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EXHIBIT 2.1
SECURITIES PURCHASE AND REDEMPTION AGREEMENT
DATED AUGUST 27, 1997
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TABLE OF CONTENTS
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1. TWP Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Repayment of Existing Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 New Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Purchase/Redemption of Partnership Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.1 Purchase/Redemption of Partnership Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.2 TWP Purchase of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.3 Exchange of Partnership Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. [Intentionally Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
5. Delivery and Surrender of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5.1 Delivery of Purchased Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5.2 Delivery of Purchased Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5.3 Surrender of Redemption Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6.1 Documents to be Delivered by the Company and/or the Partnership . . . . . . . . . . . . . . . . . . . . . . . . 4
6.2 Documents to be Delivered by the Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6.3 Documents to be Delivered by the Limited Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6.4 Documents to be Delivered by TWP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
7. Representations and Warranties by the Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
7.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
7.2 Capitalization, Equity Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7.3 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7.4 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
7.5 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
7.6 No Undisclosed Liabilities, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7.7 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7.8 Title to and Condition of Properties and Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.9 Leased Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.10 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.11 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.12 Patents, Copyrights and Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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7.13 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.14 Governmental Authorizations and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.15 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.16 Relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.17 Publications in Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.18 List of Publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.19 Replacement of Computer Tapes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.20 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.21 Compliance With Legislation Regulating Environmental Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.22 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.23 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.24 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.25 No Untrue Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8. Representations and Warranties by TWP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.3 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.4 Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.5 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.6 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.7 No Untrue Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.8 Acquisition for Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9. Representations and Warranties of the Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.1 Organization and Good Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.2 Ownership of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.3 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.4 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.5 Absence of Conflicts, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.6 Knowledge; Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.7 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10. Representations and Warranties of the Limited Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.1 Organization and Good Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.2 Ownership of Partnership Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.3 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.4 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.5 Absence of Conflicts, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.6 Knowledge; Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.7 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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11. Covenants of the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.1 Access, Information and Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.2 Conduct of Business Pending Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.3 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.4 No Solicitation of Offers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.5 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.6 No Transfers by Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.7 No Transfers by Limited Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.8 Updating of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.9 Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.10 No Unreasonable Interference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.11 Non-Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.12 ▇▇▇▇▇▇▇ Non-Competition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
12. Conditions to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
12.1 Conditions to Obligations of the Company and the Partnership. . . . . . . . . . . . . . . . . . . . . 27
12.3 Commercially Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
13. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
13.1 TWP's Right to Terminate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
13.2 The Stockholders and the Limited Partners' Right to Terminate . . . . . . . . . . . . . . . . . . . . 32
13.3 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
14. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
14.1 Non-Survival of Representations and Warranties; Release Upon Closing. . . . . . . . . . . . . . . . . 33
14.2 Limited Partner and Stockholder Representative. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
14.3 Selling Securityholder's Post-Closing Access. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
14.4 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
14.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
14.6 Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
14.7 No Third Party Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
14.8 Entire Agreement; Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
14.9 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
14.10 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
14.11 Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
14.12 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
14.13 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
14.14 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
14.15 Time of the Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
14.16 Fund Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
14.17 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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INDEX TO SCHEDULES AND EXHIBITS
Schedule 1 - Calculation Methodology of Unit Value
Schedule 3 - Redemption of Partnership Units/Redemption of Shares
Schedule 7.1 - Jurisdictions
Schedule 7.2 - Partnership Capitalization
Schedule 7.3 - Authority
Schedule 7.4 - No Violations
Schedule 7.6 - Undisclosed Liabilities
Schedule 7.7 - Absence of Certain Changes
Schedule 7.8 - Title to and Condition of Properties and Assets
Schedule 7.9 - Leased Property
Schedule 7.10 - Materials Contracts and Commitments
Schedule 7.11 - Litigation
Schedule 7.12 - Patents, Copyrights and Trademarks
Schedule 7.13 - Compliance with Laws
Schedule 7.14 - Governmental Authorizations and Regulations
Schedule 7.18 - List of Publications
Schedule 7.19 - Replacement of Computer Tapes
Schedule 7.20 - Employees
Schedule 7.21 - Compliance With Legislation Regulating Environmental Quality
Schedule 9.4 - Consents re: Stockholders
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Schedule 10.4 - Consents re: Limited Partners
Schedule 11.2.7 - Conduct of Business re: Compensation
Schedule 12.2.7 - Consents and Authorizations
Exhibit A - Legal Opinion from ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
Exhibit B - TWP Certificate
Exhibit C - Legal Opinion from ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
Exhibit D - Company Certificate
Exhibit E - Certificate of Secretary of the Company
Exhibit F - Partnership Certificate
Exhibit G - Certificate of the General Partner of the Partnership
Exhibit H - Third Amended and Restated Partnership Agreement and Summary of
Terms
Exhibit I - Investors Agreement
Exhibit J1-J2 - Employment Agreements
Exhibit K - Executive Agreement
Exhibit L - Management Agreement
Exhibit M - Registration Agreement
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SECURITIES PURCHASE AND REDEMPTION AGREEMENT
This Securities Purchase and Redemption Agreement (the "Agreement") is
entered into as of August 27, 1997 by and among TransWestern Publishing Company,
L.P., a Delaware limited partnership (the "Partnership"), TransWestern
Communications Company, Inc., a Delaware corporation (the "Company"), TWP
Recapitalization Corp., a Delaware corporation ("TWP"), ▇▇▇▇▇▇ ▇. ▇▇▇ Equity
Fund III, L.P., a Delaware limited partnership (the "Fund"), the limited
partners of the Partnership executing this Agreement (each such limited partner,
together with any additional limited partners becoming a party hereto by
execution and delivery of a counterpart signature page in accordance with the
terms hereof, a "Limited Partner" and collectively the "Limited Partners") and
the stockholders of the Company executing this Agreement (each such stockholder,
together with any additional stockholders becoming a party hereto by execution
and delivery of a counterpart signature page in accordance with the terms
hereof, a "Stockholder" and collectively the "Stockholders").
WHEREAS, the Partnership, the Company, the Stockholders and TWP desire to
effect a recapitalization of the Partnership pursuant to which TWP will purchase
units in the Partnership and the Partnership and the Limited Partners desire to
effect a redemption of all or part of the units held by the Limited Partners;
WHEREAS, TWP desires to purchase and the Stockholders desire to sell all or
part of the stock of the Company held by the Stockholders, all in accordance
with the terms and conditions of this Agreement;
WHEREAS, TWP was organized solely for the purpose of purchasing units in
the Partnership and acquiring such stock of the Company held by the
Stockholders, and, except for certain commitments made to TWP by the Fund, TWP
has no assets; and
WHEREAS, the Fund desires to induce each of the other parties hereto to
enter into this Agreement with TWP and to consummate the transactions
contemplated hereby.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and for other good and valuable consideration, the mutual
receipt and sufficiency of which are hereby acknowledged, the parties do hereby
covenant and agree as follows:
1. TWP Investment. Upon the terms and conditions of this Agreement, the
Fund shall cause TWP to, and TWP shall, pay to the Partnership the sum of (a)
One Hundred Thirty Million Dollars ($130,000,000), minus (b) the aggregate
amount of cash invested by the CIVC Parties, the Reinvesting Managers and the
Other Investors at the Closing as contemplated by Section 12.1.6 or Section
12.1.7, minus (c) the aggregate value of the Class A Units and Company common
stock exchanged, retained or purchased by the CIVC Parties, the Reinvesting
Managers and the Other
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Investors at the Closing as contemplated by Section 12.1.6 or Section 12.1.7,
minus (d) the aggregate purchase price (the "Share Purchase Price") to be paid
by TWP to certain Stockholders pursuant to Section 4 to acquire shares of
Company common stock, by wire transfer in immediately available funds as
payment in full for the Purchased Units (as defined below). In consideration
for the foregoing investment, the Partnership will issue to TWP Preferred Units
and Class A Units (collectively, the "Purchased Units"). The value of each
Purchased Unit and the number of Purchased Units shall be determined using the
methodology set forth in Schedule 1 attached hereto; it being understood that
the numbers set forth therein are assumptions made for example purposes only.
2. Indebtedness. Upon the terms and conditions of this Agreement, on the
Closing Date, the Partnership shall, upon receipt of such executed agreements
and other documents described in Section 2.1 and the proceeds of the equity
investment by TWP described in Section 1, sequentially effectuate the following
transactions described in Sections 2.1 and 2.2 relating to indebtedness.
2.1 Repayment of Existing Indebtedness. The Partnership shall use
part of the proceeds of the equity investment by TWP described in Section 1
to concurrently (i) repay all funded indebtedness of the Partnership
(except for the Promissory Note dated April 29, 1996 in favor of J&J
Marketing, Inc.), including without limitation indebtedness under the
existing credit facility with First Union National Bank of North Carolina
and CIBC, Inc., any LIBOR contract breakage costs and any costs associated
with the termination of all interest rate swap agreements.
2.2 New Financing. The Fund shall arrange the financing (the
"Financing") on behalf of the Partnership described in the following
commitment letters delivered by TWP to the Partnership and shall deliver to
the Partnership at the Closing all agreements and other documents necessary
for the Partnership to consummate such financing, each executed by Canadian
Imperial Bank of Commerce ("CIBC") or CIBC Wood Gundy Securities Corp.
("CIBC Wood Gundy"), as applicable, and the other lenders participating
therein, if any: (i) a commitment letter dated August 26, 1997 from CIBC
pursuant to which CIBC has committed pursuant to the terms thereof to
provide senior secured credit facilities to the Partnership in connection
with the transactions contemplated hereby; and (ii) a commitment letter
dated August 26, 1997 from CIBC Wood Gundy pursuant to which CIBC Wood
Gundy has committed pursuant to the terms thereof to provide senior
subordinated financing to the Partnership in connection with the
transactions contemplated hereby (collectively, the "Debt Commitment
Letters"). The Partnership shall cooperate with the Fund in obtaining such
financing. The Partnership shall use a portion of the combined proceeds of
the Financing and the equity investment by TWP to pay a portion of the
expenses set forth in Section 14.13 and to make the Class E Catch-Up
Distribution (as defined in the Partnership Agreement).
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3. Purchase/Redemption and Exchange of Partnership Units; Purchase and
Sale of Shares.
3.1 Purchase/Redemption of Partnership Units. From the proceeds of
the Financing and, to the extent necessary, part of the proceeds of the
equity investment by TWP described in Section 1, the Partnership shall
redeem and purchase from each of the Limited Partners on the Closing Date
the number of Class A Units listed opposite such Limited Partner's name on
Schedule 3 attached hereto, other than such Class A Units which such
Limited Partner elects to retain or exchange as contemplated by Section
12.1.6 or Section 12.1.7 (such Class A Units to be redeemed being sometimes
hereinafter referred to as the "Redemption Units"). Upon the terms and
conditions of this Agreement, each Limited Partner hereby agrees to sell
and deliver to the Partnership on the Closing Date such Limited Partner's
respective Redemption Units. As payment in full for the Redemption Units,
the Partnership shall pay to each Limited Partner the amount set forth on
Schedule 3 opposite the name of such Limited Partner in cash at the Closing
(reduced, in the case of each Limited Partner electing to retain or
exchange Class A Units pursuant to Section 12.1.6 or Section 12.1.7, in
direct proportion to the proportion of such Limited Partner's aggregate
amount of Class A Units which are retained or exchanged).
3.2 Exchange of Partnership Units. Each Limited Partner that elects
to retain Class A Units pursuant to Section 12.1.6 or 12.1.7, as
applicable, shall deliver to the Partnership one-half of the Class A Units
so retained by such Limited Partner and the Partnership shall issue to such
Limited Partner a Preferred Unit in exchange for each Class A Unit
delivered to the Partnership.
3.3 TWP Purchase of Shares. Upon the terms and conditions of this
Agreement, the Fund shall cause TWP to, and TWP shall, pay to each
Stockholder on the Closing Date by wire transfer of immediately available
funds as payment in full for such Stockholder's Purchased Shares (as
defined below), the amount set forth on Schedule 3 opposite the name of
such Stockholder in cash at the Closing (reduced, in the case of each
Stockholder electing to retain shares of the Company's common stock
pursuant to Section 12.1.6 or Section 12.1.7, in direct proportion to the
proportion of such Stockholder's aggregate amount of such shares which are
retained). The value of the Purchased Shares and the number of Purchased
Units and Purchased Shares shall be determined using the methodology set
forth in Schedule 1 attached hereto; it being understood that the numbers
set forth therein are assumptions made for example purposes only. The sum
total of the number of shares of Company common stock listed opposite each
Stockholder's name, other than such shares which such Stockholder elects to
retain as contemplated by Section 12.1.6 or 12.1.7, in direct proportion to
the amount of Class A Units which are being retained by such person, are
referred to as the "Purchased Shares."
4. [Intentionally Omitted]
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5. Delivery and Surrender of Certificates.
5.1 Delivery of Purchased Shares. At the Closing, each Stockholder
shall deliver to TWP the stock certificate(s) representing such
Stockholder's Purchased Shares, duly endorsed in blank for transfer or
accompanied by stock powers duly executed in blank. The Stockholders shall
cease to have any rights as stockholders relating to their respective
Purchased Shares except for such rights as they have pursuant to this
Agreement.
5.2 Delivery of Purchased Units. At the Closing, the Partnership
shall make appropriate notations in its books and records to reflect the
issuance and transfer of newly issued Purchased Units to TWP hereunder.
5.3 Surrender of Redemption Units. At the Closing, each Limited
Partner shall cease to have any rights as a limited partner relating to its
own Redemption Units (if any) except for such rights as it has pursuant to
this Agreement.
6. Closing. The closing of the transactions contemplated herein (the
"Closing") shall take place on October 1, 1997 at 10:00 am local time at the
offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or on
such earlier date that all of the conditions precedent to closing set forth in
Section 12 shall have been satisfied or waived in writing. The date that the
Closing actually occurs is referred to as the "Closing Date".
6.1 Documents to be Delivered by the Company and/or the Partnership.
On or before the Closing Date, the Company and/or the Partnership, as
applicable, shall deliver the following:
6.1.1 The Partnership shall deliver the instruments and
documents described in Section 5.2 and all documents and instruments
required to be delivered by the Partnership pursuant to Section 12.2.
6.1.2 The Company shall deliver all documents and instruments
required to be delivered by the Company pursuant to Section 12.2.
6.1.3 The Partnership shall deliver the consideration described
in Section 3.
6.1.4 All instruments and documents executed and delivered to
TWP pursuant hereto shall be in form and substance, and shall be
executed in a manner, reasonably satisfactory to TWP. All instruments
and documents executed and delivered to the Company pursuant hereto
shall be in form and substance, and shall be executed in a manner,
reasonably satisfactory to the Company. All instruments and documents
executed and delivered to the Partnership pursuant hereto shall be in
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form and substance, and shall be executed in a manner, reasonably
satisfactory to the Partnership.
6.2 Documents to be Delivered by the Stockholders On or before the
Closing Date, the Stockholders shall deliver the following:
6.2.1 All instruments and documents described in Section 5.1.
6.2.2 All instruments and documents executed and delivered to
TWP pursuant hereto shall be in form and substance, and shall be
executed in a manner, reasonably satisfactory to TWP.
6.3 Documents to be Delivered by the Limited Partners. On or before
the Closing Date, the Limited Partners shall deliver the following:
6.3.1 All instruments and documents described in Section 5.3.
6.3.2 All instruments and documents executed and delivered to
TWP pursuant hereto shall be in form and substance, and shall be
executed in a manner, reasonably satisfactory to TWP. All instruments
and documents executed and delivered to the Partnership pursuant
hereto shall be in form and substance, and shall be executed in a
manner, reasonably satisfactory to the Partnership.
6.4 Documents to be Delivered by TWP. On or before the Closing Date,
the Fund shall cause TWP to, and TWP shall, deliver the following:
6.4.1 Immediately available funds as described in Sections 1 and
all documents required to be delivered by TWP pursuant to Section
12.1.
6.4.2 All instruments and documents executed and delivered to
the Company pursuant hereto shall be in form and substance, and shall
be executed in a manner, reasonably satisfactory to the Company. All
instruments and documents executed and delivered to the Partnership
pursuant hereto shall be in form and substance, and shall be executed
in a manner, reasonably satisfactory to the Partnership.
7. Representations and Warranties by the Partnership. The Company and
the Partnership jointly and severally represent and warrant to TWP as follows:
7.1 Organization. The Partnership is a limited partnership duly
organized, validly existing and in good standing under the laws of the
State of Delaware and has the power and authority to carry on its business
as now being conducted and to own and operate the
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properties and assets now owned and being operated by it. The Partnership has
delivered to TWP complete and correct copies of its Certificate of Limited
Partnership and the Second Amended and Restated Agreement of Limited Partnership
(the "Second Amended Partnership Agreement") as in effect on the date hereof.
The Partnership is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which such qualification is necessary under the
applicable law as a result of the conduct of its business or the ownership of
its properties. Each jurisdiction in which the Partnership is qualified to do
business is listed on Schedule 7.1 attached hereto.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the corporate power and
authority to carry on its business as now being conducted and to own and operate
the properties and assets now owned and being operated by it. The Company has
delivered to TWP complete and correct copies of its Certificate of Incorporation
and By-Laws as in effect on the date hereof. The Company is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
such qualification is necessary under the applicable law.
7.2 Capitalization, Equity Ownership. Immediately prior to the consummation
of the transactions contemplated hereby, the authorized capital stock of the
Company consists of 30,000 shares of the Company's common stock (9,800.05 of
which will be issued and outstanding) and the capitalization of the Partnership
consists of 3,968,236.02 issued and outstanding Class A Units and 299,698.43
issued and outstanding Class E Units, as set forth in more detail on Schedule
7.2 attached hereto; all of the foregoing securities of the Company and the
Partnership will have been duly authorized and will be validly issued and fully
paid and non-assessable and none of them will be issued in violation of any
preemptive or other right; and, except as contemplated in this Agreement or the
other agreements, instruments or documents delivered in connection with the
transactions contemplated hereby, neither the Company nor the Partnership will
be a party to or bound by any contract, agreement or arrangement to issue, sell
or otherwise dispose of or redeem, purchase or otherwise acquire any capital
stock, partnership interest or any other security of the Company or the
Partnership or any other security exercisable or exchangeable for or convertible
into any capital stock, partnership interest or any other security of the
Company or the Partnership, and there will not be any outstanding option,
warrant or other right to subscribe for or purchase, or contract, agreement or
arrangement with respect to, any capital stock, partnership interest or any
other security of the Company or the Partnership or any other security
exercisable or convertible into any capital stock, partnership interest or any
other security of the Company or the Partnership.
7.3 Authority. The Company and the Partnership have the power to enter
into this Agreement and all other agreements, instruments and documents executed
and delivered by the Company or the Partnership pursuant to this Agreement
(collectively, the "TransWestern Delivered Documents") and to carry out their
respective obligations
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thereunder. Except as set forth on Schedule 7.3 attached hereto, the execution,
delivery and performance of the TransWestern Delivered Documents and the
consummation of the transactions contemplated thereby have been duly authorized
by the Company and the Partnership, and no other proceeding or approval on the
part of the Company or the Partnership is necessary to authorize the execution
and delivery of the TransWestern Delivered Documents or the performance of any
of the transactions contemplated thereby. Assuming due authorization, execution
and delivery of the TransWestern Delivered Documents by the other parties
thereto, the TransWestern Delivered Documents will be legal, valid and binding
obligations of the Company or the Partnership as applicable, enforceable against
the Company or the Partnership in accordance with their respective terms.
7.4 No Violation. Except as set forth in Schedule 7.4 attached hereto,
neither the execution, delivery or performance of any of the TransWestern
Delivered Documents nor the consummation of any of the transactions contemplated
thereby (i) will violate or conflict with the Certificate of Limited Partnership
of the Partnership or the Second Amended Partnership Agreement, (ii) will
violate or conflict with the Company's Certificate of Incorporation or By-Laws,
(iii) will result in any breach of or default under any provision of any
material contract or agreement to which the Company or the Partnership is a
party or by which the Company or the Partnership is bound or to which any
property or assets of the Company or the Partnership is subject, (iv) is
prohibited by or requires the Company or the Partnership to obtain or make any
consent, authorization, approval, registration or filing under any statute, law,
ordinance, regulation, rule, judgment, decree or order of any court or
governmental agency, board, bureau, body, department or authority, or of any
other person, (v) will cause any acceleration of maturity of any note,
instrument or other obligation to which the Company or the Partnership is a
party or by which the Company or the Partnership is bound or with respect to
which the Company or the Partnership is an obligor or guarantor, or (vi) will
result in the creation or imposition of any and all liens, claims, charges,
restrictions, equities, taxes and encumbrances of every kind or description
(collectively "Encumbrances" and individually an "Encumbrance") upon or give to
any other person any interest or right (including any right of termination or
cancellation) in or with respect to the equity or any of the properties, assets,
business, agreements or contracts of the Company or the Partnership, except as
may be required in connection with obtaining any of the Financing.
7.5 Financial Statements. The Partnership has heretofore furnished TWP
with copies of the audited balance sheets, statements of income, statements of
changes in partnership deficit and statements of cash flows for the fiscal years
ended April 30, 1994, 1995, 1996 and 1997 (collectively, the "Year End
Financials") and the unaudited balance sheet and income statement of the
Partnership for the three months ended July 31, 1997 and the monthly financial
review dated July 1997 (collectively, the "Unaudited Statements"). Except as
otherwise set forth therein, the Unaudited Statements were prepared in a manner
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consistent with the Partnership's historical practices and in the reasonable
judgment of management fairly present the results of operations in all material
respects for the periods covered thereby, subject to year end adjustments, the
absence of footnote disclosures and adjustments required by generally accepted
accounting principles. Except as otherwise set forth therein, the Year End
Financials are in accordance with the books and records of the Partnership and
contain and reflect all necessary adjustments for a fair representation in all
material respects of the financial statements as of the date and for the period
covered thereby and reflect the assets, liabilities, financial condition and
results of operations indicated thereby in accordance with generally accepted
accounting principles consistently applied.
7.6 No Undisclosed Liabilities, Etc. Since April 30, 1997 (except (i) for
the transactions contemplated by this Agreement and (ii) as set forth in
Schedule 7.6 attached hereto):
7.6.1 Neither the Company nor the Partnership has incurred any
liability or obligation (absolute, accrued, contingent or otherwise) of any
nature affecting the Company or the Partnership or any of their properties
or assets, other than liabilities and obligations incurred in the ordinary
course of business, that would properly be reflected or reserved against in
a balance sheet prepared in conformity with the Financial Statements; and
7.6.2 The Partnership's backlog (i.e., all sales of advertising to be
included in directories to be published) has been produced in the ordinary
course of the business of the Partnership in quantities that are not
materially greater or less than those required for the current operation of
the business of the Partnership.
7.7 Absence of Certain Changes. Since April 30, 1997 (except (i) for the
negotiation, execution and delivery of this Agreement, (ii) as contemplated by
this Agreement and (iii) as set forth in Schedule 7.7 attached hereto):
7.7.1 Neither the Company nor the Partnership has had any change in
their condition, operations, business, properties, assets or liabilities,
except where such changes would not have a materially adverse effect on the
business, assets, condition (financial or otherwise) or operating results
of the Company and the Partnership, taken as a whole (a "Materially Adverse
Effect");
7.7.2 Except for the transactions contemplated in this Agreement,
neither the Company nor the Partnership has issued, sold or otherwise
disposed of, or agreed to issue, sell or otherwise dispose of, any equity
interests or any other security of the Company or the Partnership and has
not granted or agreed to grant any option, warrant or other right to
subscribe for or to purchase any equity interests or any other security of
the Company or the Partnership;
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15
7.7.3 (i) Except for normal periodic increases in the ordinary course
of business consistent with past practice, since July 1, 1997 there has not
been any increase in the compensation payable or to become payable by the
Company or the Partnership to any of their respective directors, officers,
employees or agents (collectively, "Personnel"), (ii) other than in the
ordinary course of business, since July 1, 1997 there has not been any
bonus, incentive compensation, service award or other like benefit granted,
made or accrued, contingently or otherwise, for or to the credit of any of
the Personnel, (iii) since July 1, 1997 there has not been any employee
welfare, pension, retirement, profit-sharing or similar payment or
arrangement made or agreed to by the Company or the Partnership for any
Personnel except pursuant to existing plans and arrangements described in
Schedule 7.7 (collectively, the "Plans"), or (iv) since July 1, 1997 there
has not been any new employment or consulting agreement to which the
Company or the Partnership is a party;
7.7.4 No property or asset of a material nature to the Company or the
Partnership has been sold, transferred or otherwise disposed of, and
neither the Company nor the Partnership has agreed to sell, transfer or
otherwise dispose of, any of their respective material properties or
assets, except in the ordinary course of business;
7.7.5 No property or asset of a material nature to the Company or the
Partnership has been subjected to any Encumbrance and neither the Company
nor the Partnership has agreed to subject any of their respective material
properties or assets to any Encumbrance, except for (a) tax liens with
respect to taxes not yet due and payable or which are being contested in
good faith by appropriate proceedings and for which appropriate reserves
have been established in accordance with generally accepted accounting
principles, consistently applied; (b) deposits or pledges made in
connection with, or to secure payment of, utilities or similar services,
workers' compensation, unemployment insurance, old age pensions or other
social security obligations; (c) purchase money security interests in any
property acquired by the Company or the Partnership; (d) interests or title
of a lessor under any lease under which the Company or the Partnership is
the lessee; (e) mechanics', materialmen's or contractors' liens or
encumbrances or any similar lien or restriction; (f) easements,
rights-of-way, restrictions and other similar charges and encumbrances not
interfering with the ordinary conduct of the business of the Company or
detracting from the value of the assets of the Company; (g) liens
outstanding on the date hereof pursuant to agreements which will be
satisfied as of the Closing; and (h) liens securing the Financing
(collectively, "Permitted Encumbrances"); or
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7.7.6 There has not been any amendment or termination of any
contract, agreement or license materially adversely affecting the Company
or the Partnership taken as a whole.
7.8 Title to and Condition of Properties and Assets. As of the date
hereof, (i) the Company and the Partnership have good and marketable title to
all of their respective assets and properties and (ii) as of the Closing Date,
the Company and the Partnership will have good and marketable title to all of
their respective assets and properties (except as sold or otherwise disposed of
in the ordinary course of business), subject to no Encumbrance (other than
Permitted Encumbrances), except as set forth on Schedule 7.8 attached hereto.
The Company's and the Partnership's material facilities, machinery, furniture,
office and other equipment are in good operating condition and repair, subject
only to ordinary wear and tear, and neither the Company nor the Partnership nor
any of their respective assets or properties is in material violation of any
applicable ordinance, regulation or building, zoning, environmental or other law
in respect thereof.
7.9 Leased Property. Attached as Schedule 7.9 is a true and complete list
of all property leased by the Company or the Partnership. Each lease set forth
in Schedule 7.9 pursuant to which the Company or the Partnership leases any real
property or personal property is in full force and effect and is valid and
enforceable in accordance with its terms. There is not under any such lease any
default by the Company or the Partnership, or any event that with notice or
lapse of time or both would constitute such a default by the Company or the
Partnership and with respect to which the Company or the Partnership has not
taken adequate steps to prevent such default from occurring, except for any such
default as had not had and would not reasonably be expected to have a Materially
Adverse Effect; all of such events, if any, and the aforesaid steps taken by the
Company or the Partnership are set forth in Schedule 7.9. There is not under
any such lease any default by any other party thereto or any event that with
notice or lapse of time or both would constitute such a default thereunder by
such party, which default has had or would reasonably be expected to have a
Materially Adverse Effect. Neither the Company nor the Partnership owns any
real property.
7.10 Material Contracts. All Material Contracts to which the Company or
the Partnership is a party or by which the Company or the Partnership are bound
are listed on Schedule 7.10. Except as disclosed on Schedule 7.10, each
Material Contract is valid and subsisting and the Company or the Partnership, as
applicable, has duly performed in all material respects all its obligations
under each such Material Contract to which it is party to the extent that such
obligations to perform have accrued and no breach or default, or, to the
knowledge of the Company or the Partnership, any other party or obligor
thereunder, has occurred or, assuming that the approvals and consents set forth
on Schedule 12.2.7 are sought and obtained, as a result of the execution,
delivery and performance of this Agreement. For purposes hereof, a "Material
Contract" of the Partnership or the Company
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means any agreement, arrangement, bond, commitment, indemnity, lease or license
to which such person is a party that (a) by its terms obligates such Person to
pay an amount in excess of $50,000 per year and which cannot be terminated or
canceled by such Person without liability or penalty upon 60 days' or less prior
notice (but not including any advertising sale contract between the Partnership
and any of its customers), (b) limits or restricts the ability of such Person to
compete or to conduct its business in any manner or place, (c) is a credit
agreement, note, bond, mortgage, deed of trust or indenture evidencing any
indebtedness of such Person for borrowed money, is a guaranty or obligation,
other than pursuant to the Plans, of any Affiliate, officer or director, of such
Person, from or to such Person (but not including any advertising sale contract
between the Partnership and any of its customers), or (d) the termination of
which would have a Materially Adverse Effect (but not including any advertising
sale contract between the Partnership and any of its customers); provided,
however, that "Material Contracts" shall not mean or include any of the Plans.
7.11 Litigation. Except as set forth in Schedule 7.11, there are no
actions suits, proceedings or investigations, either at law or in equity, or
before any commission or other administrative authority in any United States
jurisdiction, of any kind now pending or, to the best of the Company's or the
Partnership's knowledge, threatened and involving in excess of $150,000,
involving the Company or the Partnership or which questions the validity of any
TransWestern Delivered Document or which seeks to delay, prohibit or restrict in
any manner any action taken or contemplated to be taken by the Company or the
Partnership under any TransWestern Delivered Document.
7.12 Patents, Copyrights and Trademarks. Schedule 7.12 sets forth a
complete list of all material copyrights, patents, trade names, trademarks and
service marks, identifying whether registered or at common law, and all
applications therefor that are pending or in the process of preparation
(collectively, the "Intellectual Property Rights"), that are directly or
indirectly owned, licensed, used, required for use or controlled in whole or in
part by the Company or the Partnership and all licenses and other agreements
allowing the Company or the Partnership to use Intellectual Property Rights of
third parties in the United States. Except as otherwise set forth in Schedule
7.12, the Partnership is the sole and exclusive owner of the Intellectual
Property Rights listed therein, free and clear of any Encumbrance (other than
Permitted Encumbrances) and such Intellectual Property Rights have not been and
are not being challenged in any way or involved in any pending or threatened
unfair competition proceeding. Except as set forth on Schedule 7.12, there has
been and is no claim challenging the scope, validity or enforceability of any of
the Intellectual Property Rights. Neither the Company, nor the Partnership has
infringed, or is infringing or is subject to any unfair competition claim with
respect to any service ▇▇▇▇ or trade name registration or application therefor,
trademark, trademark registration or application therefor, copyright, copyright
registration or application therefor, patent, patent registration or application
therefor, or any other proprietary or intellectual property right of any person
or entity and neither the Company nor the Partnership has received or has any
knowledge, after due
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inquiry, of any such claim or other notice of any such violation or
infringement. Except for the licenses listed in Schedule 7.12, neither the
Company nor the Partnership requires any license or other proprietary right to
conduct its business as it is now being conducted.
7.13 Compliance with Laws. The Company and the Partnership are in
compliance with, and the execution and delivery of this Agreement and the other
TransWestern Delivery Documents and the consummation by the Company and the
Partnership of the transactions contemplated hereby and thereby (including,
without limitation, the issuance to TWP of the Purchased Units) will comply
with, all federal, state and local statutes, laws, ordinances, regulations,
rules, permits, judgments, orders or decrees applicable to the Company or the
Partnership and there does not exist any basis for any claim of default under or
violation of any such statute, law, ordinance, regulation, rule, judgment, order
or decree except such defaults or violations, if any, that in the aggregate do
not and will not materially and adversely affect the Company and the
Partnership, taken as a whole. Except as set forth on Schedule 7.13, the
Company and the Partnership are in compliance with (i) all applicable
requirements of all United States, state and local governmental authorities with
respect to environmental protection, including, without limitation, regulations
establishing quality criteria and standards for air, water, land and hazardous
materials, (ii) all applicable requirements of the Occupational Safety and
Health Act of 1970 within the United States and all rules, regulations and
orders thereunder and (iii) all applicable laws and related rules and
regulations of all United States jurisdictions affecting labor union activities,
civil rights or employment, including without limitation, in the United States,
the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967,
the Equal Employment Opportunity Act of 1972, the Employee Retirement Income
Security Act of 1974, the Equal Pay Act and the National Labor Relations Act, in
each case, other than any such non-compliance which in the aggregate would not
reasonably be expected to have a Materially Adverse Effect.
7.14 Governmental Authorizations and Regulations. Schedule 7.14 lists all
material licenses, franchises, permits and other governmental authorizations
held by the Company or the Partnership with respect to the conduct of their
respective businesses. Such licenses, franchises, permits and other
governmental authorizations are valid and neither the Company nor the
Partnership has not received any notice that any governmental authority intends
to cancel, terminate or not renew any such license, franchise, permit or other
governmental authorization. After the Closing the Company and the Partnership
will continue to hold all licenses, franchises, permits and other governmental
authorizations necessary to the conduct of their respective businesses as
currently conducted.
7.15 Labor Matters. No employees of the Company or the Partnership are
currently represented by a labor union or labor organization, no labor union or
labor organization has been certified or recognized as a representative of any
such employees, and neither the Company nor the Partnership have any obligation
under any collective bargaining
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agreement or other agreement with any labor union or labor organization that, in
any way, affects the Company or the Partnership. Neither the Company nor the
Partnership have any obligation to recognize or deal with any labor union or
labor organization concerning the Partnership, and there are no union agreements
pertaining to or which determine the terms or conditions of employment of any
employee of the Company or the Partnership. There are no pending or, to the
Company's or the Partnership's knowledge, threatened representation campaigns,
elections or proceedings or investigations concerning union representation
involving any employees of the Company or the Partnership. Neither the Company
nor the Partnership have any knowledge of any activities or efforts of any labor
union or labor organization (or representative thereof) to organize any
employees of the Company or the Partnership nor of any demands for recognition
or collective bargaining, nor of any strikes, slowdowns, work stoppages or
lock-outs of any kind, or threats thereof, by or with respect to any employees
of the Company or the Partnership or any actual or claimed representative
thereof, and no such activities, efforts, demands, strikes, slowdowns, work
stoppages or lock-outs occurred during the three year period preceding the date
hereof. Neither the Company nor the Partnership is involved in any industrial
or trade dispute or any dispute or negotiation regarding a claim of material
importance with any labor union or labor organization concerning any employee of
the Company or the Partnership, and there are no controversies, claims, demands
or grievances of material importance pending or, so far as the Company or the
Partnership is aware, threatened, between the Company or the Partnership and any
of their respective employees or any actual or claimed representative thereof.
7.16 Relationships. To the best of their knowledge, the relationships of
the Company and the Partnership taken as a whole with material suppliers,
distributors, dealers, sales representatives, customers and others having
business relationships with them are generally satisfactory, and there is no
indication of any intention by any party thereto to terminate or modify the
terms of any of such relationships, except for any termination or modification
which would not reasonably be expected to have a Materially Adverse Effect.
7.17 Publications in Process. The publications in process and the
directories in process of distribution, including, but not limited to, artwork,
production material, production information in the hands of subcontractors,
work-in-progress and parts and supplies relating to such publications and
directories, are suitable and usable in all material respects in the ordinary
course of business for the purposes for which intended, and suitable and usable
in all material respects for the due publication of the Partnership's
neighborhood telephone directories and the satisfactory discharge of customer
contracts for the insertion of advertising that the Partnership has entered
into. Without limiting the generality of the foregoing, those items do not
include any material amount of obsolete or defective materials or any excess
stock items.
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7.18 List of Publications. Schedule 7.18 attached hereto contains a true
and complete list of (a) each telephone directory published by the Partnership,
(b) the two most recent dates on which each of such directories were published
by the Partnership and (c) the approximate number of copies of each directory
published on the most recent date listed. Each publication listed in Schedule
7.18 is substantially free of errors, substantially without offset charges and
without material claims for short distribution. To the knowledge of the
Partnership and the Company, each directory listed in Schedule 7.18 contains
substantially all of the addresses and phone numbers for the area of its
publication (except for telephone numbers that are "unlisted" by agreement with
the applicable local telephone exchange company) and was distributed to
substantially all of the residences and business firms in its area.
7.19 Replacement of Computer Tapes. Except as set for on Schedule 7.19
attached hereto, the Partnership does not have any knowledge that the
arrangements under which information is being supplied to the Partnership by the
local telephone exchange company for listed telephone numbers and addresses of
households in the geographical areas in which the Partnership publishes
telephone directories will be canceled, terminated or revoked.
7.20 Employees. Except as set forth on Schedule 7.20 attached hereto,
there has been no resignation or termination of employment of any officer or key
employee of the Company or the Partnership and neither the Company nor the
Partnership has any knowledge of any impending or threatened resignation or
termination of employment that would have a material adverse effect on the
operations or business of the Company or the Partnership. Except as set forth
on Schedule 7.20, there has been no labor trouble, strike or work stoppage with
respect to the Company or the Partnership and neither the Company nor the
Partnership has any knowledge of any impending or threatened labor trouble,
strike or work stoppage with respect to the Company or the Partnership. Except
as set forth on Schedule 7.20 attached hereto, neither the Company not the
Partnership has entered into any severance or similar arrangement in respect of
any present or former employees that will result in any obligation (absolute or
contingent) of the Company or the Partnership to make any payment to any present
or former employees following termination of employment.
7.21 Compliance With Legislation Regulating Environmental Quality. Except
as set forth on Schedule 7.21 attached hereto, to the knowledge of the Company
and the Partnership, there are no toxic wastes or other toxic or hazardous
substances or materials being stored or otherwise held on, under or about any of
the real properties owned, leased or used by the Company or the Partnership (the
"Facilities"). The Partnership has maintained the Facilities in compliance in
all material respects with all federal, state and local environmental
protection, occupational, health and safety or similar laws, ordinances,
restrictions, licenses and local environmental protection, occupational, health
and safety or similar laws, ordinances, restrictions, licenses and regulations,
including but not limited to the Federal Water Pollution Control Act (33 U.S.C.
Section 1251 et seq.), Resource Conservation
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& Recovery Act (42 U. S. C. Section 6901 et seq.), Safe Drinking Water Act (21
U. S. C. Section 349, 42 U. S. C. Section Section 2019 300f), Toxic Substances
Control Act (15 U.S.C. Section 2601 et seq.), Clean Air Act (42 U.S.C. Section
7401 et seq.), Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C. Section 9601 et seq.), California Health & Safety Code (Section
25100 et seq., Section 39000 et seq.), and California Water Code (Section
13000 et seq.). Neither the Company nor the Partnership is engaged in any
printing or manufacturing activities.
7.22 Brokers. There are no claims for brokerage commissions, finders' fees
or similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement or agreement binding upon the Company or the
Partnership.
7.23 Payments. Neither the Company nor the Partnership has, directly or
indirectly, paid or delivered any fee, commission or other sum of money or item
or property, however characterized, to any finder, agent, government official or
other party, in the United States or any other country, which is in any manner
related to the business or operations of the Company or the Partnership, which
either the Company or Partnership knows or has reason to believe to have been
illegal under any federal, state or local laws of the United States or any other
country having jurisdiction; and neither the Company nor the Partnership has
participated directly in any boycotts or other similar practices affecting any
of their actual or potential customers and have at all times done business in an
open and ethical manner.
7.24 Tax Matters. The Partnership and the Company (hereinafter referred to
collectively as the "Taxpayers") have duly filed all tax reports and returns
required to be filed by them, including all federal, state, local and foreign
tax returns and reports. The Taxpayers have paid in full all taxes required to
be paid by such Taxpayers before such payment became delinquent. The Taxpayers
have made adequate provision, in conformity with generally accepted accounting
principles consistently applied, for the payment of all taxes which may
subsequently become due. All taxes which any Taxpayer has been required to
collect or withhold have been duly collected or withheld and, to the extent
required when due, have been or will be duly paid to the proper taxing
authority. There are no audits known by the Taxpayers to be pending of the any
of the Taxpayers tax returns, and there are no claims which have been asserted
relating to any of the Taxpayers' tax returns filed for any year which if
determined adversely would result in the assertion by any governmental agency of
any deficiency. There have been no waivers of statutes of limitations by any of
the Taxpayers. None of the Taxpayers has filed a statement under Section 341(f)
of the Internal Revenue Code of 1986, as may be amended from time to time (the
"Code") (or any comparable state income tax provision) consenting to have the
provisions of Section 341(f)(2) (collapsible corporations provisions) of the
Code (or any comparable state income tax provision) apply to any disposition of
any of the Taxpayers' assets or property, no property of the Taxpayers is
property which TWP, the Partnership or the Company is or will be required to
treat as owned by another person pursuant to the provisions of Section 168(f)
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(safe harbor leasing provisions) of the Code. Neither of the Taxpayers are
a party to any tax-sharing agreement or similar arrangement with any other
party. For the purpose of this Agreement, any federal, state, local or
foreign income, sales, use, transfer, payroll, personal property, occupancy
or other tax, levy, impost, fee, imposition, assessment or similar charge,
together with any related addition to tax, interest or penalty thereon, is
referred to as a "tax."
7.25 No Untrue Statements. No statement by the Company or the
Partnership contained in this Agreement (including all Exhibits, Schedules
and certificates delivered pursuant hereto) and, to the knowledge of
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇▇▇▇, no written statement
(other than budgets or projections) furnished to TWP or the Fund or their
respective representatives by the Company or the Partnership or at the
direction of any officer thereof contains any untrue statement of a
material fact, or omits or will omit to state a material fact necessary in
order to make the statements therein contained not misleading.
8. Representations and Warranties by TWP. TWP represents and warrants to
the Company and the Partnership as follows:
8.1 Organization. TWP is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and
has the corporate power and authority to carry on its business as now being
conducted.
8.2 Authority. TWP has the power to enter into this Agreement and all
other agreements, instruments and documents executed and delivered by TWP
pursuant to this Agreement (collectively, the "TWP Delivered Documents")
and to carry out its obligations hereunder and thereunder. The execution,
delivery and performance of each of TWP Delivered Documents and the
consummation of the transactions contemplated hereby and thereby have been
duly authorized by TWP, and no other proceeding on the part of TWP is
necessary to authorize the execution and delivery of any of TWP Delivered
Documents or the performance of any of the transactions contemplated hereby
or thereby. Assuming due authorization, execution and delivery of TWP
Delivered Documents by the other parties thereto, TWP Delivered Documents
will be legal, valid and binding obligations of TWP enforceable against TWP
in accordance with their respective terms.
8.3 No Violation. Neither the execution, delivery or performance of
any of TWP Delivered Documents nor consummation of any of the transactions
contemplated thereby (i) will violate or conflict with the Certificate of
Incorporation or By-laws of TWP, (ii) will result in any breach of or
default under any provision of any contract or agreement to which TWP is a
party or by which TWP is bound or to which any property or assets of TWP is
subject, (iii) is prohibited by or requires TWP to obtain or make any
consent, authorization, approval, registration or filing under any statute,
law, ordinance, regulation, rule, judgment, decree or order of any court or
governmental agency, board, bureau, body, department or
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23
authority, or of any other person, (iv) will cause any acceleration of maturity
of any note, instrument or other obligation to which TWP is a party or by which
TWP is bound or with respect to which TWP is an obligor or guarantor or (v) will
result in the creation or imposition of any Encumbrance upon or give to any
other person any interest or right (including any right of termination or
cancellation) in or with respect to any of the properties, assets, business,
agreements or contracts of TWP, except as may be required in connection with
obtaining any of the Financing.
8.4 Financing. TWP has provided to the Partnership true and correct copies
of the Equity Commitment Letter and the Debt Commitment Letters.
8.5 Litigation. There are no actions, suits, proceedings or
investigations, either at law or in equity, or before any commission or other
administrative authority in any United States or foreign jurisdiction, of any
kind now pending or threatened or proposed in any manner, or any circumstances
which should or could reasonably form the basis of any such action, suit,
proceeding or investigation, involving TWP or any of its properties or assets
that (i) questions the validity of this Agreement or (ii) seeks to delay,
prohibit or restrict in any manner any action taken or contemplated to be taken
by TWP under this Agreement.
8.6 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by TWP directly with the
Company, the Partnership, the Limited Partners or the Stockholders and without
the intervention of any other person and in such manner as not to give rise to
any valid claim against any of the parties for a finder's fee, brokerage
commission or like payment, except for fees due CIBC, which fees shall be paid
by the Partnership.
8.7 No Untrue Statements. No statement by TWP contained in this Agreement
and no written statement contained in any certificate or other document required
to be furnished by any officer, employee, counsel or other agent of TWP pursuant
to this Agreement contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact necessary in order. to make
the statements therein contained not misleading.
8.8 Acquisition for Investment. TWP is acquiring the Purchased Shares and
the Purchased Units for investment for its own account, and not with a view to,
or for offer or sale in connection with, any distribution thereof in violation
of applicable securities laws. TWP understands that the Purchased Shares and
the Purchased Units cannot be sold, transferred or otherwise disposed of without
registration under the 1933 Act or an exemption therefrom, and that in the
absence of an effective registration statement covering such Purchased Shares
and Purchased Units or an available exemption from registration from the 1933
Act, such Purchased Shares and Purchased Units must be held indefinitely. In
particular, TWP is aware that the Purchased Shares and the Purchased Units may
not be sold
-17-
24
pursuant to Rule 144 promulgated under the 1933 Act unless all of the
conditions of that Rule are met. TWP acknowledges that all certificates
evidencing the Purchased Shares and the Purchased Units to be owned by TWP
following the Closing shall bear appropriate legends evidencing the
foregoing. TWP represents that it has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits
and risks of its execution and delivery of this Agreement and the other TWP
Delivered Agreements and the consummation of the transactions contemplated
hereby and thereby. TWP is "accredited," as such term is defined in the
regulations promulgated under the 1933 Act, and is an "institutional buyer"
as such term is defined in the regulations promulgated under Chapter 110A
of the Massachusetts General Laws.
9. Representations and Warranties of the Stockholders. Each Stockholder
hereby severally represents and warrants as follows:
9.1 Organization and Good Standing. Such Stockholder has the
requisite power, authority and legal capacity to execute and deliver this
Agreement and any other agreements, instruments and documents executed and
delivered by such Stockholder pursuant to this Agreement (this Agreement
and such other agreements, instruments and documents being referred to
collectively as the "Stockholder Delivered Agreements") and to consummate
the transactions contemplated hereby and thereby. Such Stockholder
purporting to be a corporation or partnership is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization. Such Stockholder has all requisite power
and authority to own or operate its properties and assets, and to carry on
its business as it is now being conducted. Upon their delivery, the
Stockholder Delivered Agreements will have been duly executed and delivered
by such Stockholder. Assuming the due authorization, execution and delivery
of the Stockholder Delivered Agreements to which they are a party by the
other parties thereto, the Stockholder Delivered Agreements will constitute
valid and binding obligations of such Stockholder enforceable in accordance
with their respective terms.
9.2 Ownership of Common Stock. Such Stockholder owns the Common Stock
of the Company listed as being owned by it in Schedule 7.2 free and clear
of any and all Encumbrances, except for pledges of such Common Stock
pursuant to agreements or arrangements which will be satisfied at the
Closing.
9.3 Litigation. No claim, litigation, action, investigation or
proceeding is pending or, to the best knowledge of such Stockholder,
threatened, and no administrative, governmental or judicial order, decree,
judgement or decision is outstanding against such Stockholder or any of its
assets which would prevent such Stockholder from consummating the
transactions contemplated herein.
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25
9.4 Consents. Except as otherwise set forth on Schedule 9.4 attached
hereto, no authorization, approval, consent or order of, or registration,
declaration or filing with, any administrative, governmental or judicial
agency or tribunal or any other public or private body, entity or person is
required in connection with the execution, delivery or performance of the
Stockholder Delivered Agreements by such Stockholder.
9.5 Absence of Conflicts, Etc. Neither the execution, delivery nor
performance of the Stockholder Delivered Agreements:
9.5.1 violates or conflicts with, constitutes or results in a
default or breach of, or gives rise to a right of consent,
acceleration or termination, under such Stockholder's governing
instruments, if any, or any material commitment, contract, loan, note,
agreement, instrument, lease, license or permit to which such
Stockholder is a party or by which it is bound;
9.5.2 results in the imposition of any lien or Encumbrance
against such Stockholder or any of its assets; or
9.5.3 with respect to the execution, delivery and performance by
such Stockholder, violates any applicable statues, laws or
governmental regulations.
9.6 Knowledge; Access. Such Stockholder represents that it has such
knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of its execution and delivery of this
Agreement and the other Stockholder Delivered Agreements and the
consummation of the transactions contemplated hereby and thereby. Such
Stockholder further represents that it has had access to, prior to its
execution of this Agreement, the opportunity to ask questions of, and
receive answers from, the Company and the Partnership and their respective
officers concerning the terms and conditions of the transactions
contemplated hereby and to obtain additional information (to the extent the
either the Company or the Partnership possessed such information (or could
acquire it without unreasonable effort or expense) necessary to verify the
accuracy of any information furnished to it or to which it had access.
9.7 Brokers. There are no claims for brokerage commissions, finders'
fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement
binding upon such Stockholder.
10. Representations and Warranties of the Limited Partners. Each Limited
Partner hereby represents and warrants as follows:
10.1 Organization and Good Standing. Such Limited Partner has the
requisite power, authority and legal capacity to execute and deliver this
Agreement and any other
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26
agreements, instruments and documents executed and delivered by such Limited
Partner pursuant to this Agreement (this Agreement and such other agreements,
instruments and documents being referred to collectively as the "Limited
Partner Delivered Agreements") and to consummate the transactions contemplated
hereby and thereby. Such Limited Partner purporting to be a corporation or
partnership is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization. Such Limited
Partner has all requisite power and authority to own or operate its properties
and assets, and to carry on its business as it is now being conducted. Upon
their delivery, the Limited Partner Delivered Agreements will have been duly
executed and delivered by such Limited Partner. Assuming the due
authorization, execution and delivery of the Limited Partner Delivered
Agreements to which they are a party by the other parties thereto, the Limited
Partner Delivered Agreements will constitute valid and binding obligations of
such Limited Partner enforceable in accordance with their respective terms.
10.2 Ownership of Partnership Units. Such Limited Partner owns the
equity units of the Partnership listed as being owned by it in Schedule 3 free
and clear of any and all Encumbrances, except for the pledges of such
Partnership units pursuant to agreements or arrangements which will be
satisfied at the Closing.
10.3 Litigation. No claim, litigation, action, investigation or
proceeding is pending or, to the best knowledge of such Limited Partner,
threatened, and no administrative, governmental or judicial order, decree,
judgement or decision is outstanding against such Limited Partner or any of its
assets which would prevent such Limited Partner from consummating the
transactions contemplated herein.
10.4 Consents. Except as otherwise set forth on Schedule 10.4 attached
hereto, no authorization, approval, consent or order of, or registration,
declaration or filing with, any administrative, governmental or judicial agency
or tribunal or any other public or private body, entity or person is required
in connection with the execution, delivery or performance of the Limited
Partner Delivered Agreements by such Limited Partner.
10.5 Absence of Conflicts, Etc. Neither the execution, delivery nor
performance of the Limited Partner Delivered Agreements:
10.5.1 violates or conflicts with, constitutes or results in
a default or breach of, or gives rise to a right of consent,
acceleration or termination, under such Limited Partner's governing
instruments, if any, or any material commitment, contract, loan, note,
agreement, instrument, lease, license or permit to which such Limited
Partner is a party or by which it is bound;
10.5.2 results in the imposition of any lien or Encumbrance
against such Limited Partner or any of its assets; or
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27
10.5.3 with respect to the execution, delivery and performance by
such Limited Partner, violates any applicable statues, laws or
governmental regulations.
10.6 Knowledge; Access. Such Limited Partner represents that it has such
knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of its execution and delivery of this
Agreement and the other Limited Partner Delivered Agreements and the
consummation of the transactions contemplated hereby and thereby. Such
Limited Partner further represents that it has had access, prior to its
execution of this Agreement, the opportunity to ask questions of, and receive
answers from, the Company and the Partnership and their respective officers
concerning the terms and conditions of the transactions contemplated hereby
and to obtain additional information (to the extent the either the Company or
the Partnership' possessed such information (or could acquire it without
unreasonable effort or expense) necessary to verify the accuracy of any
information furnished to it or to which it had access.
10.7 Brokers. There are no claims for brokerage commissions, finders'
fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement
binding upon such Limited Partner.
11. Covenants of the Parties. Each of the Fund, TWP, the Company and
the Partnership, as applicable, covenant and agree as follows:
11.1 Access, Information and Documents. Pending the Closing, the
Partnership will give to TWP and its agents and representatives
(including, but not limited to, accountants, lawyers and appraisers), at
TWP's own expense, reasonable access during normal business hours to any and
all of the properties, assets, books, records and other documents relating to
the Partnership, and the Partnership and the Company will furnish to TWP such
information and copies of such documents and records as TWP shall reasonably
request. As part of such examination TWP may make such inquiries of such
persons having business relationships with the Partnership (including, but
not limited to, suppliers, licensees, distributors, account executives and
customers) as TWP shall determine, subject to the prior written approval of
the Company (which approval shall not be withheld unreasonably). In
addition, the Partnership and the Company and their respective officers will
cooperate with CIBC or other lender or underwriter and its or their advisors
in the preparation of an offering memorandum and other information, filing or
marketing material, and to the extent reasonably requested (and at TWP's sole
expense), participate in and cooperate with any roadshow relating to any
marketing or sale activities in connection with the Financing.
11.2 Conduct of Business Pending Closing. From the date hereof until the
Closing, except as consented to by TWP in writing:
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11.2.1 the Partnership will maintain itself at all times as a
partnership duly organized, validly existing and in good standing under
the laws of the State of Delaware;
11.2.2 the Company will maintain itself at all times as a corporation
duly organized, validly existing and in good standing under the laws of
the State of Delaware;
11.2.3 neither the Company nor the Partnership will amend or restate
its respective incorporation, charter, by-laws, partnership or other
organizational documents;
11.2.4 the Partnership will carry on its business and operations in a
good and diligent manner on an arm's length basis and substantially in
the manner carried on as of the date hereof and the Partnership will not
engage in any activity or transaction or make any commitment to purchase or
spend other than in the ordinary course of its business as heretofore
conducted;
11.2.5 the Partnership will not authorize or pay any distribution to
its partners (except for compensation payable in the ordinary course of
business to partners who are also employees and except in connection with
the termination of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.'s existing employment agreement
with the Partnership) and will not redeem, purchase or otherwise acquire, or
agree to redeem, purchase or otherwise acquire, any equity units except
described in this Agreement;
11.2.6 the Company will not authorize or pay any dividend or
distribution to its stockholders and will not redeem, purchase or
otherwise acquire, or agree to redeem, purchase or otherwise acquire, any of
the Company's stock except as described in this Agreement;
11.2.7 except as set forth on Schedule 11.2.7, other than in
connection with the termination of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.'s existing
employment arrangements with the Partnership, the Partnership will not pay
or obligate itself to pay any compensation, commission or bonus to any
officer or employee of the Partnership except for the regular compensation
and commissions payable to such, officer or employee at the rate in effect
on the date of this Agreement;
11.2.8 the Partnership will continue to carry all of its existing
insurance with respect to its assets and properties;
11.2.9 the Partnership will not, or obligate itself to, sell or
otherwise dispose of or pledge or otherwise encumber any of its assets
or properties except in the
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ordinary course of business and the Partnership will maintain its
Facilities and other assets in good operating condition and repair,
subject only to ordinary wear and tear;
11.2.10 the Partnership will at all times maintain a cash
balance in the ordinary course of its business in a manner consistent
with its prior cash management practices;
11.2.11 the Partnership will not engage in any activity or
transaction other than in the ordinary course of the business of the
Partnership as heretofore conducted; and
11.2.12 without limiting the foregoing, the Company and the
Partnership will consult with TWP regarding all significant
developments, transactions and proposals relating to the business of
the Partnership.
Notwithstanding the foregoing, nothing in this Section 11.2 shall
prohibit the Company or the Partnership from taking any other action or omitting
to take any other action as required or contemplated by this Agreement,
including without limitation incurring and paying expenses and redeeming
securities held by the Stockholders and the Limited Partners in connection
herewith; provided, however, that subject to the prior written approval of TWP
the Partnership may make acquisitions of existing yellow pages assets or
businesses ("Permitted Acquisitions") and incur earn-out or other liabilities
("Permitted Indebtedness") and/or make cash payments in connection therewith
(such cash payments and Permitted Indebtedness collectively referred to as
"Permitted Expenditures").
11.3 Consents and Approvals. The Fund shall cause TWP to, and TWP
shall, and the Partnership shall also, use its reasonable best efforts to
obtain prior to the Closing all consents, authorizations and approvals under
all statutes, laws, ordinances, regulations, rules, judgments, decrees and
orders of any court or governmental agency, board, bureau, body, department
or authority or of any other person required to be obtained by it in
connection with the execution, delivery and performance of this Agreement and
all other agreements, certificates and instruments contemplated herein and
the consummation of the transactions contemplated hereby and thereby.
11.4 No Solicitation of Offers. The Company and the Partnership shall
not, directly or indirectly, through any officer, director, employee, agent
or otherwise, (i) solicit, initiate or encourage the submission of any
proposal or offer from any person relating to any acquisition or purchase of
all or a material amount of the assets of, or any equity interest in, or any
merger, consolidation or business combination with, the Partnership or the
Company (an "Acquisition Proposal") or (ii) participate in any discussion or
negotiation regarding, or furnish to any other person any information with
respect to, or otherwise cooperate in any way with or assist, facilitate or
encourage, any Acquisition Proposal by any other person.
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11.5 Public Announcements. Prior to the Closing, neither the Fund nor
TWP, on the one hand, nor the Partnership nor the Company, on the other
hand, shall make any public announcement of the execution of this Agreement
or any of the transactions contemplated hereby, except as necessary to
obtain regulatory approval or as otherwise required by law, without the
prior written approval of the Company (in the case of the Fund or TWP) or
TWP (in the case of the Partnership or the Company), which approval shall
not be unreasonably withheld.
11.6 No Transfers by Stockholders. From the date hereof until the
Closing or earlier termination of this Agreement, no Stockholder shall sell,
transfer, pledge, assign or dispose of any Purchased Shares or issue or sell
any options or warrants to purchase any Purchased Shares, or agree to do any
of the foregoing, other than to a transferee that executes a counterpart
hereto or otherwise agrees in writing to be bound as a Stockholder by all of
the terms hereof prior to acquiring any Purchased Shares.
11.7 No Transfers by Limited Partners. From the date hereof until the
Closing or earlier termination of this Agreement, no Limited Partner
shall sell, transfer, pledge, assign or dispose of any Purchased Units or
issue or sell any options or warrants to purchase any Purchased Units, or
agree to do any of the foregoing, other than to a transferee that executes a
counterpart hereto or otherwise agrees in writing to be bound as a Limited
Partner by all of the terms hereof prior to acquiring any Purchased Units.
11.8 Updating of Information. The Company and the Partnership shall
promptly deliver to TWP any information concerning material events
subsequent to the date of this Agreement which is necessary to supplement
the information contained in or made a part of the representations and
warranties contained herein, including without limitation all Schedules
referred to herein, and the Financial Statements (including without
limitation monthly financial reviews), pursuant to any of the covenants or
agreements contained herein, in order that the information contained herein
or so delivered be complete and accurate in all material respects at all
times prior to and including the Closing, provided, however, that the
delivery of such information shall not in any manner constitute a waiver by
TWP of any of the covenants of the Partnership, the Company, the
Stockholders or the Limited Partners or of any of the conditions precedent
to the Closing hereunder and shall not be taken into account in determining
whether such covenants and conditions have been satisfied.
11.9 Confidential Information. The Fund shall, and shall cause TWP to,
preserve and maintain all proprietary information and trade secrets of
the Partnership and the Company received or confirmed in documentary form by
the Fund or TWP from the Partnership or the Company (or any of their
respective agents or representatives) and shall not disclose to any third
person or use any such proprietary information or trade secret for personal
advantage, except that TWP shall be free to disclose all or any of such
proprietary information and trade secrets which (a) are a matter of public
knowledge (other than on
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31
account of any disclosure by or through the Fund or TWP; (b) have been
or are hereafter published other than through the Fund or TWP; (c) are
lawfully obtained by TWP from a third person not subject to any obligation
of confidentiality; or (d) required by law to be disclosed, so long as the
disclosing party gives sufficient prior notice of such anticipated
disclosure to the Company so that the Company may take steps to protect such
information, including by opposing such disclosure. In the event the
Closing does not occur, TWP will return all written documentation provided
to it by the Partnership or the Company and shall return to the Company or
destroy all written embodiments of any such proprietary information or
trade secrets. The covenants of TWP contained in this Section 11.9 shall
terminate at the Closing.
11.10 No Unreasonable Interference. Pending the Closing, neither the
Fund nor TWP will take any action which would interfere unreasonably with
the business or operations of the Partnership.
11.11 Non-Solicitation. Each Limited Partner, on behalf of itself and
its Affiliates (other than Affiliates of Chase Equity Associates, L.P.),
agrees that for a period of two (2) years after the Closing Date (the
"Non-Solicitation Period"), such Limited Partner shall not, directly or
indirectly, solicit the employment (in any capacity) of or hire any employee
(other than ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇) of the Partnership or the Company. Each
Limited Partner agrees that, during the Non-Solicitation Period, it will not
directly or indirectly divulge or appropriate for his, her or its own use,
or for the use of any third party, any secret or confidential information or
knowledge obtained by such Limited Partner concerning the business of the
Company and the Partnership. This obligation of secrecy shall not apply to
information which (i) is or becomes part of the public domain other than
through breach of this Agreement or directly or indirectly through the fault
of such Limited Partner from an unaffiliated source, which source has no
obligation of secrecy to any party hereunder or (ii) is required to be
disclosed by law or government order (but only to the extent so required).
Each Limited Partner recognizes and affirms that in the event of breach of
any of the provisions of this Section 11.11, money damages would be
inadequate and the Company and the Partnership would have no adequate remedy
at law. Accordingly, such Limited Partner agrees that the Company and the
Partnership shall have the right, in addition to any other rights and
remedies existing in their favor, to enforce their rights and such Limited
Partner's obligations under this Section 11.11 not only by an action or
actions for damages, but also by an action or actions for specific
performance, injunctive and/or other equitable relief in order to enforce or
prevent any violations (whether anticipatory, continuing or future) of this
Section 11.11. The obligations of each Limited Partner pursuant to this
Section 11.11 are several and applicable only to such Limited Partner.
11.12 ▇▇▇▇▇▇▇ Non-Competition Agreement. For a period of three (3)
years after the Closing Date (the "Non-Competition Period"), ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇. shall not,
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32
directly or indirectly, either for himself or for any other person,
"participate" in any yellow page directory publishing business in the United
States or any business competing for the same customers as the businesses of
the Partnership and its subsidiaries in the geographic markets in which the
Partnership and its subsidiaries are engaged in the local or national yellow
page directory publishing business on the date hereof (the "Business");
provided that nothing contained herein shall prohibit ▇▇. ▇▇▇▇▇▇▇ from
participating in any industry specific yellow page business or any trade or
industry publications. For purposes of this Agreement, the term
"participate" includes any direct or indirect interest in any enterprise,
whether as an officer, director, employee, partner, sole proprietor, agent,
representative, independent contractor, consultant, franchisor, franchisee,
creditor, owner or otherwise; provided, that the term "participate" shall
not include ownership of less than 2% of the stock of a publicly-held
corporation whose stock is traded on a national securities exchange, on the
NASDAQ stock market or in the over-the-counter market. If, at the time of
enforcement of this Section 11.12, a court holds that the duration, scope,
geographic area or other restrictions stated herein are unreasonable under
circumstances then existing, the parties hereto agree that the maximum
duration, scope, geographic area or other restrictions deemed reasonable
under such circumstances by such court shall be substituted for the stated
duration, scope, geographic area or other restrictions. ▇▇. ▇▇▇▇▇▇▇, on
behalf of himself and his Affiliates, recognizes and affirms that in the
event of breach of any of the provisions of this Section 11.12, money
damages would be inadequate and the Company and the Partnership and their
successors would have no adequate remedy at law. Accordingly, ▇▇. ▇▇▇▇▇▇▇,
on behalf of himself and his Affiliates, agrees that the Company and the
Partnership shall have the right, in addition to any other rights and
remedies existing in their favor, to enforce their rights and ▇▇. ▇▇▇▇▇▇▇'▇
obligations under this Section 11.12 not only by an action or actions for
damages, but also by an action or actions for specific performance,
injunctive and/or other equitable relief in order to enforce or prevent any
violations (whether anticipatory, continuing or future) of the provisions of
Section 11.12 .
11.13 Reinvesting Manager's Non-Competition Agreement. Each Reinvesting
Manager acknowledges that in the course of his or her employment with
the Partnership he or she has become familiar with the Partnership's trade
secrets and with other confidential information concerning the Partnership
and its predecessors and that his or her services have been and will be of
special, unique and extraordinary value to the Partnership. Therefore, such
Reinvesting Manager agrees that, for the period commencing on the Closing
Date and ending on the later of the second anniversary of the Closing Date
and the first anniversary of the date of termination of such Reinvesting
Manager's employment (the "Noncompete Period"), he or she shall not directly
or indirectly own, manage, control, participate in, consult with, render
services for, or in any manner engage in any yellow page directory
publishing business or any business competing for the same customers as the
businesses of the Partnership or its Subsidiaries as such businesses exist
or are in process during the Noncompete Period within any markets (or
markets contiguous thereto) in which the
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Partnership or its Subsidiaries engage or plan to engage in such businesses
during the Noncompete Period. Nothing herein shall prohibit such Reinvesting
Manager from (i) being a passive owner of not more than 5% of the outstanding
stock of any class of any corporation, so long as such Reinvesting Manager has
no active participation in the business of such corporation or (ii) becoming
employed by a competitor; provided that such Reinvesting Manager is not directly
or indirectly responsible for, or does not have control over, the business of
such competitor which directly competes with any of the businesses of the
Partnership.
12. Conditions to Closing.
12.1 Conditions to Obligations of the Company and the Partnership. The
obligations of the Partnership to issue the Purchased Units to TWP and to redeem
the Redemption Units is subject to the fulfillment prior to or at the Closing of
the following conditions:
12.1.1 The representations and warranties by TWP contained in this
Agreement or in any written statement delivered by TWP to the Company or
the Partnership pursuant to this Agreement shall be true in all material
respects at and as of the Closing as though such representations and
warranties were made at and as of said time (except (i) as contemplated by
this Agreement and (ii) to the extent, if any, the Company shall waive the
same in writing); and TWP shall have performed and complied in all material
respects with all the terms, provisions and covenants of this Agreement to
be performed and complied with by TWP at or before the Closing.
12.1.2 The Partnership shall have received an opinion, dated the
Closing Date, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for TWP, in form and substance
reasonably satisfactory to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Partnership,
with respect to the matters set forth on Exhibit A attached hereto.
12.1.3 The Partnership shall have received a certificate from TWP in
the form of Exhibit B attached hereto certifying as to the accuracy of
TWP's representations and warranties at and as of the Closing and that TWP
has performed and complied with all of the terms, provisions and conditions
to be performed and complied with by TWP at or before the Closing.
12.1.4 TWP shall have executed and delivered the Third Amended and
Restated Agreement of Limited Partnership in the form attached hereto as
Exhibit H and the Investors Agreement in the form attached hereto as
Exhibit I.
12.1.5 The Partnership, the Company and TWP shall have obtained all
material consents, authorizations and approvals under all statutes, laws,
ordinances,
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regulations, rules, judgments, decrees and orders of any court or
governmental agency, board, bureau, body, department or authority or of any
other person required to be obtained by the Partnership, the Company or TWP,
as the case may be, in connection with the execution, delivery and
performance of this Agreement and all other agreements, certificates and
instruments contemplated herein and the consummation of the transactions
contemplated hereby and thereby.
12.1.6 Continental Illinois Venture Corporation ("CIVC") and one or more
of its employees and affiliates designated by CIVC, including CIVC
Partners III (CIVC collectively with such other participating Persons, the
"CIVC Parties"), shall have been offered the opportunity to invest up to an
aggregate of $30 million in cash in Purchased Units and Purchased Shares or,
at CIVC's election, to exchange or retain Class A Units and retain shares of
the common stock of the Company with value aggregating up to $30 million (it
being understood that for such purposes the value of any such securities
shall be deemed to equal the amount otherwise payable as redemption or the
purchase price under this Agreement if such interests were redeemed or
purchased in accordance herewith), or to invest cash and exchange or retain
equity interests, in such proportions as CIVC elects, in an amount
aggregating up to $30 million, pursuant to and substantially in accordance
with the terms contained in the Third Amended and Restated Agreement of
Limited Partnership and in accordance with the summary of terms attached as
Exhibit H hereto or on such other terms and conditions and pursuant to such
other documentation as is satisfactory to CIVC, provided that after
consummating any such investment and/or exchange, and taking into account
any securities so retained, the CIVC Parties and TWP will own Purchased
Units and Purchased Shares of the same classes, and in the same proportions
(relative to TWP (together with its Affiliates), the Reinvesting Managers
and the Other Investors) as set forth in the summary of terms included in
Exhibit H.
12.1.7 Each of ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Ita ▇▇▇▇-▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (each, a "Reinvesting Manager") and
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. and First Union Investors, Inc. (together, the "Other
Investors") shall have been offered the opportunity to invest up to an
aggregate of $19 million in cash in Purchased Units or, at the election of
each such Person, to exchange or retain Class A Units and retain shares of
the common stock of the Company with value aggregating up to $19 million (it
being understood that for such purposes the value of any such securities
shall be deemed to equal the amount otherwise payable as Redemption Price
under this Agreement if such interests were redeemed in accordance
herewith), or to invest cash and exchange or retain Class A Units and retain
Company common stock in such proportions as the Key Executives and the'
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35
Other Investors elect, in an amount aggregating up to $19 million,
pursuant to and substantially in accordance with the terms contained in the
form of the Third Amended and Restated Agreement of Limited Partnership and
in accordance with the summary of terms attached as Exhibit H hereto or upon
such other terms and conditions and pursuant to such other documentation as
is satisfactory to CIVC, provided that after consummating any such
investment and/or exchange, and taking into account any securities so
retained (but excluding any securities issued pursuant to incentive
arrangements), the Reinvesting Managers, the Other Investors, the CIVC
Parties and TWP will own securities of the Company and the Partnership in
the same classes, and in the same proportions (relative to one another) as
set forth in the summary of terms included in Exhibit H.
12.1.8 The Partnership shall have executed and delivered employment
agreements in the form of Exhibits J-1 through J-2 hereto with ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
12.1.9 The Company and the Partnership shall have executed and delivered
to each Reinvesting Manager an Executive Agreement in the form attached
hereto as Exhibit K.
12.2 Conditions to Obligations of TWP. The obligations of TWP to purchase
the Purchased Units and purchase the Purchased Shares is subject to the
fulfillment prior to or at the Closing of the following conditions:
12.2.1 The representations and warranties by the Company, the Partnership,
the Stockholders or the Limited Partners contained in this Agreement or
in any written statement delivered to TWP by the Company or the Partnership
or the Stockholders or the Limited Partners pursuant to this Agreement shall
be true in all material respects at and as of the Closing as though such
representations and warranties were made at and as of said time (except (i)
as contemplated by this Agreement and (ii) to the extent, if any, TWP shall
waive the same in writing); and the Company the Partnership, the
Stockholders and the Limited Partners shall have performed and complied in
all material respects with all the terms, provisions and covenants of this
Agreement to be performed and complied with by said entities or individuals
at or before the Closing; provided, however, that if (x) one or more of such
representations or warranties or statements is untrue or partially untrue at
the Closing but (y) such fact does not have or can not reasonably be
expected to have, materially adverse monetary consequences to the Company
and the Partnership, taken as a whole, such fact shall not relieve TWP of
any of its obligations under this Agreement.
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36
12.2.2 TWP shall have received an opinion, dated the Closing
Date, of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Company and the
Partnership, in form and substance reasonably satisfactory to ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, counsel for TWP, with respect to the matters set forth on
Exhibit C attached hereto.
12.2.3 TWP shall have received a certificate from the Company in
the form of Exhibit D attached hereto certifying as to the accuracy in
all material respects of the Company's representations and warranties
at and as of the Closing and that the Company has performed and
complied in all material respects with all of the terms, provisions
and conditions to be performed and complied with by the Company at or
before the Closing.
12.2.4 TWP shall have received a certificate from the Company in
the form of Exhibit E attached hereto certifying as to certain
corporate matters with respect to the Company, together with all of
the attachments referred to therein.
12.2.5 TWP shall have received a certificate from the
Partnership in the form of Exhibit F attached hereto certifying as to
the accuracy in all material respects of the Partnership's
representations and warranties at and as of the Closing and that the
Partnership has performed and complied in all material respects with
all of the terms, provisions and conditions to be performed and
complied with by the Partnership at or before the Closing.
12.2.6 TWP shall have received a certificate from the
Partnership in the form of Exhibit G attached hereto certifying as to
certain partnership matters with respect to the Partnership, together
with all of the attachments referred to therein.
12.2.7 The Partnership, the Company and TWP shall have obtained
all of the consents, authorizations and approvals listed on Schedule
12.2.7 hereto under (i) all statutes, laws, ordinances, regulations,
rules, judgments, decrees and orders of any court or governmental
agency, board, bureau, body, department or authority or of any other
person required to be obtained by the Partnership, the Company or TWP,
as the case may be, in connection with the execution, delivery and
performance of this Agreement, and (ii) all other agreements,
certificates and instruments contemplated herein and the consummation
of the transactions contemplated hereby and thereby.
12.2.8 The Interest Rate Swap agreement between the Partnership
and First Union National Bank of North Carolina dated December 7,
1995, including the "Master Agreement" referred to therein and the
Interest Rate Swap agreement between the Partnership and the Canadian
Imperial Bank of Commerce dated December 7, 1995, including the
"Master Agreement" referred to therein shall have
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37
been terminated to the reasonable satisfaction of TWP without further
liability to the Partnership or the Company.
12.2.9 The Employment Agreement dated May 13, 1993 between the
Partnership and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. shall have been terminated in
accordance with its terms.
12.2.10 The respective Employment Agreements dated May 13, 1993
between the Partnership and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall
have been terminated to the reasonable satisfaction of TWP without
further liability to the Partnership or the Company and new Employment
Agreements, in the forms of Exhibit J-1 and J-2 hereto, shall have
been entered into with ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
12.2.11 The respective Executive Agreements dated May 13, 1993
between the Partnership and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall have been terminated to the reasonable
satisfaction of TWP without further liability to the Partnership or
the Company.
12.2.12 The Partnership's Equity Compensation Plan and the
Equity Compensation Trust shall have been terminated or continued to
the reasonable satisfaction of TWP without further liability to the
Partnership or the Company.
12.2.13 The Registration Agreement dated May 13, 1993 between
the Partnership and the persons named therein and the persons who
later became a party to said agreement shall have been terminated to
the reasonable satisfaction of TWP without further liability to the
Partnership or the Company.
12.2.14 The Investors Agreement dated May 13, 1993 between the
Company, the Partnership and the persons named therein and the persons
who later became a party to said agreement shall have been terminated
to the reasonable satisfaction of TWP without further liability to the
Partnership or the Company.
12.2.15 The Company, the Partnership and all partners of the
Partnership shall have executed and delivered the Third Amended and
Restated Agreement of Limited Partnership in the form attached hereto
as Exhibit H.
12.2.16 The Company, the Partnership and all persons who will
continue to hold an equity interest of any type or description in the
Company or the Partnership shall have executed and delivered the
Investors Agreement in the form attached hereto as Exhibit I.
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38
12.2.17 The Partnership shall have executed and delivered to
▇▇▇▇▇▇ ▇. ▇▇▇ Company the Management Agreement between the Partnership
and ▇▇▇▇▇▇ ▇. ▇▇▇ Company in substantially the form attached hereto as
Exhibit L.
12.2.18 Reinvesting Managers shall have invested cash or
exchanged or retained Class A Units, Class E Units or Company common
stock, as contemplated by Section 12.1.7, in an aggregate amount
(including the sum of the amount of such cash invested plus the value
of the Class A Units, Class E Units and Company common stock retained
or exchanged) equal to or exceeding $10 million (it being understood
that for such purposes the value of any such securities retained or
exchanged shall be deemed to equal the amount otherwise payable as
Redemption Price under this Agreement if such interests were redeemed
in accordance herewith).
12.2.19 All Stockholders shall have tendered their stock
certificates representing the Purchased Shares pursuant to the terms
hereof.
12.2.20 The Company, the Partnership and all persons who will
continue to hold an equity interest of any type or description in the
Partnership shall have executed and delivered the Registration
Agreement in the form attached hereto as Exhibit M.
12.3 Commercially Reasonable Efforts. Upon the terms and subject to
the terms and conditions set forth in this Agreement, each of the parties agrees
to use its commercially reasonable efforts to take, or cause to be taken, and
the Fund shall cause TWP to take, all actions, and to do, or cause to be done,
and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this Agreement,
including the satisfaction of the respective conditions set forth in Section 13.
13. Termination. This Agreement may be terminated as follows:
13.1 TWP's Right to Terminate. By TWP by written notice to the Company
and the Partnership (a) if the transactions contemplated hereby have not been
consummated by October 1, 1997, or (b) if any event occurs or condition exists
which would render impossible the satisfaction of one or more conditions to the
obligations of TWP to consummate the transactions contemplated by this Agreement
as set forth in Section 12.2 and such condition has not been satisfied within
five (5) days after such notice; provided that TWP will not be entitled to
terminate this Agreement pursuant to this paragraph if the occurrence of the
events, circumstances or condition described in (a) or (b) foregoing is the
direct or indirect result of (i) any breach by TWP of any of its obligations
hereunder or (ii) TWP having failed to satisfy any condition set forth herein
that TWP was required to satisfy.
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39
13.2 The Stockholders and the Limited Partners' Right to Terminate. By the
Company's board of directors, by written notice to TWP (a) if the transactions
contemplated hereby have not been consummated by October 1, 1997, or (b) if any
event occurs or condition exists which would render impossible the satisfaction
of one or more conditions to the obligations of the Stockholders or the Limited
Partners, respectively, to consummate the transactions contemplated by this
Agreement as set forth in Section 12.1 and such condition has not been satisfied
within five (5) days after such notice; provided that neither the Stockholders
nor the Limited Partners will be entitled to terminate this Agreement pursuant
to this paragraph if the occurrence of the events, circumstances or condition
described in (a) or (b) foregoing is the direct or indirect result of (i) any
breach by the Stockholders, the Limited Partners, the Company or the Partnership
of any of their respective obligations hereunder or (ii) any of the
Stockholders, the Limited Partners, the Company or the Partnership having
failed to satisfy any condition set forth herein that such party was required to
satisfy.
13.3 Effect of Termination. In the event that this Agreement shall be
terminated pursuant to Section 13.1 or 13.2, all further obligations of the
parties under this Agreement shall terminate; provided that, the obligations of
the parties contained in (i) Section 11, and (ii) the Confidentiality Agreement
dated July 18, 1997, executed by each of the Partnership and ▇▇▇▇▇▇ ▇. ▇▇▇
Company, shall survive any such termination, and that a termination under
Section 13.1 or 13.2 shall not relieve either party of any liability for a
breach of, or for any misrepresentation under this Agreement, or be deemed to
constitute a waiver of any available remedy (including specific performance if
available) for any such breach or misrepresentation.
14. Miscellaneous.
14.1 Non-Survival of Representations and Warranties; Release Upon Closing.
None of the representations and warranties in this Agreement shall survive the
Closing. Upon consummation of the Closing, notwithstanding any breach of
representations or warranties by another party, any failure to be satisfied of
any other condition to the obligations of a Party hereto or any breach of any
covenant by another party hereto, each such breach of representations and
warranties, condition that is unsatisfied and covenant which is breached prior
to the Closing Date shall be deemed to be waived by such party, and such party
shall be deemed to fully release and forever discharge the other party on
account of any and all claims, demands or charges, known or unknown with respect
to the same, except that nothing in this Section 14.1 shall be construed so as
to limit the ability of any party to bring a claim or action against any other
person for fraud or intentional tort committed directly by such person.
Further, notwithstanding the provisions of Section 13 above, each of the Parties
shall be deemed to have waived its respective right to terminate this Agreement
upon consummation of the Closing. The foregoing provision shall not limit
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40
any covenant or agreement of any of the parties which by its terms
contemplates performance after the Closing.
14.2 Limited Partner and Stockholder Representative.
14.2.1 By execution of this Agreement, each of the Limited
Partners and the Stockholders who is selling Redemption Units and Purchased
Shares hereby designates the Selling Securityholder Representative to serve as
its representative with respect to the matters contemplated in Section 14.2.2
below.
14.2.2 Each of the Limited Partners and the Stockholders who is
selling Redemption Units and Purchased Shares (a "Selling Securityholder"), by
his, her or its execution of this Agreement, hereby irrevocably appoints the
Selling Securityholder Representative as the agent, proxy and attorney-in-fact
for such Selling Securityholder for all purposes of this agreement, including
without limitation, full power and authority on such Person's behalf: (a) to
consummate the transactions contemplated herein (other than acceptance of any
amounts owed to such Selling Securityholder pursuant to this Agreement); (b) to
pay such Selling Securityholder's expenses (whether incurred on or after the
date hereof) incurred in connection with the negotiation and performance of this
Agreement, it being understood that such expense shall be allocated among the
Selling Securityholders pro rata based on the aggregate proceeds payable to such
Selling Securityholders at the Closing in respect of Redemption Units and
Purchase Shares; (c) to execute and deliver any certificates required hereunder,
including delivery of any stock certificates representing the Redemption Units
and Purchased Shares; (d) to execute and deliver on behalf of such Selling
Securityholder any amendment hereto; provided that such amendment does not
change the definition or manner of calculating the price payable in respect of
Redemption Units or Purchased Shares or the form of payment to such Selling
Securityholder, does not increase such Selling Securityholder's liabilities in
any material respect and does not treat any Selling Securityholder adversely in
a manner which is disproportionate to the manner in which the other Selling
Securityholders are treated (taking into account the Selling Securityholders'
respective ownership of Purchased Shares and Partnership Units); (e) to take all
other actions to be taken by or on behalf of such Selling Securityholder in
connection herewith; and (f) to do each and every act and exercise any and all
rights which such Selling Securityholder or the Selling Securityholders
(collectively) are permitted or required to do or exercise under this Agreement;
it being understood that none of the foregoing (a) through (e) constitutes
authority for the Selling Securityholder Representative to receive payments
hereunder on behalf of such Selling Securityholder or obligates the Selling
Securityholder Representative to take any action or omit to take any action.
Each of the Selling Securityholders agrees that such agency and proxy are
coupled with an interest and are therefore irrevocable without the consent of
the Selling Securityholder Representative.
14.2.3 Neither the Selling Securityholder Representative nor any
agent employed by him shall incur any liability to any Selling Securityholder,
TWP or the Fund (a) by virtue of the failure or refusal of the Selling
Securityholder Representative for any reason to consummate the
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41
transactions contemplated hereby, or (b) relating to the performance of his
other duties hereunder, except for fraud or bad faith.
14.3 Selling Securityholder's Post-Closing Access. TWP, the
Company and the Partnership shall fully cooperate with the Selling
Securityholders, to make available to the Selling Securityholders such
assistance and financial, Tax and other information (including the
books and records of the Company and the Partnership) reasonably
requested by any of the Selling Securityholders in connection with (a)
any audit or other investigation by any taxing authority or any
required reports or submissions to governmental entities relating to
any period (or portion thereof) ending on or before the Closing Date,
and (b) matters relating to insurance coverage of the Company and
Partnership, third-party litigation, claims, proceedings and
investigations involving the Company and the Partnership, if any.
TWP, the Company and the Partnership shall preserve such information
and such books and records for at least four years after the Closing
Date, and thereafter to dispose thereof only after it shall have given
the Selling Securityholder Representative at least 90 days' prior
written notice of such impending disposition and the opportunity (at
the Selling Securityholders' expense) to remove and retain such
information and such books and records.
14.4 Assignment. This Agreement, the rights and obligations
hereunder, and any and all other agreements, instruments or
certificates referenced herein are fully assignable and transferrable
at any time prior to or at the Closing by TWP to the Fund and/or its
affiliates without the consent or approval of any other party hereto,
provided that TWP and the Fund shall remain jointly and severally
liable for all obligations of each such assignee hereof. Subject to
the foregoing, neither this Agreement nor any of the rights or
obligations hereunder may be assigned by any party hereto without the
prior written consent of TWP, the Company and the Partnership.
Subject to the foregoing, this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and assigns, and no other person shall have any right,
benefit or obligation hereunder.
14.5 Notices. Unless otherwise provided herein, any notice,
request, instruction or other document to be given hereunder by any
party to the others shall be in writing and delivered in person or by
courier, by facsimile transmission or mailed by certified or
registered mail, postage prepaid, return receipt requested and shall
be deemed to have been given when delivered personally to the
recipient, one business day after being sent to the recipient by
reputable overnight courier service (charges prepaid for overnight
delivery) or five business days after being mailed to the recipient by
certified or registered mail, return receipt requested and postage
prepaid, as follows:
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42
If to the Partnership TransWestern Publishing Company, L.P.
or the Company: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
With a copy to: The Selling Securityholder Representative
and
Continental Illinois Venture Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C.
If to the Selling Avy ▇. ▇▇▇▇▇
Securityholder c/▇ ▇▇▇▇▇▇, ▇▇▇▇▇ & Partners
Representative: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C.
If to TWP: TWP Recapitalization Corp.
c/o ▇▇▇▇▇▇ ▇. ▇▇▇ Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Attn: ▇. ▇▇▇▇▇▇ ▇▇▇▇
With a copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
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If to the Fund: ▇▇▇▇▇▇ ▇. ▇▇▇ Equity Fund III, L.P.
c/o ▇▇▇▇▇▇ ▇. ▇▇▇ Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Attn: ▇. ▇▇▇▇▇▇ ▇▇▇▇
With a copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
or to such other place and with such other copies as either party may
designate as to itself by written notice to the others.
14.6 Choice of Law. This Agreement shall be construed, interpreted and
the rights of the parties determined in accordance with the laws of the
State of California except with respect to matters of law concerning the
internal corporate affairs of any corporate entity which is a party to or
the subject of this Agreement, and as to those matters the law of the
jurisdiction under which the respective entity derives its powers shall
govern.
14.7 No Third Party Rights. Except as otherwise specifically provided
herein, nothing in this Agreement shall be construed to give any person
or entity other than TWP, the Partnership, the Company, the Stockholders and
the Limited Partners any legal or equitable right, remedy or claim under
this Agreement. This Agreement shall be for the sole and exclusive benefit
of the foregoing parties and their respective permitted successors, assigns,
heirs and personal representatives.
14.8 Entire Agreement; Amendments and Waivers. This Agreement, together
with all exhibits and schedules hereto, constitutes the entire
agreement among the parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties. No supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
14.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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44
14.10 Attorneys' Fees. If any party to this Agreement brings an
action to enforce its rights under this Agreement, the prevailing
party shall be entitled to recover its costs and expenses, including
without limitation reasonable attorneys' fees, incurred in connection
with such action, including any appeal of such action.
14.11 Invalidity. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument
referred to herein, shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision of this
Agreement or of any other such instrument.
14.12 Headings. The headings of the Paragraphs and Sections
herein are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of
this Agreement.
14.13 Expenses. Each party will each be liable for its own
costs and expenses incurred in connection with the negotiation,
preparation, execution or performance of this Agreement; provided,
however, that in the event the Closing successfully occurs as
described herein, the Partnership shall (i) pay the Company's, the
Partnership's, TWP's and ▇▇▇▇▇▇ ▇. ▇▇▇ Company's reasonable and
necessary expenses incurred in connection with the negotiation and
documentation of the transactions described herein, (ii) pay a
transaction fee equal to Five Million Dollars ($5,000,000) pro-rata to
▇▇▇▇▇▇ ▇. ▇▇▇ Company and other stockholders of the Company and other
partners of the Partnership in proportion to their respective (or that
of their Affiliates) post-Closing equity in the Company and the
Partnership, (iii) pay ongoing management fees equal to Five Hundred
Thousand Dollars ($500,000) per year pro-rata to ▇▇▇▇▇▇ ▇. ▇▇▇ Company
and other stockholders of the Company and other partners of the
Partnership in proportion to their respective (or that of their
Affiliates) post-Closing equity in the Company and the Partnership,
pursuant to the Management Agreement described in Section 13.2.17,
(iv) pay all TransWestern Transactional Expenses and (v) pay the fees
and expenses of the lenders as set forth in the Debt Commitment
Letters. As used herein, the term "TransWestern Transactional
Expenses" is defined as any and all legal or other expenses or fees of
any legal counsel or other advisor to the Partnership, the Company,
the Stockholders or the Limited Partners relating to the transactions
described or contemplated herein up to $250,000 in the aggregate, but
not including any such expenses or fees incurred directly in
connection with the negotiation of a recapitalization of the
Partnership and the Company as proposed by Continental Illinois
Venture Corporation.
14.14 Remedies. All rights, remedies, undertakings,
obligations, options, covenants, conditions and agreements contained
in this Agreement or provided by law shall be cumulative and no one of
them shall be exclusive of any other.
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14.15 Time of the Essence. Time is of the essence under this
Agreement and any amendment, modification or revision of it.
14.16 Fund Obligations. One or more affiliates of the Fund own
all of the outstanding capital stock of TWP. The Fund enters into
this Agreement to induce each of the other parties hereto to enter
into this Agreement and the other agreements and documents
contemplated hereby and to consummate the transactions contemplated
hereby and thereby. The Fund hereby undertakes and agrees that, until
consummation of the transactions contemplated to occur at the Closing,
each and every obligation of TWP pursuant to this Agreement, and each
and every obligation of TWP pursuant to any of the other agreements
and documents contemplated hereby, is and shall be the joint and
several obligation of the Fund. In particular, and without limiting
the foregoing, the Fund shall be jointly and severally liable to
arrange the Financing (as described in Section 2) and to pay the
purchase price described in Section 1. The Fund acknowledges that each
of the Company, the Partnership, the Limited Partners and the
Stockholders have entered into this Agreement and the other agreements
and documents contemplated hereby to which each such Person is a party
in reliance on the agreements of the Fund set forth herein
14.17 Further Assurances. The parties agree to cooperate and
take such further action and execute such documents and instruments as
may reasonably be required in order to more effectively carry out the
terms of this Agreement and the intentions of the parties.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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46
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or
have caused this Agreement to be duly executed on their respective behalf by
their respective officers thereunto duly authorized, as of the day and year
first above written.
TRANSWESTERN PUBLISHING COMPANY, L.P.
By: TRANSWESTERN COMMUNICATIONS COMPANY, INC.
Its General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Title: Executive Vice President
TRANSWESTERN COMMUNICATIONS COMPANY, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Title: Executive Vice President
TWP RECAPITALIZATION CORP.
By: /s/ ▇. ▇▇▇▇▇▇ ▇▇▇▇
------------------------------
Title: Chief Financial Officer
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇ EQUITY FUND III, L.P.
By: THL Equity Advisors Limited Partnership III
Its: General Partner
By: THL Equity Trust III
Its: General Partner
By: /s/ ▇. ▇▇▇▇▇▇ ▇▇▇▇
-----------------------------
Title: Trustee
(SIGNATURE PAGE TO SECURITIES PURCHASE AND REDEMPTION AGREEEMENT)
47
CIVC PARTNERS III
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
Title: Managing Director
/s/ Avy ▇. ▇▇▇▇▇
-----------------------------------------------------
Avy ▇. ▇▇▇▇▇, individually and in his capacity as the
Selling Securityholder Representative
LIMITED PARTNERS:
FIRST UNION INVESTORS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
Title: Senior Vice President
----------------------------------------------
CONTINENTAL ILLINOIS VENTURE CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
Title: Managing Director
----------------------------------------------
CIVC PARTNERS I
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
Title: Managing Director
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
(SIGNATURE PAGE TO SECURITIES PURCHASE AND REDEMPTION AGREEMENT)
48
SPERSIBS LP
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
Title: President of SCMI, its General Partner
----------------------------------------------
KLANS ASSOCIATES
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
Its:
----------------------------------------------
/s/ ▇▇▇▇▇ ▇▇▇▇
-----------------------------------------------------
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ TESTAMENTARY TRUST
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
/s/ ▇▇▇▇▇▇ ▇▇▇▇
-----------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(SIGNATURE PAGE TO SECURITIES PURCHASE AND REDEMPTION AGREEMENT)
49
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ROLLOVER,
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ TRUST
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Trustee
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III TRUST
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Trustee
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ LIVING TRUST
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Trustee
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
(SIGNATURE PAGE TO SECURITIES PURCHASE AND REDEMPTION AGREEMENT)
50
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ TRUST
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Trustee
/s/ Ita ▇▇▇▇-▇▇▇▇▇▇▇
-----------------------------------------------------
ITA ▇▇▇▇-▇▇▇▇▇▇▇
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
THE ▇▇▇▇▇ FAMILY TRUST
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as Trustee
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
(SIGNATURE PAGE TO SECURITIES PURCHASE AND REDEMPTION AGREEMENT)
51
CHASE EQUITY ASSOCIATES, L.P.
By: Chase Capital Partners
Its: General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------
Its: General Partner
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FIRST UNION CORPORATION
By:
----------------------------------------------
Title:
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(SIGNATURE PAGE TO SECURITIES PURCHASE AND REDEMPTION AGREEMENT)