EXHIBIT 10.1


 


EXECUTION COPY


 


ASSET AND SHARE PURCHASE AGREEMENT







dated as of





April 2, 2005





among





ADVANSTAR COMMUNICATIONS INC.,





ADVANSTAR, INC.,





ADVANSTAR EXPOSITIONS CANADA LIMITED,





ADVANSTAR.COM, INC.



and



QUESTEX MEDIA GROUP, INC.


 





















 


TABLE OF CONTENTS


 


	
  ARTICLE 1

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  Section 1.01.
  Definitions.

  	
   

  
	
  Section 1.02. Other Definitional
  and Interpretative Provisions

  	
   

  
	
   

  	
   

  
	
  ARTICLE 2

  	
   

  
	
  PURCHASE AND SALE

  	
   

  
	
   

  	
   

  
	
  Section 2.01. Purchase
  and Sale of Assets

  	
   

  
	
  Section 2.02. Excluded
  Assets

  	
   

  
	
  Section 2.03. Assumed
  Liabilities

  	
   

  
	
  Section 2.04. Excluded
  Liabilities

  	
   

  
	
  Section 2.05. Assignment
  of Contracts and Rights

  	
   

  
	
  Section 2.06. Purchase
  and Sale of Interests

  	
   

  
	
  Section 2.07. Purchase
  Price; Allocation of Purchase Price

  	
   

  
	
  Section 2.08. Closing

  	
   

  
	
   

  	
   

  
	
  ARTICLE 3

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES OF ACI

  	
   

  
	
   

  	
   

  
	
  Section 3.01. Existence
  and Power

  	
   

  
	
  Section 3.02. Corporate
  Authorization

  	
   

  
	
  Section 3.03. Governmental
  Authorization

  	
   

  
	
  Section 3.04. Noncontravention

  	
   

  
	
  Section 3.05. Consents

  	
   

  
	
  Section 3.06. Capitalization

  	
   

  
	
  Section 3.07. Ownership
  of Interests

  	
   

  
	
  Section 3.08. Financial
  Statements

  	
   

  
	
  Section 3.09. Absence of
  Certain Changes

  	
   

  
	
  Section 3.10. Material
  Contracts

  	
   

  
	
  Section 3.11. Litigation

  	
   

  
	
  Section 3.12. Compliance
  with Laws and Court Orders; Permits

  	
   

  
	
  Section 3.13. Properties

  	
   

  
	
  Section 3.14. Intellectual
  Property

  	
   

  
	
  Section 3.15. Circulation

  	
   

  
	
  Section 3.16. Advertisers

  	
   

  
	
  Section 3.17. Employee
  Benefit Plans

  	
   

  
	
  Section 3.18. Employees

  	
   

  
	
  Section 3.19. Labor Matters

  	
   

  
	
  Section 3.20. Environmental
  Compliance

  	
   

  



 


 





















 


	
  Section 3.21. Finders’ Fees

  	
   

  
	
  Section 3.22. Insurance

  	
   

  
	
  Section 3.23. Exhibitors
  and Sponsors

  	
   

  
	
  Section 3.24. Penciled-in
  Dates

  	
   

  
	
   

  	
   

  
	
  ARTICLE 4

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES OF BUYER

  	
   

  
	
   

  	
   

  
	
  Section 4.01. Existence
  and Power

  	
   

  
	
  Section 4.02. Authorization

  	
   

  
	
  Section 4.03. Governmental
  Authorization

  	
   

  
	
  Section 4.04. Noncontravention

  	
   

  
	
  Section
  4.05. Financing

  	
   

  
	
  Section 4.06. Purchase
  for Investment

  	
   

  
	
  Section 4.07. Litigation

  	
   

  
	
  Section 4.08. Finders’ Fees

  	
   

  
	
  Section 4.09. No Other
  Representations

  	
   

  
	
   

  	
   

  
	
  ARTICLE 5

  	
   

  
	
  COVENANTS OF SELLERS

  	
   

  
	
   

  	
   

  
	
  Section
  5.01. Conduct of the Business

  	
   

  
	
  Section 5.02. Access to
  Information

  	
   

  
	
  Section 5.03. Release of
  Liens

  	
   

  
	
  Section 5.04. Notices of
  Certain Events

  	
   

  
	
  Section 5.05. No Solicitation

  	
   

  
	
  Section 5.06. Confidentiality
  of Sellers

  	
   

  
	
  Section 5.07. Intellectual
  Property Cooperation

  	
   

  
	
  Section 5.08. Transferred
  Subsidiary Working Capital

  	
   

  
	
  Section 5.09. Delivery
  of Monthly Financials

  	
   

  
	
  Section 5.10. Delivery
  of Financial Audit

  	
   

  
	
   

  	
   

  
	
  ARTICLE 6

  	
   

  
	
  COVENANTS OF BUYER

  	
   

  
	
   

  	
   

  
	
  Section 6.01. Confidentiality

  	
   

  
	
  Section 6.02. Access

  	
   

  
	
  Section 6.03. Trademarks;
  Tradenames; Change of Corporate Name

  	
   

  
	
  Section 6.04. Financing

  	
   

  
	
  Section 6.05. Use of
  Copyrights

  	
   

  
	
   

  	
   

  
	
  ARTICLE 7

  	
   

  
	
  COVENANTS OF BUYER AND SELLERS

  	
   

  
	
   

  	
   

  
	
  Section 7.01. Commercially
  Reasonable Efforts; Further Assurances

  	
   

  
	
  Section 7.02. Certain Filings

  	
   

  



 


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  Section 7.03. Certain
  Consents

  	
   

  
	
  Section 7.04. Collections
  and Remittances

  	
   

  
	
  Section 7.05. Public
  Announcements

  	
   

  
	
  Section 7.06. Noncompetition

  	
   

  
	
  Section 7.07. Web
  Services Agreement

  	
   

  
	
  Section 7.08. No Breach
  or Failure of Condition as a Result of Certain Matters

  	
   

  
	
  Section 7.09. Brazilian
  Distribution

  	
   

  
	
   

  	
   

  
	
  ARTICLE 8

  	
   

  
	
  TAX MATTERS

  	
   

  
	
   

  	
   

  
	
  Section 8.01. Tax Definitions

  	
   

  
	
  Section 8.02. Tax Matters

  	
   

  
	
  Section 8.03. Tax
  Returns; Tax Cooperation; Allocation of Taxes

  	
   

  
	
  Section 8.04. 338(g) Election

  	
   

  
	
   

  	
   

  
	
  ARTICLE 9

  	
   

  
	
  EMPLOYEE MATTERS

  	
   

  
	
   

  	
   

  
	
  Section 9.01. Employees
  and Offers of Employment

  	
   

  
	
  Section 9.02. ACI’s
  Employee Plans

  	
   

  
	
  Section 9.03. Buyer’s
  Employee Plans

  	
   

  
	
  Section 9.04. Commissions

  	
   

  
	
  Section 9.05. COBRA and HIPAA

  	
   

  
	
  Section 9.06. At-Will
  Employment

  	
   

  
	
  Section 9.07. No Third
  Party Beneficiaries

  	
   

  
	
   

  	
   

  
	
  ARTICLE 10

  	
   

  
	
  CONDITIONS TO CLOSING

  	
   

  
	
   

  	
   

  
	
  Section 10.01. Conditions
  to Obligations of Buyer and Sellers

  	
   

  
	
  Section 10.02. Conditions
  to Obligation of Buyer

  	
   

  
	
  Section 10.03. Conditions
  to Obligation of the Sellers

  	
   

  
	
   

  	
   

  
	
  ARTICLE 11

  	
   

  
	
  SURVIVAL; INDEMNIFICATION

  	
   

  
	
   

  	
   

  
	
  Section 11.01. Survival

  	
   

  
	
  Section 11.02. Indemnification

  	
   

  
	
  Section 11.03. Procedures

  	
   

  
	
  Section 11.04. Supplemental
  Schedules

  	
   

  
	
  Section 11.05. Calculation
  of Damages

  	
   

  
	
  Section 11.06. Assignment
  of Claims

  	
   

  
	
  Section 11.07. Exclusivity

  	
   

  



 


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  ARTICLE 12

  	
   

  
	
  TERMINATION

  	
   

  
	
   

  	
   

  
	
  Section
  12.01. Grounds for Termination

  	
   

  
	
  Section
  12.02. Effect of Termination

  	
   

  
	
   

  	
   

  
	
  ARTICLE 13

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  Section 13.01. Notices

  	
   

  
	
  Section 13.02. Amendments
  and Waivers

  	
   

  
	
  Section 13.03. Expenses

  	
   

  
	
  Section 13.04. Successors
  and Assigns

  	
   

  
	
  Section 13.05. Governing Law

  	
   

  
	
  Section 13.06. Jurisdiction

  	
   

  
	
  Section 13.07. WAIVER OF
  JURY TRIAL

  	
   

  
	
  Section 13.08. Counterparts;
  Effectiveness; Third Party Beneficiaries

  	
   

  
	
  Section 13.09. Entire
  Agreement

  	
   

  
	
  Section 13.10. Bulk Sales
  Laws

  	
   

  
	
  Section 13.11. Severability

  	
   

  
	
  Section 13.12. Disclosure
  Schedules

  	
   

  
	
   

  	
   

  
	
  EXHIBIT A  Form of Assignment and Assumption Agreement

  	
   

  
	
  EXHIBIT B  Form of Real Property Lease Assignment and
  Assumption

  	
   

  
	
  EXHIBIT C  Form of Transition Services Agreement

  	
   

  
	
  EXHIBIT D  Web Services Agreement Term Sheet

  	
   

  
	
   

  	
   

  



 


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Schedules


 


	
  Schedule
  1.01(a)

  	
   

  	
  Publications,
  Shows and Domain Names

  
	
  Schedule
  2.01(a)

  	
   

  	
  Transferred
  Leases

  
	
  Schedule
  2.01(b)

  	
   

  	
  Furniture,
  etc. at Transferred Lease Locations

  
	
  Schedule
  2.01(c)

  	
   

  	
  Computers
  and Printers Otherwise Used in the Business

  
	
  Schedule
  2.01(d)

  	
   

  	
  Other
  Furniture, etc.

  
	
  Schedule
  2.01(e)

  	
   

  	
  Telecommunications,
  Information Technology and Production Equipment

  
	
  Schedule
  2.01(n)

  	
   

  	
  Software and
  Computer Programs

  
	
  Schedule
  2.02(m)

  	
   

  	
  Excluded
  Contracts

  
	
  Schedule
  2.07(b)

  	
   

  	
  Allocation
  Statement

  
	
  Schedule
  3.05

  	
   

  	
  Consents

  
	
  Schedule
  3.06(b)

  	
   

  	
  Capitalization

  
	
  Schedule
  3.08(a)

  	
   

  	
  Statement of
  Net Liabilities and Statement of Revenue and Direct Operating Expenses

  
	
  Schedule
  3.08(b)

  	
   

  	
  Financial
  Statements of Transferred Subsidiaries

  
	
  Schedule
  3.08(c)

  	
   

  	
  Transferred
  Subsidiary and HEE Liabilities

  
	
  Schedule
  3.09

  	
   

  	
  Absence of
  Certain Changes

  
	
  Schedule
  3.10

  	
   

  	
  Material
  Contracts

  
	
  Schedule
  3.10(b)

  	
   

  	
  Exceptions
  to Material Contracts

  
	
  Schedule
  3.11

  	
   

  	
  Litigation

  
	
  Schedule
  3.13(a)

  	
   

  	
  Exceptions
  and Subsidiary Leases

  
	
  Schedule
  3.13(b)

  	
   

  	
  Exceptions
  to Transferred Leases

  
	
  Schedule
  3.13(c)(i)

  	
   

  	
  Certain
  Permitted Liens

  
	
  Schedule
  3.13(d)

  	
   

  	
  Sufficiency
  of Assets

  
	
  Schedule
  3.14(a)(i)

  	
   

  	
  Trademarks
  and Copyrights

  
	
  Schedule
  3.14(a)(ii)

  	
   

  	
  Material
  Licensed Intellectual Property

  
	
  Schedule
  3.14(a)(iii)

  	
   

  	
  Licenses of
  Material Owned Intellectual Property to Third Parties

  
	
  Schedule
  3.14(e)

  	
   

  	
  Notice of
  Third Party Intellectual Property Infringement

  
	
  Schedule
  3.14(f)

  	
   

  	
  Infringement
  of Material Owned Intellectual Property

  
	
  Schedule
  3.15

  	
   

  	
  Circulation

  
	
  Schedule
  3.16

  	
   

  	
  Advertisers

  
	
  Schedule
  3.17(a)

  	
   

  	
  Employee
  Plans

  
	
  Schedule
  3.17(e)

  	
   

  	
  Litigation
  Involving Business Employees

  
	
  Schedule
  3.17(f)

  	
   

  	
  Post
  Retirement/Termination Benefits

  
	
  Schedule
  3.18

  	
   

  	
  Business
  Employees

  
	
  Schedule
  3.19

  	
   

  	
  Labor
  Matters

  
	
  Schedule
  3.22

  	
   

  	
  Insurance

  
	
  Schedule
  3.23

  	
   

  	
  Exhibitors
  and Sponsors

  
	
  Schedule
  3.24

  	
   

  	
  Penciled-in
  Dates

  



 


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  Schedule
  4.05

  	
   

  	
  Financing
  Commitments

  
	
  Schedule
  5.01

  	
   

  	
  Interim
  Operations

  
	
  Schedule
  7.06(a)(i)

  	
   

  	
  Buyer
  Competitive Activity Areas

  
	
  Schedule
  7.08

  	
   

  	
  Disclosure
  of Certain Matters

  
	
  Schedule 9.03(f)

  	
   

  	
  Severance
  Plan

  



 


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ASSET AND SHARE PURCHASE AGREEMENT


 


AGREEMENT
dated as of April 2, 2005 among Advanstar Communications Inc., a New York
corporation (“ACI”), Advanstar, Inc., a
Delaware corporation (“AI,” and,
together with ACI, the “Share Sellers”),
Advanstar Expositions Canada Limited, a Federal Canadian Corporation (“Advanstar Canada”), Advanstar.com, Inc., a Delaware
corporation (“Advanstar.com” and, together with
ACI and Advanstar Canada, the “Asset Sellers”)
and Questex Media Group, Inc., a Delaware corporation (“Buyer”).


 


W I T N E S S E T H :


 


WHEREAS, the
Sellers and the Transferred Subsidiaries (as defined below) are engaged, among
other things, in the business (the “Business”) of
publishing, marketing and selling the publications listed on Schedule 1.01(a) (the
“Publications”); organizing, producing,
marketing and selling the trade shows and conferences listed on Schedule 1.01(a) (the
“Shows”); and owning and operating
the web sites (the “Websites”)
associated with the domain names listed on Schedule 1.01(a);


 


WHEREAS, Buyer
desires to purchase (i) substantially all of the assets and to assume
certain liabilities of the Business from the Asset Sellers, and the Asset
Sellers desire to sell such assets and transfer such liabilities to Buyer and (ii) all
of the equity interests in Advanstar Brazil and Advanstar Asia (each as defined
below), and the Share Sellers desire to sell such equity interests to Buyer, in
each case upon the terms and subject to the conditions hereinafter set forth;


 


The parties
hereto agree as follows:


 


ARTICLE 1

DEFINITIONS


 


Section 1.01.  Definitions.


 


(a)           The following terms,
as used herein, have the following meanings:


 


“Advanstar Asia” means Advanstar Asia Limited, a Hong Kong
company.


 


“Advanstar Brazil” means Advanstar Editora e Comunicacoes
Ltda., a Brazilian limited liability company.


 


“Advanstar BVI” means Advanstar Communications (BVI) Ltd., a
British Virgin Islands Company.


 





















 


“Affiliate” means, with respect to any
Person, any other Person directly or indirectly controlling, controlled by, or
under common control with such other Person.


 


“AI Interests” means 14,013 quotas
of Advanstar Brazil, par value R$0.07 per share, owned by AI.


 


“Asset Sale Business Employee” means each Business Employee
other than a Business Employee employed by a Transferred Subsidiary.


 


“Audax” means Audax Private Equity Fund, L.P., a Delaware
limited partnership.


 


“Brazilian GAAP” means the accounting practices adopted by
Advanstar Brazil in Brazil, as in effect from time to time, that are generally
accepted.


 


“Business Day” means a day, other than Saturday, Sunday or
other day on which commercial banks in New York, New York are authorized or
required by law to close.


 


“Business Intellectual Property” means all Licensed
Intellectual Property and all Owned Intellectual Property.


 


“Buyer Competitive Activity” means
the publishing, marketing or selling of any publications (in print, web-based,
electronic or other form) whose primary target readers are the same as the
primary target readers of any of the Publications as of the Closing Date; the
organizing, marketing or selling of any trade shows or conferences whose
primary target attendees are the same as the primary target attendees of any of
the Shows as of the Closing Date; or the owning and operating of any websites
whose primary target viewers are the same as the primary target viewers of any
of the Websites as of the Closing Date.


 


“Closing Date” means the date of the
Closing.


 


“Contractual Obligations” means, with respect to any Person,
any contract, agreement, deed, mortgage, lease, license or other document or
instrument (including any document or instrument evidencing or otherwise relating
to any Debt) to which or by which such Person is a party or otherwise subject
or bound or to which or by which any property, business, operation or right of
such Person is subject or bound.


 


“Debt”
means, with respect to any Person, all obligations (including all obligations
in respect of principal, accrued interest, penalties, fees and premiums) of
such Person (a) for borrowed money (including overdraft facilities), (b) evidenced
by notes, bonds, debentures or similar Contractual Obligations, (c) for
the deferred purchase price of property, goods or services (other than trade
payables or accruals incurred in the Ordinary Course of Business), (d) under


 


2





















 


capital leases (in accordance
with GAAP), (e) in respect of letters of credit and bankers’ acceptances, (f) for
Contractual Obligations relating to interest rate protection, swap agreements
and collar agreements and (g) in the nature of Guarantees of the
obligations described in clauses (a) through (f) above of any other
Person.


 


“Environmental Laws” means any statute, law,
regulation, rule, judgment, order, injunction, or governmental requirement, in
each case relating to the protection of the environment or worker health, to
the extent related to the exposure to hazardous substances, wastes or materials,
or the management, release, manufacture, handling, transport, treatment,
storage, use or disposal of pollutants, contaminants, wastes or chemicals or
any toxic or otherwise hazardous substances, wastes or materials.


 


“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended and the rules and regulations promulgated
thereunder.


 


“ERISA Affiliate” of any entity means any
other entity which, together with such entity, would be treated as a single
employer under Section 414 of the Code.


 


“GAAP” means generally accepted accounting principles in the
United States, as in effect from time to time.


 


“Governmental Authority” means any United States federal,
state or local or any foreign government, or political subdivision thereof, or
any multinational organization or authority or any United States federal,
state, local or foreign authority, agency or commission entitled to exercise
any administrative, executive, judicial, legislative, police, regulatory or
taxing authority or power, or any United States federal, state, local or
foreign court or tribunal (or any department, bureau or division thereof),
arbitrator or arbitral body.


 


“HEE” means Home Entertainment Events, a Delaware general
partnership.


 


“Hong Kong GAAP” means generally accepted accounting
principles in Hong Kong, as in effect from time to time.


 


“HSR Act” means the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended.


 


“Intellectual Property” means any of the following: (w)
patents, copyrights, know-how, processes, data and database rights and trade
secrets; (x) trademarks, trade names, service marks, service names, brands,
trade dress and logos, and the goodwill and activities associated therewith;
(y) domain names, rights of privacy and publicity and moral rights, throughout
the world in all media


 


3





















 


now known or hereafter created
or (z) any and all registrations, applications or common law rights relating to
any of the foregoing.


 


“Interests” means, collectively, 50,000 shares of Advanstar
Asia, par value $1.00 per share, 18,632,852 quotas of
Advanstar Brazil, par value R$0.07 per quota and 50% of the outstanding partnership interests in
HEE, in each case owned by ACI.


 


“International Plan” means, whether or not required by applicable
law, (x) any employment, consultancy, severance or similar agreement, plan,
arrangement or policy; (y) any other plan or arrangement providing for
compensation, bonuses, profit-sharing, equity or equity-based compensation or
other forms of incentive or deferred compensation, vacation benefits, insurance
(including any self-insured arrangements), medical, dental, vision or
prescription benefits, disability or sick leave benefits, life insurance,
employee assistance program, workers’ compensation, supplemental unemployment
benefits and post-employment or retirement benefits (including compensation,
pension or insurance benefits); or (z) any loan that is sponsored, maintained,
administered, contributed to, extended or arranged by Advanstar Asia, Advanstar
Brazil or an Asset Seller and covers any Business Employee of Advanstar Asia,
Advanstar Brazil or any other Business Employee located outside the United
States; provided, however, that a plan or
program sponsored or operated by a Governmental Authority shall not constitute
an International Plan.


 


“Knowledge of ACI,” “ACI’s Knowledge” or any other
similar knowledge qualification in this Agreement means to the actual
knowledge, after reasonable investigation, of David Montgomery, Eric Lisman,
Joseph Loggia and Adele Hartwick.


 


“Knowledge of Buyer,” “Buyer’s Knowledge” or any other
similar knowledge qualification in this Agreement means to the actual
knowledge, after reasonable investigation, of Keith Palumbo, Donald Bramley or
Young Lee.


 


“Liability” means, with respect to any Person, any liability
or obligation of such Person whether known or unknown, whether asserted or
unasserted, whether determined, determinable or otherwise, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
whether incurred or consequential, whether due or to become due and whether or
not required under GAAP to be accrued on the financial statements of such
Person.


 


“Licensed Intellectual Property”
means all Intellectual Property described on Schedule 3.14(a)(ii) and
all other Intellectual Property owned by a third party and licensed or
sublicensed to any Asset Seller or Transferred Subsidiary that is used
exclusively in the Business.


 


“Lien” means, with respect to any property or asset, any
mortgage, lien, pledge, charge, security interest, community or other marital
property interest,


 


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equitable interest, license,
option, right of way, easement, encroachment, servitude, right of first offer
or first refusal, buy/sell agreement or other encumbrance with respect to the
use, construction, voting (in the case of any security or equity interest),
transfer, receipt of income or exercise of any other attribute of ownership in
respect of such property or asset.


 


“Material Adverse Effect” means a material
adverse effect on the business, assets or results of operations of the
Business, except that an effect resulting from any of the following shall not
be considered when determining if a Material Adverse Effect has occurred: (i) this
Agreement or the transactions contemplated hereby; (ii) any change in
national or international political, regulatory, economic, business or market
conditions generally or in the geographic markets served by the Business or (iii) any
change in conditions generally affecting the publication or trade show and
conference industry or any of the industries engaged in by customers of the
Business, excluding in the case of clauses (ii) and (iii) any change
that materially disproportionately affects the Business relative to other
companies operating in the publication or trade show and conference industry or
any of the industries engaged in by customers of the Business.


 


“Ordinary Course of Business” means an action taken by any Person
in the ordinary course of such Person’s business which is consistent with the
past practices of such Person.


 


“Organizational Documents” means, with respect to any Person
(other than an individual), (a) the certificate or articles of
incorporation or organization and any joint venture, limited liability
company, operating or partnership agreement and other similar documents adopted
or filed in connection with the creation, formation or organization of such
Person and (b) all by-laws, voting agreements and similar documents,
instruments or agreements relating to the organization or governance of such
Person, in each case, as amended or supplemented.


 


“Owned Intellectual Property”
means all Intellectual Property described on Schedule 3.14(a)(i), the
internet domain names associated with the Websites and all other Intellectual
Property owned by any Asset Seller or Transferred Subsidiary that is used
exclusively in the Business.


 


“1934 Act” means the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated thereunder.


 


“Person” means an individual, corporation,
partnership, limited liability company, association, trust or other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.


 


“Post-Closing Attributable” means, with respect to any asset
or Liability, the portion of such asset or Liability attributable to (i) the
publication, marketing


 


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or sale of any Post-Closing
Issues, (ii) the production, marketing or sale of any Post-Closing Shows,
or (iii) the conduct of any Post-Closing Web Related Operations.


 


“Post-Closing Issues” means all
issues of any Publications mailed after the Closing Date.


 


“Post-Closing Shows” means all Shows that
end after the Closing Date.


 


“Post-Closing Web Related
Operations” means the operation of the Websites after the Closing,
including the display of advertising and banner ads on the Websites after the
Closing.


 


“Pre-Closing Attributable” means, with respect to any asset
or Liability, the portion of such asset or Liability attributable to (i) the
publication, marketing or sale of any Pre-Closing Issues, (ii) the
production, marketing or sale of any Pre-Closing Shows, or (iii) the
conduct of any Pre-Closing Web Related Operations.


 


“Pre-Closing Issues” means all
issues of any Publications mailed on or prior to the Closing Date.


 


“Pre-Closing Shows” means all
Shows that end on or prior to the Closing Date.


 


“Pre-Closing Web Related
Operations” means the operation of the Websites on or prior to the
Closing, including the display of advertising and banner ads on the Websites at
or prior to the Closing.


 


“Representatives” means, with respect to any Person, any
director, officer, employee, agent, consultant, advisor, or other
representative of such Person, including legal counsel, accountants and
financial advisors.


 


“Retained Business” means those publications (in print,
web-based, electronic or other form) published, marketed or sold, those trade
shows and conferences organized, marketed or sold, and those websites owned or
operated by ACI or any of its Subsidiaries, other than the Shows, Publications
and Websites.


 


“Sellers” means the Asset Sellers and the Share Sellers.


 


“Subsidiary” means, with respect to any
Person, any entity of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions are at the time directly or indirectly
owned by such Person.


 


“Title IV Plan”
means an Employee Plan subject to Title IV of ERISA other than any
Multiemployer Plan.


 


6





















 


“Transaction Documents” means, collectively, this Agreement,
the Assignment and Assumption Agreement, the Web Services Agreement, the Real
Property Assignment and Assumption Agreements, the Transition Services
Agreement, the Equity Commitment Letter and the Debt Commitment Letter.


 


“Transferred Subsidiaries” means, collectively, Advanstar
Asia, Advanstar Brazil and Advanstar BVI.


 


“Transferred Subsidiary Working Capital” means, (x) with
respect to Advanstar Brazil and Advanstar BVI, the consolidated total current
assets (including cash and cash equivalents) of Advanstar Brazil and Advanstar
BVI minus the consolidated total liabilities
(excluding any Liabilities of the type described in Section 11.02(a)(iv))
of Advanstar Brazil and Advanstar BVI and (y) with respect to Advanstar Asia,
the total current assets (including cash and cash equivalents) of Advanstar
Asia minus the total liabilities (excluding
any Liabilities of the type described in Section 11.02(a)(iv)) of
Advanstar Asia, in each case determined as of the close of business on the
Closing Date in U.S. Dollars using the accounting principles used by ACI in the
preparation of the consolidating financial statements of ACI and its
consolidated subsidiaries for the year ended December 31, 2004.


 


(b)           Each of the following terms is
defined in the Section set forth opposite such term:


 


	
  Term

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  Accounting Referee

  	
   

  	
  2.07

  
	
  ACI

  	
   

  	
  Preamble

  
	
  Advanstar.com

  	
   

  	
  Preamble

  
	
  Advanstar Canada

  	
   

  	
  Preamble

  
	
  Advanstar Trademarks and Tradenames

  	
   

  	
  2.02

  
	
  AI

  	
   

  	
  Preamble

  
	
  Apportioned Obligations

  	
   

  	
  8.03

  
	
  Allocation Statement

  	
   

  	
  2.07

  
	
  Asia Balance Sheet

  	
   

  	
  3.08

  
	
  Asset Sellers

  	
   

  	
  Preamble

  
	
  Assignment and Assumption Agreement

  	
   

  	
  2.08

  
	
  Assumed Liabilities

  	
   

  	
  2.03

  
	
  Brazil Balance Sheet

  	
   

  	
  3.08

  
	
  Business

  	
   

  	
  Recitals

  
	
  Business Employee

  	
   

  	
  3.18

  
	
  Buyer

  	
   

  	
  Preamble

  
	
  Buyer Employee Plan

  	
   

  	
  9.01

  
	
  Buyer 125 Plan

  	
   

  	
  9.03

  
	
  Buyer 401(k) Plan

  	
   

  	
  9.03

  
	
  BVI Shares

  	
   

  	
  3.06

  
	
  Capital Reduction Procedure

  	
   

  	
  7.09

  



 


7





















 


	
  Term

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  Closing

  	
   

  	
  2.08

  
	
  COBRA Coverage

  	
   

  	
  9.05

  
	
  Code

  	
   

  	
  8.01

  
	
  Confidentiality Agreement

  	
   

  	
  6.01

  
	
  Consents

  	
   

  	
  3.05

  
	
  Contracts

  	
   

  	
  2.01

  
	
  Damages

  	
   

  	
  11.02

  
	
  Debt Commitment Letter

  	
   

  	
  4.05

  
	
  Employee Plans

  	
   

  	
  3.17

  
	
  Equity Commitment Letter

  	
   

  	
  4.05

  
	
  Equity Investment

  	
   

  	
  4.05

  
	
  Excess Brazil Cash

  	
   

  	
  7.09

  
	
  Excluded Assets

  	
   

  	
  2.02

  
	
  Excluded Contracts

  	
   

  	
  2.02

  
	
  Excluded Liabilities

  	
   

  	
  2.04

  
	
  Fee Letter

  	
   

  	
  4.05

  
	
  Final Termination Date

  	
   

  	
  12.01

  
	
  Financing Commitments

  	
   

  	
  4.05

  
	
  Indemnified Party

  	
   

  	
  11.03

  
	
  Indemnifying Party

  	
   

  	
  11.03

  
	
  Insurance Policies

  	
   

  	
  3.22

  
	
  Material Contracts

  	
   

  	
  3.10

  
	
  New Business Agreement

  	
   

  	
  7.03

  
	
  Notice of Capital Reduction

  	
   

  	
  7.09

  
	
  Permitted Liens

  	
   

  	
  3.13

  
	
  Permitted ACI Employees

  	
   

  	
  7.06

  
	
  Permitted Transferred Employees

  	
   

  	
  7.06

  
	
  Petty Cash

  	
   

  	
  2.01

  
	
  Post-Closing Tax Period

  	
   

  	
  8.03

  
	
  Potential Contributor

  	
   

  	
  11.06

  
	
  Pre-Closing Tax Period

  	
   

  	
  8.01

  
	
  Publications

  	
   

  	
  Recitals

  
	
  Purchased Assets

  	
   

  	
  2.01

  
	
  Purchase Price

  	
   

  	
  2.07

  
	
  Real Property Lease Assignment and Assumption Agreement

  	
   

  	
  2.08

  
	
  Returns

  	
   

  	
  8.02

  
	
  Seller 125 Plan

  	
   

  	
  9.03

  
	
  Seller 401(k) Plan

  	
   

  	
  9.03

  
	
  Share Sellers

  	
   

  	
  Preamble

  
	
  Shows

  	
   

  	
  Recitals

  
	
  Statement of Net Liabilities

  	
   

  	
  3.08

  
	
  Statement of Revenue and Direct Operating Expenses

  	
   

  	
  3.08

  
	
  Subsidiary Lease

  	
   

  	
  3.13

  



 


8





















 


	
  Term

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  Tax

  	
   

  	
  8.01

  
	
  Taxing Authority

  	
   

  	
  8.01

  
	
  Third Party Claim

  	
   

  	
  11.03

  
	
  Trademark Assignment

  	
   

  	
  6.03

  
	
  Transfer Taxes

  	
   

  	
  8.03

  
	
  Transferred Employees

  	
   

  	
  9.01

  
	
  Transferred Lease Locations

  	
   

  	
  2.01

  
	
  Transferred Leases

  	
   

  	
  2.01

  
	
  Transferred Vacation

  	
   

  	
  9.03

  
	
  Transition Consent

  	
   

  	
  7.03

  
	
  Transitional Service Agreement

  	
   

  	
  2.08

  
	
  Unaudited Statement

  	
   

  	
  3.08

  
	
  Warranty Breach

  	
   

  	
  11.02

  
	
  Web Services Agreement

  	
   

  	
  7.07

  
	
  Websites

  	
   

  	
  Recitals

  



 


Section 1.02.  Other Definitional and Interpretative
Provisions. 
The words “hereof”, “herein” and “hereunder” and words of like import
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. 
The captions herein are included for convenience of reference only and
shall be ignored in the construction or interpretation hereof.  References to Articles, Sections, Exhibits
and Schedules are to Articles, Sections, Exhibits and Schedules of this
Agreement unless otherwise specified. 
All references to “$” or “Dollars” shall be to United States dollars and
all references to “days” shall be to calendar days unless otherwise
specified.  All Exhibits and Schedules
annexed hereto or referred to herein are hereby incorporated in and made a part
of this Agreement as if set forth in full herein.  Any capitalized terms used in any Exhibit or
Schedule but not otherwise defined therein, shall have the meaning as
defined in this Agreement.  Any singular
term in this Agreement shall be deemed to include the plural, and any plural
term the singular.  Whenever the words “include”,
“includes” or “including” are used in this Agreement, they shall be deemed to
be followed by the words “without limitation”, whether or not they are in fact
followed by those words or words of like import.  “Writing”, “written” and comparable terms
refer to printing, typing and other means of reproducing words (including
electronic media) in a visible form. 
References to any Person include the successors and permitted assigns of
that Person.  References from or through
any date mean, unless otherwise specified, from and including or through and
including, respectively.


 


ARTICLE 2

PURCHASE AND SALE


 


Section 2.01.  Purchase and Sale of Assets.  Except as otherwise provided below, upon the
terms and subject to the conditions of this Agreement, Buyer


 


9





















 


agrees to
purchase (either directly or through a wholly-owned Subsidiary of Buyer) from
the Asset Sellers, and the Asset Sellers agree to sell, convey, transfer, assign
and deliver, or cause to be sold, conveyed, transferred, assigned and
delivered, to Buyer at the Closing, free and clear of all Liens and
Liabilities, other than Permitted Liens (excluding Liens set forth on Schedule 3.13(c)(i))
and Assumed Liabilities, all of their respective right, title and interest in,
to and under the following assets, properties, rights and interests, in each
case as the same shall exist on the Closing Date, except to the extent
described in Section 2.02 (collectively, the “Purchased Assets”):


 


(a)           the leases of real
property (the “Transferred Lease Locations”)
listed on Schedule 2.01(a) (the “Transferred Leases”);


 


(b)           all furniture,
fixtures, equipment and other tangible personal property located at any
Transferred Lease Location, including personal desktop and laptop computers and
printers set forth on Schedule 2.01(b) and wireless devices and
telephone handsets;


 


(c)           all personal
desktop, laptop computers and printers set forth on Schedule 2.01(c) and
all wireless devices, to the extent used primarily by the Transferred Employees
in the conduct of the Business at any location where any Asset Seller conducts
the Business other than any Transferred Lease Location;


 


(d)           all furniture,
fixtures, equipment and other tangible personal property set forth on Schedule 2.01(d);


 


(e)           all
telecommunications, information technology and networking hardware and
production equipment set forth on Schedule 2.01(e);


 


(f)            all hardwalls and
booths used exclusively, and all signage, decorations, props and other
promotional, marketing, solicitation or display materials used primarily, for
any Shows;


 


(g)           all work-in-process,
supplies, books, periodicals, videotapes, cassette tapes, CD-ROMs, DVDs and
other inventories of the Business, including all editorial and story material,
graphic art work, photographs, negatives, illustrations, manuscripts,
promotional materials (including all current and historical databases) owned,
used or held for use by any Asset Seller primarily in the conduct of the
Business, together with all rights of any Asset Seller relating to back issues
of the Publications and prior materials for Shows, including trade show
directories and files but expressly excluding all unused paper inventory and
paper stock; provided that each Seller shall
be entitled to one copy of each issue of each Publication for archival
purposes;


 


(h)           all publications,
newsletters, expositions and electronic magazines that are ancillary to the
Business and marketed under the same branding as any Publication or Show;


 


10





















 


(i)            all rights under
all Contractual Obligations listed on Schedule 3.10 and other Contractual
Obligations that relate exclusively to the conduct of the Business and to which
any Asset Seller is a party or by which any Asset Seller is bound, in each case
to the extent Post-Closing Attributable (collectively, the “Contracts”);


 


(j)            all customer lists,
advertiser lists, exhibitor lists, subscriber lists, circulation lists,
sponsorship lists, speaker lists, vendor lists, press lists, conference
attendees lists and other lists and databases to the extent used or held for
use primarily in the conduct of the Business, in whatever form, including the
right to distribute the Publications to subscribers, the right to own and use
the names of all subscribers to the Publications and attendees of the Shows,
copies of all records and reports of the circulation department of the
Publications including information, if any, as to former subscribers, and
copies of all records and reports of the exhibitors and attendees of the Shows,
including information, if any, as to former exhibitors and attendees;


 


(k)           all accounts
receivable, notes and other evidences of Debt of any Person to the Business
(other than any such item owed by any Seller or any of their respective
Affiliates) to the extent both arising out of the conduct of the Business and
Post-Closing Attributable, and any collateral or other security relating
thereto and all proceeds thereof;


 


(l)            all deposits made
by any Seller and other prepaid assets and expenses to the extent both arising
out of the conduct of the Business and Post-Closing Attributable, it being
understood that all security deposits made pursuant to any Transferred Leases
shall be deemed to be both arising out of the conduct of the Business and
Post-Closing Attributable;


 


(m)          all petty cash
located at the Transferred Lease Locations (“Petty
Cash”);


 


(n)           all Business
Intellectual Property, the computer software and programs listed on Schedule 2.01(n)
and related program documentation, manuals and guides;


 


(o)           all licenses,
permits or other governmental authorizations used exclusively in the conduct of
the Business;


 


(p)           all books, records,
files, correspondence and papers, whether in hard copy or electronic format,
used exclusively in the conduct of the Business, to the extent Post-Closing
Attributable; provided that each Seller shall
be entitled to copies of any such materials that it may reasonably request
(subject to Section 5.06);


 


11





















 


(q)           all goodwill
associated with the Business or the Purchased Assets, together with the right
to represent to third parties that Buyer is the successor to the Business; 


 


(r)            all research
materials available to Sellers in written or electronic form primarily relating
to the Business, including event and advertising research;


 


(s)           all permissions,
consents, releases, waivers and licenses related to editorial material included
in the Purchased Assets;


 


(t)            all other assets used
exclusively in the conduct of the Business.


 


Section 2.02.  Excluded
Assets. 
Notwithstanding any provision in the Transaction Documents to the
contrary, Buyer is purchasing only the Purchased Assets and Buyer expressly
understands and agrees that all other assets, properties, rights and interests
of each Asset Seller shall be excluded from the Purchased Assets (such excluded
assets, the “Excluded Assets”), and,
notwithstanding anything to the contrary in this Agreement, none of the
following assets, properties, rights or interests of any Asset Seller shall be
Purchased Assets:


 


(a)           all real property
interests, together with all buildings, fixtures and improvements erected
thereon, other than the Transferred Leases and the occupancy rights granted
pursuant to the Transition Services Agreement;


 


(b)           all cash and cash
equivalents, except for Petty Cash and deposits described in Section 2.01(l);


 


(c)           all accounts
receivable, notes or other evidences of Debt of any Person to the extent either
not arising out of the conduct of the Business or Pre-Closing Attributable, and
any collateral or other security relating thereto and all proceeds thereof;


 


(d)           all accounts
receivable, notes or other evidences of Debt owed by any Seller or any of their
respective Affiliates;


 


(e)           all deposits made by
any Seller and other prepaid assets and expenses to the extent either not
arising out of the conduct of the Business or Pre-Closing Attributable, it
being understood that all security deposits made pursuant to the Transferred Leases
shall be deemed to be both arising out of the conduct of the Business and
Post-Closing Attributable;


 


(f)            all insurance
policies and all claims, credits, causes of action or rights thereunder and
proceeds thereof;


 


(g)           the name “Advanstar”
and the Advanstar “star symbol” and all variations and derivations thereof (the
“Advanstar Trademarks and Tradenames”);


 


12





















 


(h)           all books, records,
files, correspondence and papers, whether in hard copy or electronic format, to
the extent Pre-Closing Attributable or prepared in connection with this
Agreement or the transactions contemplated hereby, all minute books and
corporate records of ACI and its Affiliates (other than the Transferred
Subsidiaries), all records (including accounting records) relating to Taxes
paid or payable by ACI or any of its Affiliates (other than the Transferred
Subsidiaries) and all financial, accounting and Tax records relating to the
Business, including all Tax returns relating to the Business on or prior to the
Closing Date and any notes, worksheets, files and documents relating thereto,
in each case whether in hard copy or electronic format; provided
that Buyer shall be entitled to copies of any such records that it may
reasonably request (subject to the last two sentences of Section 5.02(a),
and its obligation to maintain the confidentiality thereof in accordance with
the Confidentiality Agreement) and each Seller shall be entitled to copies of
all minute books, corporate records and records relating to Taxes of the
Transferred Subsidiaries (subject to Section 5.06).


 


(i)            all rights of any
Seller arising under any Transaction Document, the Confidentiality Agreement or
the transactions contemplated hereby or thereby;


 


(j)            all claims for and
rights to receive Tax refunds relating to the Business arising on or prior to
the Closing Date;


 


(k)           all application
systems and software, including all computer software, programs and source
disks, and related program documentation, tapes, manuals, forms, guides and
other materials, computer hardware and other systems hardware and networking
and communications assets, including servers, databases, backups and
peripherals, other than the items described in Section 2.01(b), 2.01(c),
2.01(d) and 2.01(e) and the computer software and programs listed on Schedule 2.01(n);


 


(l)            except as otherwise
provided in Article 9, all assets relating to or under the Employee Plans;


 


(m)          all rights arising
under all Contractual Obligations, whether written or oral, listed on Schedule 2.02(m)
(the “Excluded Contracts”) and all
Contractual Obligations relating exclusively to the Retained Business or
exclusively Pre-Closing Attributable; and


 


(n)           any Purchased Assets
sold or otherwise disposed of in accordance with Section 5.01(a)(i) during
the period from the date hereof until the Closing Date.


 


Section 2.03.  Assumed Liabilities.  At the Closing, and effective as of the close
of business on the Closing Date, Buyer shall assume and thereafter pay, perform
and discharge when due and payable the following Liabilities (collectively, the
“Assumed Liabilities”):


 


13





















 


(a)           all Liabilities of
any Asset Seller or any of its Affiliates under the Contracts, in each case to
the extent Post-Closing Attributable or arising or relating to performance
after the Closing Date;


 


(b)           all Liabilities of
ACI under the Transferred Leases, in each case to the extent arising or
relating to performance after the Closing Date;


 


(c)           all Liabilities of
any Asset Seller in respect of accounts payable of the Business, in each case
to the extent Post-Closing Attributable;


 


(d)           all Liabilities of
any Asset Seller in respect of deferred revenues of the Business, in each case
to the extent Post-Closing Attributable;


 


(e)           all Liabilities in
respect of Transferred Vacation and accrued but unpaid bonuses for the Business
Employees, in each case as of the close of Business on the Closing Date;


 


(f)            to the extent not
included in Section 2.03(e), all Liabilities for which Buyer is
responsible pursuant to Article 9; and 


 


(g)           all Liabilities for
which Buyer is responsible pursuant to Article 8;


 


provided
that Buyer shall in no event assume any Liabilities of any Seller arising from
or in connection with any transactions between or among Sellers and any of
their Affiliates.


 


Section 2.04.  Excluded Liabilities.  Notwithstanding any provision in this
Agreement or any other writing to the contrary, Buyer is assuming only the
Assumed Liabilities and is not assuming any other Liability of any Asset Seller
of whatever nature, whether presently in existence or arising hereafter.  All such other Liabilities shall be retained
by and remain Liabilities of the applicable Asset Seller or Affiliate (all such
Liabilities not being assumed being herein referred to as the “Excluded Liabilities”).  Except as set forth in Article 8, Buyer
is not assuming any Liability of any Asset Seller for Taxes and no Liability of
any Asset Seller in respect of Taxes shall constitute an Assumed Liability.


 


Section 2.05.  Assignment of Contracts and Rights.  Anything in this Agreement to the contrary
notwithstanding, this Agreement shall not constitute an agreement to assign any
Purchased Asset or any right thereunder if an attempted assignment, without the
consent of a third party, would constitute a breach or in any way adversely
affect the rights of Buyer or any Asset Seller thereunder.  If such consent is not obtained, the
applicable Asset Seller, on the one hand, and Buyer, on the other hand, will
cooperate in a mutually agreeable arrangement under which Buyer would obtain
the benefits and assume the obligations thereunder in accordance with this
Agreement.  


 


14





















 


Section 2.06.  Purchase and Sale of Interests.  Upon the terms and
subject to the conditions of this Agreement, (a) ACI agrees to sell to
Buyer, and Buyer agrees to purchase from ACI, the Interests at the Closing and (b) AI
agrees to sell to Buyer, and Buyer agrees to purchase from AI, the AI Interests
at the Closing; provided that the parties agree
that a portion of the quotas of
Advanstar Brazil and the shares of Advanstar Asia to be so purchased as
Interests and AI Interests may be purchased on Buyer’s behalf by a subsidiary
of the Buyer.  At the Closing, ACI shall
procure the resignation of each of the directors and officers of Advanstar Asia
and Advanstar Brazil, other than individuals who are Transferred Employees.


 


Section 2.07.  Purchase Price; Allocation of Purchase Price.  (a) The purchase price for the Purchased
Assets, the AI Interests and the Interests (the “Purchase
Price”) is $185,000,000, less an adjustment based on the working
capital of the Business, which shall be payable in cash as provided in Section 2.08.  The Sellers and Buyer agree that the
adjustment based on the working capital of the Business shall be
$7,000,000.  The Purchase Price shall be
subject to further adjustment as provided in Section 7.09.


 


(b)           Set forth on Schedule 2.07(b) is
a statement (the “Allocation Statement”)
setting forth the principles for allocating the Purchase Price (plus Assumed
Liabilities, to the extent properly taken into account under Section 1060
of the Code) among the Purchased Assets, the AI Interests and the Interests in
accordance with Section 1060 of the Code. 
Each Asset Seller, Share Seller and Buyer agree to (i) be bound by
the principles in the Allocation Statement and (ii) act in accordance with
the Allocation Statement in the preparation, filing and audit of any Tax return
(including filing Form 8594 with its federal income Tax return for the
taxable year that includes the date of the Closing).


 


(c)           No later than 60
days following the Closing Date, the final allocation of the Purchase Price
(plus Assumed Liabilities, to the extent appropriate) shall be made in
accordance with the principles in the Allocation Statement and as mutually
agreed by Buyer and ACI.  If mutual
agreement is not reached by such date, Buyer and ACI shall, during the 30 days
thereafter, use their commercially reasonably efforts to reach agreement on the
disputed items or amounts in order to determine, as may be required, the final
allocation of Purchase Price.  If during
such period, Buyer and ACI are unable to reach such agreement, they shall
promptly thereafter jointly retain a nationally recognized accounting firm (the
“Accounting
Referee”) and cause the Accounting Referee promptly to review
this Agreement and the disputed items or amounts for the purpose of calculating
the final allocation of the Purchase Price. 
The Accounting Referee shall deliver to Buyer and ACI, as promptly as
practicable, a report setting forth such calculation.  Such report shall be final and binding upon
Buyer and all Sellers.  The cost of such
review and report shall be borne equally by Buyer and ACI.


 


15





















 


(d)           If an adjustment is
made with respect to the Purchase Price pursuant to Section 7.09, the
Allocation Statement shall be adjusted in accordance with Section 1060 of
the Code and as mutually agreed by Buyer and ACI.  Buyer and each Seller agree to file any
additional information return required to be filed pursuant to Section 1060
of the Code and to treat the Allocation Statement as adjusted in the manner
described in Section 2.07(c).


 


(e)           Not later than 30
days prior to the filing of their respective Forms 8594 relating to this
transaction, each party shall deliver to the other party a copy of its Form 8594.


 


Section 2.08.  Closing.  The closing (the “Closing”)
of the purchase and sale of the Purchased Assets, the Interests and the AI
Interests and the assumption of the Assumed Liabilities hereunder shall take
place at the offices of Davis Polk & Wardwell, 450 Lexington Avenue,
New York, New York, not later than two Business Days after all of the conditions
set forth in Article 10 have been satisfied or waived, or at such other
time or place as Buyer and ACI may agree. 
At the Closing:


 


(a)           Buyer shall deliver
to the Asset Sellers and the Share Sellers, in amounts consistent with the
Allocation Statement, the Purchase Price in immediately available funds by wire
transfer to the bank accounts designated by ACI, by written notice to Buyer,
not later than two Business Days prior to the Closing Date (or if not so
designated, then by certified or official bank check payable in immediately
available funds to the order of the Asset Sellers and Share Sellers in such
amounts).


 


(b)           ACI shall deliver to
Buyer (i) certificates for the Interests in Advanstar Asia, duly executed
transfers of the Interests in Advanstar Asia and the corresponding sold
contract notes in a form as required by the Stamp Duty Ordinance, Cap. 117 Laws
of Hong Kong, in favor of the Buyer, together with (ii) evidence of the
registration of Buyer as holder of the Interests in Advanstar Brazil in the
share register of Advanstar Brazil.


 


(c)           Buyer shall deliver
to ACI duly executed bought contract notes in respect of the transfer of the
Interests in Advanstar Asia in a form as required by the Stamp Duty Ordinance,
Cap. 117 Laws of Hong Kong, in favor of ACI.


 


(d)           AI shall deliver to
Buyer evidence of the registration of Buyer
as holder of the AI Interests in the share register of Advanstar Brazil.


 


(e)           ACI shall deliver to
Buyer an assignment of its Interests in HEE in form and substance satisfactory
to Buyer.


 


(f)            ACI shall deliver
to Buyer a statement setting forth each Consent which has been received by any
Seller on or prior to the Closing Date, together with a true and complete copy
of each such Consent.


 


16





















 


(g)           Each Asset Seller
and Buyer shall enter into an Assignment and Assumption Agreement substantially
in the form attached hereto as Exhibit A (the “Assignment
and Assumption Agreement”), and, subject to the provisions hereof,
each Asset Seller shall deliver to Buyer such deeds, bills of sale,
endorsements, consents, assignments and other good and sufficient instruments
of conveyance and assignment as the parties and their respective counsel shall
deem reasonably necessary to vest in Buyer all right, title and interest in, to
and under the Purchased Assets.


 


(h)           The applicable Asset
Seller and Buyer shall enter into the Web Services Agreement.


 


(i)            The applicable
Asset Seller and Buyer shall enter into a separate Assignment and Assumption
Agreement substantially in the form attached hereto as Exhibit B for each
Transferred Lease (each a “Real Property Lease
Assignment and Assumption Agreement”).


 


(j)            ACI and Buyer shall
enter into a Transition Services Agreement substantially in the form attached
hereto as Exhibit C (the “Transition Services
Agreement”).


 


(k)           ACI and Buyer shall
deliver to each other the certificates and other documents contemplated by Section 10.02
and Section 10.03, and such other instruments of sale, transfer,
conveyance and assignment as Buyer may reasonably request in connection with
the performance and execution of this Agreement.


 


ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF ACI


 


In order to
induce Buyer to enter into and perform this Agreement, except as set forth in
the disclosure schedules hereto (the “Schedules”),
ACI represents and warrants to Buyer as of the date hereof that:


 


Section 3.01.  Existence
and Power. 
Each Seller, each Transferred Subsidiary and HEE is (a) duly
organized, validly existing and in good standing, where applicable, under the
laws of its jurisdiction of organization, (b) duly qualified to do
business and in good standing in each jurisdiction in which it owns or leases
real property and in each other jurisdiction in which the failure to be so
qualified has not had, and is not reasonably likely to have, a Material Adverse
Effect, and (c) has all powers and all material governmental licenses,
authorizations, permits, consents and approvals required to carry on its
respective businesses as now conducted. 
The Sellers have delivered to the Buyer true, accurate and complete
copies of (x) the Organizational Documents of each of the Transferred
Subsidiaries and HEE and (y) the minute books of each Transferred Subsidiary
and HEE which contain records of all meetings held of, and other


 


17





















 


corporate
actions taken by, its stockholders or partners, as the case may be, directors
and any committees appointed by its directors prior to the date hereof.


 


Section 3.02.  Corporate Authorization.  The execution, delivery and performance by
each Seller of each Transaction Document to which it is a party and the
consummation of the transactions contemplated hereby and thereby are within
such Seller’s corporate powers and have been duly authorized by all necessary
corporate action on the part of such Seller. 
Each Transaction Document, when duly executed and delivered by each
Seller party thereto, will constitute a valid and binding agreement of such
Seller, enforceable against such Seller in accordance with its terms.


 


Section 3.03.  Governmental Authorization.  The execution, delivery and performance by
each Seller of each Transaction Document to which it is a party and the
consummation of the transactions contemplated hereby and thereby require no
material action (including any authorization, consent or approval) by or in
respect of, or material filing with, any Governmental Authority other than (i) compliance
with any applicable requirements of the HSR Act; and (ii) compliance with
any applicable requirements of the 1934 Act.


 


Section 3.04.  Noncontravention.  The execution, delivery and performance by
each Seller of each Transaction Document to which it is a party and the
consummation of the transactions contemplated hereby and thereby do not and
will not (i) violate the Organizational Documents of such Seller, any
Transferred Subsidiary or HEE, (ii) assuming compliance with the matters
referred to in Section 3.03, violate in any material respect any
applicable law, rule, regulation, judgment, injunction, order or decree, (iii) assuming
the obtaining of all Consents, constitute a default or breach under or give
rise to any right of termination, cancellation or acceleration of any material
right or material obligation or to a loss of any material benefit relating to
the Business to which such Seller, any Transferred Subsidiary or HEE is
entitled under any provision of any material agreement or other material
instrument binding upon such Seller, any Transferred Subsidiary or HEE or (iv) result
in the creation or imposition of any Lien on any Purchased Asset or on any
asset of any Transferred Subsidiary or HEE, except for Permitted Liens.


 


Section 3.05.  Consents.  Schedule 3.05 sets forth each material
agreement or other instrument binding upon any Seller or Transferred Subsidiary
or HEE (including the Material Contracts, the Transferred Leases and the
Subsidiary Leases) that requires a consent or other action by any Person as a
result of the execution, delivery and performance of this Agreement (all such
required consents or other actions, the “Consents”).


 


Section 3.06.  Capitalization.  (a) The authorized capital stock of
Advanstar Brazil consists of 18,646,865 quotas, par
value R$0.07 per quota.  The authorized share capital of Advanstar
Asia consists of 1,000,000 ordinary shares, par value $1.00 per share and the
authorized capital stock of Advanstar BVI


 


18





















 


consists of
2,500,000 ordinary shares, par value $1.00 per share (the “BVI Shares”).  The only capital stock of Advanstar Brazil
and Advanstar Asia outstanding are the Interests and the AI Interests, and the
only capital stock of Advanstar BVI outstanding are the BVI Shares.  The interests owned by ACI in HEE constitute
50% of the outstanding partnership interests in HEE.  The Sellers have delivered to the Buyer true,
accurate and complete copies of the stock ledger of each Transferred Subsidiary
which reflects all issuances, transfers, repurchases and cancellations of
shares of such Transferred Subsidiary’s capital stock.


 


(b)           Except as set forth
on Schedule 3.06(b), all outstanding shares of capital stock of each
Transferred Subsidiary have been duly authorized and validly issued and are
fully paid and non-assessable.  Except as
set forth in this Section 3.06, there are no outstanding (i) shares
of capital stock, voting securities or other membership interests of any
Transferred Subsidiary, (ii) securities of any Transferred Subsidiary
convertible into or exchangeable for shares of capital stock, voting securities
or other membership interests of such Transferred Subsidiary, (iii) options
or other rights to acquire from any Transferred Subsidiary, or other obligation
of any Transferred Subsidiary to issue, any capital stock, voting securities,
other membership interests or securities convertible into or exchangeable for
capital stock, voting securities or other membership interests of any
Transferred Subsidiary, (iv) preemptive rights or other similar rights in
respect of capital stock or other equity interests in any Transferred
Subsidiary, (v) Contractual Obligations or provision in the Organizational
Documents of any Transferred Subsidiary which obligates it to purchase, redeem
or otherwise acquire, or make any payment (including any dividend or
distribution) in respect of any capital stock or other equity interests in any
Transferred Subsidiary, or (vi) registration or similar rights with
respect to any capital stock or other equity interests in any Transferred
Subsidiary.  None of the Transferred
Subsidiaries hold any shares of capital stock in its treasury.


 


(c)           All of the
outstanding capital stock or other voting securities of Advanstar BVI is
directly owned by Advanstar Brazil, free and clear of any Lien other than
Permitted Liens.  There is no Subsidiary
of either Advanstar Brazil or Advanstar Asia other than Advanstar BVI, and
there is no Subsidiary of Advanstar BVI.


 


Section 3.07.  Ownership of Interests.  All of the Interests are owned, beneficially
and of record, by ACI, free and clear of any Lien other than Permitted Liens,
and ACI will transfer and deliver to Buyer at the Closing valid title to the
Interests, free and clear of any Lien. 
All of the AI Interests are owned, beneficially and of record, by AI,
free and clear of any Lien other than Permitted Liens, and AI will transfer and
deliver to Buyer at the Closing valid title to the AI Interests, free and clear
of any Lien.


 


Section 3.08.  Financial Statements.  (a) The draft audited Statement of Net
Liabilities of the Business as of December 31, 2004 (the “Statement of Net Liabilities”) and the draft audited
Statement of Revenue and Direct Operating


 


19





















 


Expenses of the Business for
the year then ended (the “Statement of Revenue and
Direct Operating Expenses”), in each case as set forth on Schedule 3.08(a),
fairly present in all material respects the assets and liabilities of the
Business of the types to be assigned to and assumed by Buyer hereunder
(disregarding any qualifications to the description of such assets and
liabilities in Section 2.01 or Section 2.03 as “Pre-Closing
Attributable” or “Post-Closing Attributable”) as of December 31, 2004 and
the revenue and direct expenses, excluding the allocation of corporate overhead
and office costs, of the Business for the year then ended, subject to the
qualifications contained in the footnotes thereto.  The financial information used by ACI in
preparing the Statement of Net Liabilities and the Statement of Revenue and
Direct Operating Expenses was derived from the financial information used by
ACI in preparing the audited consolidated balance sheet as of December 31,
2004 and the related audited consolidated statement of operations for the year
then ended of ACI and its consolidated subsidiaries, which audited balance
sheet and statement of operations were prepared in accordance with GAAP applied
on a consistent basis (except as may be indicated in the notes thereto).  The unaudited statement of revenue and direct
operating expenses of the Business for the two-month period ended February 28,
2005 (the “Unaudited Statement”), as set
forth on Schedule 3.08(a), fairly presents in all material respects the
revenue and direct expenses, excluding the allocation of corporate overhead and
office costs, of the Business for the two-month period then ended, subject to
the qualifications contained in the footnotes to the Statement of Net Assets
and Statement of Revenue and Direct Operating Expenses.  The financial information used by ACI in preparing
the Unaudited Statement was derived from the books and records of ACI and is in
the form customarily prepared by the management of ACI for its internal
use.  Notwithstanding the foregoing, the
Statement of Net Liabilities and the Statement of Revenue and Direct Operating
Expenses may not necessarily reflect what the financial position of the
Business as of December 31, 2004 or its results of operations for the year
then ended would have been had the Business been a stand-alone entity, and the
Unaudited Statement may not necessarily reflect what the results of operations
of the Business for the two-month period ended February 28, 2005 would
have been had the Business been a stand-alone entity.


 


(b)           The audited balance
sheet as of December 31, 2004 (the “Brazil Balance Sheet”)
and the related audited statements of income and changes in financial position
for the year then ended, in each case as set forth on Schedule 3.08(b), of
Advanstar Brazil fairly present, in conformity with Brazilian GAAP applied on a
consistent basis (except as may be indicated in the notes thereto), the
financial position of Advanstar Brazil as of December 31, 2004 and its
results of operations and changes in financial position for the year then
ended.  The audited balance sheet as of December 31,
2004 (the “Asia Balance Sheet”) and the
related audited statement of income for the year then ended, in each case as
set forth on Schedule 3.08(b), of Advanstar Asia fairly present, in
conformity with Hong Kong GAAP applied on a consistent basis (except as may be
indicated in the notes thereto), the financial position of Advanstar Asia as of
December 31,


 


20





















 


2004 and its results of
operations for the year then ended.  The
financial information used by ACI in preparing the unaudited balance sheet and
income statement of the Advanstar BVI as of and for the year ending December 31,
2004, as set forth on Schedule 3.08(b) was derived from the financial
information used by ACI in preparing the audited consolidated balance sheet as
of December 31, 2004 and the related audited consolidated statement of
operations for the year then ended of ACI and its consolidated subsidiaries,
which audited balance sheet and statement of operations were prepared in accordance
with GAAP applied on a consistent basis (except as may be indicated in the
notes thereto).


 


(c)           Except as disclosed
on Schedule 3.08(c), no Transferred Subsidiary or HEE has any Liabilities
except for (i) Liabilities set forth on the Brazil Balance Sheet, the Asia
Balance Sheet or the Statement of Net Liabilities or in any note thereto, (ii) Liabilities
incurred in the Ordinary Course of Business since December 31, 2004, (iii) Liabilities
disclosed in, related to or arising under any Contractual Obligations disclosed
in any Schedule hereto; and (iv) other Liabilities which,
individually or in the aggregate, are not material to the Business, taken as a
whole.  No Transferred Subsidiary has any
Liabilities in respect of Debt.


 


Section 3.09.  Absence of Certain Changes.  Except as disclosed in Schedule 3.09,
since December 31, 2004, the Business has been conducted only in the
Ordinary Course of Business and there has not been:


 


(a)           any event,
occurrence or development which has had, or is reasonably likely to have, a
Material Adverse Effect;


 


(b)           any damage,
destruction, eminent domain taking or other casualty loss (whether or not
covered by insurance) affecting the Business or any Purchased Assets or any
assets of any Transferred Subsidiary in any material respect;


 


(c)           any creation or
other incurrence of any Lien on any material Purchased Asset or on any material
asset of any Transferred Subsidiary, other than Permitted Liens;


 


(d)           any material change
in any method of accounting or accounting practice (including with respect to
reserves) with respect to the Business except for any such change required by
reason of a concurrent change in GAAP; or


 


(e)           any (i) employment,
deferred compensation, severance, retirement or other similar agreement entered
into with, or put into place affecting, any Business Employee (or any amendment
to any such existing agreement), (ii) grant of any severance or
termination pay to any Business Employee, (iii) change in compensation or
other benefits payable to any Business Employee pursuant to any severance or
retirement plans or policies thereof, or (iv) consulting agreement


 


21





















 


entered into with any Person,
in each case other than in the Ordinary Course of Business.


 


(f)            any amendment to (i) the
Organizational Documents or (ii) the outstanding capital stock or other
equity interests of any Transferred Subsidiary or any issuance or disposal of
capital stock or other equity interests of any Transferred Subsidiary;


 


(g)           any increase or
material alteration to the compensation payable or paid, or alteration in the
timing or method of such payments, whether conditionally or otherwise, to any
Business Employee or consultant, other than in the Ordinary Course of Business;
or


 


(h)           any change or
revocation of any material Tax election, change to methods of accounting for
Tax purposes, settlement in respect of Taxes or agreement entered into with
respect of Taxes with any Governmental Authority.


 


Section 3.10.  Material
Contracts. 
(a)  Except for the Contracts disclosed in Schedule 3.10 (the “Material Contracts”), the Excluded Contracts and Contractual
Obligations that do not relate exclusively to the conduct of the Business, with
respect to the Business, as of the date hereof, no Asset Seller, Transferred
Subsidiary or HEE is a party to or bound by:


 


(i)            any lease of personal property
providing for future payments or receipts in excess of $50,000 per year or
$100,000 in the aggregate;


 


(ii)           any Contractual Obligation for the
purchase of materials, equipment or other personal property, supplies or
services providing for future payments by any Asset Seller or Transferred
Subsidiary in excess of $50,000 per year or $100,000 in the aggregate;


 


(iii)          any Contractual Obligation for the
sale of any publications, products or services providing for future payments by
any Asset Seller or Transferred Subsidiary in excess of $50,000 per year or
$100,000 in the aggregate;


 


(iv)          any Contractual Obligation between a
Transferred Subsidiary and any Affiliate thereof;


 


(v)           any hotel, exhibition venue,
sponsorship, admission, exhibitor or co-host agreement relating to any Show
that provides for future payments to or from or receipts by any Asset Seller or
Transferred Subsidiary in excess of $50,000 per year or $100,000 in the
aggregate;


 


(vi)          any partnership, limited liability
company, joint venture or other similar agreement or arrangement;


 


22





















 


(vii)         any Contractual Obligation after January 1,
2001 relating to the acquisition of any Publication, Show or Website (whether
by merger, purchase of stock, purchase of assets or otherwise);


 


(viii)        any Contractual Obligation material to
the Business that would limit the freedom of the Business to compete in any
line of business or with any Person or in any area or that prohibits the use of
any Intellectual Property by the Business or pursuant to which any Asset Seller
or Transferred Subsidiary has agreed to refrain from using any Owned
Intellectual Property, it being understood that the grant of an exclusive
license by or a limited license to an Asset Seller or Transferred Subsidiary is
not a Contractual Obligation of the type described in this Section 3.10(a)(viii);


 


(ix)           any Contractual Obligation under
which any Transferred Subsidiary is, or may become, obligated to pay any amount
in respect of indemnification obligations or purchase price adjustment in
connection with any (A) acquisition or disposition of assets or
securities, (B) merger, consolidation or other business combination or (C) series
or group of related transactions or events of the type specified in clauses (A) and
(B) above;


 


(x)            any Contractual Obligation (or group
of related Contractual Obligations) (A) under which any Transferred
Subsidiary has created, incurred, assumed or guaranteed any Debt or (B) under
which any Transferred Subsidiary has permitted any asset to become encumbered
by any Lien;


 


(xi)           any Contractual Obligation providing
compensation or other benefits to any Business Employee; or


 


(xii)          any other Contractual Obligation that
requires or would reasonably be expected to require aggregate future payments
of more than $100,000 in any calendar year.


 


(b)           The Asset Sellers
have delivered to the Buyer a complete copy of each Material Contract, in each
case, as amended or otherwise modified and in effect as of the date
hereof.  Except as disclosed in Schedule 3.10(b),
each Material Contract is a valid and binding agreement of the applicable Asset
Seller or Transferred Subsidiary, as the case may be, and is in full force and
effect, and no Asset Seller or Transferred Subsidiary or, to the Knowledge of
ACI, any other party thereto is in default or breach in any material respect
under the terms of any such Material Contract.


 


(c)           No offer has been
made pursuant to Section 5.4 of the Joint Venture Partnership Agreement of
HEE, dated February 9, 1998, by and between Expocon Management Associates, Inc.,
ACI, and Video Software Dealers Association, and,


 


23





















 


to the Knowledge of ACI, no
party to such agreement intends to make such an offer.


 


Section 3.11.  Litigation.  Except as disclosed on Schedule 3.11,
there is no material action, suit, arbitration, investigation or proceeding
pending against, or to the Knowledge of ACI, threatened in writing against any
Asset Seller or Transferred Subsidiary that (a) affects the Business or
any Purchased Asset before any court or arbitrator or any Governmental
Authority, (b) in any manner challenges or seeks the rescission of this
Agreement, or seeks to prevent, enjoin, alter or materially delay the
consummation of the transactions contemplated hereunder or (c) may result
in any change in the current equity interest of any Seller in any Transferred
Subsidiary.


 


Section 3.12.  Compliance with Laws and Court Orders; Permits.  (a) No Asset Seller or Transferred
Subsidiary is in material violation of any law, rule, regulation, judgment,
injunction, order or decree applicable to the Purchased Assets or the conduct
of the Business.


 


(b)           Except to the extent
that such actions would not reasonably be expected to adversely affect the
Business after the Closing, no Asset Seller nor any Transferred Subsidiary nor
any of their respective directors, officers, employees or agents, has, in the conduct
of the Business, directly or intentionally indirectly given, or agreed to give,
any illegal gift, contribution, payment or similar benefit of value to any
supplier, customer, governmental official or employee of another Person who
was, is or may reasonably be considered to be in a position to help or hinder
the Business (or assist in connection with the consummation of any actual or
proposed transaction involving the Business) or made, or agreed to make, any
illegal contribution, or reimbursed any illegal political gift or contribution
made by any other Person, to any candidate for federal, state, local or foreign
public office.


 


(c)           Each of the Asset
Sellers and the Transferred Subsidiaries has been duly granted all material
permits required pursuant to applicable law for the conduct of the
Business.  All such permits are in effect
on the date hereof and are valid and in full force and effect (other than those
permits that have expired or lapsed pursuant to their respective terms), and no
Asset Seller or Transferred Subsidiary is in material breach or violation of,
or material default under, any such permit. 
All books, records, files, correspondence and papers relating to such
permits are included in the Purchased Assets.


 


Section 3.13.  Properties.  (a) Except as set forth on Schedule 3.13(a),
the Transferred Lease Locations constitute the only real property owned or
leased by any Asset Seller that is used or held for use exclusively in the
conduct of the Business.  Schedule 3.13(a) sets
forth the only real property owned or leased by any Transferred Subsidiary.


 


24





















 


(b)           ACI or the
applicable Transferred Subsidiary has valid leasehold interests in the
Transferred Lease Locations pursuant to the Transferred Leases and each lease
to which a Transferred Subsidiary is a party described on Schedule 3.13(a) (each,
a “Subsidiary Lease”).  Except as set forth on Schedule 3.13(b),
the Asset Sellers have delivered to Buyer a complete copy of each Transferred
Lease and Subsidiary Lease, in each case as amended or otherwise modified and
in effect as of the date hereof, and each Transferred Lease and each Subsidiary
Lease is a valid and binding agreement of ACI or a Transferred Subsidiary and
is in full force and effect, and none of ACI, any Transferred Subsidiary and,
to the Knowledge of ACI, any other party thereto is in default or breach in any
material respect under the terms of any such Transferred Lease or Subsidiary
Lease.


 


(c)           No Purchased Asset
and no asset of any Transferred Subsidiary is subject to any Lien, except:


 


(i)            Liens disclosed on Schedule 3.13(c)(i);


 


(ii)           Liens for Taxes, assessments and
similar charges that are not yet due or are being contested in good faith and
for which adequate reserves have been established in accordance with GAAP,
Brazilian GAAP or Hong Kong GAAP, as applicable;


 


(iii)          mechanic’s, materialman’s, carrier’s,
repairer’s, warehouseman’s, workmen’s and other similar Liens arising or
incurred in the Ordinary Course of Business or that are not yet due and payable
or are being contested in good faith;


 


(iv)          all matters, whether or not of record,
affecting the title of the lessor under the Transferred Leases or the
Subsidiary Leases (and any underlying lessors); or


 


(v)           other Liens that do not materially
interfere with the present use of the Purchased Assets or the present use of
any of the assets of the Transferred Subsidiaries (clauses (i) - (v) of
this Section 3.13(c) are, collectively, the “Permitted Liens”).


 


(d)           Except as set forth
on Schedule 3.13(d), the Purchased Assets include all of the property and
assets used or held for use by any Asset Seller exclusively in the conduct of
the Business.  Except as set forth on Schedule 3.13(d),
at the time of the Closing, the Purchased Assets and assets of the Transferred
Subsidiaries, together with the services to be provided pursuant to the Web
Services Agreement, the services and occupancy arrangements to be provided by
ACI pursuant to the Transition Services Agreement, the arrangements described
in Section 2.05, the New Business Agreements (if obtained prior to the
Closing) and the Interests shall be adequate in all material respects to allow
Buyer at such time to conduct the Business as it is currently being conducted.


 


25


















 


Section 3.14.  Intellectual Property.  (a) Schedule 3.14(a)(i) contains a list of
all Intellectual Property registrations and applications for registration
included in the Business Intellectual Property, other than copyrights, and a
list of all copyright registrations for issues of the Publications published
since January 1, 2002.  Each such
registration is valid and subsisting. 
Schedule 3.14(a)(i) further identifies each material trade name,
material trade dress and material unregistered trademark or material service
mark used in the Business and included in the Business Intellectual
Property.  Schedule 3.14(a)(ii) sets
forth a list of all agreements to which any Asset Seller or Transferred
Subsidiary is a party and pursuant to which such Asset Seller or Transferred
Subsidiary is authorized to use any material Intellectual Property that is used
exclusively in the conduct of the Business. 
Schedule 3.14(a)(iii) sets forth a list of all agreements as to which
any Asset Seller or Transferred Subsidiary is a party and pursuant to which any
Person other than such Asset Seller or Transferred Subsidiary is authorized to
use any material Owned Intellectual Property, excluding (x) editorial reprints
and permissions, (y) customer list rentals and (z) non-exclusive licenses to
list management agents, content aggregators, digital media and marketing
services providers, printers, website development and hosting providers and
other third parties providing services to any Asset Seller or Transferred
Subsidiary, in each case in the Ordinary Course of Business.


 


(b)           The Asset Sellers
and Transferred Subsidiaries own (free and clear of any Liens other than
Permitted Liens), all material Owned Intellectual Property that is necessary
for the conduct of the Business as currently conducted.


 


(c)           None of (i) the use
of the Owned Intellectual Property, (ii) to the Knowledge of ACI, the use of
the Licensed Intellectual Property nor (iii) the conduct of the Business by the
Asset Sellers and Transferred Subsidiaries materially infringes or otherwise
violates in any material respect the Intellectual Property rights of any
Person.


 


(d)           No Owned
Intellectual Property right is subject to any outstanding judgment, injunction,
order, decree or agreement restricting in any material respect the use thereof
by the Asset Sellers and Transferred Subsidiaries with respect to the Business
or materially restricting the licensing thereof by Asset Sellers and
Transferred Subsidiaries to any Person.


 


(e)           Except as set forth
on Schedule 3.14(e), no Asset Seller or Transferred Subsidiary has received
during the three years prior to the date hereof any written notice of any
pending third-party claim (i) contesting in any material respect the validity,
enforceability, use or ownership of any material Owned Intellectual Property or
(ii) alleging any material infringement, misappropriation or violation of, or
other material conflict with, any Intellectual Property of any third party
relating to the conduct of the Business.


 


(f)            Except as disclosed
in Schedule 3.14(f), to the Knowledge of ACI, no Person is infringing,
misappropriating or otherwise violating, in any material


 


26





















 


respect, any
right of any Asset Seller or Transferred Subsidiary with respect to any material
Owned Intellectual Property owned by them.


 


(g)           The Asset Sellers
have delivered to Buyer true and complete copies of each agreement set forth on
Schedule 3.14(a)(ii) or Schedule 3.14(a)(iii), and each such agreement is a
valid and binding agreement of the Asset Seller or Transferred Subsidiary party
thereto, and is in full force and effect, and no Asset Seller or any
Transferred Subsidiary or, to the Knowledge of ACI, any other party thereto is
in default or breach in any material respect under the terms of any such
agreement.


 


Section 3.15.  Circulation.  Except as set forth
on Schedule 3.15, ACI has previously made available to Buyer the Audit Bureau
of Circulations or BPA Worldwide circulation statements for each Publication for the periods set forth on Schedule
3.15.  The circulation data and
information for such Publications as set forth on such circulation statements
is accurate in all material respects.


 


Section 3.16.  Advertisers.  Schedule 3.16 is a
complete and correct list of the 20 largest advertisers of each of the
Publications (in terms of advertising purchases during the twelve-month period
ended December 31, 2004).  Except as set
forth on Schedule 3.16, each such advertiser has advertised in at least one
issue of each Publication listed for such advertiser in calendar year
2005.  ACI has furnished to Buyer copies
of the published 2004/2005 rate cards with respect to the Publications and the
Website.


 


Section 3.17.  Employee Benefit Plans.  (a) Schedule 3.17(a) contains a true and
complete list of each material “employee benefit plan”, as defined in Section
3(3) of ERISA, each employment, severance or similar contract, plan arrangement
or policy and each other plan or arrangement (written or oral) providing for
compensation, bonuses, profit-sharing, stock option or other stock related
rights or other forms of incentive or deferred compensation, vacation benefits,
insurance (including any self-insured arrangements), health or medical
benefits, employee assistance program, disability or sick leave benefits,
workers’ compensation, supplemental unemployment benefits, severance benefits
and post-employment or retirement benefits (including compensation, pension,
health, medical or life insurance benefits) which is maintained, administered
or contributed to by ACI or any of its ERISA Affiliates and benefits any Asset
Seller Business Employee or with respect to which the Business, the Buyer or
any of its Affiliates has or could reasonably be expected to have any
Liability.  Such plans are referred to
collectively herein as the “Employee Plans”;
provided that any International Plan
(and any plan or program that would otherwise constitute an International Plan,
but for the proviso in the definition of such term) shall not constitute an
Employee Plan.  ACI has made available to
Buyer copies of all Employee Plans (and, if applicable, related trust or
funding agreements or insurance policies) and all amendments thereto and
written interpretations thereof, together with the most recent summary plan
description, and annual report (Form


 


27





















 


5500 including, if applicable, Schedule B thereto) and Form 990,
if applicable, prepared in connection with any such plan, program or trust.


 


(b)      None of ACI, any ERISA
Affiliate of ACI and any predecessor thereof, sponsors, maintains, contributes
or is required to contribute to, or has in the past sponsored, maintained,
contributed to or was required to contribute to, any Employee Plan subject to
Title IV of ERISA.


 


(c)       None of ACI, any ERISA
Affiliate and any predecessor thereof contributes or is required to contribute
to, or has in the past contributed or was required to contribute to, any
multiemployer plan, as defined in Section 3(37) of ERISA.


 


(d)      Each Employee Plan that
is intended to be qualified under Section 401(a) of the Code has received a
favorable determination letter, or has pending or has time remaining in which
to file, an application for such determination from the Internal Revenue
Service, and, to ACI’s Knowledge, there is no reason why any such determination
letter should be revoked or not be reissued. 
ACI has made available to Buyer copies of the most recent Internal
Revenue Service determination letters with respect to each such Employee
Plan.  Each Employee Plan, including any
associated trust or fund, has been maintained in material compliance with its
terms and with the requirements prescribed by any and all statutes, orders,
rules and regulations, including ERISA and the Code, which are applicable to such
Employee Plan (including any associated trust fund).  No material events have occurred with respect
to any Employee Plan that could result in payment or assessment by or against
the Business, Buyer or any of its Affiliates of any material excise taxes under
Sections 4972, 4975, 4976, 4977, 4979, 4980B, 4980D, 4980E or 5000 of the Code
or of a penalty or Liability under Section 502 of ERISA.


 


(e)       Other than as set forth
on Schedule 3.17(e), there is no (i) material lawsuit or claim against any
Asset Seller or Transferred Subsidiary pending or, to the Knowledge of ACI,
threatened in writing that relates to any Business Employee’s coverage under an
Employee Plan or an International Plan or (ii) other material dispute involving
any Asset Seller or Transferred Subsidiary, on the one hand, and any Business
Employee, on the other hand, pending or, to the Knowledge of ACI, threatened in
writing pursuant to which the improper administration of an Employee Plan or an
International Plan has been alleged.


 


(f)       Except as described in
Schedule 3.17(f) and other than as required under Section 601 et seq. of ERISA, no Employee Plan that is a welfare plan
(as defined in Section 3(1) of ERISA) provides benefits or coverage following
retirement or other termination of employment with respect to which Buyer or
its Affiliates could have any Liability.


 


(g)      ACI has provided a true
and complete list of each material International Plan and has made available to
Buyer copies of each material


 


28





















 


International
Plan and any amendments thereto, and copies of, to the extent applicable, any
related trust or funding agreements or insurance policies, amendments thereto,
actuarial reports relating thereto and prospectuses or summary plan descriptions
relating thereto.  Each International
Plan has been maintained in material compliance with its terms and with the
requirements prescribed by applicable law (including any special provisions
relating to qualified plans where such International Plan was intended to so
qualify) and has been maintained in good standing with the applicable
regulatory authorities.


 


Section
3.18.  Employees.  Schedule 3.18 sets forth the name, job title,
employment commencement date, employer, date of birth, annual salary or hourly
wage, as applicable, total compensation (including bonus), date of most recent
salary or wage increase and each other item referred to in Section 9.01(d)(i)
for each employee set forth on such Schedule. 
Each employee listed on Schedule 3.18, each employee of any Transferred
Subsidiary and each other employee of any Asset Seller who commenced employment
with an Asset Seller prior to the Closing Date to replace an employee listed on
Schedule 3.18 whose employment terminated prior to the Closing Date or to fill
a previously budgeted open position shall be a “Business
Employee” for purposes of this Agreement.


 


Section 3.19.  Labor Matters.  Except as disclosed
on Schedule 3.19, (a) none of the Business Employees is, or within the last
three years has been, a member of a bargaining unit covered by a collective
bargaining agreement to which any Asset Seller or Transferred Subsidiary is a
party; (b) no Asset Seller or Transferred Subsidiary is now, or has been within
the last three years, subject to any union organizing effort, strike, work
stoppage, lock out or other labor dispute involving any of the Business
Employees; (c) none of the Asset Sellers or Transferred Subsidiaries is engaged
in any unfair labor practice with respect to any of the Business Employees and
none has any material employee grievance or other employee dispute pending
which involves any of the Business Employees and (d) no Asset Seller or
Transferred Subsidiary is the subject of any material complaint, charge,
investigation, audit, suit or other legal process with respect to any of the
Business Employees, or any of the terms or conditions of their employment, by
any Governmental Authority.


 


Section 3.20.  Environmental Compliance.  (a) (i) No written notice, order, request for
information, complaint or penalty has been received by any Asset Seller or
Transferred Subsidiary and (ii) there are no judicial, administrative or other
actions, suits or proceedings pending or threatened, in either case, which
allege a material violation by any Asset Seller or Transferred Subsidiary of
any Environmental Law and which relate to the Purchased Assets or Transferred
Lease Locations;


 


(b)           each Asset Seller and each
Transferred Subsidiary has obtained or caused to be obtained all material
environmental permits necessary for the operation of the Purchased Assets and
the Transferred Lease Locations to comply, in all material respects, with
applicable


 


29





















 


Environmental Laws (as in effect on the date
this representation is made) and no Asset Seller or Transferred Subsidiary is
in material violation of such permits or, with respect to the operation of the
Purchased Assets and the Transferred Lease Locations, applicable Environmental
Laws (as in effect on the date this representation is made); and


 


(c)           there has been no written
environmental audit conducted by, or in the possession of, any Asset Seller or
Transferred Subsidiary or any Transferred Lease Location.


 


Section 3.21.  Finders’
Fees. 
There is no investment banker, broker, finder or other intermediary
which has been retained by or is authorized to act on behalf of any Seller who
might be entitled to any fee or commission in connection with the transactions
contemplated by this Agreement.


 


Section 3.22.  Insurance.  Schedule 3.22 sets
forth a list of all insurance policies of each Seller or any Transferred
Subsidiary that cover any Purchased Asset or any assets of any Transferred
Subsidiary.  Except as set forth on
Schedule 3.22, there are no claims that relate to the Business currently
pending under any such insurance policy.


 


Section 3.23.  Exhibitors and Sponsors.  Except as set forth
therein, Schedule 3.23 sets forth a complete and correct list of the 20 largest
exhibitors and sponsors of each of the Shows most recently held and indicates
for each the total exhibit or sponsorship fee payable in respect thereof.


 


Section 3.24.  Penciled-in Dates.  Schedule 3.24
contains a list of “penciled in” exhibition space for Shows scheduled for 2005
and 2006.


 


ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF BUYER


 


Except as set
forth in the Schedules, Buyer represents and warrants to the Asset Sellers and
Share Sellers as of the date hereof that:


 


Section
4.01.  Existence
and Power. 
Buyer is a corporation duly incorporated, validly existing and in good
standing under the laws of Delaware and has all powers and all material
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now conducted.


 


Section
4.02.  Authorization.  The execution, delivery and performance by
Buyer of each Transaction Document to which it is a party and the consummation
of the transactions contemplated hereby and thereby are within the corporate
powers of Buyer and have been duly authorized by all necessary action on the
part of Buyer.  Each Transaction Document
to which it is a party, when duly executed


 


30





















 


and delivered by it, will constitute a valid and binding agreement of
Buyer, enforceable against Buyer in accordance with its respective terms.


 


Section 4.03.  Governmental Authorization.  The execution, delivery and performance by
Buyer of each Transaction Document to which it is a party and the consummation
of the transactions contemplated hereby and thereby require no material action
(including any authorization, consent or approval) by or in respect of, or
material filing with, any Governmental Authority other than compliance with any
applicable requirements of the HSR Act.


 


Section
4.04.  Noncontravention.  The execution, delivery and performance by
Buyer of each Transaction Document to which it is a party and the consummation
of the transactions contemplated hereby and thereby do not and will not (i)
violate the Organizational Documents of Buyer, (ii) assuming compliance with
the matters referred to in Section 4.03, violate any applicable law, rule,
regulation, judgment, injunction, order or decree, (iii) require any consent or
other action by any Person under, constitute a default or breach under or give
rise to any right of termination, cancellation or acceleration of any right or
obligation or to a loss of any benefit to which Buyer is entitled under any
provision of any agreement or other instrument binding upon Buyer or (iv)
result in the creation or imposition of any Lien on any asset of Buyer, except,
in the cases of clauses (ii) through (iv), as would not prevent, enjoin, alter
or materially delay, or materially impair the ability of Buyer to consummate,
the transactions contemplated by the Transaction Documents.


 


Section 4.05.  Financing.  Schedule 4.05 provides copies of: (i) a
letter dated April 2, 2005 from Audax (the “Equity
Commitment Letter”) evidencing its commitment to subscribe for and
purchase shares of common stock of Buyer for an aggregate subscription price of
$65 million in cash, subject to the terms and conditions thereof (the “Equity Investment”); and (ii) a letter dated April 2, 2005
from Bank of Montreal, Chicago Branch, d/b/a Harris Nesbitt (including the Fee
Letter referred to therein (the “Fee Letter”)
and any other related agreements or arrangements among the parties thereto, the
“Debt Commitment Letter” and,
collectively with the Equity Commitment Letter, the “Financing
Commitments”) evidencing its commitment, subject to the terms and
conditions thereof (including any modification thereto pursuant to the “market
flex” terms contained in the Fee Letter), to make loans of up to $135,000,000
million to Buyer, in each case as described therein.  The cash proceeds of the Financing
Commitments shall be used by Buyer to pay the Purchase Price.  The Financing Commitments are in full force
and effect and have not been amended or modified in any respect.  Buyer has no reason to believe that any of
the conditions to the Financing Commitments will not be satisfied or that the
Financing Commitments will not be available on a timely basis to consummate the
transactions contemplated by this Agreement.


 


Section 4.06.  Purchase
for Investment.  Buyer is purchasing the Interests and the AI
Interests for investment for its own account and not with a view to, or


 


31





















 


for sale in connection with, any distribution thereof.  Buyer (either alone or together with Audax
and its advisors) has sufficient knowledge and experience in financial and
business matters so as to be capable of evaluating the merits and risks of its
investment in the Interests and the AI Interests and is capable of bearing the
economic risks of such investment.


 


Section
4.07.  Litigation.  There is no action, suit, investigation or
proceeding pending against, or to the Knowledge of Buyer threatened against or
affecting, Buyer before any court or arbitrator or any Governmental Authority
which in any in any manner challenges or seeks the rescission of this Agreement
or any of the Transaction Documents, or seeks to prevent, enjoin, alter or
materially delay the consummation of the transactions contemplated hereunder or
thereunder, or which would materially impair the ability of Buyer to consummate
the transactions contemplated hereby and thereby.


 


Section
4.08.  Finders’
Fees. 
Except for Innovation Advisors, whose fees will be paid by Buyer, there
is no investment banker, broker, finder or other intermediary which has been
retained by or is authorized to act on behalf of Buyer who might be entitled to
any fee or commission from ACI or any of its Affiliates upon consummation of
the transactions contemplated by this Agreement or any other Transaction
Documents.


 


Section 4.09.  No Other Representations.  Buyer acknowledges and agrees that the
Purchased Assets, Interests and AI Interests are sold “as is” and Buyer agrees
to accept the Purchased Assets, Interests and AI Interests and the Business in
the condition they are in on the Closing Date based on its own inspection,
examination and determination with respect to all matters and without reliance
upon any express or implied representations or warranties of any nature made by
or on behalf of or imputed to any Seller, except as expressly set forth in this
Agreement.  Without limiting the
generality of the foregoing, Buyer acknowledges that no Seller makes any
representation or warranty with respect to (i) any projections, estimates or
budgets delivered to or made available to Buyer of future revenues, future
results of operations (or any component thereof), future cash flows or future
financial condition (or any component thereof) of the Business or the future
business and operations of the Business or (ii) any other information or
documents made available to Buyer or its counsel, accountants or advisors with
respect to the Business, except as expressly set forth in this Agreement.


 


ARTICLE 5

COVENANTS OF SELLERS


 


Sellers agree
that:


 


Section 5.01.  Conduct of
the Business.  (a) From the
date hereof until the Closing Date, the Asset Sellers shall, and the Share
Sellers shall cause the


 


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Transferred Subsidiaries to, conduct the Business only in the Ordinary
Course of Business and shall use its commercially reasonable efforts to
preserve intact the relationships of the Business with third parties and to
keep available the services of their respective Business Employees.  Without limiting the generality of the
foregoing, from the date hereof until the Closing Date, except as disclosed on
Schedule 5.01, the Asset Sellers will not and the Share Sellers will not,
without the written consent of Buyer, permit any Transferred Subsidiary to:


 


(i)            sell, lease, license or otherwise
dispose of any Purchased Assets or assets of any Transferred Subsidiaries
except (A) pursuant to existing contracts or commitments disclosed on Schedule
3.10 or (B) otherwise in the Ordinary Course of Business in individual amounts
of less than $50,000;


 


(ii)           create or incur any Lien on any
Purchased Asset, asset of any Transferred Subsidiary, Interest or AI Interest,
in each case other than Permitted Liens;


 


(iii)          terminate, amend in any material
respect or waive any material provision of any Material Contract, or enter into
any new contract or agreement that, if in existence on the date of this
Agreement, would have been required to have been set forth on Schedule 3.10,
other than exhibitor, sponsor or custom publishing contracts or agreements
entered into in the Ordinary Course of Business;


 


(iv)          except as otherwise provided in this
Agreement, (i) amend any employment, deferred compensation, severance,
retirement or other similar agreement with any Business Employee, (ii) grant
any severance or termination pay to any Business Employee or (iii) change any
compensation or other benefits payable to any Business Employee pursuant to any
severance or retirement plans or policies or otherwise, in each case other than
in the Ordinary Course of Business;


 


(v)           change any method of accounting with
respect to the Business or any Purchased Assets or Assumed Liabilities, except
as may be required by GAAP;


 


(vi)          adopt or propose any change in the
Organizational Documents of any Transferred Subsidiary;


 


(vii)         merge or consolidate any Transferred Subsidiary
with any other Person;


 


(viii)        change or revoke any material Tax
election of any Transferred Subsidiary or HEE, change methods of accounting for
Tax purposes of any Transferred Subsidiary or HEE, enter into a settlement in
respect of Taxes of any Transferred Subsidiary or HEE or enter into an


 


33





















 


agreement with respect to Taxes of any
Transferred Subsidiary or HEE with any Governmental Authority (except for
settlements and agreements for which reserves have been established, in
accordance with Brazilian GAAP, Hong Kong GAAP or GAAP, as applicable, as
reflected on the Brazil Balance Sheet, the Asia Balance Sheet or the Statement
of Net Liabilities, respectively);


 


(ix)   materially increase or materially alter the
aggregate compensation payable or paid, or materially alter the timing or
method of such payments, whether conditionally or otherwise, to any Business
Employee, other than in the Ordinary Course of Business; or


 


(x)    agree or commit to do any of the foregoing.


 


(b)           From the date hereof
until the Closing Date, no Seller nor any Transferred Subsidiary will take any
action that is designed or intended to discourage any customers from
maintaining their respective business relationships with the Business as such
relationships existed prior to the date of this Agreement.


 


(c)           For the avoidance of
doubt, the parties agree that nothing herein shall limit, restrict or otherwise
impair any Transferred Subsidiary’s ability to make any distributions of cash
or cash equivalents to any Share Seller prior to Closing.


 


Section 5.02.  Access to Information.  (a) From the date hereof until the Closing
Date, each Seller will (i) give Buyer, its counsel, financial advisors,
auditors and other authorized Representatives reasonable access during normal
business hours to the offices, properties, books and records of each Seller and
Transferred Subsidiary relating to the Business, (ii) furnish to Buyer, its
counsel, financial advisors, auditors and other authorized Representatives such
financial and operating data and other information relating to the Business as
such Persons may reasonably request and (iii) instruct the employees, counsel
and financial advisors of each Seller or Transferred Subsidiary to cooperate
with Buyer in its reasonable investigation of the Business; provided that all contact with employees of any Seller or
Transferred Subsidiary pursuant to this Section 5.02 shall be made through
individuals previously designated by ACI to Buyer, and Buyer agrees that it
will not, and it will not permit any of its Affiliates or their respective
counsel, financial advisors, auditors or other Representatives, to contact any
customers, suppliers, business partners or employees of any Asset Seller, any
Transferred Subsidiary or the Business without the prior consent of ACI, which
consent shall not be unreasonably withheld. 
Any investigation pursuant to this Section shall be conducted in such
manner as not to interfere unreasonably with the conduct of the business of any
Asset Seller or Transferred Subsidiary. 
Notwithstanding the foregoing, Buyer shall not have access to personnel
records of any Asset Seller or Transferred Subsidiary relating to individual
performance or evaluation records, medical histories or other information the
disclosure of which is prohibited by applicable law or could reasonably be
expected to subject


 


34





















 


any Asset Seller or Transferred Subsidiary to risk of liability.  Nothing in this Agreement shall require ACI
or AI, or any of their respective Subsidiaries to disclose to Buyer or its
Representatives any confidential information that ACI or AI or any of their
respective Subsidiaries is advised by counsel it is prohibited from disclosing
to Buyer pursuant to applicable law or contract (other than a Contract) or the
disclosure of which would impair protection afforded by a lawful privilege; provided that ACI, AI, or such Subsidiary,
as applicable, shall provide Buyer with notice of the existence of such information
and a detailed summary of the contents of such records to the extent not
inconsistent with the foregoing.


 


(b)           On and after the
Closing Date, each Seller will afford promptly to Buyer and its agents
reasonable access to its books of account, financial and other records
(including accountant’s work papers), information, employees and auditors to
the extent necessary or useful for Buyer in connection with any audit,
investigation, dispute or litigation (other than any dispute with or litigation
against any Seller) or any other reasonable business purpose relating to the
Business; provided that any such
access shall not unreasonably interfere with the conduct of the business of any
Seller.  Buyer shall bear all of the
out-of-pocket costs and expenses (including attorneys’ fees, but excluding
reimbursement for general overhead, salaries and employee benefits) reasonably
incurred in connection with the foregoing.


 


Section 5.03.  Release of Liens.  At or prior to
Closing, ACI shall obtain the release of the Liens disclosed on Schedule
3.13(c)(i).


 


Section 5.04.  Notices of Certain Events.  ACI shall promptly notify Buyer of:


 


(a)           any notice or other communication
from any Person alleging that the consent of such Person is or may be required
in connection with the transactions contemplated by this Agreement;


 


(b)           any notice or other communication
from any Governmental Authority in connection with the transactions
contemplated by this Agreement; and


 


(c)           any actions, suits, claims,
investigations or proceedings commenced relating to any Asset Seller or
Transferred Subsidiary or the Business that, if pending on the date of this
Agreement, would have been required to have been disclosed pursuant to Section
3.11.


 


Section 5.05.  No Solicitation.  From the date of this Agreement until the
Closing, no Seller will (and the Sellers will not permit their respective
Affiliates or any of their or their Affiliates’ Representatives to) directly or
indirectly: (a) solicit, initiate, or encourage the submission of any proposal
or offer from any Person relating to, or enter into or consummate any
transaction relating to, the acquisition or disposition of any portion of the
Business or the Purchased Assets


 


35





















 


(other than purchases and sales of assets in the Ordinary Course of
Business) or any similar transaction or (b) participate in any discussions or
negotiations regarding, furnish any information with respect to the Business in
furtherance of, assist or participate in, or facilitate in any other manner any
effort or attempt by any Person to make or seek to make any proposal regarding
any of the foregoing.


 


Section 5.06.  Confidentiality of Sellers.  Each Seller hereby
agrees with the Buyer that such Seller and its Representatives will not, and
that such Seller will cause its Affiliates and Representatives not to, at any
time on or after the Closing Date, directly or indirectly, without the prior
written consent of the Buyer, disclose, any confidential or proprietary
information of the Business or a Transferred Subsidiary or any confidential or
proprietary information concerning Buyer, its Subsidiaries provided to it
pursuant to Section 6.02; provided that
the information subject to the foregoing provisions of this sentence will not
include any information (i) that was publicly available prior to the
Closing Date or thereafter becomes publicly available without any violation of
this Agreement on the part of any Seller or any of its Affiliates or
Representatives, (ii) that was available to any Seller or such Representatives
on a non-confidential basis prior to its disclosure to such Seller or its
Representatives by Buyer or its Representatives or becomes available to any
Seller or such Representatives from a Person other than Buyer and its
Representatives who is not, to the best of such Seller’s knowledge, subject to
any legally binding obligation to keep such information confidential or (iii)
to the extent that such information relates to the Retained Business; and provided further that the provisions of this Section 5.06
will not prohibit any disclosure (i) required by any applicable legal
requirement, so long as reasonable prior notice is given of such disclosure and
a reasonable opportunity is afforded to contest the same, or (ii) made in
connection with the enforcement of any right or remedy relating to this
Agreement or the transactions contemplated hereunder.


 


Section 5.07.  Intellectual Property Cooperation.  ACI shall reasonably
cooperate with Buyer after the Closing in connection with any lawsuit by Buyer
or its Affiliates for any infringement or other violation of Business
Intellectual Property after Closing; provided that
ACI shall be entitled to all recoveries relating to any of such lawsuits to the
extent Pre-Closing Attributable if ACI shares pro rata
in the costs and expenses (including attorney’s and experts’ fees) relating to
any such lawsuits.  If ACI determines,
within a reasonable time after having received written notice of such suit from
Buyer, not to participate in the pursuit of such infringement or other
violation, ACI will assign to Buyer any rights to sue and recover damages in
respect of any infringement or other violation of such Business Intellectual
Property occurring prior to the Closing Date.


 


Section 5.08.  Transferred Subsidiary Working Capital.  Sellers will not
permit the Transferred Subsidiary Working Capital of either Advanstar Brazil
and Advanstar BVI (taken together), on the one hand, or Advanstar Asia, on the
other hand, to be less than zero at the Closing.  The Share Sellers shall cause there to


 


36





















 


be, as of the Closing, at least (i) a value of $600,000
in cash held by Advanstar Brazil and Advanstar BVI, in the aggregate; and (ii)
a value of $150,000 in cash held by Advanstar Asia.


 


Section 5.09.  Delivery of Monthly Financials.  Until the Closing
Date, ACI shall, as promptly as practicable but in no event later than 20 days
after the end of each calendar month, prepare and deliver to Buyer an unaudited
statement of revenue and direct operating expenses of the Business for the
period commencing on January 1, 2005 and ending on the last day of such
calendar month.  Such unaudited
statements shall be prepared on a basis consistent with the preparation of the
Unaudited Statement.


 


Section 5.10.  Delivery of Financial Audit.  ACI agrees to
deliver to Buyer, promptly after their delivery to ACI and in any event not
later than April 13, 2005, a copy of the final audited Statement of Net
Liabilities of the Business as of December 31, 2004 and the final audited
Statement of Revenue and Direct Operating Expenses of the Business for the year
then ended.  ACI agrees to provide Buyer
with reasonable access to the accountant work papers relating to such Statement
of Net Liabilities or Statement of Revenue and Direct Operating Expenses.


 


ARTICLE 6

COVENANTS OF BUYER


 


Buyer agrees
that:


 


Section 6.01.  Confidentiality.  Prior to the Closing Date and after any
termination of this Agreement, Buyer and its Affiliates will hold, and will use
their commercially reasonably efforts to cause their respective officers,
directors, employees, accountants, counsel, consultants, advisors and agents to
hold, in confidence all confidential documents and information furnished to Buyer
or its Affiliates in connection with the transactions contemplated by this
Agreement as and to the extent provided in the Confidentiality Agreement dated
November 22, 2004, between ACI and Audax Management Company, LLC (as it may be
amended from time to time, the “Confidentiality Agreement”).


 


Section
6.02.  Access.  On and after the Closing Date, Buyer and each
of its Subsidiaries will afford promptly to each Seller and their respective
agents reasonable access during normal business hours to its properties, books,
records, employees and auditors to the extent necessary to permit ACI to
determine any matter reasonably relating to its rights and obligations
hereunder or to any period ending on or before the Closing Date; provided that any such access shall not
unreasonably interfere with the conduct of the business of Buyer or any of its
Subsidiaries.


 


37





















 


Section 6.03.  Trademarks; Tradenames; Change of Corporate
Name.  (a) Buyer shall within 180 days
after Closing, change the Publications and subscription information, signage
and stationery as well as all other information or other materials of Buyer or
any of its Affiliates (including the Transferred Subsidiaries and HEE),
including any internet or other electronic communications vehicles, to
discontinue use of the Advanstar Trademarks and Tradenames (during which time
Buyer and its Affiliates shall have the right to use the Advanstar Trademarks
and Tradenames consistent with the usage during the 180-day period preceding
the Closing); provided that the foregoing shall
not require any changes with respect to any Publications printed or submitted
for printing prior to the end of such 180-day period.  In no event shall Buyer or any of its
Affiliates use any Advanstar Trademarks and Tradenames after Closing in any
manner or for any purpose different from the use of such Advanstar Trademarks
and Tradenames by ACI during the 180-day period preceding the Closing.


 


(b)           Buyer agrees, as
promptly as practicable after Closing, to take, or cause to be taken, all
actions necessary or desirable under applicable laws and regulations to effect
the transfer and assignment to ACI of all Advanstar Trademarks and Tradenames
owned or licensed by any Transferred Subsidiary to ACI (collectively, the “Trademark Assignment”), and ACI shall assist the Buyer in
effecting the Trademark Assignments.  ACI
and Buyer agree to execute and deliver, and to cause to be executed and
delivered, such other documents, certificates, agreements and other writings
and to take such other actions as may be necessary or desirable in order to
consummate or implement expeditiously the Trademark Assignments.


 


(c)           As soon as
practicable following the Closing Date, but in no event later than 30 days
following the Closing Date, Buyer shall cause each Transferred Subsidiary to
change its corporate name to a name that does not include “Advanstar” and to
make any necessary legal filings with the appropriate Governmental Authorities
to effectuate such changes.


 


Section 6.04.  Financing.  Buyer agrees (a) to
use its commercially reasonable efforts to obtain the financing described in
the Financing Commitments on substantially the terms and conditions set forth
therein as expeditiously as practicable after the date hereof, including the
negotiation, execution and delivery of the definitive documentation for the
Financing Commitments and the satisfaction or waiver of all conditions to
closing set forth therein, (b) to keep ACI reasonably informed on the status of
its efforts to obtain financing for its obligations hereunder and (c) to not
permit any amendment or modification to the Financing Commitments or the
definitive documentation therefor that could reasonably be expected to hinder
or delay its receipt of financing upon the terms and conditions set forth in
the Financing Commitments as of the date hereof.


 


Section 6.05.  Use of Copyrights.  With respect to
copyrighted works obtained from third parties and used in any Publications or
on any Website prior


 


38





















 


to the Closing Date, Buyer will and will cause its Affiliates to,
exercise rights in such work in accordance with (i) the rights Seller received
from such third party, (ii) the rights Buyer or its Affiliates receive from any
rights holder in such work and (iii) applicable Law.


 


ARTICLE 7

COVENANTS OF BUYER AND SELLERS


 


Buyer and each
Seller agree that:


 


Section 7.01.  Commercially  Reasonable
Efforts; Further Assurances.  (a) Subject to the terms and conditions of
this Agreement, Buyer and each Seller agree to use their respective
commercially reasonable efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary or desirable under applicable
laws and regulations to consummate the transactions contemplated by this
Agreement.  Buyer and each Seller agree
to execute and deliver such other documents, certificates, agreements and other
writings and to take such other actions as may be necessary or desirable in
order to consummate or implement expeditiously the transactions contemplated by
this Agreement and to vest in Buyer good title to the Purchased Assets, the
Interests and the AI Interests.


 


(b)           In furtherance and
not in limitation of the foregoing, each of Buyer and ACI shall make an
appropriate filing of a Notification and Report Form pursuant to the HSR Act
with respect to the transactions contemplated hereby as promptly as practicable
and in any event within 10 Business Days after the date hereof and to supply as
promptly as practicable any additional information and documentary material
that may be requested pursuant to the HSR Act and to take all other actions
necessary to cause the expiration or termination of the applicable waiting
periods under the HSR Act as soon as practicable.


 


Section
7.02.  Certain
Filings. 
Buyer and each Seller agrees to cooperate with one another (i) in
determining whether any action by or in respect of, or filing with, any
Governmental Authority is required, or any actions, consents, approvals or waivers
are required to be obtained from parties to any Contracts, in connection with
the consummation of the transactions contemplated by this Agreement and (ii) in
taking such actions or making any such filings, furnishing information required
in connection therewith and seeking timely to obtain any such actions,
consents, approvals or waivers.


 


Section 7.03.  Certain Consents.  ACI agrees to use
its commercially reasonable efforts to (i) obtain as soon as practicable after
the date hereof (x) all of the Consents and (y) any consents or approvals that
are required to be obtained in connection with the provision of the Transition
Services (as defined in the Transition Services Agreement) (such consents and
approvals, the “Transition Consents”) by ACI and
(ii) assist Buyer in its efforts to obtain agreements with


 


39





















 


each of the counterparties to the Excluded Contracts that would enable
Buyer to realize the benefits of the Excluded Contracts to the extent
applicable to the Business (each, a “New Business Agreement”),
and Buyer will cooperate in assisting ACI to obtain all of the Consents and the
Transition Consents; provided
that such commercially reasonable efforts shall not include any requirement of
ACI to expend money, commence any litigation or offer or grant any
accommodation (financial or otherwise) to any Person.  ACI shall keep Buyer reasonably apprised of
the status of its efforts to obtain the Consents and the Transition
Consents.  Buyer agrees that no representation,
warranty or covenant of any Seller contained herein or in any other Transaction
Document shall be breached or deemed breached and no condition to the
obligations of Buyer shall be deemed not to be satisfied as a result of the
failure to obtain any Consent, Transition Consent or New Business Agreement.


 


Section 7.04.  Collections and Remittances.  Each party will
promptly forward to the other applicable party any revenue or other amount (and
related documentation) which is received by such party (or any of its
Subsidiaries) and to which such other applicable party is entitled pursuant to
this Agreement, including any revenues received by Buyer or any of its
Subsidiaries (including the Transferred Subsidiaries) that are Pre-Closing
Attributable and any revenues received by any Asset Seller or any of their
respective Subsidiaries that are Post-Closing Attributable.  Each party will promptly provide the other
applicable party with copies of any invoices received by it to be paid in whole
or in part by the other party pursuant to this Agreement.  The responsible party shall promptly pay (or
contest in good faith) such invoices.


 


Section 7.05.  Public Announcements.  No public announcement or disclosure will be
made by any party with respect to the subject matter of this Agreement or the
transactions contemplated hereunder without the prior written consent of the
Buyer and ACI; provided that the provisions of
this Section 7.05 will not prohibit (x) any disclosure required by any
applicable legal requirements or any listing agreement with any national
securities exchange (in which case the disclosing party will provide the other
parties with the opportunity to review in advance the disclosure) or (y) any
disclosure made in connection with the enforcement of any right or remedy
relating to this Agreement or the transactions contemplated hereunder.


 


Section 7.06.  Noncompetition.  (a) Each Seller
agrees that, unless such Seller obtains the prior written consent of Buyer,
from the Closing Date until the second anniversary of the Closing Date, neither
it nor any of its Subsidiaries shall:


 


(i)            engage, either directly or
indirectly, as a principal or for its own account or solely or jointly with
others, or as a stockholder in any corporation or joint stock association or as
an owner of any equity or membership interest in any other Person, in any Buyer
Competitive


 


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Activity within the geographic area
designated on Schedule 7.06(a)(i) for the Show, Publication or Website to which
such Buyer Competitive Activity corresponds; provided
that nothing herein shall prohibit the acquisition by ACI or any of its
Subsidiaries of (x) a diversified company having not more than 5% of its sales
(based on its latest published annual audited financial statements)
attributable to any Buyer Competitive Activity, (y) less than 5% of any class
of stock listed on a national securities exchange or traded in the
over-the-counter market or (z) any Person engaged in Buyer Competitive Activities
if (A) such Buyer Competitive Activities collectively account for less than 25%
of such Person’s sales (based on its latest published annual audited financial
statements) and (B) as soon as practicable, but in any event within 60 days
after the closing of such acquisition, ACI or the relevant Subsidiary, as the
case may be, commences efforts to divest, and, within nine months after the
closing of such acquisition, ACI or such Subsidiary consummates the divestiture
of, the portion of such acquired Person required in order to comply with clause
(x) of this Section 7.06(a)(i); or


 


(ii)           employ or solicit, agree to employ or
receive or accept the performance of services by any Transferred Employee,
other than any Transferred Employees who have resigned from the employment of
Buyer or any of its Subsidiaries more than three months prior to their hiring
by ACI or one of its Subsidiaries or who have been terminated without cause by
Buyer or any of its Subsidiaries (collectively, “Permitted
Transferred Employees”); provided that
nothing in this Section 7.06(a)(ii) shall prohibit ACI or any of its
Subsidiaries from making general solicitations or general advertisements to the
public not specifically directed toward the Transferred Employees, but neither
ACI nor any of its Subsidiaries shall employ, agree to employ, or receive or
accept the performance of services by any Transferred Employee as a result of
any such general solicitation or general advertisement, other than Permitted
Transferred Employees.


 


(b)           Buyer agrees that,
unless Buyer obtains the prior written consent of ACI, from the Closing Date
until the second anniversary of the Closing Date, neither it nor any of its
Subsidiaries shall employ or solicit, agree to employ or receive or accept the
performance of services by any employee of ACI or any of its Subsidiaries who
does not become a Transferred Employee, other than any employees who have
resigned from the employment of ACI or any of its Subsidiaries more than three
months prior to their hiring by Buyer or one of its Subsidiaries or who have
been terminated without cause by ACI or any of its Subsidiaries (collectively, “Permitted ACI Employees”); provided
that nothing in this Section 7.06(b) shall prohibit Buyer or any of its
Subsidiaries from making general solicitations or general advertisements to the
public not specifically directed toward employees of ACI or any of its
Subsidiaries, but neither Buyer nor any of its Subsidiaries shall employ, agree
to employ, or receive or accept the performance of services by, any employee or
ACI or any of its Subsidiaries as a result of any such general solicitation or
general advertisement, other than Permitted ACI Employees.


 


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(c)           If any provision
contained in this Section 7.06 shall for any reason be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Section 7.06, but this Section
7.06 shall be construed as if such invalid, illegal or unenforceable provision
had never been contained herein.  It is
the intention of the parties that if any of the restrictions or covenants
contained herein is held to cover a geographic area or to be for a length of
time which is not permitted by applicable law, or in any way construed to be
too broad or to any extent invalid, such provision shall not be construed to be
null, void and of no effect, but to the extent such provision would be valid or
enforceable under applicable law, a court of competent jurisdiction shall
construe and interpret or reform this Section 7.06 to provide for a covenant
having the maximum enforceable geographic area, time period and other
provisions (not greater than those contained herein) as shall be valid and enforceable
under such applicable law.  ACI and Buyer
each acknowledge that the other party would be irreparably harmed by any breach
by Buyer or ACI, respectively, of its obligations pursuant to this Section and
that there would be no adequate remedy at law or in damages to compensate such
other party for any such breach.  ACI and
Buyer each agree that the other shall be entitled to injunctive relief
requiring specific performance by Buyer or ACI, as the case may be, of this
Section 7.06, and ACI and Buyer, respectively, consent to the entry thereof.


 


Section 7.07.  Web Services Agreement.  Buyer and ACI will
negotiate in good faith to reach agreement on the terms and conditions of a web
services agreement (the “Web Services Agreement”)
pursuant to which ACI shall, or shall cause its Affiliates to, provide to Buyer
the services described on Exhibit D hereto substantially on the terms set forth
in such Exhibit.


 


Section 7.08.  No Breach or Failure of Condition as a Result
of Certain Matters.  Buyer agrees that no
representation, warranty or covenant of any Seller contained herein or in any
other Transaction Document shall be breached or deemed breached, and no
condition to the obligations of Buyer shall be deemed not to be satisfied, as a
result of any matter set forth on Schedule 7.08.


 


Section 7.09.  Brazilian Distribution.  (a)  Promptly following the expiration of 90 days
after the publication of Advanstar Brazil’s minutes of the quota holders’
meeting approving a capital reduction with respect to Advanstar Brazil’s quotas (“Notice of Capital
Reduction”) that permits a distribution of Excess Brazil Cash as
contemplated by this Section 7.09 (i.e., 90 days
after March 8, 2005 or the date of publication pursuant to Section 7.09(b), as
applicable), Buyer will cause Advanstar Brazil to (x) amend its bylaws to
reflect the reduced capital resulting from the distribution of Excess Brazil
Cash, and file the amended bylaws with the Board of Registration of Companies
in Brazil and (y) amend its Certificate of Registration of Foreign Investment
with the Central Bank of Brazil to reflect such reduction.  The expiration of the 90-day period and the
completion and filing of the amendments described in clauses (x) and (y) is
referred to herein as the “Capital Reduction
Procedure.”


 


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(b)           If the Notice of
Capital Reduction published by Advanstar Brazil on March 8, 2005 will not
permit Advanstar Brazil to make the distribution of  Excess Brazil Cash to
Buyer following the expiration of 90 days after such publication, Buyer will
cause Advanstar Brazil to publish a new Notice of Capital Reduction, and
complete the Capital Reduction Procedure as promptly as practicable after the
Closing, in accordance with this Section 7.09 and applicable law.


 


(c)           As promptly as
practicable after the Capital Reduction Procedure is completed, Buyer will
cause Advanstar Brazil to distribute to Buyer an amount equal to the aggregate
amount of cash held by Advanstar Brazil on the Closing Date minus $600,000 (such excess, “Excess Brazil Cash”), and Buyer will
promptly upon receipt of such funds pay the amount of Excess Brazil Cash to
Seller as an adjustment to the Purchase Price.


 


(d)           Prior to the
Closing, ACI shall keep Buyer reasonably apprised, and after the Closing Buyer
shall keep ACI reasonably apprised, of the status of the Capital Reduction
Procedure and shall promptly notify ACI if it or Advanstar Brazil receives any
written communication from any creditor, the Central Bank of Brazil or any
third party which would, or would reasonably be expected to, impede, delay or
prohibit the Capital Reduction Procedure or the distribution of the Excess
Brazil Cash.  If the Excess Brazil Cash
is not distributed, Buyer and ACI shall each use their respective commercially
reasonable efforts to (i) promptly resolve any disputes or other issues
limiting or restricting such distribution and (ii) take any actions deemed
necessary or advisable to consummate the Capital Reduction Procedure and effect
the distribution of the Excess Brazil Cash.


 


(e)           In connection with
the transactions contemplated by this Section 7.09, Buyer shall cause all
outstanding quotas of Advanstar Brazil to be owned
beneficially and of record by one or more entities, each of which is organized
under the laws of a jurisdiction other than Brazil or any jurisdiction within
Brazil.


 


ARTICLE 8

TAX MATTERS


 


Section
8.01.  Tax
Definitions.  The following terms, as used herein, have the
following meanings:


 


“Code” means the Internal Revenue Code of
1986, as amended.


 


“Pre-Closing Tax Period” means (i) any Tax
period ending on or before the Closing Date and (ii) with respect to a Tax
period that commences before but ends after the Closing Date, the portion of
such period up to and including the Closing Date.


 


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“Tax” means (i) any tax, governmental fee or other like
assessment or charge of any kind whatsoever (including, without limitation,
U.S. federal, state, local, or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental, customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, property, sales, use,
transfer, registration, and value added taxes and withholding on amounts paid
to or by any Person), together with any interest, penalty, addition to tax or
additional amount imposed by any Governmental Authority (a “Taxing Authority”) responsible for the imposition of any
such tax (domestic or foreign), or (ii) Liability for the payment of any
amounts of the type described in (i) as a result of being party to any
agreement or any express or implied obligation to indemnify any other Person or
under law, as a transferee or successor, or otherwise.


 


Section 8.02.  Tax Matters.  ACI hereby
represents and warrants to Buyer that:


 


(a)           Each Asset Seller
has timely paid all Taxes required to be paid on or prior to the date hereof,
the non-payment of which would result in a Lien on any Purchased Asset.


 


(b)           Each Asset Seller
has established adequate reserves for the payment of, and will timely pay, all
Taxes which arise from or with respect to the Purchased Assets or the operation
of the Business and are incurred in or attributable to the Pre-Closing Tax
Period, the non-payment of which would result in a Lien on any Purchased Asset
for which Buyer or any Affiliate could reasonably be expected to have any
Liability.


 


(c)           Each Asset Seller
has withheld and paid all Taxes required to have been withheld and paid in
connection with any amounts paid or owing to any employee, independent
contractor, creditor, stockholder or other third party, to the extent that
Buyer or any Affiliate could have any Liability for such Taxes.


 


(d)           (i) All material Tax
returns, statements, reports and forms required to be filed with any Taxing
Authority with respect to any Pre-Closing Tax Period by or on behalf of any
Transferred Subsidiary or HEE, including any schedule or attachments thereto
and any amendments thereof and including information returns (collectively, the
“Returns”), have been timely filed, to
the extent required to be filed on or before the date hereof; (ii) the Returns
that have been filed are true and complete in all material respects; (iii) all
Taxes shown as due and payable on the Returns that have been filed and all
other Taxes due and payable by any Transferred Subsidiary or HEE (whether or
not shown on any Return) have been timely paid; (iv) there is no deficiency,
adjustment, action, suit, proceeding, investigation, audit or claim now
proposed or pending against or with respect to any Transferred Subsidiary or
HEE in respect of any material Tax, and, to the Knowledge of ACI, no claim has
been made in any jurisdiction where any Transferred Subsidiary or HEE does not
file Returns that such Transferred


 


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Subsidiary or
HEE, as the case may be, is or may be subject to taxation by that jurisdiction;
(v) there are no Liens for Taxes (other than Liens for Taxes not yet due) upon
any of the assets of any Transferred Subsidiary or HEE; (vi) each Transferred
Subsidiary and HEE has withheld and paid all Taxes required to have been
withheld and paid in connection with any amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other third party; (vii) HEE
has been a partnership for U.S. federal income tax purposes at all times during
its existence; and (viii) the unpaid Taxes of the Transferred Subsidiaries and
HEE as of the Closing Date will not exceed the amount reserved for Taxes set
forth on the Brazil Balance Sheet, the Asia Balance Sheet and the Statement of
Net Liabilities (solely to the extent such amounts relate to reserves for taxes
of HEE), respectively, as adjusted for the passage of time through the Closing
Date in accordance with the past custom and practice of the Transferred
Subsidiaries and HEE in filing their Returns.


 


Section 8.03.  Tax Returns; Tax
Cooperation; Allocation of Taxes.  (a) 
Buyer shall prepare, or cause to be prepared, all Returns required to be
filed by any Transferred Subsidiary or HEE after the Closing Date with respect
to any Pre-Closing Tax Period.  Buyer
shall timely file, or cause to be timely filed, all such Returns.  Any such Return shall be prepared in a manner
consistent with past practice and without a change of any election or any
accounting method, except as otherwise required by law, and shall be submitted
by Buyer to ACI (together with schedules, statements and, to the extent reasonably
requested by ACI, supporting documentation) at least 20 days prior to the due
date (including extensions) of such Return. 
If ACI, within 10 Business Days after delivery of any such Return,
notifies Buyer in writing that it objects to any items in such Return, the
disputed items shall be resolved by mutual agreement between Buyer and ACI.


 


(b)           Buyer and each
Seller agrees to furnish or cause to be furnished to each other, upon request,
as promptly as practicable, such information and assistance relating to the
Business, Purchased Assets, the Interests, the AI Interests and the Assumed
Liabilities (including reasonable access to books and records) as is reasonably
necessary for the filing of all Tax returns, the making of any election
relating to Taxes, the preparation for any audit by any taxing authority, and
the prosecution or defense of any claim, suit or proceeding relating to any
Tax.  Buyer and each Seller agrees to
retain all books and records with respect to Taxes pertaining to the Business,
the Purchased Assets, the Interests, the AI Interests and the Assumed
Liabilities for a period of at least six years following the Closing Date.  On or after the end of such period, each
party shall provide the other with at least 10 days prior written notice before
destroying any such books and records, during which period the party receiving
such notice can elect to take possession, at its own expense, of such books and
records.  Buyer and each Seller agrees to
cooperate with each other in the conduct of any audit or other proceeding
relating to Taxes involving the Business, the Purchased Assets, the Interests,
the AI Interests or the Assumed Liabilities.


 


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(c)           All real property
taxes, personal property taxes and similar ad valorem obligations levied with respect
to the Purchased Assets for a taxable period which includes (but does not end
on) the Closing Date (collectively, the “Apportioned
Obligations”) shall be apportioned between ACI and Buyer based on the
number of days of such taxable period included in the Pre-Closing Tax Period
and the number of days of such taxable period after the Closing Date (any such
portion of such taxable period, the “Post-Closing
Tax Period”).  ACI shall be
liable for the proportionate amount of such taxes that is attributable to the
Pre-Closing Tax Period, and Buyer shall be liable for the proportionate amount
of such taxes that is attributable to the Post-Closing Tax Period.


 


(d)           All excise, sales,
use, value added, registration stamp, recording, documentary, conveyancing,
franchise, property, transfer, gains and similar Taxes, levies, charges and
fees (collectively, “Transfer Taxes”)
incurred in connection with the transactions contemplated by this Agreement and
the other Transaction Documents shall be borne by 50% by Buyer and 50% by
ACI.  Buyer and ACI shall cooperate in
providing each other with any appropriate resale exemption certifications and
other similar documentation.


 


(e)           Apportioned
Obligations and Transfer Taxes shall be timely paid, and all applicable
filings, reports and returns shall be filed, as provided by applicable
law.  The paying party shall be entitled
to reimbursement from the non-paying party in accordance with Section 8.03(c)
or (d), as the case may be.  Upon payment
of any such Apportioned Obligation or Transfer Tax, the paying party shall
present a statement to the non-paying party setting forth the amount of
reimbursement to which the paying party is entitled under Section 8.03(c) or
(d), as the case may be, together with such supporting evidence as is
reasonably necessary to calculate the amount to be reimbursed.  The non-paying party shall make such
reimbursement promptly but in no event later than 10 days after the
presentation of such statement.  Any
payment not made within such time shall bear interest from the due date for
such payment until, but excluding, the date of payment at a rate per annum
equal to the Prime Rate as published in the Wall Street Journal,
Eastern Edition in effect from time to time during the period from the due date
for such payment to the date of payment. 
Such interest shall be payable at the same time as the payment to which
it relates and shall be calculated daily on the basis of a year of 365 days and
the actual number of days elapsed, without compounding.


 


(f)            Buyer shall
promptly pay or cause to be paid to ACI all refunds of Taxes and interest
thereon received by any Transferred Subsidiary attributable to Taxes paid by
any Transferred Subsidiary with respect to any Pre-Closing Tax Period, except
to the extent such refund is attributable to the carryback of a Tax attribute
arising in a Post-Closing Tax Period. 
If, in lieu of receiving such refund, any Transferred Subsidiary elects
to reduce a Tax Liability relating to a taxable period (or portion thereof)
ending after the Closing Date, Buyer shall promptly pay or cause to be paid to
ACI the amount of such reduction in Tax Liability.


 


46





















 


Section 8.04.  338(g) Election.  Seller and Buyer agree that Buyer will make a
timely, effective and irrevocable election under Section 338(g) of the Code
with respect to Advanstar Brazil.


 


ARTICLE 9

EMPLOYEE MATTERS


 


Section 9.01.  Employees and Offers of Employment.  (a) Buyer shall offer employment to each
Asset Sale Business Employee, effective as of the Closing Date.  Each such offer of employment shall be
communicated to such Business Employees within 30 Business Days following the
date hereof or, if earlier, no later than the fifth Business Day prior to the
Closing; provided that, with respect to any Asset
Sale Business Employee who commences employment with an Asset Seller following
the date hereof, each such offer of employment shall be communicated to such
Asset Sale Business Employee promptly following Buyer’s receipt of notification
from ACI of such employee’s hiring.  No
such offer of employment shall require any Asset Sale Business Employee to
relocate to a job site more than 25 miles from such employee’s job site
immediately prior to the Closing Date. 
The Asset Sale Business Employees who commence employment with Buyer or
its Subsidiaries as of the Closing Date or as otherwise provided in the next
sentence and Business Employees of any Transferred Subsidiary as of the Closing
Date shall be referred to herein as the “Transferred Employees”.  Notwithstanding anything herein to the
contrary, in the case of Asset Sale Business Employees who, on the Closing
Date, are on a leave of absence approved by ACI, AI or one of its Subsidiaries pursuant
to an Employee Plan or International Plan (not including vacation time,
personal days or sick leave not yet covered by short-term disability), the
employment of such employees by Buyer shall be effective as soon as they return
from leave; provided that Buyer shall be obligated
to hire any such Asset Sale Business Employee only if such employee returns to
active service on the earlier of (x) the first day following expiration of such
employee’s approved leave of absence, subject to any permissible extension and
(y) 90 days following the Closing Date, except that Buyer shall be obligated to
hire all such Asset Sale Business Employees to the extent required by
applicable law.  No Seller will
discourage any Asset Sale Business Employee from accepting employment with
Buyer or make a competing offer of employment to any Asset Sale Business
Employee.


 


(b)           No later than five
Business Days prior to the Closing Date, the Sellers shall provide the Buyer a
list of all Business Employees who would have been Transferred Employees but
for the fact that they will be on leave of absence on the Closing Date, the
expected duration of the leave as of the date of that list (subject to any
permissible extensions) and the position held by such Business Employee as of
the date the leave began.  From time to
time prior to the Closing Date, to the extent not prohibited by law, the
Sellers shall use commercially reasonable efforts to promptly provide Buyer
information regarding Business


 


47





















 


Employees that
is required by Buyer to enable it to establish the Buyer Employee Plans.  As soon as practicable, but in no event later
than 30 days following the Closing Date, to the extent not prohibited by law,
each Seller shall provide to Buyer a copy of all records of the Transferred
Employees in its possession.


 


(c)           Commencing at 12:00
a.m. on the day immediately following the Closing Date, Transferred Employees
(other than those Asset Sale Business Employees who, on the Closing Date, are
on a leave of absence, which Asset Sale Business Employees shall cease to
participate in the Employee Plans on the date such Asset Sale Business Employee
becomes a Transferred Employee) shall cease to participate in the Employee
Plans and shall commence participation in employee benefit plans established or
to be established and maintained by the Buyer or its Affiliates on and after
the Closing Date on the terms and conditions set forth therein (a “Buyer Employee Plan”).


 


(d)           During the period
commencing on the day following the Closing Date and ending on December 31,
2005, Buyer shall provide or cause to be provided to each Transferred Employee
(i) total compensation (including base salary, bonus and incentive opportunity
and commission arrangement), equal to or greater than, in every respect, the
total compensation (including base salary, bonus and incentive opportunity and
commission arrangement) in effect for such employees immediately prior to
Closing and (ii) benefits (including health and welfare benefits, disability,
retirement, severance and vacation benefits) substantially equivalent in each
case to the benefits (including health and welfare benefits, disability,
retirement, severance and vacation benefits) provided such Transferred
Employees immediately prior to Closing.


 


Section 9.02.  ACI’s Employee Plans.  Unless otherwise provided in this Article 9,
all debts and obligations relating to all Asset Sale Business Employees related
to periods of employment on or prior to the Closing Date (or, with respect to
any Asset Sale Business Employees on leave of absence on the Closing Date,
periods of employment prior to the date such Asset Sale Business Employee
becomes a Transferred Employee) shall remain with and be paid by the ACI.


 


Section 9.03.  Buyer’s Employee Plans.  (a) All liabilities and obligations relating
to any Transferred Employee who accepts Buyer’s offer of employment pursuant to
Section 9.01(a) of this Agreement related to periods of employment on or after
the Closing Date (or, with respect to any Asset Sale Business Employees on
leave of absence on the Closing Date, periods of employment on or after the
date such Asset Sale Business Employee becomes a Transferred Employee) shall be
the exclusive responsibility of Buyer. 
All liabilities and obligations relating to any Transferred Employee
employed by a Transferred Subsidiary related to periods of employment before,
on or after the Closing Date shall be the exclusive responsibility of Buyer.


 


(b)           Following the
Closing Date, Buyer shall cause each Transferred Employee to receive service
credit for purposes of eligibility, vesting and benefits


 


48





















 


accrual for
all periods of employment with ACI and or any of its Affiliates or predecessors
thereto prior to the Closing Date under any employee benefit plan of Buyer or
its Affiliates in which such employee is eligible to participate after the
Closing Date, to the extent such credit was given under the corresponding
Employee Plan or International Plan.


 


(c)           Buyer shall use
commercially reasonable efforts to cause all pre-existing conditions that any
Transferred Employee or his or her covered dependents has as of the Closing
Date, and all proof of insurability provisions to which such employee or
dependent would be otherwise subject, to be waived or satisfied for all
conditions covered by any plan maintained by Buyer or its Affiliates in which
any such employee participates, in each case to the same extent waived or
satisfied under the corresponding Employee Plan or International Plan. 
Buyer shall use commercially reasonable efforts to cause all waiting periods
applicable to newly-hired employees under each plan maintained by Buyer or its
Affiliates to be waived with respect to Transferred Employees and their covered
dependents to the extent that any such waiting periods were waived or satisfied
under the corresponding Employee Plan or International Plan.


 


(d)           Buyer shall use
commercially reasonable efforts to cause any eligible expenses incurred by a
Transferred Employee and his or her covered dependents during the portion of
the plan year prior to the Closing Date to be accounted for in the
corresponding new or existing employee benefit plan of Buyer or its Affiliates
for purposes of satisfying all deductibles, coinsurance and maximum
out-of-pocket requirements applicable to such employee and/or his or her
covered dependents for the plan year in which the Closing Date occurs if such
amounts had been paid for the corresponding benefit in accordance with such new
or existing employee benefit plan.


 


(e)           Buyer shall credit
each Transferred Employee the amount of accrued and unpaid days of vacation
(the “Transferred Vacation”) applicable to
such Transferred Employee as of the close of business on the Closing Date, as
reflected for Transferred Employees in the Asset Sellers’ books and
records.  Buyer shall ensure that such
Transferred Vacation is not subject to forfeiture and that such Transferred
Vacation does not count toward any maximum accrual amount under any plan,
program or policy maintained by Buyer for the purpose of providing vacation; provided that to the extent permitted under applicable law,
Transferred Vacation may be forfeited after March 31, 2006 to the extent the
Transferred Employee failed to use any Transferred Vacation prior to such
time.  Buyer shall credit each
Transferred Employee’s length of service with ACI or any of its Affiliates
(including any length of service recognized by ACI or any of its Affiliates for
service performed for any business purchased by ACI or any of its Affiliates)
for purposes of determining such Transferred Employee’s rate of vacation
accrual, to the extent the rate of vacation accrual under Buyer’s vacation
policy is dependent upon length of service. 
ACI shall provide Buyer, no later than five Business Days prior to the
Closing, a list of the name and total service


 


49





















 


credit of each
Transferred Employees and each individual on leave of absence who would
otherwise be a Transferred Employee.


 


(f)            Buyer shall cause
to be provided to any Transferred Employee who is terminated other than for
cause prior to December 31, 2005 severance pay that is no less favorable than
the severance pay to which such Transferred Employee would have been entitled
under the severance plan set forth on Schedule 9.03(f) if such Transferred
Employee was terminated as of the Closing Date. 
Buyer shall cause each Transferred Employee terminated after December
31, 2005 to receive service credit for all periods of employment with ACI and
or any of its Affiliates or predecessors thereto prior to the Closing Date
under any severance plan, program or policy of Buyer, to the extent service
credit is relevant to any such plan, program or policy.  Buyer shall be responsible for any claim of
an Asset Sale Business Employee arising out of Buyer’s failure to make an offer
to such Asset Sale Business Employee in accordance with Section 9.01(a) hereof.


 


(g)           Subject to the last
sentence of Section 9.03(f), Seller shall be responsible for any and all
liability under the Worker Adjustment and Retraining Notification Act (“WARN”) or under any state, local or foreign law concerning
layoffs or the closing or relocation of worksites or the like which arises out
of or results from any termination of employment by any Seller or Transferred
Subsidiary on or before the Closing Date. 
Buyer shall be responsible for any and all liability under WARN or under
any such state, local or foreign law with respect to Transferred Employees which
arises out of or results from any termination of employment by Buyer after the
Closing Date.


 


(h)           Buyer shall cause
the tax-qualified contribution plan (the “Buyer 401(k) Plan”)
established or to be established or maintained by Buyer to accept, within a
reasonable period of time following the Closing Date, a direct plan-to-plan
transfer from Seller’s defined contribution plan (the “Seller
401(k) Plan”) with respect to the accounts under such plan
maintained for the benefit of the Transferred Employees; provided
that Buyer, in its reasonable discretion, is satisfied that the Seller 401(k)
Plan and its related trust are qualified under Sections 401(a) and 501(a) of
the Code and that the transfer would not adversely affect the tax-qualified
status of the Buyer 401(k) Plan or its related trust; and, provided
further, that Seller agrees to cooperate with Buyer to implement the
transfer including, without limitation, by making any amendments required under
the Seller 401(k) Plan to implement the transfer and by making reasonable
representations requested by Buyer with respect to (i) the qualified status of
the Seller 401(k) Plan and its related trust at the time of such transfer and
(ii) whether the transfer will adversely affect the qualified status of the Seller
401(k) Plan or its related trust.  Seller
hereby agrees that until the date of such plan-to-plan transfer, Transferred
Employees may continue to make payments on outstanding loans to the Seller
401(k) Plan.


 


(i)            Effective on the
Closing Date, Buyer will establish a fringe benefit plan pursuant to Section
125 of the Code (the “Buyer 125 Plan”),
which will


 


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provide for
dependent care, medical reimbursement and premium conversion benefits at the
same level as the Sellers’ corresponding fringe benefit plan (the “Seller 125 Plan”), such plan to be maintained through
December 31, 2005.  That portion of the
Seller 125 Plan relating to the Transferred Employees will be spun off and
merged into the Buyer 125 Plan, and, in connection therewith, Sellers will
transfer, or cause to be transferred, all account related information
reasonably necessary to effect such spin off-merger, including without
limitation participant name, identifying numbers, available account balances on
the Closing Date.  On and after the
Closing Date, Transferred Employees will cease to participate in the Seller 125
Plan and will commence participation in the Buyer 125 Plan.  On the Closing Date, Sellers shall pay to
Buyer the net aggregate amount of the account balances attributable to
Transferred Employees under Buyer 125 Plan, if such amount is positive, and
Buyer shall pay to Sellers the net aggregate amount of the account balances
attributable to Transferred Employees under Buyer 125 Plan, if such amount is
negative.


 


Section 9.04.  Commissions.  ACI and Buyer
acknowledge and agree that ACI shall be responsible for the direct payment of
all sales commissions payable to Business Employees in respect of Publications
that are Pre-Closing Attributable and Buyer shall be responsible for the direct
payment of all sales commissions payable to Business Employees in respect of
Publications that are Post-Closing Attributable.


 


Section 9.05.  COBRA and HIPAA.  Buyer shall provide continued health and medical
coverage to the extent required under Section 4980B of the Code, Part 6 of
Title I of ERISA or any other applicable Law (“COBRA
Coverage”) to all Transferred Employees with respect to all “qualifying
events” (as such term is defined under Sections 4980B(f)(3) of the Code or 603
of ERISA) or other triggering events described under the applicable law that
occur after the Closing Date; provided that
Buyer shall provide COBRA Coverage to any spouse, dependent or beneficiary of
any Transferred Employee with respect to all “qualifying events” (as defined
above) whether they occur or occurred before, on or after the Closing
Date.  Effective as of the day after the
Closing, Buyer shall assume all obligations, liabilities and commitments of ACI
and its Affiliates after the Closing Date to Transferred Employees and their
eligible dependents under the Health Insurance Portability and Accountability
Act of 1996 and applicable state or similar laws.


 


Section 9.06.  At-Will Employment.  No provision of this
Agreement shall be construed to create an express or implied contract of
employment between Buyer and any Transferred Employee for a definite term or to
limit in any way the right of the Buyer to terminate the employment of any
Transferred Employee with or without notice or cause or to limit in any way the
right of the Buyer to alter any of the terms and conditions of the employment
of any Transferred Employee, other than as expressly provided in this Article
9.


 


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Section 9.07.  No Third Party Beneficiaries.  No provision of this Article 9 shall create
any third party beneficiary or other rights in any employee or former employee
(including any beneficiary or dependent thereof) of ACI or any of its
Affiliates, including any rights in any such Persons in respect of any benefits
that may be provided, directly or indirectly, under any Employee Plan or any
plan or arrangement which may be established by Buyer or any of its Affiliates.


 


ARTICLE 10

CONDITIONS TO CLOSING


 


Section 10.01.  Conditions to Obligations of Buyer and Sellers.  The obligations of Buyer and each Seller to
consummate the Closing are subject to the satisfaction of the following
conditions:


 


(a)           Any applicable
waiting period under the HSR Act relating to the transactions contemplated
hereby shall have expired or been terminated.


 


(b)           No provision of any
applicable law or regulation and no judgment, injunction, order or decree shall
prohibit the consummation of the Closing.


 


Section 10.02.  Conditions to Obligation of Buyer.  The obligation of Buyer to consummate the
Closing is subject to the satisfaction of the following further conditions:


 


(a)           (i) Each Seller
shall have performed in all material respects all of its obligations hereunder
required to be performed by it on or prior to the Closing Date, (ii) the
representations and warranties of ACI contained in this Agreement or in any
certificate or other writing delivered by ACI pursuant hereto shall be true at
and as of the Closing Date (disregarding all qualifications as to materiality
contained therein), as if made at and as of such date, with only such
exceptions as would not in the aggregate have a Material Adverse Effect and
(iii) Buyer shall have received a certificate signed by the Chief Executive Officer,
Executive Vice President-Corporate Development or Vice President & General
Counsel of ACI to the foregoing effect.


 


(b)           All of the
conditions to consummation of the debt financing set forth in the Debt
Commitment Letter shall have been satisfied or waived and the funds under the
Debt Commitment Letter shall have been received by Buyer, or shall be fully
available to Buyer to the extent contemplated by the Debt Commitment Letter, on
substantially the terms and conditions set forth in the Debt Commitment Letter
(after giving effect to any changes made or requested pursuant to the “market
flex” terms contained in the Fee Letter); provided that
Buyer shall not be entitled to assert the failure of the condition set forth in
this 10.02(b) as a basis for not consummating the transactions contemplated
hereby if the failure of such condition to be satisfied has resulted from any
failure by Buyer to comply, or any failure by Audax Management Company, LLC or
Audax to


 


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cause Buyer to
comply, with Section 6.04 or the failure by Audax to provide the Equity
Investment pursuant to the terms of the Equity Commitment Letter.


 


(c)           Each Seller shall
have executed and delivered to Buyer each Transaction Document to which it is a
party.


 


(d)           The excess of the
revenues over direct operating expenses (excluding allocated expenses) of the
Business for the year ended December 31, 2004, as reflected on the final
audited Statement of Revenue and Direct Operating Expenses of the Business for
such year, delivered to Buyer pursuant to Section 5.10, calculated in
accordance with the draft audited Statement of Revenue and Direct Operating
Expenses set forth on Schedule 3.08(a), shall not be materially less than the
excess of the revenues over direct operating expenses (excluding allocated
expenses) of the Business reflected on the draft audited Statement of Revenue
and Direct Operating Expenses set forth on Schedule 3.08(a).


 


(e)           Buyer shall have
received all documents it may reasonably request relating to the existence of
each Seller and the authority of each Seller for this Agreement, all in form
and substance reasonably satisfactory to Buyer.


 


(f)            Sellers shall have
delivered to Buyer any necessary Tax clearance or other certificates required
by law or necessary to avoid withholding amounts from the Purchase Price.


 


(g)           Sellers shall have
delivered to Buyer the resignation of each of the directors and officers of
Advanstar Asia and Advanstar Brazil, other than the individuals who are Transferred
Employees.


 


(h)           Buyer shall have
received the Amendment to the Articles of Association of Advanstar Brazil for
the assignment and transfer of quotas from ACI and AI to Buyer and Buyer’s
Subsidiary.


 


Section 10.03.  Conditions to Obligation of the Sellers.  The obligation of each Seller to consummate
the Closing is subject to the satisfaction of the following further conditions:


 


(a)           (i) Buyer shall have
performed in all material respects all of its obligations hereunder required to
be performed by it at or prior to the Closing Date, (ii) the representations
and warranties of Buyer contained in this Agreement or in any certificate or
other writing delivered by Buyer pursuant hereto shall be true in all material
respects at and as of the Closing Date, as if made at and as of such date and
(iii) ACI shall have received a certificate signed by the Chief Executive
Officer or President of Buyer to the foregoing effect.


 


(b)           Buyer shall have
executed and delivered to ACI each of the Transaction Documents to which Buyer
is a party.


 


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(c)           ACI shall have
received all documents it may reasonably request relating to the existence of
Buyer and the authority of Buyer for this Agreement, all in form and substance
reasonably satisfactory to ACI.


 


ARTICLE 11

SURVIVAL; INDEMNIFICATION


 


Section
11.01.  Survival.  Except for the representations and warranties
of ACI contained in Article 3 made with respect to the Transferred
Subsidiaries, which shall survive the Closing until the second anniversary of
the Closing Date, the representations and warranties of the parties hereto
contained in this Agreement shall survive the Closing until the first anniversary of the Closing Date; provided that Sections 3.01, 3.02, 3.04(i), 3.06, 3.07,
3.12(a), 3.12(b) and 3.21 shall survive indefinitely and Section 3.17 and 8.02
shall survive until the thirtieth day after the expiration of the applicable
statute of limitations (taking into account any tolling periods and other
extensions).  The covenants set forth in
this Agreement shall survive the Closing indefinitely or for the shorter period
explicitly specified therein, and any breaches thereof shall survive
indefinitely.  Notwithstanding the
preceding sentence, any breach of representation, warranty, covenant or
agreement in respect of which indemnity may be sought under this Agreement
shall survive the time at which it would otherwise terminate pursuant to the
preceding sentence, if notice of the breach giving rise to such right of indemnity
shall have been given to the party against whom such indemnity may be sought
prior to such time.


 


Section
11.02.  Indemnification.  (a) ACI hereby indemnifies Buyer and its
Affiliates against and agrees to hold each of them harmless from any and all
liability, damage, loss and expense (including reasonable expenses of
investigation and reasonable attorneys’ fees and expenses in connection with
any action, suit or proceeding whether involving a third party claim or a claim
solely between the parties hereto) (“Damages”)
actually incurred or suffered by Buyer or any of its Affiliates arising out of:


 


(i)            any breach of, or inaccuracy in, any
representation or warranty (each such breach of, or inaccuracy in, any
representation or warranty a “Warranty Breach”)
made by any of the Sellers in this Agreement or in any Schedules or
certificates delivered pursuant hereto (determined as if all qualifications as
to materiality, including each reference to the defined term “Material Adverse
Effect,” were deleted from the applicable representation or warranty);


 


(ii)           any breach or violation of any
covenant or agreement of any of the Sellers made or to be performed pursuant to
this Agreement;


 


(iii)          any Excluded Liability;


 


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(iv)          any Liability of any Transferred
Subsidiary resulting from, arising out of or related to any of the matters
required to be set forth on Schedule 3.11 or any other Liability of any
Transferred Subsidiary arising as a result of any legal or equitable action or
judicial or administrative proceeding initiated at any time in respect of any
action by or inaction of any Seller or Transferred Subsidiary or any of their
respective directors, officers, employees or agents on or prior to the Closing
Date.


 


provided that with respect to indemnification
by ACI for Warranty Breaches pursuant to Section 11.02(a)(i), (A) the amount of
Damages incurred or suffered arising out of any Warranty Breach shall be
determined as if all qualifications as to materiality, including each reference
to the defined term “Material Adverse Effect,” were deleted from the applicable
representation or warranty; (B) no individual Warranty Breach shall be deemed
to have occurred unless the amount of Damages with respect thereto exceeds $25,000;
(C) ACI shall not be liable unless the aggregate amount of Damages with respect
to all such Warranty Breaches exceeds $925,000, and then only to the extent of
the excess over $925,000 and (D) ACI’s maximum liability for all such Warranty
Breaches shall not exceed $18,500,000; and provided further that
the limitations set forth in clauses (C) and (D) shall not apply to Warranty
Breaches in respect of Sections 3.01, 3.02, 3.04(i), 3.06, 3.07, 3.12(a),
3.12(b), 3.17, 3.21 or 8.02.


 


(b)           Buyer hereby indemnifies
ACI and its Affiliates against and agrees to hold each of them harmless from
any and all Damages actually incurred or suffered by ACI or any of its
Affiliates arising out of:


 


(i)            any Warranty Breach or breach of
covenant or agreement made or to be performed by Buyer pursuant to this
Agreement; or


 


(ii)           any Assumed Liability.


 


Section
11.03.  Procedures.  (a) The party seeking indemnification under
Section 11.02 (the “Indemnified Party”)
agrees to give prompt notice to the party against whom indemnity is sought (the
“Indemnifying Party”) of the
assertion of any claim, or the commencement of any suit, action or proceeding
in respect of which indemnity may be sought under such Section and will provide
the Indemnifying Party such information with respect thereto that the
Indemnifying may reasonably request.  The
failure to so notify the Indemnifying Party shall not relieve the Indemnifying
Party of its obligations hereunder, except to the extent such failure shall have
adversely prejudiced the Indemnifying Party.


 


(b)           The Indemnifying
Party shall be entitled to participate in the defense of any Claim asserted by
any third party (“Third Party Claim”).  In addition, the Indemnifying Party will have
the right to defend, at its own expense, the Indemnified Party against the
Third Party Claim with counsel of its choice so long as (i) the Indemnifying
Party provides the Indemnified Party with evidence reasonably acceptable to the
Indemnified Party that the Indemnifying Party will


 


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have adequate
financial resources to defend against the Third Party Claim and fulfill its
indemnification obligations hereunder, (ii) the Third Party Claim involves only
money damages and does not seek an injunction or other equitable relief against
the Indemnified Party, and (iii) the Indemnifying Party conducts the defense of
the Third Party Claim actively and diligently.


 


(c)           If the Indemnifying
Party shall assume the control of the defense of any Third Party Claim in
accordance with the provisions of this Section 11.03, (i) the Indemnifying
Party shall obtain the prior written consent of the Indemnified Party (which
shall not be unreasonably withheld, conditioned or delayed) before entering
into any settlement of such Third Party Claim if the settlement does not
release the Indemnified Party from all liabilities and obligations with respect
to such Third Party Claim or the settlement imposes injunctive or other
equitable relief against the Indemnified Party and (ii) the Indemnified Party
shall be entitled to participate in the defense of such Third Party Claim and
to employ separate counsel of its choice for such purpose.  The fees and expenses of such separate
counsel shall be paid by the Indemnified Party.


 


(d)           Each party shall
cooperate, and cause their respective Affiliates to cooperate, in the defense
or prosecution of any Third Party Claim and shall promptly furnish or cause to
be furnished such records, information and testimony, and attend such
conferences, discovery proceedings, hearings, trials or appeals, as may be
reasonably requested in connection therewith.


 


Section 11.04.  Supplemental Schedules.  From time to time,
but no later than ten days prior to the Closing Date, Sellers may disclose any
matters arising or occurring after the date hereof that, if they had arisen or
occurred on or prior to the date hereof, would have been required to be
disclosed on the Schedules.  Buyer shall
have the right to review such disclosure for a period of five days after
receipt thereof.  At any time within such
five day time period, Buyer shall have the right to terminate this Agreement by
delivery of a notice to Seller if, in the absence of an amendment to the
Schedules to incorporate such disclosure and taking into account the effect of
any items previously disclosed by Sellers pursuant to this Section 11.04, the
condition to Buyer’s obligation set forth in Section 10.02(a) would not be able
to be satisfied.  This notice, if given,
shall specify the information forming the basis for the decision to
terminate.  Sellers shall have five days
after receipt of such notice to review with Buyer the information forming the
basis of the decision to terminate and to attempt to agree on corrective
measures, if any.  If the parties cannot
agree on corrective measures within such five day period, then this Agreement
shall terminate.  If this Agreement is
not terminated as permitted by this Section, the Schedules shall be deemed to
have been amended by such disclosures as of the end of the time immediately prior
to the Closing, and Sellers shall have no liability hereunder for any such
disclosures.


 


Section 11.05.  Calculation of Damages.  (a) The amount of any Damages payable under
Section 11.02 by the Indemnifying Party shall be net of any


 


56





















 


amounts recovered or recoverable by the Indemnified Party under
applicable insurance policies, or from any other Person alleged to be
responsible therefor, and the Indemnified Party shall use commercially
reasonable efforts to recover such amounts. 
If the Indemnified Party receives any amounts under applicable insurance
policies, or from any other Person alleged to be responsible for any Damages,
subsequent to an indemnification payment by the Indemnifying Party, then such
Indemnified Party shall promptly reimburse the Indemnifying Party for any
payment made or expense incurred by such Indemnifying Party in connection with
providing such indemnification payment up to the amount received by the
Indemnified Party, net of any expenses incurred by such Indemnified Party in
collecting such amount (including any increased premiums under any such
insurance policies).  For purposes of
calculating the unpaid Taxes of the Transferred Subsidiaries and HEE as of the
Closing Date for which ACI is responsible pursuant to Section 8.02(d)(viii), in
the case of any Taxes that are payable for a taxable period that includes (but
does not end on) the Closing Date, the portion of such Tax related to the
portion of such taxable period ending on the Closing Date shall, in the case of
any Tax based upon or related to income, be deemed equal to the amount which
would be payable if the relevant taxable period ended on the Closing Date.


 


(b)           The Indemnifying
Party shall not be liable under Section 11.02 for any punitive or speculative
Damages.


 


Section 11.06.  Assignment of Claims.  If the Indemnified Party receives any payment
from an Indemnifying Party in respect of any Damages pursuant to Section 11.02
and the Indemnified Party could have recovered all or a part of such Damages
from a third party (a “Potential Contributor”)
based on the underlying Claim asserted against the Indemnifying Party, the
Indemnified Party shall assign such of its rights to proceed against the
Potential Contributor as are necessary to permit the Indemnifying Party to
recover from the Potential Contributor the amount of such payment.


 


Section
11.07.  Exclusivity.  Except with respect to claims based upon
fraud or intentional misrepresentation, the indemnification rights provided in
this Article 11 shall be the sole and exclusive remedy of the parties following
the Closing (a) for any and all breaches or alleged breaches of any
representations, warranties, covenants or agreements of the parties in this
Agreement or in any Schedules or certificates delivered pursuant hereto, or (b)
otherwise in connection with the transactions contemplated hereby.  This Section 11.07 shall not limit any
rights, obligations or remedies available to any party under the Transition
Services Agreement or the Web Services Agreement, all of which are expressly
preserved.


 


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ARTICLE 12

TERMINATION


 


Section 12.01.  Grounds for Termination.  This Agreement may be terminated
at any time prior to the Closing:


 


(a)           by mutual written
agreement of ACI and Buyer (the “Final Termination Date”);


 


(b)           by either ACI or
Buyer if the Closing shall not have been consummated on or before June 30,
2005;


 


(c)           by Buyer pursuant to
Section 11.04;


 


(d)           by Buyer if either
(i) there has been a breach of, or inaccuracy in, any representation or
warranty of any Seller contained in this Agreement or (ii) any Seller has
breached or violated any covenant contained in this Agreement, in each case
which breach, inaccuracy or violation (x) would result in, or would reasonably
be expected to result in, the failure to satisfy a condition set forth in
Sections 10.01 or 10.02 and (y) cannot be or has not been cured on or before
the earlier of five Business Days before the Final Termination Date or ten
Business Days after the Buyer notifies ACI of such breach, inaccuracy or
violation;


 


(e)           by ACI if either (i)
there has been a breach of, or inaccuracy in, any representation or warranty of
Buyer contained in this Agreement or (ii) Buyer has breached or violated any
covenant contained in this Agreement, in each case which breach, inaccuracy or
violation (x) would result in, or would reasonably be expected to result in,
the failure to satisfy a condition set forth in Sections 10.01 or 10.03 and (y)
cannot be or has not been cured on or before the earlier of five Business Days
before the Final Termination Date or ten Business Days after a Seller notifies
Buyer of such breach or violation; or


 


(f)            by either ACI or
Buyer if consummation of the transactions contemplated hereby would violate any
nonappealable final order, decree or judgment of any court or governmental body
having competent jurisdiction.


 


The party
desiring to terminate this Agreement pursuant to Sections 12.01(b), 12.01(c),
12.01(d), 12.01(e) or 12.01(f) shall give notice of such termination to the
other party.


 


Section 12.02.  Effect of
Termination.  In the event of
the termination of this Agreement pursuant to Section 12.01, this Agreement,
other than the provisions of Sections 5.06 (Confidentiality of Sellers), 6.01
(Confidentiality of Buyer), 7.05 (Public Announcements) and Article 13
(Miscellaneous), will then be null and void and have no further force and
effect and all other rights and Liabilities of the parties hereunder will terminate
without any Liability of any party to any other party (or any Representative of
such party), except for


 


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Liabilities arising in respect of willful breaches of any
representation, warranty, covenant or agreement under this Agreement by any
party on or prior to the date of termination.


 


ARTICLE 13

MISCELLANEOUS


 


Section 13.01.  Notices.  All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
transmission) and shall be given,


 


if to any
Seller, to:


 


Advanstar Communications Inc.


6200 Canoga Avenue, 2nd Floor


Woodland Hills, CA 91367 USA


Attention:  Joseph Loggia, Chief
Executive Officer


Facsimile No.: (818) 593-5020


 


with a copy to:


 


Advanstar Communications Inc.


Damonmill Square – Suite 6A


Concord, MA 01742


Attention: Eric I. Lisman, EVP – Corporate Development and

Ward Hewins, Vice President and General Counsel


Facsimile No.: (978) 341-0451


 


and


 


Davis Polk & Wardwell


450 Lexington Avenue


New York, New York 10017


Attention: Nancy L. Sanborn


Facsimile No.: (212) 450-3800


 


If to Buyer, to:


 


Questex Media Group, Inc.


c/o Audax Management Company, LLC


101 Huntington Avenue


Boston, MA 02199


Attention: Keith Palumbo


Donald G. Bramley


Young J. Lee


Facsimile No.: (617) 859-1600


 


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with a copy to:


 


Ropes & Gray


One International Place


Boston, MA 02110


Attention:  Paul Van Houten


Facsimile No.: (617) 951-7050


 


or such other
address or facsimile number as such party may hereafter specify for the purpose
by notice to the other parties hereto. 
All such notices, requests and other communications shall be deemed
received on the date of receipt by the recipient thereof if received prior to
5:00 p.m. in the place of receipt and such day is a Business Day in the place
of receipt.  Otherwise, any such notice,
request or communication shall be deemed not to have been received until the
next succeeding Business Day in the place of receipt.


 


Section 13.02.  Amendments and Waivers.  (a) Any provision of this Agreement may be
amended or waived if, but only if, such amendment or waiver is in writing and
is signed, in the case of an amendment, by each party to this Agreement, or in
the case of a waiver, by the party against whom the waiver is to be effective.


 


(b)           No failure or delay
by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.  The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.


 


Section 13.03.  Expenses.  Except as otherwise provided herein, all
costs and expenses incurred in connection with this Agreement and the other
Transaction Documents shall be paid by the party incurring such cost or
expense.  Notwithstanding the foregoing,
if the transactions contemplated by this Agreement are consummated, Buyer shall
promptly reimburse and be responsible for all expenses and charges of
PricewaterhouseCoopers incurred in connection with its review and audit of the
Statement of Net Liabilities and the Statement of Revenue and Direct Operating
Expenses as set forth in the engagement letter dated February 21, 2005 between
Pricewaterhouse Coopers LLP and Advanstar, Inc.


 


Section 13.04.  Successors and Assigns.  The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. No party may assign, delegate or otherwise transfer any
of its rights or obligations under this Agreement without the consent of each
other party hereto; provided that
Buyer may assign its rights under this Agreement as collateral security for the
debt financing described in the Financing


 


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Commitments and provided further that
no such assignment shall relieve Buyer of any of its obligations hereunder.


 


Section 13.05.  Governing
Law. 
This Agreement shall be governed by and construed in accordance with the
law of the State of New York, without regard to the conflicts of law rules of
such state.


 


Section 13.06.  Jurisdiction.  The parties hereto agree that any suit,
action or proceeding seeking to enforce any provision of, or based on any
matter arising out of or in connection with, this Agreement or the transactions
contemplated hereby shall be brought in the United States District Court for
the Southern District of New York or any New York State court sitting in New
York City, so long as one of such courts shall have subject matter jurisdiction
over such suit, action or proceeding, and that any cause of action arising out
of this Agreement shall be deemed to have arisen from a transaction of business
in the State of New York, and each of the parties hereby irrevocably consents
to the jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to the
fullest extent permitted by law, any objection that it may now or hereafter
have to the laying of the venue of any such suit, action or proceeding in any
such court or that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum.  Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court. 
Without limiting the foregoing, each party agrees that service of process
on such party as provided in Section 13.01 shall be deemed effective service of
process on such party.


 


Section 13.07.  WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT
OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.


 


Section 13.08.  Counterparts; Effectiveness; Third Party
Beneficiaries.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.  This Agreement shall become effective when
each party hereto shall have received a counterpart hereof signed by the other party
hereto.  Until and unless each party has
received a counterpart hereof signed by the other party hereto, this Agreement
shall have no effect and no party shall have any right or obligation hereunder
(whether by virtue of any other oral or written agreement or other
communication).  No provision of this
Agreement is intended to confer any rights, benefits, remedies or Liabilities
hereunder upon any Person other than the parties hereto and their respective
successors and assigns.


 


Section 13.09.  Entire
Agreement. 
The Transaction Documents and the Confidentiality Agreement constitute
the entire agreement between the parties


 


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with respect to the subject matter of this Agreement and supersedes all
prior agreements and understandings, both oral and written, between the parties
with respect to the subject matter of this Agreement.


 


Section 13.10.  Bulk Sales
Laws. 
Buyer, each Seller hereby waive compliance by each Seller with the
provisions of the “bulk sales,” “bulk transfer” or similar laws of any state.


 


Section 13.11.  Severability.  If any term,
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party.  Upon such a
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent
possible.


 


Section 13.12.  Disclosure Schedules.  The parties acknowledge and agree that each party has or may have set forth
information in the Schedules in a section thereof that corresponds to the
section of this Agreement to which it relates. 
A matter set forth in one section of the Schedules need not be set forth
in any other section of the Schedule so long as its relevance to such other
section of the Schedule or section of the Agreement is reasonably apparent on
the face of the information disclosed therein to the Person to which such
disclosure is being made.  The
parties acknowledge and agree that (i) the Schedules to this Agreement may
include certain items and information solely for informational purposes for the
convenience of Buyer or any Seller and (ii) the disclosure by Buyer or any
Seller of any matter in the Schedules shall not be deemed to constitute an
acknowledgment by Buyer or any Seller that the matter is required to be
disclosed by the terms of this Agreement or that the matter is material.


 


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IN WITNESS
WHEREOF, the undersigned have caused this Agreement to be duly executed by
their respective authorized officers as of the day and year first above
written.


 


 


	
   

  	
  ADVANSTAR COMMUNICATIONS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOE LOGGIA

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ADVANSTAR, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOE LOGGIA

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ADVANSTAR EXPOSITIONS CANADA

  LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOE LOGGIA

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ADVANSTAR.COM, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOE LOGGIA

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  QUESTEX MEDIA GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ YOUNG LEE

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Young Lee

  
	
   

  	
   

  	
  Title: 

  	
  Its Duly Authorized Signatory