business matters is such that it is capable of evaluating the risks of the
investment in the KKR 1996 Shares.
III. RULE 144
PRIMEDIA agrees that it will use its best efforts to file in a
timely manner all reports required to be filed by it pursuant to the Securities
Exchange Act of 1934, as amended, and, upon request of KKR 1996 or a transferee
of KKR 1996 Shares, will furnish KKR 1996 with such information as may be
necessary to enable KKR 1996 to effect routine sales pursuant to Rule 144 under
the Act.
IV. REGISTRATION RIGHTS
KKR 1996 will have such rights to have the KKR 1996 Shares
registered under the Act as may be provided in any Registration Rights Agreement
entered into by KKR 1996, PRIMEDIA and other holders or purchasers of shares of
Common Stock of PRIMEDIA on or after the date hereof.
V. MISCELLANEOUS
5.1 Notices. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been given if delivered personally or sent by certified mail,
return receipt requested,
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postage prepaid, to the parties to this Agreement at the following addresses or
to such other address as either party to this Agreement shall specify by notice
to the other:
if to PRIMEDIA, to it at:
PRIMEDIA Inc.
745 Fifth Avenue
New York, NY 10151
Attention: Beverly Chell, Esq.
With a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Attention: Gary I. Horowitz, Esq.
if to KKR 1996, to it at:
KKR 1996 Fund L.P.
9 West 57th Street
New York, NY 10019
Attention: Perry Golkin
With a copy to:
Latham & Watkins
885 Third Avenue
New York, NY 10022
Attention: Scott Bowie, Esq.
All such notices and communications shall be deemed to have been received on the
date of delivery or on the third business day after the mailing thereof.
5.2 Binding Effect; Benefits. This Agreement shall be binding upon
and inure to the benefit of the parties to this Agreement and their respective
successors and assigns. Except as provided in Article V, nothing in this
Agreement, express or implied, is intended or shall be construed to give any
person other than the parties to this Agreement or their respective
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successors or assigns any legal or equitable right, remedy or claim under or in
respect of any agreement or any provision contained herein.
5.3 Waiver. Either party hereto may by written notice to the other
(a) extend the time for the performance of any of the obligations or other
actions of the other under this Agreement; (b) waive compliance with any of the
conditions or covenants of the other contained in this Agreement; and (c) waive
or modify performance of any of the obligations of the other under this
Agreement. Except as provided in the preceding sentence, no action taken
pursuant to this Agreement, including, without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties, covenants
or agreements contained herein. The waiver by any party hereto of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any preceding or succeeding breach and no failure by any party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.
5.4 Amendment. This Agreement may be amended, modified or
supplemented only by a written instrument executed by KKR 1996 and PRIMEDIA.
5.5 Assignability. Neither this Agreement nor any right,
remedy, obligation or liability arising hereunder or by
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reason hereof shall be assignable by PRIMEDIA or KKR 1996 without the prior
written consent of the other party.
5.6 Expenses. PRIMEDIA agrees that, whether or not the transactions
contemplated by this Agreement are consummated, PRIMEDIA will pay or cause to be
paid all costs and expenses arising in connection with the preparation,
execution, administration and enforcement of, and the preservation of rights
under, this Agreement, including, without limitation:
(a) all taxes (other than taxes based on income), fees or other
charges which may be payable in connection with the sale or purchase of
the KKR 1996 Shares pursuant to this Agreement;
(b) all expenses incurred by KKR 1996 in connection with the
maintenance of its books and records, preparation of tax returns and
delivery of tax information to its partners;
(c) an allocable portion of certain expenses incurred by KKR 1996
in connection with its organization in an amount not to exceed $10,000 in
the aggregate, including, without limitation, legal fees; and
(d) all reasonable travel and other out-of-pocket expenses of the
general partner of KKR 1996 incurred in connection with KKR 1996's
ownership of the KKR 1996 Shares.
In addition, after consummation of the transactions contemplated by this
Agreement and so long as KKR 1996 owns any shares of common stock acquired
pursuant to this Agreement, PRIMEDIA will reimburse KKR 1996 or the general
partner of KKR 1996 for all
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costs incurred in transmitting information regarding PRIMEDIA to the limited
partners of KKR 1996 or in distributing dividends or other distributions
received from PRIMEDIA to the limited partners of KKR 1996.
5.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, PRIMEDIA agrees to indemnify and hold harmless KKR 1996,
its limited and general partners and its affiliates (and the partners, members,
directors, officers, affiliates and controlling persons of each of the
foregoing) (each a "KKR 1996 Indemnitee") from and against any liabilities,
obligations, losses, damages, deficiencies, obligations, fines and assessments,
penalties, actions, judgments, suits, claims, costs, injuries, demands,
proceedings, investigations, arbitrations (including shareholder claims,
actions, injuries, demands, suits, judgments, proceedings, investigations or
arbitrations) and disbursements, including, without limitation, accountant's and
attorney's fees and expenses incurred by a KKR 1996 Indemnitee before or after
the date of this Agreement and arising out of, resulting from, or relating to
(i) the operations of PRIMEDIA, (ii) KKR 1996's purchase and/or ownership of the
KKR 1996 Shares or (iii) any litigation to which a KKR 1996 Indemnitee is made a
party in its capacity as a shareholder or owner (or a partner, member, director,
officer, affiliate or controlling person of a shareholder or owner) of
securities of PRIMEDIA.
5.8 Limited Liability of Partners. Notwithstanding any other
provision of this Agreement, neither the general
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partner nor the limited partners nor any future general or limited partner of
KKR 1996 shall have any personal liability for performance of any obligation of
KKR 1996 under this Agreement in excess of the respective capital contribution
of such general partner and limited partners to KKR 1996.
5.9 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
5.10 Section and Other Headings. The section and other headings
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
5.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
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IN WITNESS WHEREOF, PRIMEDIA and KKR 1996 have executed this
Agreement as of the day and year first above written.
PRIMEDIA INC.
By: /s/ Beverly C. Chell
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Name: Beverly C. Chell
Title: Vice Chairman
KKR 1996 FUND L.P.
By: KKR Associates 1996 L.P.
Its General Partner
By: KKR 1996 GP LLC
By: /s/ Perry Golkin
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Member