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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of March 7, 2001 (the "Effective Date"), by and between TransWestern
Publishing Company, LLC, a Delaware limited liability company ("TransWestern"),
and Alliance Media Group, Inc., a Texas corporation ("Seller"), as debtor and
debtor in possession, with reference to the following facts (TransWestern and
Seller sometimes are referred to herein individually as a "Party" and
collectively as the "Parties." Capitalized terms not otherwise defined have the
meanings set forth below in Article 1:
W I T N E S S E T H:
WHEREAS, each of Seller and TransWestern are in the business of
printing, publishing and distributing telephone directory "yellow pages," and
subject to the terms and conditions set forth herein, TransWestern desires to
acquire from Seller and Seller desires to sell to TransWestern its business and
assets of or relating to each of the following directories relating to certain
geographical markets located in Texas and Kentucky (exclusive of real property,
plant and equipment, machinery, furniture, fixtures and other fixed assets of
Seller, and exclusive of Seller's sales office leases (other than the Lexington
Lease), utilities and similar lease agreements pertaining to Seller's current
publishing operations): Lexington Directory, Gateway Directory, San Antonio
Directory, South Texas Directory, Southwest Texas Directory, Austin Directory,
▇▇▇▇▇▇▇▇▇▇ County Directory and Hill Country Directory (each as defined below
and sometimes referred to herein collectively as the "Directories"; each, a
"Directory").
WHEREAS, it is agreed that on or about the date hereof (the "Filing
Date"), Seller will file a voluntary petition for relief under Chapter 11 of
Title 11 of the United States Bankruptcy Code (the "Bankruptcy Code") in the
United States Bankruptcy Court for the Western District of Texas, San Antonio
Division (the "Bankruptcy Court") (the "Bankruptcy Case" or "Chapter 11 Case",
as appropriate); and
WHEREAS, subject to approval of the Bankruptcy Court, Seller desires to
sell, transfer and assign to TransWestern, and TransWestern desires to purchase
and acquire from Seller substantially all of Seller's assets (other than the
Excluded Assets) free and clear of all liens, claims, encumbrances, liabilities
and other obligations and interests, all as more specifically set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties hereby agree as follows:
ARTICLE 1 - DEFINITIONS
Unless otherwise defined herein, the terms defined in this Article 1
shall have the meanings herein specified for all purposes of this Agreement,
applicable to both the singular and plural forms of any of the terms herein
defined.
"Accounts Receivable Measurement Date" shall have the meaning assigned
to such term in Section 4.4(b).
"Ad Ideas" means ▇▇▇▇▇ & Debbie's Ideas, Incorporated, a Louisiana
corporation.
"Ad Ideas Payment" shall have the meaning assigned to such term in
Section 2.2(a)(iii).
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"Advance Payments" means customer payments received by either Seller (or
TransWestern, as the case may be) with respect to any Customer Contract(s)
associated with any Future Editions, in the amount(s) set forth on the attached
Closing Schedule.
"Advertisement Material" shall have the meaning assigned to such term in
Section 4.2(a)(i).
"Affiliate" of any Person means any other Person controlling, controlled
by or under common control with such first Person.
"Alternative Proposal" shall have the meaning assigned to such term in
Section 4.1(c).
"Approval Motion" shall have the meaning assigned to such term in
Section 4.1(a)(i).
"Approval Order" shall have the meaning assigned to such term in Section
4.1(a)(i).
"Assigned Contracts" shall have the meaning assigned to such term in
Section 2.1(a)(iv).
"Assignment Order" shall have the meaning assigned to such term in
Section 4.1(a)(iii).
"Assignment Order Ruling" shall have the meaning assigned to such term
in Section 2.3(c)(iv).
"Assumed Liabilities" shall have the meaning assigned to such term in
Section 2.1(b).
"Austin Directory" means the telephone directory owned by Seller as of
the date hereof which covers distribution of those areas of Texas which fall
within the zip codes set forth on the attached Directory Zip Code Schedule.
"Bankruptcy Case" shall have the meaning set forth in the recitals
hereto.
"Bankruptcy Code" shall have the meaning set forth in the recitals
hereto.
"Bankruptcy Court" shall have the meaning set forth in the recitals
hereto.
"Business" means the business of printing, publishing, marketing and
distributing telephone directory "yellow pages" (including, without limitation,
the Directory yellow pages) as conducted by Seller prior to and as of the date
hereof.
"Chapter 11 Case" shall have the meaning set forth in the recitals
hereto.
"Closing" shall have the meaning assigned to such term in Section
2.1(a).
"Closing Date" shall have the meaning assigned to such term in Section
2.3(a).
"Closing Payment" shall have the meaning assigned to such term in
Section 2.2(a)(iii).
"Closing Schedule" means the closing schedule statement of Advance
Payments and Pre-Paid Direct Costs attached hereto and delivered by Seller to
TransWestern on or prior to the Closing Date.
"Code" means the Internal Revenue Code of 1986, as amended, and all
rules and regulations promulgated thereunder.
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"Completed Directories" means, collectively, the following Directories
(substantially completed but requiring additional listings and production prior
to publication for Future Editions of such Directories) to be purchased by
TransWestern, and which TransWestern intends to complete publication and
distribution of after the Closing Date: Lexington Directory, San Antonio
Directory and South Texas Directory.
"Confidential Information" means any information that is not generally
known to the public and that is or has been used, developed or obtained by
Seller or TransWestern (as applicable) and their respective Affiliates in
connection with the Directories including but not limited to (i) products or
services, (ii) fees, costs and pricing structures, (iii) designs, (iv) analysis,
(v) drawings, photographs and reports, (vi) computer software, including
electronic mail, operating systems, applications and program listings, (vii)
flow charts, transaction summaries and models, manuals and documentation, (viii)
data bases, (ix) financial reports, investment summaries, and accounting and
business methods, (x) inventions, devices, new developments, methods and
processes, whether patentable or unpatentable and whether or not reduced to
practice, (xi) customers and clients and customer, contact or client lists,
(xii) copyrightable works, (xiii) Records and (xiv) all similar and related
information in whatever form, except that "Confidential Information" shall not
include any information that is or becomes generally available to the public,
other than as a result of a disclosure by the Parties or their respective
representatives.
"Cure Period" shall have the meaning assigned to such term in Section
4.2(a)(iii).
"Customer Contract" means any written contract or agreement (other than
trade contracts) between Seller and any of its customers (or under which Seller
has rights) which has been entered into and signed by the parties thereto in
connection with the publication of the Directories and corresponding provision
of Directory Services.
"Direct Costs" means, with respect to any Future Editions, all direct
sales costs (including, without limitation, sales representatives' salaries,
expenses and sales commissions), but only to the extent allocable to or
associated with such Future Editions.
"Directory(ies)" shall have the meaning set forth in the preamble.
"Directory Services" means the printing and publishing of advertisements
in the Directory.
"Employee Benefit Plan" means any (a) nonqualified deferred compensation
or retirement plan or arrangement, (b) qualified defined contribution retirement
plan or arrangement which is an Employee Pension Benefit Plan, (c) qualified
defined benefit retirement plan or arrangement which is an Employee Pension
Benefit Plan (including any Multiemployer Plan), or (d) Employee Welfare Benefit
Plan or material fringe benefit or other retirement, bonus, or incentive plan or
program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA
Section 3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA
Section 3(1).
"Environmental, Health, and Safety Requirements" shall mean all federal,
state, local and foreign statutes, regulations, ordinances and similar
provisions having the force or effect of law, all judicial and administrative
orders and determinations, and all common law concerning public health and
safety, worker health and safety, and pollution or protection of the
environment, including without
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limitation all those relating to the presence, use, production, generation,
handling, transportation, treatment, storage, disposal, distribution, labeling,
testing, processing, discharge, release, threatened release, control, or cleanup
of any hazardous materials, substances or wastes, chemical substances or
mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum
products or byproducts, asbestos, polychlorinated biphenyls, noise or radiation.
"EPS Files" shall have the meaning assigned to such term in Section
5.1(a)(xv)(C).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means each entity which is treated as a single
employer with Seller for purposes of Code Section 414.
"Excluded Assets" shall have the meaning assigned to such term in
Section 2.1(a).
"Excluded Liabilities" shall have the meaning assigned to such term in
Section 2.1(c).
"Exclusivity Provision" shall have the meaning assigned to such term in
Section 4.1(c).
"Fiduciary" has the meaning set forth in ERISA Section 3(21).
"Filing Date" shall have the meaning set forth in the recitals hereto.
"Financial Statements" shall have the meaning assigned to such term in
Section 3.1(h).
"Future Edition Advertisements" shall have the meaning assigned to such
term in Section 5.1(a)(xv)(B).
"Future Edition Customer Contract" means any Customer Contract
associated with any Future Edition.
"Future Edition(s)" means any and all editions of any of the Directories
published after the Closing Date.
"GAAP" means United States generally accepted accounting principles,
consistently applied.
"Gateway Directory" means the telephone directory owned by Seller as of
the date hereof which covers distribution of those areas of Kentucky which fall
within the zip codes set forth on the attached Directory Zip Code Schedule.
"Good Faith Ruling" shall have the meaning assigned to such term in
Section 2.3(c)(iii).
"Hill Country Directory" means the telephone directory owned by Seller
as of the date hereof which covers distribution of those areas of Texas which
fall within the zip codes set forth on the attached Directory Zip Code Schedule.
"Indemnification Claim Notice" shall have the meaning assigned to such
term in Section 7.5(a).
"Indemnified Party" shall have the meaning assigned to such term in
Section 7.5(a).
"Indemnifying Party" shall have the meaning assigned to such term in
Section 7.5(a).
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"Intellectual Property" means all (i) patents, patent applications,
patent disclosures, and improvements thereto, (ii) trademarks, service marks,
trade dress, logos, trade names, and corporate names and registrations and
applications for registration thereof, (iii) copyrights and registrations and
applications for registration thereof, (iv) mask works and registrations and
applications for registration thereof, (v) computer software, data and
documentation, (vi) trade secrets and confidential business information
(including ideas, formulas, compositions, inventions (whether patentable or
unpatentable and whether or not reduced to practice), know-how, manufacturing
and production processes and techniques, research and development information,
software products in development, drawings, specifications, designs, plans,
proposals, technical data, copyrightable works, financial (excluding employee
benefit plans), marketing, and business data, pricing and cost information,
business and marketing plans, and customer and supplier lists and information),
and (vii) copies and tangible embodiments thereof (in whatever form or medium).
"Knowledge or "Seller's Knowledge" refers to matters that are within the
actual conscious knowledge of the current officers and directors of Seller,
without any obligation to make or to have made any investigation or inquiry with
respect thereto.
"Latest Balance Sheet" shall have the meaning assigned to such term in
Section 3.1(h).
"Letter Agreement" shall have the meaning assigned to such term in
Section 4.2(a)(i).
"Lexington Directory" means the telephone directory owned by Seller as
of the date hereof which covers distribution of those areas of Kentucky which
fall within the zip codes set forth on the attached Directory Zip Code Schedule.
"Lexington Lease" shall have the meaning assigned to such term in the
attached Contracts Schedule.
"Liability" or "Liabilities" means any liability or obligation (whether
known or unknown, whether asserted or not asserted, whether absolute or
contingent, whether liquidated or unliquidated, and whether due or to become
due), including any liability for taxes.
"Loss" means any loss, Liability, damage or expense, whether or not
arising out of third-party claims (including, without limitation, interest,
penalties, reasonable attorneys' fees and expenses and all amounts paid in
investigation, defense or settlement of any of the foregoing).
"Material Adverse Effect" means any change, event or occurrence which
has a material adverse effect upon the ownership, use, business, operations,
prospects, profitability or condition (financial or otherwise) of any of the
Directories or, considered as a whole, the Purchased Assets.
"Multiemployer Plan" has the meaning set forth in ERISA Section 3(37).
"Noncompetition Period" shall have the meaning assigned to such term in
Section 7.3(a).
"Nonsolicitation Period" shall have the meaning assigned to such term in
Section 7.3(b).
"OIRR" shall have the meaning assigned to such term in Section 4.1(b).
"Ordinary Course of Business" means the ordinary course of the Business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Overbid Provisions" shall have the meaning assigned to such term in
Section 4.1(d).
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"Provision Motion" shall have the meaning assigned to such term in
Section 4.1(a)(i).
"Provision Order" shall have the meaning assigned to such term in
Section 4.1(a)(i).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, a partnership, a corporation, an
association, a limited liability company, a joint stock company, a trust, a
joint venture, an unincorporated organization, a governmental entity or any
department, agency or political subdivision thereof or any other entity.
"Pre-Paid Direct Costs" means any Direct Costs associated with any
Future Editions paid by Seller as of the Closing Date and evidenced by a receipt
(or other evidence satisfactory to TransWestern), in the amounts set forth on
the attached Closing Schedule.
"Prior Edition(s)" means any and all editions of any of the Directories
which have a publication date prior to the Closing Date.
"Prohibited Transaction" has the meaning set forth in ERISA Section 406
and Code Section 4975.
"Purchase Price" shall have the meaning assigned to such term in Section
2.2(a)(iii).
"Purchased Assets" shall have the meaning assigned to such term in
Section 2.1(a).
"Records" means, collectively, (i) any and all procedure manuals, books,
records and accounts; (ii) all invoices and commission reports; (iii) customer
lists (whether partial and/or complete); (iv) data layouts, including magnetic
tape layouts, diskette layouts, etc.; (v) promotional letters, brochures and
advertising materials; (vi) displays and display materials; (vii) processor
notes or information; (viii) correspondence and old or current proposals to any
former, present or prospective customer; (ix) information concerning gross sales
and profitability and any other measurements of a business' financial condition;
(x) data, account information or other similar matters furnished by or
concerning customers; and (xi) all copies of any of the foregoing data,
documents or devices in any form, including carbon copies, photo copies, copies
of floppy disks, diskettes, tapes, cassettes or any other form whatsoever.
"Reportable Event" has the meaning set forth in ERISA Section 4043.
"Review Material" shall have the meaning assigned to such term in
Section 4.2(a)(ii).
"Review Period" shall have the meaning assigned to such term in Section
4.2(a)(iii).
"Sales/Use Tax Liability" means any state sales and use Tax Liability
for periods (or portions thereof) ending on or prior to the Closing Date
relating to or arising in connection with the Business or any operations of
Seller.
"San Antonio Directory" means the telephone directory owned by Seller as
of the date hereof which covers distribution of those areas of Texas which fall
within the zip codes set forth on the attached Directory Zip Code Schedule.
"Security Interest" means any mortgage, pledge, security interest,
encumbrance, lien or charge, of any kind (including, without limitation, any
conditional sale or other title retention agreement or lease in the nature
thereof, any sale of receivables with recourse against Seller, any Affiliate of
Seller) or any filing or agreement to file a financing statement as debtor under
the Uniform Commercial Code or any
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similar statute other than to reflect ownership by a third party of property
leased to Seller under a lease which is not in the nature of a conditional sale
or title retention agreement, or any subordination arrangement in favor of
another Person (other than any subordination arising in the Ordinary Course of
Business).
"Seller's Accounts Receivable Records" shall have the meaning assigned
to such term in Section 4.2(a)(ii).
"Seller's Closing Accounts Receivable" shall have the meaning assigned
to such term in Section 4.4(b).
"South Texas Directory" means the telephone directory owned by Seller as
of the date hereof which covers distribution of those areas of Texas which fall
within the zip codes set forth on the attached Directory Zip Code Schedule.
"Southwest Texas Directory" means the telephone directory owned by
Seller as of the date hereof which covers distribution of those areas of Texas
which fall within the zip codes set forth on the attached Directory Zip Code
Schedule.
"Tax" or "Taxes" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, communications, severance,
stamp, occupation, premium, windfall profits, environmental (including taxes
under Code Sec. 59A), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transaction, transfer, registration,
value added, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not.
"Tax Return" means any return, information report or filing with respect
to Taxes, including any schedules attached thereto and including any amendment
thereof.
"TransWestern Indemnities" shall have the meaning assigned to such term
in Section 7.4(a).
"Unpublished Directories" means, collectively, the following Directories
(currently in canvass for Future Editions of such Directories) to be purchased
by TransWestern, and which TransWestern intends to complete publication and
distribution of after the Closing Date: Gateway Directory and Southwest Texas
Directory.
"▇▇▇▇▇▇▇▇▇▇ County Directory" means the telephone directory owned by
Seller as of the date hereof which covers distribution of those areas of Texas
which fall within the zip codes set forth on the attached Directory Zip Code
Schedule.
ARTICLE 2 - PURCHASE AND SALE
2.1 Purchased and Sale of Assets and Assumption and Assignment of
Contracts.
(a) Asset Purchase. On the terms and subject to the conditions
set forth in this Agreement, and in accordance with the Approval Order
of the Bankruptcy Court, at the closing of the transactions contemplated
herein (the "Closing"), TransWestern agrees to purchase from Seller, and
Seller agrees to sell, transfer, convey and deliver to TransWestern,
free and clear of any Security Interest, all of Seller's right, title
and interest in and to the assets, rights, properties
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and interests of every kind and nature, whether tangible or intangible,
and wherever located, which are owned or used by Seller in its operation
of the Directories existing as of the Closing regardless of whether such
assets existed prior to the commencement of Seller's Chapter 11 Case or
arose thereafter, including, without limitation, all of Seller's right,
title and interest in the following assets (collectively, the "Purchased
Assets"):
(i) Records (including, without limitation, customer
lists, customer correspondence and customer telephone numbers)
relating to any Future Edition of the Directories, together with
copies of all Customer Contracts (it being understood that
Seller may retain copies of such Records or Customer Contracts);
(ii) Intellectual Property, goodwill associated
therewith, licenses and sublicenses granted and obtained with
respect thereto, and rights thereunder, remedies against
infringements thereof, and rights to protection of interests
therein under the laws of all jurisdictions, in each case
associated with, relating to or used by Seller in connection
with the ownership and/or operation of any Directory;
(iii) all accounts, notes and other receivables arising
solely and exclusively in connection with any Future Editions of
the Directories;
(iv) the rights under all agreements, contracts,
purchase orders, contractual rights and other similar
arrangements identified as "Assigned Contracts" on the attached
"Contracts Schedule," and all Customer Contracts for all Future
Editions of the Directories;
(v) any and all claims, refunds, rights of recovery,
rights of set off and rights of recoupment of any kind relating
solely and exclusively to any Future Editions of the
Directories;
(vi) all franchises, approvals, permits, licenses,
orders, registrations, certificates, variances and similar
rights obtained from governments and governmental agencies
associated with, relating to or arising out of or as a result of
the ownership and/or operation of the Directories;
(vii) rights to receive mail, telephone calls and other
communications addressed to or directed at Seller relating to the
Directories (including mail, telephone calls and other
communications from customers (including, without limitation, any
customer inquiries regarding the terms or provision of Directory
Services pursuant to any Customer Contract), suppliers,
distributors, agents and others) and payments relating to the
Future Editions of the Directories;
(viii) ad-copy, drawings, specifications, advertising
and promotional materials, including, without limitation, the EPS
Files of Ad Ideas (pursuant to the ▇▇▇▇ of Sale from Ad Ideas to
Seller immediately prior to the Closing of the transactions
contemplated hereby, as provided in Sections 4.2(a), 5.1(a) and
5.1(b) below), studies, reports and other printed or written
materials including directory-in-process materials relating to,
associated with or used by Seller in connection with the
ownership or publication of any Directory (other than items which
are solely associated with publication of Seller's yellow page
directories other than the Directories); and
(ix) any assets identified on the attached Miscellaneous
Assets Schedule.
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Notwithstanding the foregoing, Seller shall retain and shall not
transfer to TransWestern and the term "Purchased Assets" shall not
include (i) real property, plant and equipment, machinery, furniture,
fixtures and other fixed assets pertaining to Seller's current
publishing operations, (ii) Seller's sales office leases (other than
obligations arising under the terms of the Lexington Lease as identified
on the attached Contracts Schedule), utilities and similar lease
agreements, (iii) any avoidance or other rights of Seller's bankruptcy
estate under the Bankruptcy Code (other than (A) any such claims
described in Section 2.1(a)(v) above, and (B) any rights in or to any of
the Purchase Assets or Assigned Contracts and any rights necessary for
TransWestern to avoid losing the benefit of any Purchased Assets or
Assigned Contracts), (iv) all accounts, notes, and other receivables
arising solely in connection with any Prior Editions of the Directories,
(v) any and all claims, refunds, rights of recovery, right of set-off
and rights of recoupment of any kind relating to any Prior Editions of
the Directories, (vi) items which are solely associated with publication
of Seller's yellow page directories other than the Directories, (vii)
all prepayments (including, without limitation, Pre-Paid Direct Costs),
deposits, cash and cash equivalents, and (viii) any of the other assets
described on the attached "Excluded Assets Schedule" (collectively, the
"Excluded Assets").
(b) Limited Assumed Liabilities. TransWestern shall not assume
or in any way be responsible for any Liabilities of Seller or any other
Liabilities whatsoever arising out of or relating to the condition or
operation of the Directories at any time as of or prior to the Closing
Date, or, except as set forth in the following sentence, any other
Liabilities. Subject to the terms and satisfaction of the conditions in
this Agreement, from and after the Closing Date, TransWestern will
assume and agree to pay, defend, discharge and perform as and when due
only the following specific Liabilities of Seller that relate
exclusively to the ownership and operation of the Directories after the
Closing (the "Assumed Liabilities"):
(i) Liabilities accruing on or after the Closing Date
under the Assigned Contracts (but excluding any Liability
relating to or arising out of any breach of contract, lease,
sublease, violation of law (including, without limitation,
violation of any Environmental Health and Safety Requirements),
breach of warranty, tort, infringement or other claim arising
out of any circumstance, fact, event or condition occurring or
existing prior to the Closing Date, or relating to Prior
Editions, or with respect to any of the foregoing items, any
related charge, complaint, action, suit, proceeding, hearing,
investigation, claim or demand to the extent such Liability
arises prior to the Closing Date); and
(ii) current Liabilities, solely to the extent (and in
such amounts) such current Liabilities are set forth on the
attached Assumed Liability Schedule and not paid prior to the
Closing Date.
(c) Excluded Liabilities. TransWestern shall not assume or be
liable for, and Seller shall remain liable for, any Liability of, or
incurred on behalf of, Seller other than the Assumed Liabilities (all
such other Liabilities being referred to herein collectively as the
"Excluded Liabilities") regardless of whether such other Liability
(other than the Assumed Liabilities) is disclosed herein or on any
schedule hereto (whether known or unknown, whether absolute or
contingent, whether liquidated or unliquidated, whether due or to become
due, and whether claims with respect thereto are asserted before or
after the Closing Date). The Excluded Liabilities shall constitute
claims and alleged claims in Seller's Bankruptcy Case; provided,
however, that nothing herein shall grant or create any rights in favor
of the holders of Excluded Liabilities or create any priority to right
of payment. It is expressly understood and agreed that the Parties
intend that TransWestern shall not be considered to be a successor to
Seller by reason
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of any theory of law or equity and that TransWestern shall have no
liability except as expressly provided in this Agreement for any
liability of the Seller. Without in any way limiting the generality of
the foregoing, Excluded Liabilities specifically includes all
Liabilities of Seller for any claims and administrative or other
expenses of whatever kind or nature, arising prior or subsequent to the
commencement of the Bankruptcy Case, whether or not asserted, Seller's
lease obligations, utilities and similar lease agreements (other than
obligations arising under the terms of the Lexington Lease as identified
on the attached Contracts Schedule), including, without limitation,
violation of any Environmental Health and Safety Requirements, and any
Liability resulting from any error, omission or illegality arising out
of or relating to sales into, or the printing or publication of, any
Prior Editions, or any actions, conditions or events occurring or
existing prior to the Closing Date in connection with the production,
printing or publication of any Future Edition(s), (including, without
limitation, all Liabilities arising prior to the Closing Date with
respect to Seller's employees (including any former employees of Seller
hired by TransWestern), including, without limitation, any and all
directory sales bonuses and/or commissions (including liabilities for
unpaid commissions arising prior to the Closing Date but which mature
upon receipt of payments from customers that may be received after the
Closing with respect to Future Editions), compensation, accrued salary,
accrued vacation, benefits or unemployment compensation to be paid to
such employees) or Liabilities incurred under ERISA or related Employee
Benefit Plans, Employee Pension Plans or Employee Welfare Plans relating
to such employees (including any former employees of Seller hired by
TransWestern) immediately after the Closing) arising prior to the
Closing Date and relating to any and all Prior and/or Future Editions of
the Directories or the production or publication thereof. Seller
acknowledges that Seller is retaining the Excluded Liabilities and that
Seller shall have full responsibility to pay, discharge and perform any
Excluded Liabilities promptly when due.
2.2 Purchase Price.
(a) The aggregate consideration to be paid by TransWestern to
Seller for the Purchased Assets shall be equal to the sum of:
(i) the assumption by TransWestern of the Assumed
Liabilities; plus
(ii) the reimbursement of the Pre-Paid Direct Costs
solely with respect to the Unpublished Directories (i.e., the
Gateway Directory and Southwest Texas Directory), in the
amount(s) set forth on the attached Closing Schedule, payable to
Seller in cash by wire transfer of immediately available funds
to an account designated by Seller at the Closing; plus
(iii) Six Million Dollars ($6,000,000) (the "Purchase
Price"), consisting of (x) Two Hundred Thirty-Six Thousand Seven
Hundred Twenty Dollars ($236,720), payable to Ad Ideas by wire
transfer of immediately available funds to an account designated
by Ad Ideas at the Closing (the "Ad Ideas Payment"), and (y)
Five Million Seven Hundred Sixty-Three Thousand Two Hundred
Eighty Dollars ($5,763,280) payable to Seller by wire transfer
of immediately available funds to an account designated by
Seller at the Closing (the "Closing Payment").
(b) The allocation of the Purchase Price among the Purchased
Assets hereof shall be made in a manner consistent with the provisions
of Section 1060 of the Code and applicable Treasury Regulations
thereunder. The Parties shall allocate the Purchase Price in accordance
with the fair value of the Purchased Assets as determined by the Parties
and reflected on the attached Purchase Price Allocation Schedule in
preparing (a) Form 8594, Asset Acquisition
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Statement, for each of TransWestern and Seller, and (b) all Tax Returns.
Each of TransWestern and Seller shall file Form 8594, prepared in
accordance with this section, with its federal income Tax Return for its
Tax period including the Closing Date, and make all other filings in a
manner consistent with this provision.
2.3 Closing Date Transactions.
(a) Closing. Subject to the terms and conditions set forth in
this Agreement, the Closing shall take place via facsimile and wire
transfer of immediately available funds (to an account designated by
Seller) on the earlier of the following (the "Closing Date"): (i) April
2, 2001, or (ii) the satisfaction or written waiver of all of the
conditions to the obligations of the Parties to consummate the
transactions contemplated hereby, as set forth in Article 5.
(b) TransWestern Deliveries on the Closing Date. On the Closing
Date:
(i) TransWestern shall deliver (A) the Ad Ideas Payment
to Ad Ideas, and (B) the Closing Payment to Seller;
(ii) TransWestern shall deliver the ▇▇▇▇ of Sale,
Assignment and Assumption Agreement, in the form attached hereto
as Exhibit A;
(iii) TransWestern shall reimburse the Pre-Paid Direct
Costs to Seller, solely with respect to the Unpublished
Directories (i.e., the Gateway Directory and Southwest Texas
Directory), and solely in the amount(s) set forth on the
attached Closing Schedule; and
(iv) TransWestern shall deliver to Seller (A) the
various certificates, instruments and documents referred to in
Section 5.1(b), and (B) such other instruments of assumption as
Seller may reasonably request in form reasonably satisfactory to
Seller and consistent with the provisions of this Agreement.
(c) Seller Deliveries on the Closing Date: On the Closing Date:
(i) Seller shall deliver to TransWestern the ▇▇▇▇ of
Sale, Assignment and Assumption Agreement, in the form attached
hereto as Exhibit A;
(ii) Seller shall deliver or cause to be delivered the
Approval Order, entered by the Bankruptcy Court approving this
Agreement and the consummation of the transactions contemplated
hereby;
(iii) Unless the Approval Order (as defined in Section
4.1(a)(i) below) includes language set forth in the second
sentence of this subparagraph (iii), Seller shall deliver a
certificate, as of a date not earlier than the eleventh (11th)
day following the entry of the Approval Order, of the Clerk of
the Bankruptcy Court certifying as to the absence of the filing
of any appeal with respect to the Approval Order or the
Provision Order, or, if certificate(s) to such effect are not
timely provided by such Clerk, then a certified copy of the
court docket for the Bankruptcy Case establishing the absence of
any such appeal as of the Closing Date. However, if the Approval
Order includes a finding, pursuant to 11 U.S.C. Section 363(m),
that TransWestern is purchasing Seller's assets in good faith,
and if the Approval Order includes a provision, pursuant to Rule
6004(g) of the Federal Rules of Bankruptcy Procedure, that the
ten (10) day stay contained in
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Bankruptcy Rule 6004(g) is waived or is not applicable to the
sale governed by this Agreement (collectively, the "Good Faith
Ruling"), then Seller will not be required to make any delivery
otherwise required by this subparagraph (iii) (other than the
Approval Order including the Good Faith Ruling);
(iv) Unless the Assignment Order (as defined in Section
4.1(a)(iii) below) includes language set forth in the second
sentence of this subparagraph (iv), Seller shall deliver a
certificate, as of a date not earlier than the eleventh (11th)
day following the entry of the Assignment Order, of the Clerk of
the Bankruptcy Court certifying as to the absence of the filing
of any appeal with respect to the Assignment Order, or, if
certificate(s) to such effect are not timely provided by such
Clerk, then a certified copy of the court docket for the
Bankruptcy Case establishing the absence of any such appeal as
of the Closing Date. However, if the Assignment Order includes a
provision to the effect that the ten (10) day stay contained in
Rule 6006(d) of the Federal Rules of Bankruptcy Procedure is
waived or not applicable to the sale governed by this Agreement
(the "Assignment Order Ruling"), then Seller will not be
required to make any delivery otherwise required by this
subparagraph (iv) (other than the Assignment Order including the
Assignment Order Ruling);
(v) Seller shall execute and deliver to TransWestern (A)
the various certificates, instruments and documents referred to
in Section 5.1(a), and (B) all other documents, instruments of
sale, transfer, conveyance, assignments and consents as
TransWestern may reasonably request with respect to the
Purchased Assets in form and substance reasonably satisfactory
to TransWestern and consistent with the provisions of this
Agreement; and
(vi) Seller shall deliver to TransWestern the Purchased
Assets free and clear of all Security Interests (consistent with
the Assignment Order).
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ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Seller. As a material inducement
to TransWestern to enter into this Agreement and to consummate the transactions
contemplated hereby, Seller represents and warrants to TransWestern that:
(a) Organization, Qualification and Corporate Power. Seller is a
corporation duly organized, validly existing, and in good standing under
the laws of the State of Texas and is qualified to do business in all
jurisdictions in which the conduct of its business or its ownership of
property require it to be so qualified, except where the failure to so
qualify would not materially adversely affect the assets, Business,
operations or financial condition of Seller.
(b) Authorization of Transaction. Subject to the Approval Order,
(i) Seller's Board of Directors have duly approved Seller's execution,
delivery and performance of this Agreement and the transactions
contemplated hereby, and (ii) Seller has the requisite corporate power
and authority and all material licenses, permits and authorization
necessary to own and operate the Directories, provide Directory Services
and carry on its telephone directory business as now conducted, to
execute and deliver this Agreement and the other agreements contemplated
hereby to which it is a party and to perform its obligations hereunder
and thereunder. This Agreement has been duly executed and delivered by
Seller. Assuming the due authorization, execution and delivery of this
Agreement and each of the other agreements contemplated hereby by
TransWestern, this Agreement and each of the other agreements
contemplated hereby to which Seller is a party constitutes the valid and
legally binding obligations of Seller, enforceable against Seller in
accordance with its respective terms and conditions, except as such
enforceability may be limited by principles of public policy, applicable
bankruptcy, insolvency, reorganization, moratorium and/or other similar
laws affecting the rights of creditors generally and by general
equitable principles (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
(c) Noncontravention. Upon entry of the Provision Order and the
Approval Order, and except as described in the attached "Seller Consents
Schedule," neither the execution and the delivery of this Agreement and
the other agreements contemplated hereby, nor the consummation of the
transactions contemplated hereby or thereby will violate or conflict
with any provision of the Articles of Incorporation, Bylaws or governing
documents of Seller, or result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any authorization,
consent, approval, execution or other action by or notice to any third
party under, any material contract, lease, sublease, license,
sublicense, franchise, permit, indenture, agreement, instrument of
indebtedness, Security Interest, or other arrangement by which Seller is
bound or affected or to which any of the Purchased Assets is subject, or
any law, statute, rule, regulation, order, judgment, decree,
stipulation, injunction, charge or other restriction, to which Seller is
subject or to which any of the Purchased Assets is subject, except in
each case, for violations, breaches and/or accelerations as to which
waivers or consents have or will be obtained or which would not
reasonably be expected to have a Material Adverse Effect.
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(d) Consents and Approvals. Other than the approval of the
Bankruptcy Court and except as set forth on the Seller Consents
Schedule, (i) Seller is not required to give any notice to, make any
declaration to or registration or filing with, or to obtain any permit,
license, consent, accreditation, exemption, approval or authorization
from, any governmental or regulatory authority in connection with the
execution, delivery or performance of this Agreement or the consummation
of any of the transactions contemplated hereby, and (ii) no consent or
approval of any other third party is required in connection with the
execution, delivery and performance of Seller of this Agreement or in
connection with the transactions contemplated hereby, or is required in
order to prevent a breach of, or a default under or a termination,
change in the terms and conditions or modifications of, any instrument,
contract, lease, license or other agreement to which Seller is party
which such breach, default or termination would have a Material Adverse
Effect.
(e) Recent Events. Except as described in the attached "Recent
Events Schedule," since December 31, 2000, Seller has not experienced
any change that has had a Material Adverse Effect with respect to the
Directories and/or Purchased Assets which would materially interfere
with TransWestern's good and indefeasible title to, and use of, the
Directories and Purchased Assets, upon consummation of the transactions
contemplated hereby. Without limiting the generality of the foregoing,
since such date:
(i) Seller has not sold, leased, transferred or assigned
(or entered into any agreement to sell, lease, transfer or
assign) any of its assets that would otherwise be Purchased
Assets hereunder;
(ii) Seller has not entered into any agreement,
contract, lease or license with respect to the Directories (or
any series of related agreements, contracts, leases or licenses)
other than in the Ordinary Course of Business;
(iii) Seller has not entered into any other material
transaction with any third party having a Material Adverse
Effect with respect to the Directories; and
(iv) Seller has not committed to any of the foregoing.
(f) Intellectual Property. Except as set forth on the attached
"Intellectual Property Schedule":
(i) To Seller's Knowledge, no third party has interfered
with, infringed upon, misappropriated, or violated any
Intellectual Property rights of Seller relating to any
Directory.
(ii) The Intellectual Property Schedule identifies each
registration which has been issued to the Seller with respect to
any of its Intellectual Property, each pending application for
registration which Seller has made with respect to any of its
Intellectual Property, and each license, agreement, or other
permission which Seller has granted to any third party with
respect to any of its Intellectual Property (together with any
exceptions), in each case which is used in connection with or
related to any Directory. The Intellectual Property Schedule
also identifies each material trade name or unregistered
trademark used by the Seller in connection with its Business as
currently
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conducted by Seller. With respect to each item of Intellectual
Property identified in the Intellectual Property Schedule, to
Seller's Knowledge:
(A) Seller possesses all right, title, and
interest in and to the item, free and clear, upon
consummation of the transactions contemplated hereby, of
any Security Interest, license, or other restriction;
(B) the item is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge;
(C) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is
pending or threatened which challenges the legality,
validity, enforceability, use, or ownership of the item;
and
(D) Seller has not ever agreed to indemnify any
Person for or against any interference, infringement,
misappropriation, or other conflict with respect to the
item.
(iii) The Intellectual Property Schedule also identifies
each material item of Intellectual Property that any third party
owns and that Seller uses in connection with any Directory
pursuant to license, sublicense, agreement, or permission.
(g) Contracts and Commitments. Except as set forth on the
attached "Contracts Schedule," other than Customer Contracts, Seller is
not a party to any other written or oral contract or commitment that is
significant to its provision of Directory Services in connection with
the Directories or any of the Purchased Assets (including, without
limitation, any contract with a third party or parties relating to the
purchase or sale of services or products relating to any Directories),
or any other material agreement. Seller has delivered or otherwise made
available to TransWestern a correct and complete copy of the standard
forms of Customer Contracts used in connection with any Directories and
each written agreement (including all amendments thereto) identified on
the Contracts Schedule. The Contracts Schedule identifies all contracts
presently in effect associated with the Prior Editions, and, to the
extent available, the Future Editions, and identifies all Assigned
Contracts included in the Purchased Assets. Seller has delivered to
TransWestern a true and complete list of all Customer Contracts
associated with the Directories all of which are in the form previously
delivered to TransWestern. With respect to each Customer Contract and
each agreement identified on the Contracts Schedule: (A) such agreement
is (and following consummation of the transactions contemplated hereby
will continue to be) legal, valid, binding, enforceable, except as such
enforceability may be limited by principles of applicable bankruptcy,
insolvency, reorganization, moratorium and/or other similar laws
affecting the rights of creditors generally, and in full force and
effect; and (B) neither Seller, nor to Seller's Knowledge, any other
party to such agreement is in breach or default, and no event has
occurred which with notice or lapse of time would constitute a breach or
default by Seller or permit termination, modification, or acceleration
(in each case, other than by Seller), under such agreement, except where
such breach or default would not have a Material Adverse Effect. Seller
has not waived or modified any limitation on liability or similar
provision in any Customer Contract.
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(h) Financial Statements. The attached "Financial Statements
Schedule" contains the following tax returns and/or financial statements
(collectively, the "Financial Statements"):
(i) the unaudited balance sheet of Seller dated as of
November 30, 2000 (the "Latest Balance Sheet"), and the related
unaudited income statement of Seller for the seven (7) months
then ended;
(ii) Seller's book level financials prepared in respect
of the Directories, a copy of which have been previously
delivered to and received by TransWestern; and
(iii) Seller's gross revenue projections for the Future
Editions, copies of which have been previously delivered to and
received by TransWestern.
Each of the Financial Statements described in clause (i) above
(i.e., Seller's Latest Balance Sheet and income statement, as set forth
on the attached Financial Statements Schedule) (including in all cases
the notes thereto, if any) is prepared in accordance with GAAP
consistent with the books and records of Seller (except for the absence
of footnotes and subject to year-end adjustments) and presents fairly,
in all material respects, the financial condition and results of
operations of Seller throughout the periods covered thereby. Except as
set forth on the attached Financial Statements Schedule, all accounts
receivable for Future Editions of the Directories of Seller reflected on
the Latest Balance Sheet, and all accounts receivable for Future
Editions of the Directories of Seller that have arisen since the Latest
Balance Sheet, are valid and enforceable claims of Seller under the
terms of Seller's Customer Contracts relating to Future Editions of the
Directories (subject, with respect to Future Editions of the
Directories, to performance under such Customer Contracts). The
Financial Statements Schedule contains a true and complete aging of
Seller's accounts receivable as of the date of the Latest Balance Sheet.
The gross revenue projections for the Future Editions described
in clause (iii) above represent good faith estimates of Seller relating
to Future Editions and were based upon assumptions which are set forth
therein and which were in good faith believed to be reasonable when
made, provided, however, that such gross revenue projections is not a
guarantee of the future performance of Seller.
(i) Accuracy and Completeness of Information Furnished. To
Seller's Knowledge, no representation or warranty of Seller contained in
this Agreement or in any of the Exhibits and Schedules attached hereto
delivered to TransWestern by Seller in connection with the transactions
contemplated hereby (including, without limitation, any Customer
Contract or any other Records compiled in connection with the
Directories) contains or will contain as of the date such representation
and warranty is made or other document has been, is or will be
furnished, any untrue statement of a material fact or omitted, omits, or
will omit to state as of the date such representation or warranty is
made or such document is or will be furnished, any material fact which
is necessary not to make the statement contained herein or therein not
misleading.
(j) Affiliated Transactions. Except as set forth on the attached
"Affiliated Transaction Schedule," no officer, director, employee, owner
or Affiliate of Seller is a party to any agreement, contract, commitment
or transaction with Seller or has any interest in the Purchased Assets.
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(k) Undisclosed Liabilities. To Seller's Knowledge, Seller has
no Liability relating to its operation or ownership of any Directory
(and, to Seller's Knowledge, there is no basis for any present or future
action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand against any of them giving rise to any Liability that
would be required to be reflected in or reserved against in the balance
sheet of Seller prepared in accordance with GAAP), except for (i)
Liabilities set forth on the face of the Latest Balance Sheet, and (ii)
Liabilities which have arisen after the date of the Latest Balance Sheet
in the Ordinary Course of Business (none of which results from, arises
out of, relates to, is in the nature of, or was caused by any breach of
contract, breach of warranty, tort, infringement, claim or violation of
law); (iii) Liabilities that would not have a Material Adverse Effect;
and (iv) Liabilities set forth on "Seller's Liabilities Schedule"
attached hereto.
(l) Compliance with Laws. To Seller's Knowledge, Seller has
complied and is in material compliance with all applicable material
laws, rules or regulations of any federal, state, local or foreign
government or agency thereof with respect to the Directories and no
notice, claim, charge, complaint, action, suit, proceeding,
investigation or hearing has been received by Seller or filed, commenced
or, to Seller's Knowledge, threatened in writing against Seller alleging
any such violation.
(m) Litigation; Proceedings. Except as set forth in the attached
"Litigation Schedule," there are no actions, suits, proceedings,
hearings, orders, investigations, charges, complaints or claims, pending
or, to Seller's Knowledge, threatened, by or against or affecting,
Seller, or any Directory or the Purchased Assets or to which Seller, the
Directories or the Purchased Assets may be bound or affected, at law or
in equity, or before or by any federal, state, municipal, foreign or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, and there is no basis for any of
the foregoing. Seller is not subject to any judgment, order or decree of
any court or governmental agency.
(n) Title and Sufficiency of Assets. Except as set forth in the
attached Title and Sufficiency of Assets Schedule, Seller owns good,
marketable and indefeasible title, free and clear of all interests,
including, without limitation, all Security Interests, to the Purchased
Assets, and Seller is the exclusive and sole owner thereof (subject,
solely with respect to the EPS Files of Ad Ideas, to Seller's receipt of
the ▇▇▇▇ of Sale from Ad Ideas immediately prior to the Closing of the
transactions contemplated hereby, as provided in Sections 4.2(a), 5.1(a)
and 5.1(b) below). At the Closing, and subject to the Approval and
Assignment Orders, Seller will convey to TransWestern good, marketable
and indefeasible title to all of such property and assets included
within or comprising the Purchased Assets, free and clear of all
interests, including, without limitation, all Security Interests
(subject, solely with respect to the EPS Files of Ad Ideas, to Seller's
receipt of the ▇▇▇▇ of Sale from Ad Ideas immediately prior to the
Closing of the transactions contemplated hereby, as provided in Sections
4.2(a), 5.1(a) and 5.1(b) below). The Purchased Assets so conveyed will
include all of those assets (personal, tangible and intangible) used
solely and exclusively in connection with the Directories during the
twelve months prior to the Closing Date other than those assets used by
Seller in connection with its ownership and publication of directories
other than the Directories, all of which assets are described generally
on the attached "Excluded Asset Schedule."
(o) Directory Listings. Each of the directory listings
associated with the Directories has been published in the Ordinary
Course of Business and in accordance with customary practices currently
prevailing in the telephone directory industry for companies of a size
comparable to Seller, except where the failure to do so would not have a
Material Adverse Effect on the Directories. To Seller's Knowledge, no
such listing has been published in material violation of
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any applicable law, code or regulation. Seller has provided TransWestern
with copies of all invoices (or other evidence reasonably satisfactory
to TransWestern) relating to the purchase by Seller of the white page
listings and yellow page listings used or to be used (as the case may
be) in connection with the printing and publication of any Directory.
(p) Brokers' Fees. Seller has no Liability to pay any fees or
commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which TransWestern or
any other party could become liable or obligated.
(q) Tax Matters.
(i) Except as set forth in the attached "Taxes
Schedule," to Seller's Knowledge, Seller has timely filed all
Tax Returns required to be filed by them, each such Tax Return
has been prepared in compliance with all applicable material
laws and regulations, and all such Tax Returns are true and
accurate in all material respects. To Seller's Knowledge, all
Taxes due and payable by Seller (whether or not shown on any Tax
Return) have been paid. Except as set forth in the attached
Taxes Schedule, there is no action, suit, taxing authority
proceeding or audit now in progress, pending or, to Seller's
Knowledge, threatened against Seller with respect to any Tax.
(ii) The "Taxes Schedule" contains a list of states,
territories and jurisdictions (whether foreign or domestic) in
which Seller is required to file Tax Returns.
(r) Customers and Suppliers. Except as set forth on the attached
"Customer/Supplier Schedule," Seller has not received any notice that
any material customer or supplier with respect to any Directory intends
to terminate or materially reduce its business with Seller and, except
as set forth on the attached "Customer/Supplier Schedule," no material
customer or supplier has terminated or materially reduced its business
with Seller in the last twelve (12) months.
(s) Closing Date. All of the representations and warranties made
by Seller contained in this Section 3.1 and elsewhere in the Agreement
and all information delivered in any schedule, attachment or exhibit
hereto or in any certificate delivered by Seller to TransWestern shall
be true and correct on the Closing Date in all material respects as
though then made, except as affected by the transactions expressly
contemplated by this Agreement and except as expressly disclosed in
writing to TransWestern by Seller prior to the Closing. Prior to the
Closing Date, Seller shall notify TransWestern of any information that
came into existence after the date hereof and would have been required
to be disclosed on one or more schedules or reflected in such
representations or warranties if such information was in existence on
the date hereof and may or supplement the disclosure schedules attached
hereto to reflect such information.
3.2 Representations and Warranties of TransWestern. As a material
inducement to Seller to execute this Agreement and consummate the transactions
contemplated hereby, TransWestern hereby represents and warrants to Seller that:
(a) Organization. TransWestern is a limited liability company
duly organized, validly existing and in good standing under the laws of
the State of Delaware. TransWestern is qualified to conduct business in
each other jurisdiction wherein the nature of its business or ownership
of property requires it to be so qualified except where failure to so
qualify would not materially adversely effect the assets, business,
operations or financial condition of TransWestern.
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(b) Authorization of Transaction. Except as set forth on the
attached "TransWestern Consents Schedule," TransWestern has the power
and authority to execute and deliver this Agreement and the other
agreements contemplated hereby to which it is a party and to perform its
obligations hereunder and thereunder. Except as set forth on the
attached "TransWestern Consents Schedule," this Agreement and the other
agreements contemplated hereby to which TransWestern is a party have
been duly executed and delivered by TransWestern and constitute the
valid and legally binding obligations of TransWestern, enforceable
against TransWestern in accordance with their respective terms.
(c) Noncontravention. Except as set forth on the attached
"TransWestern Consent Schedule," neither the execution and the delivery
of this Agreement and the other agreements contemplated hereby, nor the
consummation of the transactions contemplated hereby or thereby will
violate, conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any authorization,
consent, approval, execution or other action by or notice to any third
party under, any contract, lease, sublease, license, sublicense,
franchise, permit, indenture, agreement, instrument of indebtedness,
Security Interest, or other arrangement by which TransWestern is bound
or affected or to which any of the Purchased Assets is subject, or any
law, statute, rule, regulation, order, judgment, decree, stipulation,
injunction, charge or other restriction, to which TransWestern is
subject or to which any of the Purchased Assets is subject.
(d) Consents and Approvals. Except as set forth on the attached
"TransWestern Consents Schedule," (i) TransWestern is not required to
give any notice to, make any declaration to or registration or filing
with, or to obtain any permit, license, consent, accreditation,
exemption, approval or authorization from, any governmental or
regulatory authority in connection with the execution, delivery or
performance of this Agreement or the consummation of any of the
transactions contemplated hereby and (ii) no consent or approval of any
other third party is required in connection with the execution, delivery
and performance of TransWestern of this Agreement or the agreements
contemplated hereby to which it is a party, in order to prevent a breach
of, or a default under or a termination, change in the terms and
conditions or modifications of, any instrument, contract, lease, license
or other agreement to which TransWestern is party.
(e) Brokers' Fees. TransWestern has no Liability to pay any fees
or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Seller could
become liable or obligated.
(f) Closing Date. All of the representations and warranties of
TransWestern contained in this Section 3.2 and elsewhere in this
Agreement and all information delivered in any schedule, attachment or
exhibit hereto or in any certificate delivered by TransWestern shall be
true and correct on the Closing Date in all material respects as though
then made and except as expressly disclosed in writing to Seller by
TransWestern prior to the Closing. Prior to the Closing Date,
TransWestern shall notify Seller of any information that came into
existence after the date hereof and would have been required to be
disclosed on one or more schedules or reflected in such representations
or warranties if such information was in existence on the date hereof,
may supplement this Agreement with disclosure schedules, or otherwise
amend or modify its representations and warranties hereunder to reflect
such information.
(g) Due Diligence. TransWestern acknowledges that: (i) it has
had access to the properties and operations of Seller and has had the
opportunity to meet with and ask questions of Seller's management to
discuss the business, assets, liabilities, financial condition, cash
flow and
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operations of Seller, and (ii) all materials and information requested
by TransWestern have been provided to it to its reasonable satisfaction.
TransWestern acknowledges that it has made its own independent
examination, investigation, analysis and evaluation of Seller, including
TransWestern's own estimate of the value of the Purchased Assets, the
Directories and Seller's Business. TransWestern acknowledges that it has
undertaken such due diligence (including, without limitation, a review
of the assets, liabilities, books, records and contracts of Seller) as
it deems adequate, including that described above. Notwithstanding the
foregoing, nothing in this Section 3.2(g) shall modify or limit, or be
deemed to modify or limit, or otherwise affect or reduce Seller's
representations and warranties to TransWestern, as set forth expressly
in Section 3.1 (and the subsections thereto) of this Agreement or
attached as part of the Schedules to this Agreement.
(h) No Additional Representations. TransWestern acknowledges and
agrees that Seller shall be deemed not to have made any representation
or warranty other than as expressly set forth in Section 3.1 (and the
subsections thereto) of this Agreement. Without limiting the generality
of the foregoing and except for the express representations and
warranties made by Seller in Section 3.1 (and the subsections thereto)
of this Agreement, Seller does not make any representation or warranty
with respect to:
(i) any projections, estimates or budgets heretofore
delivered to or made available to TransWestern of future
revenues, expenses or expenditures or future results of
operations (other than projections referenced in Section 3.1
(and the subsections thereto) of this Agreement or attached as
part of the Schedules to this Agreement);
(ii) any information or documents (financial or
otherwise) made available to TransWestern or its counsel,
accountants, advisers or representatives (other than information
or documents specifically referenced in Section 3.1 (and the
subsections thereto) of this Agreement or attached as part of
the Schedules to this Agreement);
(iii) the value, nature, quality of condition, or state
of repair of any of the Purchased Assets (other than as set
forth in Section 3.1 (and the subsections thereto) of this
Agreement or attached as part of the Schedules to this
Agreement); or
(iv) the habitability, merchantability, marketability,
profitability or fitness for a particular purpose of the any of
the Purchased Assets, the Directories or of Seller's Business
(other than as set forth in Section 3.1 (and the subsections
thereto) of this Agreement or attached as part of the Schedules
to this Agreement).
Notwithstanding the foregoing, nothing in this Section 3.2(h) shall
modify or limit, or be deemed to modify or limit, or otherwise affect or
reduce Seller's representations and warranties to TransWestern, as
expressly set forth in Section 3.1 (and the subsections thereto) of this
Agreement or attached as part of the Schedules to this Agreement.
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ARTICLE 4 - COVENANTS
4.1 Pre-Closing Covenants.
(a) Bankruptcy Covenants.
(i) Immediately subsequent to the execution of this
Agreement, Seller shall (at its sole cost and expense) file (A)
a motion, pursuant to 11 U.S.C. Sections 105, 363, and 365 to
approve the sale of the Purchased Assets to TransWestern
pursuant to this Agreement (the "Approval Motion"), (B) a motion
(the "Provision Motion") for emergency determination of approval
of the Exclusivity Provision (as defined in Section 4.1(c)
hereof), and the Overbid Provisions (as defined in Section
4.1(d) hereof) provided for in this Agreement. Seller shall use
its commercially reasonable efforts to obtain an order approving
the Provision Motion (the "Provision Order") within nine (9)
days from (and including) the date of this Agreement, and
approval of the Approval Motion (the "Approval Order") within
sixteen (16) days from (and including) the date of this
Agreement, or, in the event Seller is able to obtain the Good
Faith Ruling with respect to the Approval Order then at least
prior to the Closing Date hereof, which orders shall each be in
form and substance reasonably acceptable to TransWestern.
(ii) Seller shall promptly provide TransWestern with
drafts of all documents, motions, orders, filings or pleadings
that Seller proposes to file with the Bankruptcy Court which
relate to the consummation or approval of this Agreement, the
Approval Motion, Provision Motion, related orders, or any
provision herein or therein, and will provide TransWestern with
reasonable opportunity to review and comment with respect to
such filings as reasonably practical. Seller shall also promptly
(within 24 hours) provide TransWestern with facsimile copies of
all pleadings received by or served by or upon Seller in
connection with its Bankruptcy Case, which have not otherwise
been served on TransWestern.
(iii) Seller shall use commercially reasonable efforts
to obtain, at its sole cost and expense, the entry of a final
order authorizing Seller to assign the Assigned Contracts and
Purchased Assets to TransWestern (the "Assignment Order") within
sixteen (16) days from (and including) the date of this
Agreement, or, in the event Seller is able to obtain the
Assignment Order Ruling with respect to the Assignment Order
then at least prior to the Closing Date hereof. Other than the
Ad Ideas Payment and subject to the Assignment Order, Seller
shall be responsible for the payment, at or prior to Closing, of
any amounts necessary to cure any defaults which exist on the
Closing Date under the Assigned Contracts, and TransWestern
shall be responsible for providing adequate assurance of its
ability to perform the obligations of Seller under the Assigned
Contracts following the Closing.
(iv) From and after the date hereof, Seller shall not
take any action or fail to take any action, which action or
failure to act would reasonably be expected to (A) prevent or
impede the consummation of the transactions contemplated by this
Agreement in accordance with the terms of this Agreement, or (B)
result in (I) the reversal, avoidance, revocation, vacating or
modification (in any manner which would reasonably be expected
to materially and adversely affect the TransWestern's rights
hereunder) or (II) the entry of a stay pending appeal, in the
cases of each of sub-clauses
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(I) or (II) of this section, with respect to the Approval Order,
the Assignment Order, or the Provision Order; provided, however,
that nothing contained herein will in any way limit Seller's
ability to provide notice of the Approval Motion and to comply
with requests for information from potential competing bidders
for the Purchased Assets, so long as it is in compliance with
the provisions of Section 4.1(c) hereof (regarding exclusivity).
(v) From and after the commencement of the Chapter 11
Case, Seller shall continue to operate its business as a debtor
in possession pursuant to Sections 1107 and 1108 of the
Bankruptcy Code.
(b) Affirmative Covenants Concerning the Business. Except as
contemplated by this Agreement and to the extent not inconsistent with
the Bankruptcy Code, the Bankruptcy Rules, the operation and information
requirements of the Office of United States Trustee (the "OIRR"), and
any orders entered by the Bankruptcy Court in Seller's Chapter 11 Case,
during the period from the date of this Agreement to the Closing, Seller
shall conduct its Business operations in compliance with all other
applicable laws and regulations in all material respects, and to the
extent consistent therewith so as to preserve the current value and
integrity of the Purchased Assets, pay all post-petition taxes as they
become due and payable, and maintain insurance on the Purchased Assets
(in amounts and types consistent with past practice). Without limiting
the generality of the foregoing, prior to the Closing, Seller covenants
and agrees that Seller shall not, without the prior written consent of
TransWestern:
(i) fail to promote the ordinary and smooth transition
of the Business as it relates to the Directories and the
Purchased Assets to TransWestern;
(ii) fail to use commercially reasonably efforts to
maintain, and maintain its books and records relating to, the
Directories and/or Purchased Assets in all material respects in
accordance with past practices;
(iii) pay any prepetition Liabilities, or forgive,
cancel, or waive any rights or any debts or other obligations
owed to Seller in respect of the Directories, other than such
prepetition Liabilities, debts or other obligations as are
approved for payment by the Bankruptcy Court;
(iv) merge or consolidate with, or purchase
substantially all of the stock or assets of, or otherwise
acquire, any corporation, partnership, association or other
business organization or entity or division thereof;
(v) institute any material change in the methods of
purchase, sale, lease or accounting from those used in the
Ordinary Course of Business or in the collection of accounts
receivable (including receivables associated with Customer
Contracts) or the payment of accounts payable other than to the
extent consistent with the Ordinary Course of Business;
(vi) mortgage, pledge or subject to any Security
Interest any of the Purchased Assets;
(vii) sell, assign or transfer any of the Purchased
Assets;
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(viii) pay or commit to pay commissions, bonuses or
similar payments outside of the Ordinary Course of Business; or
(ix) enter into a binding commitment to do any of the
foregoing.
(c) Exclusivity. Prior to the earlier of (i) the termination of
this Agreement in accordance with Section 6.1 below, or (ii) the Closing
of the transactions contemplated hereby, Seller shall not, directly or
indirectly, encourage, solicit or initiate any proposal or offer from
any person or entity (other than TransWestern) concerning any merger,
consolidation, sale of material assets, tender offer, recapitalization,
accumulation of shares of stock of Seller, proxy solicitation or other
business combination involving Seller or its Businesses relating to the
Purchased Assets, Directories and/or the Assigned Contracts (an
"Alternative Proposal"), or (i) agree to, endorse or take any other
action to facilitate an Alternative Proposal unless such Alternative
Proposal has been approved by the Bankruptcy Court pursuant to the
Section 363 sale process contemplated by this Agreement or (b) provide
any non-public information concerning the business, properties or assets
of Seller to any person or entity (other than TransWestern); provided,
however, that Seller shall not be prohibited from giving notice or
providing information, including non-public information, to any persons
who may seek to make a proposal as part of the Section 363 sale process
contemplated by this Agreement (the "Exclusivity Provision"); provided,
however, that notwithstanding the foregoing, Seller shall be entitled to
give such notice of whatever buyer protections and/or bidding procedures
order as the Bankruptcy Court requires to respond to and discuss any
Alternative Proposal, to provide information, including due diligence
materials and negotiate and discuss any Alternative Proposal. Seller
shall promptly (but in any event within one (1) calendar day of its
receipt) notify TransWestern of, and shall disclose to TransWestern a
reasonably detailed description of any inquiries received by Seller or
any of its agents or representatives (including, without limitation, the
date of such inquiry, the identity of the inquirer and the status of
such inquiry) with respect to the acquisition of any of the Purchased
Assets and Seller shall provide TransWestern with copies of any written
proposals and a description of any verbal proposals which are received
by Seller or any of its agents or representatives. Nothing in this
Section 4.1(c) shall require the divulgence of the identity of any third
party making an Alternative Proposal in violation of any Confidential
Agreement with such third party.
(d) Competitive Bid Procedures. Subject to Bankruptcy Court
approval, Seller agrees that in order for any Alternative Proposal to be
approved by the Bankruptcy Court, such proposal must (i) be upon and
subject to substantially the same or more favorable terms and conditions
as are contained in this Agreement, in all material respects (as
reasonably determined by Seller), except as to purchase price, and (ii)
include (A) a cash purchase price having a value at least Three Hundred
Seventy Five Thousand Dollars ($375,000) greater than the value of the
Purchase Price provided in this Agreement, and (B) any subsequent
increase thereof shall be at least Two Hundred Thousand Dollars
($200,000) (in cash) in excess of the prior cash offer (in any event,
TransWestern shall have the right to match any competitive offers and
any and all increases thereof) (collectively, the "Overbid Provisions").
(e) General Obligations. Each of the Parties will use their
respective commercially reasonable efforts to effect an orderly
transition of business and to take all reasonable actions and to do all
things reasonably necessary or desirable, including any necessary
approvals, to consummate and make effective the transactions
contemplated by this Agreement (including, without limitation,
satisfaction, but not waiver, of the closing conditions set forth in
Article 5) and to cause the other conditions to TransWestern's and
Seller's respective obligations
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hereunder to be satisfied as soon as practicable but in any event no
later than required to permit the Closing to occur on or prior to the
Closing Date.
4.2 Other Covenants.
(a) Full Access. At all times prior to the Closing Date, subject
to any reasonable and appropriate inquiry relating to this Agreement by
any creditors' committee appointed in the Chapter 11 Case, Seller shall
permit TransWestern, TransWestern's Affiliates, and their respective
employees, accountants, legal counsel and other representatives to have
full access to Seller's premises, properties, personnel, books, records,
contracts, Tax records, and to all documents of or pertaining to Seller,
the Purchased Assets or the Directories, as is reasonably necessary or
(in the opinion of TransWestern) desirable to consummate all of the
transactions contemplated herein. All information given to TransWestern
and its representatives shall be subject to the confidentiality
provisions set forth in Section 7.2(a). Without limiting the generality
of the foregoing, the Parties hereto covenant and agree as follows:
(i) Access to Ad Ideas Materials. Under that certain
Letter Agreement between (among others) Seller and Ad Ideas, of
even date herewith, and with respect to which TransWestern is an
intended third-party beneficiary, a copy of which is attached
hereto as Exhibit B (the "Letter Agreement"), Ad Ideas has
agreed with Seller to provide TransWestern access to review the
Future Edition Advertisements (including electronic and/or
digital copies in computer file format(s), if any), together
with all contracts arising out of or relating to such Future
Edition Advertisements (collectively, the "Advertisement
Material"). The Parties hereto acknowledge and agree that, in
the event Ad Ideas has not delivered the Advertisement Material
to Seller, for purposes of TransWestern's review, within five
(5) business days from the Effective Date hereof, TransWestern
may terminate this Agreement, in accordance with Section 6.1
below.
(ii) Access to Accounts Receivable Materials. Seller
hereby covenants and agrees to provide TransWestern with any and
all records and files (including electronic download files from
Seller's "▇▇▇▇▇▇▇" internal accounting or book keeping system)
relating to all accounts receivable of Seller (whether arising
in connection with or relating to any Prior and/or Future
Edition(s) of the Directories) (collectively, "Seller's Accounts
Receivable Records", and together with the Advertisement
Material, the "Review Material"). The Parties hereto acknowledge
and agree that, in the event Seller has not delivered Seller's
Accounts Receivable Records to TransWestern within five (5)
business days from the Effective Date hereof, TransWestern may
terminate this Agreement, in accordance with Section 6.1 below.
(iii) Review. The Parties further acknowledge and agree
that, in accordance with Section 5.1(a) hereof, TransWestern
shall have access to review the Review Material (and additional
EPS Files delivered to TransWestern more than five (5) days from
the Effective Date hereof) for a period of ten (10) business
days from the later of (A) TransWestern's receipt of said Review
Material, or (B) TransWestern's receipt of the last EPS File
with respect to any and all completed Future Edition
Advertisements converted into an EPS File format (the "Review
Period"). If the Review Material does not meet with
TransWestern's approval and satisfaction, in its sole and
absolute discretion, then TransWestern must provide Seller with
written notice of any deficiency existing with respect to the
Review Material (or additional EPS Files) prior to the
expiration of said Review Period (and, in the event TransWestern
does not provide Seller with such written notice prior to the
expiration of the Review Period, TransWestern will
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be prohibited from terminating this Agreement under Section
6.1(d) below). Seller shall have the opportunity for a period of
five (5) days from receipt of written notice from TransWestern
(prior to the expiration of the Review Period) to cure any
deficiency or bring about a cure in any deficiency existing with
respect to the Review Material (or additional EPS Files), as
specified in such written notice from TransWestern (the "Cure
Period"). After said Cure Period, if the Review Material does
not meet with TransWestern's satisfaction, in its sole and
absolute discretion, TransWestern may terminate this Agreement
as provided in Section 6.1(d).
(iv) Delivery. The Parties further acknowledge and agree
that, in accordance with Section 5.1(a) and 5.1(b) hereof, it is
a condition to each Party's obligation to consummate the
transactions contemplated hereby that, immediately prior to the
Closing hereof, Ad Ideas shall have delivered to Seller (without
demand or claim for any additional monies other than the Ad
Ideas Payment) the Advertisement Material (in the condition
previously approved by TransWestern during the Review Period)
and a ▇▇▇▇ of Sale and Assignment of Rights (with respect to the
EPS Files) in form and substance satisfactory to TransWestern
and Seller, whereupon (and provided that), Seller, as a
condition to TransWestern's obligation to consummate the
transactions contemplated hereby, shall immediately thereafter
execute and deliver to TransWestern the ▇▇▇▇ of Sale, Assignment
and Assumption Agreement, substantially in the form attached
hereto as Exhibit A.
(b) Notice of Developments. At all times prior to the Closing
Date, (i) Seller will give prompt written notice to TransWestern of any
development materially adversely affecting the condition, operation,
results of operations, or future prospects of any Directory or any
Purchased Assets, and (ii) each Party will give prompt written notice to
the other of any development adversely affecting the ability of the
notifying Party to consummate the transactions contemplated by this
Agreement. No disclosure by any Party pursuant to this Section 4.2(b)
shall be deemed to amend or supplement the schedules attached hereto
delivered by such Party or to prevent or cure any misrepresentation,
breach of warranty, or breach of covenant by such Party.
(c) TransWestern Audit. The Parties hereto acknowledge and agree
that, following and subject to the Closing of the transactions
contemplated hereby, TransWestern will appoint an outside accounting
firm, on its behalf, to perform an audit of the last two (2) fiscal
year(s) of financial statements of Seller, at TransWestern's sole cost
and expense. Seller agrees, following and subject to the Closing of the
transactions contemplated hereby, to use commercially reasonably efforts
to assist TransWestern, and its appointed accounting firm in connection
with such audit. Without limiting the generality of the foregoing,
Seller covenants and agrees to use commercially reasonable efforts to
provide TransWestern, within twenty (20) days of the Closing Date, with
copies of all books, records and documents necessary to complete such
audit.
4.3 Employee Matters. The Parties hereto acknowledge and agree that
TransWestern is not hiring, and is not legally obligated to hire, any of Seller
employees in connection with, arising out of or relating to this Agreement or
the transactions contemplated hereby. From and after the Closing Date, Seller
shall retain all Liabilities (other than the Assumed Liabilities) arising with
respect to its former and/or current employees on or before the Closing Date,
including, without limitation, any and all directory sales bonuses and/or
commissions (including liabilities for unpaid commissions arising prior to the
Closing Date but which mature upon receipt of payments from customers that may
be received after the Closing with respect to Future Editions), to be paid to
such employees (including any former employees of Seller hired by TransWestern)
arising prior to the Closing Date and relating to any and all
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Prior and/or Future Editions of the Directories or arising in connection with
any Employee Benefit Plan or any other employee benefit plan (as such term is
defined in Section 3(3) of ERISA) or arrangement at any time maintained or
contributed to by Seller, including, but not limited to, those Liabilities
arising under Part 6 of Title I of ERISA and Section 4980B of the Code. Seller
shall be additionally responsible for all Liabilities (other than the Assumed
Liabilities) of any employee (i) relating to any and all compensation
(including, without limitation, vacation pay and insurance benefits) for periods
prior to the Closing Date, and/or (ii) arising as a result of the transactions
contemplated by this Agreement, including, but not limited to, severance
compensation and bonus payments.
4.4 Post-Closing Collection Services.
(a) Following the Closing, TransWestern shall assume complete
responsibility for all billing and collection activities associated with
the Future Edition(s). In the event that any customer directs a claim to
any Party, such Party shall notify promptly the other Party of such
claim. Each of TransWestern and Seller will cooperate with one another
and use their respective good faith efforts to deliver to the other
party (promptly, but in any event no less frequent than monthly) any
payments mistakenly received by one party and belonging to the other
party in accordance with this Section 4.4(a).
(b) From and after the Closing Date, TransWestern shall assume
responsibility, on behalf of Seller, for all billing and collection
activities associated with any Prior Editions, including, but not
limited to, collection of all trade accounts receivable outstanding as
of the Closing with respect to such Prior Editions (including local,
foreign and national advertising accounts) (which accounts receivable in
the amount(s) set forth on the attached "Accounts Receivable Schedule",
less allowance for bad debts and uncollectible accounts, returns,
discounts, refunds and similar deductions, shall collectively be
referred to hereinafter as "Seller's Closing Accounts Receivable").
TransWestern shall apply any payments (including interest (if any))
collected by it hereunder with respect to Seller's Closing Accounts
Receivable to Seller's Closing Accounts Receivable balance, on a
customer-by-customer basis (with priority over payments owed to
TransWestern by the same customer or creditor for advertising services
on Future Editions as described further below) until either (i) Seller's
Closing Accounts Receivables are paid in full, or (ii) immediately prior
to the close of Seller's Bankruptcy Case, as requested by Seller, or
(iii) upon expiration of the period ending on the last day of the twelve
(12)-month period following the Closing Date, whichever shall first
occur (the "Accounts Receivable Measurement Date"). On the Accounts
Receivable Measurement Date, TransWestern shall make a one-time
adjustment necessary to credit Seller with respect to the following: in
the event TransWestern receives any payment(s) on a Future Edition of a
Directory from the same customer owing Seller payment(s) towards
satisfaction of Seller's Closing Accounts Receivable with respect to a
Prior Edition of a Directory, to the extent such customer has a written
contract with TransWestern for a Future Edition of any such Directory,
TransWestern shall apply any payments as they are received (including
interest (if any)) collected by it hereunder with respect thereto first,
to payment in satisfaction of TransWestern's Customer Contract(s)
account(s) for Future Editions purchased hereunder (only for
TransWestern's internal accounting purposes and for purposes of
crediting such customer's account with TransWestern), and second, as a
one-time adjustment made on the Accounts Receivable Measurement Date, to
credit any such payments to Seller's Closing Accounts Receivable balance
(the "Accounts Receivable Adjustment"). TransWestern shall remit such
applicable amounts received with respect to Seller's Closing Accounts
Receivable for Prior Editions on a monthly basis (and the Accounts
Receivable Adjustment on the Accounts Receivable Measurement Date).
During such time (prior to the Accounts Receivable Measurement Date),
TransWestern agrees to use commercially reasonable efforts to implement
collection methods consistent with its past custom and collection
practice.
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TransWestern shall not settle or compromise amounts due under any
Seller's Closing Accounts Receivable without providing Seller with seven
(7) days prior notice of the proposed settlement or compromise, and
Seller and TransWestern shall cooperate and work jointly to reach
agreement during such seven (7) day period with respect to all
adjustments, settlements and write-offs to be taken in connection with
any such settlement or compromise. Seller agrees to respond to all
requests by TransWestern to evaluate any such settlement in a timely
manner (and, in any event, shall respond to such notice by TransWestern
within three (3) business days after receipt thereof). TransWestern
shall deliver aging reports and a "cash received" journal for Customer
Contracts to Seller on a monthly basis prior to the Accounts Receivable
Measurement Date. After such date, TransWestern, in its sole and
absolute discretion, may terminate, without any further obligation to
the Seller hereunder or Seller may require termination regarding, any
collection efforts with respect to Seller's Closing Accounts Receivable.
Seller and its accountants reserve the right to examine (at their own
expense, at reasonable times upon prior notice, and on a scope limited
to the collection records at issue) the books and records of
TransWestern during the period of time when TransWestern is responsible
for the collection of Seller's Closing Accounts Receivable to verify the
aging report given to Seller. Notwithstanding the foregoing, or any
other terms and provisions of this Agreement, the Parties hereto
acknowledge and agree that, under no circumstances, shall TransWestern
be liable or obligated with respect to any deficiencies in collecting
Seller's Closing Accounts Receivable or any Liabilities or Losses
arising out of or relating to the collection or deficiencies in
collecting Seller's Closing Accounts Receivable.
ARTICLE 5 - CONDITIONS
5.1 Conditions To Closing.
(a) Conditions to Closing Obligations of TransWestern. The
obligation of TransWestern to consummate the transactions contemplated
hereby is subject to satisfaction at or prior to the Closing Date of the
following conditions:
(i) the sale of the Purchased Assets by Seller to
TransWestern as contemplated by this Agreement shall have been
approved by the Bankruptcy Court pursuant to the Approval Order,
which shall have been entered not less than ten (10) calendar
days prior to (and not including) the Closing Date and, as of
the Closing Date, all applicable periods for appeal or rehearing
shall have expired and no notice of appeal or request for
rehearing shall have been entered and such order shall be in
full force and effect, and not stayed, modified, vacated,
amended or revoked, and final for all purposes hereof; provided
that, notwithstanding the foregoing, in the event the Approval
Order also includes the Good Faith Ruling, said Approval Order
shall have been entered at least prior to the Closing Date
hereof, and such order shall be in full force and effect, and
not stayed, modified, vacated, amended or revoked, and final for
all purposes hereof;
(ii) the assignment by Seller of the Assigned Contracts
and Purchased Assets to TransWestern as contemplated by this
Agreement shall have been approved by the Bankruptcy Court
pursuant to the Assignment Order which shall have been entered
not less than ten (10) calendar days prior to (and not
including) the Closing Date and, as of the Closing Date, all
applicable periods for appeal or rehearing shall have expired
and no notice of appeal or request for rehearing shall have been
entered and such order shall be in full force and effect and not
stayed, modified, vacated, amended or revoked, and final for all
purposes hereof; provided that, notwithstanding the foregoing,
in the event
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the Assignment Order also includes the Assignment Order Ruling,
said Assignment Order shall have been entered at least prior to
the Closing Date hereof, and such order shall be in full force
and effect, and not stayed, modified, vacated, amended or
revoked, and final for all purposes hereof;
(iii) the representations and warranties set forth in
Section 3.1 shall be true and correct in all material respects,
in each case at and as of the Closing Date, as though the
Closing Date were substituted for the date hereof throughout
such representations and warranties, except for representations
and warranties that are made by their terms as of a specified
date, which shall be true and correct as of a specified date and
except for changes contemplated by this Agreement;
(iv) Seller shall have performed and complied with all
of its respective covenants and agreements set forth in this
Agreement through the Closing Date in all material respects;
(v) all governmental or third party filings, licenses,
consents, authorizations, waivers and approvals (including,
without limitation, any consent or approval that may be required
from TransWestern's lenders) that are required to be made or
obtained for the transfer to TransWestern of the Purchased
Assets will have been duly made and obtained without conditions
or requirements that are materially adverse to TransWestern;
(vi) all corporate (including Board of Director)
approvals and other proceedings and actions taken in connection
with authorizing and approving or otherwise relating to the
transactions contemplated hereby shall be in a form and
substance satisfactory to TransWestern;
(vii) as of the Closing Date, except for the Bankruptcy
Case, the Provision Motion and the Approval Motion, no suit,
action or proceeding before any court or quasi-judicial or
administrative agency shall be pending or threatened wherein any
adverse judgment, decree, order or injunction would (A) prevent
the consummation of the transactions contemplated by this
Agreement, (B) cause any of such transactions to be rescinded
following consummation of the transactions contemplated by this
Agreement, (C) materially and adversely affect the right of
TransWestern to operate or control the Directories or (D) result
in a Material Adverse Effect (and no such judgment, decree,
order or injunction shall be in effect), and there shall be no
motions pending or expected to be filed to convert or dismiss
the Chapter 11 Case or to appoint a trustee for Seller;
(viii) Seller shall have executed and delivered to
TransWestern a certificate signed by Seller to the effect that
each of the conditions specified above in subsections
(a)(i)-(vii), inclusive, are satisfied in all respects;
(ix) Since the Filing Date, except for the commencement
of the Chapter 11 Case and the circumstances attendant thereto,
there shall have occurred no Material Adverse Effect with
respect to the Purchased Assets or Directories;
(x) Seller shall have provided TransWestern with a true
and accurate copy of all monthly reports provided to the office
of the United States Trustee with respect to Seller in its
Chapter 11 Case;
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(xi) Seller shall have executed and delivered to
TransWestern the ▇▇▇▇ of Sale, Assignment and Assumption
Agreement in substantially the form attached as Exhibit A, and
all other documents, instruments of sale, transfer, conveyance,
assignments and consents necessary or which TransWestern may
reasonably request with respect to the Purchased Assets in form
and substance reasonably satisfactory to TransWestern and Seller
and consistent with the provisions of this Agreement;
(xii) TransWestern shall have received from ▇▇▇▇▇
▇▇▇▇▇▇▇▇ his agreement not to complete with TransWestern for a
period of five (5) years from the Closing Date hereof within
certain defined distribution areas of Texas and within certain
defined distribution areas of Kentucky covered by the
Directories or any other yellow-page directory owned or
published by TransWestern or any of its Affiliates as of the
Closing Date in Texas or Kentucky, pursuant to a separate
Noncompetition Agreement, in form and substance satisfactory to
TransWestern in its sole and absolute discretion;
(xiii) TransWestern shall have received an estoppel
certificate, with respect to the Lexington Lease, in form and
substance satisfactory to TransWestern and any consent to
assignment of the Lexington Lease that may be required of the
lessor under the terms thereof;
(xiv) On or prior to the Closing Date, Seller will have
made available or delivered to TransWestern each of the
following:
(A) copies of all governmental licenses,
consents, authorizations, accreditations, waivers and
approvals and of all consents, waivers and approvals by
third parties that are required to be obtained pursuant
to subsection (iii) above;
(B) a copy of the licensing agreement(s) entered
into by Seller for the licensing of white pages in
connection with publication of the Directories and/or
Future Editions;
(xv) TransWestern shall have completed to its
satisfaction all of its accounting, business, legal,
environmental and financial due diligence review of Seller,
including, without limitation, the Directories, Financial
Statements and Purchased Assets, and received from Seller and/or
Ad Ideas such materials and instruments of sale described below:
(A) Ad Ideas and Seller shall have delivered the
Review Material, for purposes of TransWestern's review,
in accordance with Section 4.2(a) above;
(B) within (and prior to the expiration of) the
Review Period (but subject to the Cure Period set forth
in Section 4.2(a)), TransWestern shall have reviewed and
approved, to its satisfaction in its sole and absolute
discretion, of each and every advertisement, including,
without limitation, with respect to all advertisement
design, artwork, layout, composition, quality, usability
and suitability, arising with respect to work previously
performed by Ad Ideas for Seller in connection with
Future Editions of the Directories (collectively, the
"Future Edition Advertisements") and the additional
Review Material; and
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(C) consistent with Section 4.2(a) hereof, Ad
Ideas shall have released (without any additional claim
for monies other than the Ad Ideas Payment) its Future
Edition Advertisements in the form of an EPS (graphic)
file (the "EPS Files") to TransWestern (and in the form
previously approved by TransWestern), together with a
▇▇▇▇ of Sale and Assignment of Rights with respect to
the EPS Files to Seller (whereupon and provided that
Seller immediately executes and delivers to TransWestern
the ▇▇▇▇ of Sale, Assignment and Assumption Agreement),
as part of the Purchased Assets hereunder, free and
clear of all Security Interests.
(b) Conditions to Closing Obligations of Seller. The obligation
of Seller to consummate the transactions contemplated hereby is subject
to satisfaction at or prior to the Closing Date of the following
conditions:
(i) Except for the Bankruptcy Case, the Provision Motion
and the Approval Motion, no action, suit or proceeding shall be
pending or threatened before any governmental entity (other than
the Bankruptcy Case) against TransWestern wherein an unfavorable
judgment, order, decree, stipulation or injunction would (A)
prevent consummation of any of the transactions contemplated by
this Agreement, or (B) cause any of the transactions
contemplated by this Agreement to be rescinded following
consummation;
(ii) TransWestern's representations and warranties set
forth in Section 3.2 shall be true and correct in all material
respects, in each case at and as of the Closing Date, as though
the Closing Date were substituted for the date hereof throughout
such representations and warranties except for representations
and warranties that are made by their terms as of a specified
date, which shall be true and correct as of a specified date and
except for changes contemplated by this Agreement;
(iii) TransWestern shall have performed and complied
with all of its covenants and agreements set forth in this
Agreement through the Closing Date;
(iv) If requested by Seller, TransWestern shall have
delivered to Seller a certificate signed by an officer of
TransWestern to the effect that each of the conditions specified
above in subsections (b)(i) through (iii) are satisfied in all
respects; and
(v) the sale of the Purchased Assets by the Seller to
TransWestern as contemplated by this Agreement shall have been
approved by the Bankruptcy Court pursuant to the Approval Order
and Assignment Order, which, as of the Closing Date, shall be in
full force and effect and unstayed and unmodified;
(vi) Except as may have become unnecessary due to
order(s) of the Bankruptcy Court or otherwise, all applicable
approvals, consents and requirements under any federal or state
law shall have been satisfied;
(vii) TransWestern shall have delivered (or caused to be
delivered) (A) the Closing Payment (and reimbursement of
Pre-Paid Direct Costs) to Seller, and (B) the Ad Ideas Payment
to Ad Ideas, in accordance with Article 2 (and Ad Ideas shall
have delivered a ▇▇▇▇ of Sale to Seller with respect to the EPS
Files, as provided for herein); and
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(viii) TransWestern shall have executed and delivered to
Seller the ▇▇▇▇ of Sale, Assignment and Assumption Agreement, in
substantially the form attached hereto as Exhibit A.
All actions to be taken by any Party in connection with consummation of
the transactions contemplated hereby and all certificates, opinions,
instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to the
other Party. Any Party may waive any condition to such Party's obligation, in
whole or in part, specified in this Section 5.1 if it executes a writing so
stating at or prior to the Closing Date or if the Closing occurs; provided,
however, that consummation of the Closing by a Party prior to the satisfaction
of any closing condition in this Section 5.1 shall not operate as a waiver of
any indemnification rights such Party may otherwise have hereunder as a result
of any breach of any representation, warranty or covenant of the other Party
contained herein.
ARTICLE 6 - TERMINATION
6.1 Termination. The Parties may terminate this Agreement prior to the
Closing (whether before or after the Approval Order) as provided below:
(a) TransWestern and Seller may terminate this Agreement by
mutual written consent.
(b) TransWestern may terminate this Agreement upon written
notice to Seller if Seller has not filed for the Approval Motion, in
accordance with Section 4.1(a)(i) of this Agreement, within two (2)
business days from the Effective Date of this Agreement.
(c) TransWestern may terminate this Agreement upon written
notice to Seller if Seller or Ad Ideas has not delivered the Review
Material for purposes of TransWestern's review, in accordance with
Section 4.2(a) above, within five (5) business days from the Effective
Date of this Agreement.
(d) Upon expiration of the Cure Period (as described in Section
4.2(a)) and provided TransWestern has delivered written notice to Seller
prior to the expiration of the Review Period (as provided in Section
4.2(a)), TransWestern may terminate this Agreement upon written notice
to Seller if TransWestern is not satisfied, in its sole and absolute
discretion, with its review of the Review Material (or additional EPS
Files).
(e) TransWestern may terminate this Agreement by giving written
notice to Seller in the event Seller is in material breach of any
representation, warranty, covenant or agreement contained in this
Agreement.
(f) Seller may terminate this Agreement by giving written notice
to TransWestern in the event TransWestern is in material breach of any
representation, warranty, covenant or agreement contained in this
Agreement.
(g) TransWestern may terminate this Agreement by giving written
notice to Seller at any time prior to the Closing Date if the Closing
shall not have occurred on or before April 2, 2001, as a result of
Seller's inability to satisfy, in TransWestern's determination, the
conditions to TransWestern's obligations hereunder set forth in Article
5; provided that TransWestern is not
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in material breach of any of its representations, warranties or
covenants contained in this Agreement.
(h) Seller may terminate this Agreement by giving written notice
to TransWestern at any time prior to the Closing Date if the Closing
shall not have occurred on or before April 2, 2001, as a result of
TransWestern's inability to satisfy the conditions to Seller's
obligations hereunder set forth in Article 5; provided that Seller is
not in material breach of any of its representations, warranties or
covenants contained in this Agreement.
(i) TransWestern or Seller may terminate this Agreement, upon
written notice to the other Party, if the Bankruptcy Court has not
entered the Approval Order and the Assignment Order by March 22, 2001;
provided that, notwithstanding the foregoing, in the event the Approval
Order and Assignment Order also include the Good Faith Ruling and
Assignment Order Ruling, respectively, then either Party hereto may only
terminate this Agreement under this subparagraph (i) in the event said
Approval Order and Assignment Order (which orders shall be in full force
and effect, and not stayed, modified, vacated, amended or revoked, and
final for all purposes hereof) shall not have been entered at least
prior to the Closing Date hereof.
(j) TransWestern or Seller may terminate this Agreement, upon
written notice to the other Party, if by April 2, 2001, the following
shall not have occurred: (i) the Approval Order and Assignment Order are
approved by the Bankruptcy Court; and (unless the Good Faith Ruling and
the Assignment Order Ruling have been obtained with respect to such
orders, respectively) (ii) all applicable periods for appeal or
rehearing are expired; and (iii) no notice of appeal or request for
rehearing has been entered; and (iv) such orders are in full force and
effect, and not stayed, modified, vacated, amended or revoked, and final
for all purposes hereof.
(k) TransWestern may terminate this Agreement by giving written
notice to Seller if a motion to dismiss the Bankruptcy Case or a motion
to convert the Bankruptcy Case or appoint a trustee or examiner has been
filed or granted in the Bankruptcy Case.
6.2 Effect of Termination. If any Party terminates this Agreement
pursuant to Section 6.1, all obligations of the Parties hereunder shall
terminate without any Liability of any Party to any other Party (but without
prejudice to any rights either party may have against the breaching party
pursuant to termination under Section 6.1(e) or 6.1(f) above); provided,
however, that Sections 6.2, 7.2 and 7.6(a) and (m) shall survive such
termination.
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ARTICLE 7 - ADDITIONAL AGREEMENTS
7.1 Post-Closing Assistance.
(a) In case at any time after the Closing Date any further
action is necessary or desirable to carry out the purposes of this
Agreement and to effect, consummate, confirm or evidence the
consummation of the transactions contemplated hereby (including, without
limitation, with respect to the sales, printing and publication of each
of the Future Editions), each of the Parties will take such further
action (including, without limitation, the execution and delivery of
such further instruments and documents) as any other Party reasonably
may request, at the sole cost and expense of the requesting Party
(unless the requesting Party is entitled to indemnification therefor
under Section 7.4). TransWestern shall have reasonable access to
Seller's books and records (and to make copies thereof at TransWestern's
expense) for any proper purpose set forth by TransWestern in a writing
delivered to Seller. TransWestern agrees to cooperate with Seller, in
providing Seller with reasonable access to records transferred to
TransWestern hereby, in order for Seller to complete administration of
the Bankruptcy Case.
(b) Seller shall use its commercially reasonable efforts, at its
sole cost and expense (including the payment of any cure amounts), to
obtain the entry of a final order authorizing Seller to assign to
TransWestern any and all additional executory contracts of Seller which
are not the subject of the Assignment Order, to the extent that such
executory contracts have not been included as Assigned Contracts on the
Contracts Schedule and were discovered or disclosed by Seller
TransWestern after the date hereof or were entered into by Seller after
the date hereof. Seller shall be responsible for payment, at or prior to
the Closing of any amounts necessary to cure any defaults which exist
under the Assigned Contracts, to the extent that such amounts are not
Assumed Liabilities.
7.2 Confidentiality.
(a) Prior to the Closing Date, without Seller's prior consent,
TransWestern shall keep confidential and not disclose to any third party
Confidential Information received or obtained by TransWestern from
Seller relating to the Business; provided that any such Confidential
Information may be disclosed to the TransWestern's representatives and
advisors who need to know such information in connection with
consummation of the transactions contemplated hereby.
(b) Seller acknowledges that as of the Closing Date all
Confidential Information relating solely and exclusively to the
Directories shall become the property of TransWestern. Seller agrees
that, without the prior written consent of TransWestern, it shall not
disclose or permit to be disclosed to any Person, or utilize for its own
account or permit to be utilized by any Person, at any time, any
Confidential Information disclosed or made available to Seller or
obtained, observed or known by Seller relating to the Business (to the
extent to be purchased by TransWestern hereunder), whether before or
after the Closing and whether or not such information was developed by
such Person or such Person's officers, employees, representatives or
advisors. Seller shall take all appropriate steps to safeguard all such
Confidential Information and to protect them against disclosure, misuse,
espionage, loss and theft. As soon as practicable after the Closing
Date, Seller shall promptly deliver to TransWestern all copies and
embodiments, in whatever form, of all such Confidential Information of
TransWestern in Seller's possession or within its or his control,
irrespective of the location or form of such
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material and, if requested by TransWestern, shall provide TransWestern
with written confirmation that all such materials have been delivered to
TransWestern. In the event any Seller is required to disclose any such
Confidential Information pursuant to applicable law, such person shall
promptly notify TransWestern in writing, which notification shall
include the nature of the legal requirement and the extent of the
required disclosure, and shall cooperate with TransWestern to preserve
the confidentiality of such information consistent with applicable law.
7.3 Non-Competition.
(a) As a material inducement to TransWestern to enter into and
perform its obligations under this Agreement, for a period of five (5)
years following the Closing Date (the "Noncompetition Period"), neither
Seller nor any of its respective successors or Affiliates will, directly
or indirectly, either for themselves or for any partnership, limited
liability company, individual, corporation, joint venture or any other
entity "participate in" (as defined below) any business (including,
without limitation, any division, group or franchise of a larger
organization) which engages in or proposes to engage in the promotion,
sale or distribution of telephone directory "yellow pages" (including,
without limitation, the Directories) or similar products or related
services in any "distribution areas," defined herein to mean any
distribution areas of Texas which are covered by the Directories or by
any other yellow-page directory owned or published by TransWestern or
any of its Affiliates as of the Closing Date. For purposes of this
Agreement, the term "participate in" shall include, without limitation,
having any direct or indirect interest in any corporation, partnership,
limited liability company, joint venture or other entity, whether as a
sole proprietor, owner, shareholder, partner, member, manager, joint
venturer, creditor or otherwise, or rendering any direct or indirect
service or assistance to any individual corporation, partnership,
limited liability company, joint venture and other business entity
(whether as a director, officer, manager, member, shareholder, partner,
supervisor, employee, agent, consultant or otherwise). In addition, for
purposes of this Section 7.3(a), the term "Affiliates," when used with
respect to Seller, shall not include ▇▇▇▇ Mix or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
(b) During the five (5) year period following the Closing (the
"Nonsolicitation Period"), neither Seller nor any of its successors or
Affiliates shall (i) induce or attempt to induce any employee of
TransWestern (including any employees hired by TransWestern) to leave
the employ of TransWestern, or in any way interfere with the
relationship between TransWestern and any employee thereof, (ii) hire
directly or through another entity any individual employed by
TransWestern who was previously employed by Seller or its Affiliates, or
(iii) induce or attempt to induce any customer, supplier, licensee or
other business relation of TransWestern to cease doing business with
TransWestern, or in any way interfere with the relationship between any
such customer, supplier, licensee or business relation and TransWestern
(including, without limitation, making any negative statements or
communications concerning TransWestern).
(c) Seller agrees that TransWestern would suffer irreparable
harm from a breach by such Party of any of the covenants or agreements
contained in this Section 7.3. Accordingly, in the event of an alleged
or threatened breach by Seller, or any of its respective Affiliates of
any of the provisions of Section 7.3, TransWestern or its successors or
assigns may, in addition to all other rights and remedies existing in
its favor, apply to any court of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce or
prevent any violations of the provisions hereof equal to the length of
the violation of this Section 7.3.
(d) If, at the time of enforcement of this Section 7.3, a court
shall hold that the duration, scope or area restrictions stated herein
are unreasonable under circumstances then existing, the
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Parties agree that the maximum duration, scope or area reasonable under
such circumstances shall be substituted for the stated duration, scope
or area and that the court shall be allowed to revise the restrictions
contained herein to cover the maximum period, scope and area permitted
by law. Seller agrees that the restrictions contained in Section 7.3 are
reasonable.
(e) Each Party agrees that the covenants made in this Section
7.3 shall be construed as an agreement independent of any other
provision of this Agreement and shall survive any order of a court of
competent jurisdiction terminating any other provision of this
Agreement.
7.4 Indemnification.
(a) In addition to all rights and remedies available to
TransWestern at law or in equity (but subject to the limitation on
damages set forth in the last sentence of Section 7.4(c) below and
expiration of each Party's representations, warranties, indemnities and
covenants set forth in Section 7.5(e) below), Seller shall indemnify
TransWestern, its affiliates, members, managers, officers, employees,
agents, representatives, permitted successors and assigns (collectively,
the "TransWestern Indemnitees") in respect of, and defend, save and hold
each TransWestern Indemnitee harmless against, and pay on behalf of or
reimburse each TransWestern Indemnitee for, as and when incurred at any
time after the Closing Date, any Loss which any such TransWestern
Indemnitee may suffer, sustain or become subject to, as a result of, in
connection with, relating or incidental to or by virtue of:
(i) any breach of any representation or warranty made by
Seller in this Agreement or any facts or circumstances
constituting such a breach;
(ii) any breach of any covenant or agreement made by
Seller in this Agreement;
(iii) any Excluded Liability; or
(iv) any Sales/Use Tax Liability or any Liability
arising out of any audit described on the Taxes Schedule.
(b) In addition to all rights and remedies available to Seller
at law or in equity (but subject to the limitation on damages set forth
in the last sentence of Section 7.4(c) below and expiration of each
Party's representations, warranties, indemnities and covenants set forth
in Section 7.5(e) below), TransWestern shall indemnify Seller and its
affiliates, officers, directors, employees, agents, representatives and
permitted successors and assigns (collectively, "Seller Indemnitees") in
respect of, and save and hold each of them harmless from and against,
and pay on behalf of or reimburse each Seller Indemnitee for, as and
when incurred at any time after the Closing Date, any Loss which such
Seller Indemnitee may suffer, sustain or become subject to, as the
result of, in connection with, relating to or incidental to or by virtue
of the breach by TransWestern of any representation, warranty, covenant
or agreement made by TransWestern contained in this Agreement or any
Assumed Liability.
(c) Notwithstanding anything in this Agreement to the contrary,
TransWestern will not be entitled to any indemnification pursuant to
Section 7.4(a) unless and until the damages relating to the
indemnification claims exceed Fifty Thousand Dollars ($50,000) in the
aggregate, in which case TransWestern will be entitled only to those
damages in excess of Fifty Thousand Dollars ($50,000). Notwithstanding
anything in this Agreement to the contrary, Seller will not be entitled
to any indemnification pursuant to Section 7.4(b) unless and until the
damages relating
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to the indemnification claims exceed Fifty Thousand Dollars ($50,000) in
the aggregate, in which case Seller will be entitled only to those
damages in excess of Fifty Thousand Dollars ($50,000). In no event shall
the indemnification obligations of Seller or TransWestern under this
Article 7 (or the Loss of either Party arising out of or relating to
this Agreement or consummation of the transactions contemplated hereby)
exceed the Purchase Price.
7.5 Indemnification Procedures.
(a) Notice of Claim. Any Person making a claim for
indemnification pursuant to Section 7.4 above (an "Indemnified Party")
agrees to give the Party from whom indemnification is sought (an
"Indemnifying Party") prompt written notice of such claim describing
such claim and the nature and amount of such Loss (to the extent that
the nature and amount of such Loss is known at such time) (an
"Indemnification Claim Notice").
(b) Control of Defense; Exceptions. With respect to the defense
of any Proceeding against or involving an Indemnified Party in which the
party in question seeks only the recovery of a sum of money for which
indemnification is provided in Section 7.4, at its option an
Indemnifying Party may appoint as lead counsel of such defense any legal
counsel selected by the Indemnifying Party; provided that the
Indemnified Party will be entitled to participate in the defense of such
claim and to employ counsel of its choice for such purpose at its own
expense; provided that notwithstanding the foregoing, the Indemnifying
Party will bear the reasonable fees and expenses of such separate
counsel incurred prior to the date upon which the Indemnifying Party
effectively assumes control of such defense. The Indemnifying Party will
not be entitled to assume control of the defense of such claim, and will
pay the reasonable fees and expenses of legal counsel retained by the
Indemnified Party, if
(i) the Indemnified Party reasonably believes that an
adverse determination of such Proceeding could be materially
detrimental to or materially injure the Indemnified Party's
reputation or future business prospects,
(ii) the Indemnified Party reasonably believes that
there exists or could arise a conflict of interest which, under
applicable principles of legal ethics, could prohibit a single
legal counsel from representing both the Indemnified Party and
the Indemnifying Party in such Proceeding, or
(iii) a court of competent jurisdiction rules that the
Indemnifying Party has failed or is failing to prosecute or
defend vigorously such claim; and
The Indemnifying party must obtain the prior written consent of
the Indemnified Party (which the Indemnified Party will not unreasonably
withhold) prior to entering into any settlement of such claim or
Proceeding or ceasing to defend such claim or Proceeding.
(c) Payments. Subject to Section 7.5(d) below, any payment
pursuant to a claim for indemnification shall be made not later than
thirty (30) days after receipt by the Indemnifying Party of written
notice from the Indemnified Party stating the amount of the claim,
unless the claim is subject to defense as provided in Section 7.5(b) or
is otherwise disputed by the Indemnifying Party, in which case payment
shall be made not later than thirty (30) days after the amount of the
claim is finally determined in accordance with this Section 7.4 or
Section 7.5, as applicable.
(d) Claims in Bankruptcy. Any claims arising out of or in
connection with Seller's
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breach of any representation, warranty or covenant in this Agreement, or
any claim for indemnification by TransWestern hereunder in accordance
with the terms of this Article 7 shall be treated as follows: (i) if the
breach occurs prior to Closing, then such claims shall be treated as
unsecured claims in the Bankruptcy Case, or (ii) if the breach occurs
after the Closing, then such claims shall be treated as expenses of
administration under 11 U.S.C. Section 503(b)(1) of Seller's bankruptcy
estate.
(e) Survival of Representations, Warranties and Indemnities. All
of the representations and warranties made by any Party in this
Agreement and the other agreements delivered at the Closing in
connection herewith (except for post-closing covenants of either Party,
including, without limitation, covenants not to compete, covenants to
maintain the confidentiality of information and transition post-closing
covenants), and all indemnification obligations of any Party to this
Agreement as set forth in Article 7 hereof, shall survive the Closing
and consummation of the transactions contemplated hereby and continue
until the earlier of the following: (i) distribution of all assets from
Seller's bankruptcy estate; (ii) the close of Seller's Bankruptcy Case;
or (iii) upon the mutual written agreement of the Parties. Neither
Party's participation in the consummation of any transaction pursuant to
this Agreement (or any agreement contemplated hereby) will affect the
survival of any such representation and warranty.
7.6 Miscellaneous.
(a) Press Releases and Announcements; Notice to Customers. All
press releases and other public announcements and all announcements to
Seller's customers, suppliers, licensees or employees relating to the
transactions contemplated hereby (including with respect to any
termination of this Agreement pursuant to Article 6) shall be prepared
jointly by Seller and TransWestern. Without in any way limiting the
generality of the foregoing, at the request of TransWestern, Seller
shall promptly notify (in a manner in form and substance mutually
satisfactory to TransWestern and Seller) each of its customers and each
other Person deemed by TransWestern to be an appropriate recipient of
such notice (i) that TransWestern will own and publish all editions of
the Directories as of the Closing Date and (ii) setting forth such other
information as TransWestern may reasonably request to confirm or
evidence the transfer of the Directories to TransWestern.
(b) Further Transfers and Assurance. Each Party will execute and
deliver such other documents as the other Party may reasonably request
to effect, consummate, confirm or evidence the transfer to such other
Party of the Purchased Assets and any other transactions contemplated
hereby. Without limiting the generality of the foregoing, to the extent
there are any assets necessary or (in the opinion of TransWestern)
advisable to the ownership and publication of the Directories as
presently owned and published by Seller and as proposed to be owned and
published by TransWestern that are not transferred hereunder to
TransWestern, Seller will execute and deliver such further instruments
of conveyance and transfer and take such additional action as may be
required to transfer such assets to TransWestern.
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(c) Name and Logos of Parties. The Parties hereby agree that the
cover of the first edition of each Directory to be published after the
Closing shall be designed to reflect the names and logos of each of
TransWestern and Seller and shall be produced in a style and format
reasonably acceptable to TransWestern and Seller.
(d) No Third Party Beneficiaries. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties and
their respective successors and permitted assigns.
(e) Entire Agreement. This Agreement (including the documents
referred to herein, the Schedules and Exhibits attached hereto and the
recitals hereto, which are hereby incorporated herein by reference)
constitutes the entire agreement between the Parties and supersedes any
prior understandings, agreements, or representations by or between the
Parties, written or oral, that may have related in any way to the
subject matter hereof.
(f) Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their
respective successors and permitted assigns (including any trustee
appointed in the Bankruptcy Case). No Party may assign either this
Agreement or any of its rights, interests, or obligations hereunder
without the prior written approval of the other Parties hereto.
(g) Counterparts. This Agreement may be executed in two or more
faxed or original counterparts, each of which shall be deemed an
original but all of which together will constitute one and the same
instrument.
(h) Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
(i) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed duly
given (i) when delivered, if personally delivered, (ii) when receipt is
electronically confirmed, if faxed (with hard copy to follow via first
class mail, postage prepaid) or (iii) one day after deposit with a
reputable overnight courier, in each case addressed to the intended
recipient as set forth below:
If to Seller: with a copy (which shall not
constitute notice) to:
Alliance Media Group, Inc. ▇▇▇ & ▇▇▇▇▇, Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇. Mix, Jr. Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telecopy #: (▇▇▇) ▇▇▇-▇▇▇▇
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If to TransWestern: with a copy (which shall not
constitute notice) to:
TransWestern Publishing Company ▇▇▇▇▇▇▇▇, ▇▇▇▇, Hargreaves
& Savitch LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇. ▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Chief Financial Officer Telecopy #: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy #: (▇▇▇) ▇▇▇-▇▇▇▇
Any Party may change the address and/or telecopier number to
which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Party notice in the
manner herein set forth.
(j) Governing Law. This Agreement is made and entered into in
San Diego, California, and this Agreement shall be governed by and
construed in accordance with the domestic laws of the State of
California, without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of California or any other
jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of California.
(k) Bankruptcy Court Jurisdiction. The Parties agree that the
Bankruptcy Court shall have exclusive jurisdiction over all disputes and
other matters relating to the interpretation and enforcement of this
Agreement and the other agreements and transactions contemplated hereby.
Each of the Parties expressly consents to and agrees not to contest such
exclusive jurisdiction.
(l) Amendments and Waivers. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and
signed by each Party. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder
or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
(m) Expenses. Except as otherwise specifically provided herein,
each Party will bear its own costs and expenses (including legal and
broker fees and expenses) incurred in connection with this Agreement and
the transactions contemplated hereby; provided that, Seller shall be
solely responsible for all Bankruptcy Court costs and fees.
(n) Taxes; Recording Charges. All transfer, documentary, sales,
use, stamp, registration, conveyance, income, gains, value added or
other Taxes and fees arising out of the sale of the Purchased Assets or
otherwise incurred in connection with this Agreement or the consummation
of the transactions contemplated hereby and all charges for or in
connection with the recording of all of the documents and instruments
contemplated hereby shall be paid by Seller.
(o) Construction. The Parties have jointly participated in the
negotiation and drafting of this Agreement. In the event of an ambiguity
or question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the Parties and no presumptions or
burdens of proof shall arise favoring any Party by virtue of the
authorship of any of the provisions of this Agreement. Any reference to
any federal, state, local, or foreign statute or law shall be deemed
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also to refer to all rules and regulations promulgated thereunder,
unless the context requires otherwise. Nothing in the disclosure
schedules shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless the disclosure schedules
identifies the exception with reasonable particularity and describes the
relevant facts in reasonable detail. The Parties intend that each
representation, warranty, and covenant contained herein shall have
independent significance.
(p) Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
(q) Number and Gender. Each defined term used in this Agreement
has a comparable meaning when used in its plural or singular form. Each
gender-specific term used herein has a comparable meaning whether used
in a masculine, feminine or gender-neutral form.
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IN WITNESS WHEREOF, the Parties hereto have executed this Asset Purchase
Agreement as of the date first above written.
TRANSWESTERN PUBLISHING COMPANY, LLC,
a Delaware limited liability company
By: TransWestern Communications Company, Inc.
Its: Manager
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Vice President, Chief Financial Officer
SELLER:
ALLIANCE MEDIA GROUP, INC.,
a Texas corporation
By: /s/▇▇▇▇ ▇. Mix
Its: Chairman, Chief Executive Officer
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