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EXHIBIT 10.2
INVESTORS AGREEMENT
THIS AGREEMENT is made as of October 1, 1997, by and among TransWestern
Communications Company, Inc., a Delaware corporation (the "Company"),
TransWestern Publishing Company, L.P., a Delaware limited partnership (the
"Partnership"), each of the investors listed on the Schedule of Investors
attached hereto (the "Investors") and each of the executives listed on the
Schedule of Executives attached hereto (the "Executive"). Capitalized terms
used herein are defined in paragraph 8 hereof.
The parties hereto desire to enter into this Agreement for the
purposes, among others, of (i) establishing the composition of the Company's
Board of Directors (the "Board"), (ii) assuring continuity in the management
and ownership of the Company and the Partnership and (iii) limiting the manner
and terms by which the Stockholder Shares and the Partnership Securities may be
transferred.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:
1. Board of Directors.
(a) From and after the Closing (as defined in the Securities Purchase
and Redemption Agreement) and until the provisions of this paragraph 1 cease to
be effective, each Investor shall vote all of his Stockholder Shares (as
defined in paragraph 8 hereof) and any other voting securities of the Company
over which such Stockholder has voting control and will take all other
necessary or desirable actions within his control (whether in his capacity as a
stockholder, director, member of a board committee or officer of the Company or
otherwise), and the Company will take all necessary and desirable actions
within its control, in order to cause:
(i) subject to paragraph 1(g) below, the authorized number of
directors on the Board to be established at nine (9) directors, or in the
event the condition in 1(f) below is satisfied, the authorized number of
directors on the Board will be established at eight (8);
(ii) the election to the Board of
(A) five (5) representatives designated by Xxx (the "Xxx
Directors");
(B) each of the then current chairman and president of
the Partnership (the "Executive Directors");
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(C) two (2) representatives designated by CIVC (the
"CIVC Directors"); and
(D) one (1) CIVC Director to be a voting member of the
Board's audit committee, compensation committee,
and executive committee.
(iii) the removal from the Board (with or without cause) of any
representative designated hereunder by Xxx, CIVC, or by the Executives at the
written request of Xxx, CIVC, or the Executives, respectively, but only upon
such written request and under no other circumstances (in each case, determined
on the basis of a vote of the holders of a majority of the Common Units held by
such persons, respectively), provided that if any director elected pursuant to
(ii)(B) above ceases to be an employee of the Partnership he shall be removed
as a director promptly after his employment ceases; and
(iv) in the event that any representative designated hereunder by
CIVC, Xxx, or by the Executives for any reason ceases to serve as a member of
the Board during his term of office or until any such representative is
initially designated, the resulting vacancy on the Board to be filled by a
representative designated by CIVC, Xxx, or the Executives, respectively, as
provided hereunder, without any further action by the stockholders of the
Company.
(b) The Company shall pay the reasonable out-of-pocket expenses incurred by
each director in connection with attending the meetings of the Board and any
committee thereof.
(c) The right of Xxx under this paragraph 1 will terminate at such time as
Xxx and its Permitted Transferees (as defined in paragraph 2(e) hereof) hold in
the aggregate less than 30% of the Common Units held by such persons on the
date hereof.
(d) The rights of CIVC under this paragraph 1 will terminate at such time as
CIVC and its Permitted Transferees (as defined in paragraph 2(e) hereof) hold
in the aggregate less than 30% of the Common Units held by such persons on the
date hereof.
(e) The Board will not directly or indirectly approve or permit the Company
or the Partnership to take, engage or participate in any of the following
activities without the express approval of at least one of the CIVC Directors
or at least one of the Executive Directors:
(i) transfer of any material assets, business, or shares of any
subsidiaries;
(ii) convert to corporate form (or take other action having the effect
of preventing the Partnership from being treated as a partnership for federal
and state income tax purposes) other than in connection with a Qualified Public
Offering or any merger, consolidation or reorganization of the Company or the
Partnership that is not part of a Sale of the Company or Sale of the
Partnership other than a merger, consolidation or reorganization of any blocker
corporation established by Xxx into the Company;
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(iii) any amendment to the Partnership's Partnership Agreement or the
Company's Certificate of Incorporation or bylaws which is material or has
adverse impact on any of the Investors;
(iv) incur any indebtedness if after giving effect thereto the
Partnership would have an aggregate amount of indebtedness in excess of 5.5
times the Partnership's trailing twelve (12) months EBITDA (on a pro forma
basis giving effect to any acquisition completed on or before the date such
proposed indebtedness is incurred) provided, however, that this subparagraph
(iv) shall not restrict (a) working capital borrowings in the ordinary course
of business pursuant to a committed facility in effect as of Closing or entered
into after Closing in compliance with this subparagraph (iv); (b) indebtedness
incurred under committed facilities existing on the Closing in connection with
add-on acquisitions permitted under subparagraph (x) below, or (c) refinancings
which do not increase the aggregate amount of the Partnership's indebtedness
outstanding as of the date of any such refinancing;
(v) enter into any hedging agreements outside the ordinary course of
business;
(vi) enter into any new agreement or transaction or amend any existing
agreement with Xxx or any party affiliated with, related to, or directly or
indirectly employed or owned by Xxx or any of its affiliates;
(vii) appoint auditors;
(viii) liquidate or wind up its affairs other than directly as a part
of a Sale of the Company or Sale of the Partnership;
(ix) terminate any Executive, hire any other key executive or take any
action which results in a material diminution in compensation or responsibility
of any Executive or other key executives;
(x) make any material investment or acquisition other than acquisitions
in the yellow pages business for an aggregate purchase price (including assumed
liabilities, deferred payments, earnouts, and similar payments) less than $10
million in any transaction or series of related transactions; and/or
(xi) redeem or repurchase any shares of the Company or any partnership
interests of the Partnership other than (a) on a pro rata redemption in which
CIVC participates or (b) repurchases Securities from management pursuant to the
terms of the Executive Agreement.
(f) Notwithstanding anything herein to the contrary other than paragraph
1(c), if at any time Xxx (together with its Permitted Transferees) owns less
Partnership Securities or Stockholder Shares than the amount of Partnership
Securities or Stockholder Shares then owned by CIVC, the Executives, and their
respective Permitted Transferees (taken as a group), then (i) the
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number of Xxx Directors will be reduced from five (5) to three (3), and
(ii) the number of CIVC Directors will be increased from two (2) to three (3).
(g) The provisions of this paragraph 1 will terminate automatically and
be of no further force and effect upon the first to occur of (i) the tenth
anniversary of the date hereof unless extended by the parties hereto in
accordance with Section 218 of the Delaware General Corporation Law or (ii) a
Qualified Public Offering (as defined in paragraph 8 hereof).
2. Restrictions on Transfer of Securities.
(a) Transfer of Securities Other than Executive Securities. The
holders of Securities (other than Xxx and CIVC) shall not sell, transfer,
assign, pledge, be redeemed, have repurchased, or otherwise dispose of (a
"Transfer") any interest in any Stockholder Shares or Partnership Securities
(other than Executive Securities pursuant to the Executive Agreements) without
the prior written consent of Xxx (which consent will not be unreasonably
withheld), except pursuant to (i) the provisions of this paragraph 2, (ii)
pursuant to a Public Sale or (iii) pursuant to a Sale of the Company or Sale of
the Partnership. Notwithstanding the foregoing, neither Xxx nor CIVC will
sell, transfer or otherwise convey any Securities to any person who directly or
indirectly owns (beneficially or otherwise) more than 5% of any class of
securities of any entity engaged in the yellow pages business without the prior
written consent of the other party other than pursuant to a Sale of the Company
or a Sale of the Partnership.
(b) Transfer of Executive Securities.
(i) Unvested Executive Securities. The holders of Executive
Securities shall not transfer any Executive Securities which are not
vested (as such term is used in such holder's Executive Agreement) except
pursuant to (A) the provisions of this paragraph 2, or (B) pursuant to a Sale
of the Company or a Sale of the Partnership, or (C) pursuant to the Executive
Agreements.
(ii) Vested Executive Securities. At least 30 days prior to
making any Transfer (other than a Public Sale) of Executive Securities
which have vested, the holder of such Executive Securities (the "Transferring
Partner") will deliver a written notice (the "Offer Notice") to the
Partnership and the other Partners (the "Other Partners"). The Offer Notice
will disclose in reasonable detail the proposed number of vested Executive
Securities to be transferred, the identity of the transferee(s) and the
proposed terms and conditions of the Transfer. First, the Partnership may
elect to purchase all (but not less than all) of such vested Executive
Securities specified in the Offer Notice at the price and on the terms
specified therein by delivering written notice of such election to the
Transferring Partner and the Other Partners as soon as practical but in any
event within ten days after the delivery of the Offer Notice. If the
Partnership has not elected to purchase all of such Executive Securities
within such ten-day period, the other Partners or a combination of the
Partnership and the other Partners may elect to purchase all (but not less
than all) of their Pro Rata Share (as defined below) of the Executive
Securities specified in the Offer Notice at the price and on the terms
specified therein by delivering written notice of such election to the
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Transferring Partner as soon as practical but in any event within 20
days after delivery of the Offer Notice (the "Election Period"). Any
Executive Securities not elected to be purchased by the end of such
Election Period shall be reoffered by the Transferring Partner on a
pro rata basis to the Other Partners who have elected to purchase
their Pro Rata Share. If the Partnership or any Other Partners have
elected to purchase all of such vested Executive Securities from the
Transferring Partner, the transfer will be consummated as soon as
practical after the delivery of the election notices, but in any event
within 15 days after the expiration of the Election Period. If the
Partnership or any Other Partners have not elected to purchase all of
the vested Executive Securities being offered, the Transferring
Partner may, within 90 days after the expiration of the Election
Period, transfer all of such vested Executive Securities to the party
identified in the Offer Notice at the price and on the terms specified
in the Offer Notice. The purchase price specified in any Offer Notice
shall be payable solely in cash at the closing of the transaction or
in installments over time. Notwithstanding any provision herein to
the contrary, no vested Executive Securities may be pledged, except on
terms and conditions satisfactory to Xxx. Each Other Partner's "Pro
Rata Share" shall be based upon such Partner's proportionate ownership
of Common Units on a fully diluted basis.
(c) Participation Rights. In the event of a Transfer of
Securities by Xxx, at least 30 days prior to such Transfer (other than a
Public Sale), Xxx will deliver a written notice (the "Sale Notice") to the
Company and the other Stockholders (the "Other Stockholders") if Xxx is
transferring Stockholder Shares or to the Partnership and the Other Partners if
Xxx is transferring Partnership Securities, specifying in reasonable detail the
identity of the prospective transferee(s), the Securities to be sold and the
terms and conditions of the Transfer. In the event that the Other Stockholders
or Other Partners (as the case may be) hold the type of Securities which are to
be transferred, they may elect to participate in the contemplated Transfer by
delivering written notice to Xxx within 30 days after delivery of the Sale
Notice. If any Other Stockholder or Other Partner has elected to participate
in such Transfer, each of Xxx and each such Other Stockholder or Other Partner
will be entitled to sell in the contemplated Transfer, at the same price and on
the same terms, a number of Securities equal to the product of (i) the quotient
determined by dividing the percentage of such Securities held by such person by
the aggregate percentage of such Securities owned by Xxx and the Other
Stockholders and/or Other Partners participating in such sale and (ii) the
number of such Securities to be sold in the contemplated Transfer.
For example, if the Sale Notice contemplated a sale of 100 Stockholder
Shares by Xxx, and if Xxx at such time owns 30% of all Stockholder
Shares and if one Other Stockholder elects to participate and owns 20%
of all Stockholder Shares, Xxx would be entitled to sell 60 shares
(30% / 50% x 100 shares) and the other Stockholder would be entitled
to sell 40 shares (20% / 50% x 100 shares).
Xxx shall use its best efforts to obtain the agreement of the prospective
transferee(s) to the participation of the Other Stockholders and/or Other
Partners in any contemplated Transfer, and notwithstanding any provision herein
to the contrary, in the event that the prospective transferees do not allow
such participation, Xxx may not transfer any of its Securities to the
prospective transferee(s).
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(d) Preemptive Rights.
(i) Neither the Company or the Partnership ("Issuer") will issue or
sell or otherwise transfer any "equity securities" (including any options,
warrants, securities convertible, exchangeable or exercisable into equity or
any other securities containing equity features) (an "Issuance") unless, at
least 30 days and not more than 60 days prior to such Issuance, Issuer notifies
each holder of Securities, in writing of the Issuance (including the price, the
purchaser(s) thereof and other terms thereof) and grants to each holder of
Securities in such Issuer, the right (the "Right") to subscribe for and
purchase such additional stock or other Securities so issued at the same price
and on the same terms to be issued in the Issuance such that, after giving
effect to the Issuance and exercise of the Right, the shares owned by such
holder shall represent the same percentage of total voting and economic
interests (on a fully diluted basis) in such Issuers as was owned by such
holder prior to the Issuance, or such lesser amount designated by such holder.
The Right may be exercised by such holder or its nominee at any time by written
notice by such holder to Issuer received within 30 days after receipt of notice
by such holder from Issuer of the Issuance. The closing of the purchase and
sale pursuant to the exercise of the Right shall occur at least 10 days after
Issuer receives notice of the exercise of the Right and concurrently with the
closing of the Issuance.
(ii) Notwithstanding the foregoing, the Right shall not apply to (A)
issuances of securities pro rata to all holders of Securities, as a dividend
on, subdivision of, or other distribution in respect of, Securities, (B)
options and sales of securities to management in the ordinary course of
business as approved by the Board (including under the Executive Agreements)
and (C) any warrants required to be issued in connection with senior
subordinated debt financing being provided by CIBC Wood Gundy Securities Corp.
and First Union Corporation in connection with the transactions contemplated by
the Securities Purchase and Redemption Agreement.
(iii) If all of the Issuance offered to the holders of securities of
such Issuer are not fully subscribed by such holders, the shares that are not
so subscribed for will be reoffered to such holders purchasing their full
allotment upon the terms set forth in this Section except that such holders
must exercise their purchase rights within five (5) days after the receipt of
such reoffer.
(iv) Upon the expiration of the offering periods described above,
Issuer will be free to sell such Issuance during the one hundred twenty (120)
days following such expiration on terms and conditions no more favorable to the
purchaser(s) thereof than those offered to such holders. Any shares of such
Issuance not sold after such one hundred twenty (120) days period must be
reoffered to the holders of securities of such Issuer pursuant to the terms of
this Section.
(v) If any holder of securities in such Issuer determines that it may
have a regulatory problem if issued securities of the class in the proposed
Issuance, the Issuer shall, upon written request of such holder, take all such
commercially reasonable actions requested by such holder to allow such holder
to purchase securities which are identical to the securities of the proposed
Issuance, except that such securities shall be non-voting and shall be
convertible into securities issued in the Issuance on such terms as are
requested by such holder in light of regulatory considerations then prevailing.
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(vi) Except for Issuances subject to subparagraph (i) above
or excluded from subparagraph (i) pursuant to subparagraph (ii), neither
the Company of the Partnership will authorize or issue any equity securities
including any stock appreciation rights or phantom stock rights (each right to
be considered on a per share basis).
(e) Permitted Transfers. The restrictions contained in this paragraph
2 shall not apply with respect to any Transfer of Securities by any Investor
(i) in the case of any individual Investor, pursuant to applicable laws of
descent and distribution or among such Investor's Family Group or (ii) in the
case of any Investor, among its Affiliates (collectively referred to herein as
"Permitted Transferees"); provided that the restrictions contained in this
paragraph 2 shall continue to be applicable to the Securities after any such
Transfer and provided further that the transferees of such Securities shall
have agreed in writing to be bound by the provisions of this Agreement
affecting the Securities so transferred. "Family Group" means an Investor's
spouse and descendants (whether natural or adopted) and any trust solely for
the benefit of the Investor and/or any of the Investor's spouse and/or
descendants. "Affiliate" of an Investor means any other person, entity or
investment fund controlling, controlled by or under common control with the
Investor and any partner of an Investor which is a partnership or any employee
of an Investor.
(f) Termination of Restrictions. The restrictions set forth in this
paragraph 2 will continue with respect to each Security until the earlier of
(i) the date on which such Security has been transferred in a Public Sale, (ii)
the tenth anniversary of the date of this Agreement, (iii) the consummation of
a Qualified Public Offering, (iv) with respect to Stockholder Shares, the
consummation of a Sale of the Company, and (v) with respect to Partnership
Securities, the consummation of a Sale of the Partnership.
3. Legend. Each certificate evidencing Securities and each certificate
issued in exchange for or upon the transfer of any Securities (if such
securities remain subject to the terms of this Agreement after such transfer)
shall be stamped or otherwise imprinted with a legend in substantially the
following form:
"The securities represented by this certificate are subject to an
Investors Agreement dated as of October 1, 1997 among the issuer of
such securities (the "Company") and certain of the Company'ssecurity
holders. A copy of such Investors Agreement will befurnished without
charge by the Company to the holder hereof upon written request."
The legend set forth above shall be removed from the certificates or notes
evidencing any Securities which cease to be subject to the terms of this
Agreement, in accordance with the definition of such term contained in
paragraph 8 hereof.
4. Transfer. Prior to transferring any Security (other than in a
Public Sale) to any person or entity, the transferring Stockholder or
transferring Partner will cause the prospective transferee to execute and
deliver to the Company or Partnership (as and case may be) and the Other
Stockholders or Other Partners (as the case may be) a counterpart of this
Agreement.
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5. Sale of the Company.
(a) If the Board and the holders of a majority of the Stockholder
Shares then outstanding approve a Sale of the Company (the "Approved Company
Sale"), the holders of Stockholder Shares will consent to and raise no
objections against the Approved Company Sale. If the Approved Company Sale is
structured as a (i) merger or consolidation, each holder of Stockholder Shares
shall waive any dissenters rights, appraisal rights or similar rights in
connection with such merger or consolidation or (ii) sale of stock, each holder
of Stockholder Shares shall agree to sell all of his Stockholder Shares and
rights to acquire Stockholder Shares on the terms and conditions approved by
the Board and the holders of a majority of the Stockholder Shares then
outstanding. Each holder of Stockholder Shares shall take all necessary or
desirable actions in connection with the consummation of the Approved Company
Sale as requested by the Company.
(b) The obligations of the holders of Stockholder Shares with respect
to the Approved Company Sale are subject to the satisfaction of the following
conditions: (i) upon the consummation of the Approved Company Sale, each holder
of Stockholder Shares shall receive the same form of consideration and the same
portion of consideration such holder would have received if the aggregate
consideration had been distributed by the Company in complete liquidation
pursuant to the rights and preferences set forth in the Company's Certificate
of Incorporation as in effect immediately prior to the consummation of the
Approved Company Sale; (ii) if any holders of a class of Stockholder Shares are
given an option as to the form and amount of consideration to be received, each
holder of such class of Stockholder Shares shall be given the same option; and
(iii) each holder of then currently exercisable rights to acquire a class of
Stockholder Shares shall be given an opportunity to exercise such rights prior
to the consummation of the Approved Company Sale and participate in such sale
as holders of such class of Stockholder Shares.
(c) If the Company or the holders of any of the Company's securities
enter into any negotiation or transaction for which Rule 506 (or any similar
rule then in effect) promulgated by the Securities Exchange Commission may be
available with respect to such negotiation or transaction (including a merger,
consolidation or other reorganization), each holder of Stockholder Shares will,
at the request of the Company, appoint either a purchaser representative (as
such term is defined in Rule 501) designated by the Company, in which event the
Company will pay the fees of such purchaser representative, or another
purchaser representative (reasonably acceptable to the Company), in which event
such holder will be responsible for the fees of the purchaser representative so
appointed.
(d) All holders of Stockholder Shares will bear their pro-rata share
(based upon the number of shares sold) of the costs of any sale of Stockholder
Shares pursuant to an Approved Company Sale to the extent such costs are
incurred for the benefit of all such holders of Stockholder Shares and are not
otherwise paid by the Company or the acquiring party. Costs incurred by the
holders of Stockholder Shares on their own behalf will not be considered costs
of the Approved Company Sale.
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(e) In no event will the Board or Stockholders enter into an agreement
for, or otherwise effect, a Sale of the Company unless it is in connection with
a contemporaneous Sale of the Partnership without the prior approval of the Xxx
Directors and the CIVC Directors.
6. Sale of the Partnership.
(a) If the General Partner and the holders of a majority of the Class A
Common Units then outstanding approve a Sale of the Partnership (the "Approved
Partnership Sale"), the holders of Partnership Securities will consent to and
raise no objections against the Approved Partnership Sale. If the Approved
Partnership Sale is structured as a (i) merger or consolidation, each holder of
Partnership Securities shall waive any dissenters rights, appraisal rights or
similar rights in connection with such merger or consolidation or (ii) sale of
Partnership Securities, each holder of Partnership Securities shall agree to
sell all of his Partnership Securities and rights to acquire Partnership
Securities on the terms and conditions approved by the General Partner and the
holders of a majority of the Class A Common Units then outstanding. Each
holder of Partnership Securities shall take all necessary or desirable actions
in connection with the consummation of the Approved Partnership Sale as
requested by the Partnership.
(b) The obligations of the holders of Partnership Securities with
respect to the Approved Partnership Sale are subject to the satisfaction of the
following conditions: (i) upon the consummation of the Approved Partnership
Sale, each holder of Partnership Securities shall receive the same form of
consideration and the same portion of consideration such holder would have
received if the aggregate consideration had been distributed by the Partnership
in complete liquidation pursuant to the rights and preferences set forth in the
Partnership's Partnership Agreement as in effect immediately prior to the
consummation of the Approved Partnership Sale; (ii) if any holders of a class
or type of Partnership Securities are given an option as to the form and amount
of consideration to be received, each holder of such class or type of
Partnership Securities shall be given the same option; and (iii) each holder of
then currently exercisable rights to acquire Partnership Securities shall be
given an opportunity to exercise such rights prior to the consummation of the
Approved Partnership Sale and participate in such sale as holders of such
Partnership Securities.
(c) If the Partnership or any of the holders of the Partnership's
Securities enter into any negotiation or transaction for which Rule 506 (or any
similar rule then in effect) promulgated by the Securities Exchange Commission
may be available with respect to such negotiation or transaction (including a
merger, consolidation or other reorganization), each holder of Partnership
Securities will, at the request of the Partnership, appoint either a purchaser
representative (as such term is defined in Rule 501) designated by the
Partnership, in which event the Partnership will pay the fees of such purchaser
representative, or another purchaser representative (reasonably acceptable to
the Partnership), in which event such holder will be responsible for the fees
of the purchaser representative so appointed.
(d) All holders of Partnership Securities will bear their pro-rata
share (based upon the amount of securities sold) of the costs of any sale of
Partnership Securities pursuant to an Approved Partnership Sale to the extent
such costs are incurred for the benefit of all such holders
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of Partnership Securities and are not otherwise paid by the Partnership or
the acquiring party. Costs incurred by the holders of Partnership Securities
on their own behalf will not be considered costs of the Approved Partnership
Sale.
7. Public Offering. In the event that the General Partner and the
holders of a majority of the Class A Common Units approve an initial public
offering and sale of equity securities of the Partnership (a "Public Offering")
pursuant to an effective registration statement under the Securities Act, the
holders of Securities will take all necessary or desirable actions in
connection with the consummation of the Public Offering. In the event that
such Public Offering is an underwritten offering and the managing underwriters
advise the Partnership in writing that in their opinion the capital structure
will adversely affect the marketability of the offering, each security holder
will vote for a recapitalization or exchange of the existing securities into
securities that the managing underwriters, the General Partner and the holders
of a majority of the Class A Common Units then outstanding find acceptable;
provided, that the resulting securities reflect and are consistent with the
rights and preferences set forth in the Partnership Agreement as in effect
immediately prior to such Public Offering and that the Partnership's Partners
are as a result of holding such resulting securities in substantially the same
economic position they were in prior to such recapitalization or exchange.
8. Definitions.
"CIVC" means, collectively, Continental Illinois Venture Corporation,
and CIVC Partners III.
"Class A Common Units" means the Partnership's Class A Common Units.
"Common Stock" means the Company's Common Stock, par value $.01 per
share.
"Common Unit" has the meaning given to such term in the Partnership
Agreement.
"Executive" means anyone who has executed or will execute an Executive
Agreement with the Partnership; provided that for purposes of paragraph 1
hereof, the Executive must also be employed by the Partnership.
"Executive Agreements" means the Executive Agreements by and between
the Partnership and each Executive relating to such Executive's Securities.
"Executive Securities" means the Partnership Securities and/or Common
Stock held by the Executives and/or their Permitted Transferees.
"General Partner" means the Company or any successor general partner of
the Partnership.
"Independent Third Party" means any person who, immediately prior to
the contemplated transaction, does not own in excess of 5% of the Company's
Common Stock or 5%
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of the Partnership's Common Units on a fully-diluted basis (a "5% Owner)",
who is not controlling, controlled by or under common control with any such 5%
Owner and who is not the spouse or descendent (by birth or adoption) of any
such 5% Owner or a trust for the benefit of any such 5% Owner and/or such other
persons.
"Xxx" means Xxxxxx X. Xxx Equity Fund III, L.P.
"Partner" means the General Partner or any of the limited partners of
the Partnership who are bound by the terms of this Agreement.
"Partnership Agreement" means that certain Third Amended and Restated
Agreement of Limited Partnership, dated as of the date hereof, by and among the
General Partner and the limited partners listed on Schedule I attached thereto,
as may be amended and restated from time to time.
"Partnership Securities" mean (i) any Common Units held by a Partner,
(ii) any Preferred Units held by a Partner, (iii) any equity securities issued
or issuable directly or indirectly with respect to the securities referred to
in clauses (i) and (iii) above by any of a split or dividend or in connection
with a combination of securities, recapitalization, merger, consolidation or
other reorganization, and (iv) any other securities of the Partnership held by
a Partner. As to any particular securities constituting Partnership
Securities, such securities will cease to be Partnership Securities when they
have been transferred in a Public Sale.
"Preferred Unit" has the meaning given to such term in the Partnership
Agreement.
"Public Sale" means any sale of Securities to the public pursuant to an
offering registered under the Securities Act or to the public through a broker,
dealer or market maker pursuant to the provisions of Rule 144 (or any similar
provision then in effect) adopted under the Securities Act.
"Qualified Public Offering" means the sale in an underwritten public
offering registered under the Securities Act of equity securities of the
Partnership (or its successor) having an aggregate value of at least $40
million.
"Sale of the Company" means the sale of the Company to an Independent
Third Party or group of Independent Third Parties pursuant to which such party
or parties acquire (i) capital stock of the Company possessing the voting power
under normal circumstances to elect a majority of the Company's board of
directors (whether by merger, consolidation, recapitalization, or sale or
transfer of the Company's capital stock) or (ii) all or substantially all of
the Company's assets determined on a consolidated basis.
"Sale of the Partnership" means the sale of the Partnership to an
Independent Third Party or group of Independent Third Parties pursuant to which
such party or parties acquire (i) equity securities of the Partnership
constituting a majority of the residual equity of the Partnership (whether
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by merger, consolidation, or sale or transfer of Preferred Units the Common
Units) or (ii) all or substantially all of Partnership's assets determined on a
consolidated basis.
"Securities" means the Stockholder Shares and the Partnership
Securities.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Securities Purchase and Redemption Agreement" means the Securities
Purchase and Redemption Agreement, dated as of August 27, 1997, as amended,
between TransWestern Communications Company, Inc. and the other parties
thereto.
"Stockholder" means any stockholder of the Company who is subject to
the terms of this Agreement.
"Stockholder Shares" means (i) any Common Stock held by any
Stockholder, (ii) any equity securities issued or issuable directly or
indirectly with respect to the Common Stock referred to in clause (i) above by
way of stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization, and
(iii) any other shares of any class or series of capital stock of the Company
held by a Stockholder. As to any particular shares constituting Stockholder
Shares, such shares will cease to be Stockholder Shares when they have been
transferred in a Public Sale.
9. Amendment and Waiver. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement will be
effective against the Company, the Partnership or the Investors unless such
modification, amendment or waiver is approved in writing by the Company, the
Partnership, the holders of at least a majority of the Stockholder Shares and a
majority of the Class A Common Units, respectively. The failure of any party
to enforce any of the provisions of this Agreement will in no way be construed
as a waiver of such provisions and will not affect the right of such party
thereafter to enforce each and every provision of this Agreement in accordance
with its terms.
10. Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
11. Entire Agreement. Except as otherwise expressly set forth herein,
this document embodies the complete agreement and understanding among the
parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among
the parties, written or oral, which may have related to the subject matter
hereof in any way.
-12-
13
12. Successors and Assigns. Except as otherwise provided herein, this
Agreement will bind and inure to the benefit of and be enforceable by the
Company and its successors and assigns, the Partnership and its successors and
assigns and the Stockholders and any subsequent holders of Stockholder Shares
and the Partners and any subsequent holders of Partnership Securities and the
respective successors and assigns of each of them, so long as they hold
Stockholder Shares and/or Partnership Securities.
13. Counterparts. This Agreement may be executed in separate
counterparts each of which will be an original and all of which taken together
will constitute one and the same agreement.
14. Remedies. The Company, the Partnership and the Investors shall be
entitled to enforce their rights under this Agreement specifically to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights existing in their favor. The parties hereto agree
and acknowledge that money damages may not be an adequate remedy for any breach
of the provisions of this Agreement and that any Investor may in its sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive relief (without posting a bond or other
security) in order to enforce or prevent any violation of the provisions of
this Agreement.
15. Notices. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, or mailed first class mail
(postage prepaid) or sent by reputable overnight courier service (charges
prepaid) to the recipient at the address indicated on the schedules hereto, to
the Company or the Partnership at the address for Xxx indicated on the
schedules hereto and to any subsequent holder of Securities subject to this
Agreement at such address as indicated by the Company's or the Partnership's
records, or at such address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
Notices will be deemed to have been given hereunder when delivered personally,
three days after deposit in the U.S. mail and one day after deposit with a
reputable overnight courier service.
16. Governing Law. The corporate law of the State of Delaware will
govern all issues concerning the relative rights of the Company and its
stockholders. The partnership law of the State of Delaware will govern all
issues concerning the relative rights of the Partnership and its Partners. All
questions concerning the construction, validity and interpretation of this
Agreement will be governed by the internal law, and not the law of conflicts,
of the State of Delaware.
17. Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
* * * * *
- 13 -
14
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
TRANSWESTERN PUBLISHING COMPANY, L.P.
By: TransWestern Communications
Company, Inc.
Its: General Partner
By: /s/ Xxxxxxxx X. Xxxxx
--------------------------------------------
Its: Vice President
TRANSWESTERN COMMUNICATIONS COMPANY, INC.
By: /s/ Xxxxxxxx X. Xxxxx
--------------------------------------------
Its: Vice President
XXXXXX X. XXX EQUITY FUND III, L.P.
By: THL Equity Advisors Limited Partnership III
Its: General Partner
By: THL Equity Trust III
Its: General Partner
By:
-------------------------------------------
Its:
-------------------------------------------
CONTINENTAL ILLINOIS VENTURE CORPORATION
By: /s/ Xxxxxx Xxxxxx
---------------------------------------------
Its: Managing Director
15
CIVC PARTNERS III
By: /s/ Xxxxxx Xxxxxx
------------------------------------------
Its: Managing Director
FIRST UNION INVESTORS, INC.
By /s/ Xxxxx Xxxxxx
------------------------------------------
Its Senior Vice President
XXXXX X. XXXXXXX TRUST
By /s/ Xxxxx X. Xxxxxxx, Xx.
------------------------------------------
Its Trustee
XXXXX X. XXXXXXX III, TRUST
By /s/ Xxxxx X. Xxxxxxx, Xx.
------------------------------------------
Its Trustee
/s/ Xxxxx X. Xxxxxxx, Xx.
-----------------------------------------------
Xxxxx X. Xxxxxxx, Xx.
/s/ Xxxxxxxx X. Xxxxx
-----------------------------------------------
Xxxxxxxx X. Xxxxx
XXXXXXX XXXXXX LIVING TRUST
By /s/ Xxxxxxx Xxxxxx
------------------------------------------
Its Trustee
(SIGNATURE PAGE TO INVESTORS AGREEMENT)
16
XXXXXXXX XXXXXXX TRUST
By /s/ Xxxxxxxx Xxxxxxx
-------------------------------------------------
Its Trustee
/s/ Xxxx Xxxxxxx
-------------------------------------------------
Xxxx Xxxxxxx
XXXXX FAMILY TRUST
By /s/ Xxxxxx X. Xxxxx
---------------------------------------------
Its Trustee
/s/ Xxxxxx Xxxxxxx
-------------------------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxxxx Xxxx
-------------------------------------------------
Xxxxxxx Xxxx
/s/ Xxxxxxx Xxxxx
-------------------------------------------------
Xxxxxxx Xxxxx
/s/ Xxxxx Xxxxxxxxx
-------------------------------------------------
Xxxxx Xxxxxxxxx
/s/ Xxx Xxxxxxxxx
-------------------------------------------------
Xxx Xxxxxxxxx
/s/ Xxxxxxx Xxxxxxx
-------------------------------------------------
Xxxxxxx Xxxxxxx
/s/ Ita Xxxx-Xxxxxxx
-------------------------------------------------
Ita Xxxx-Xxxxxxx
/s/ Xxxx Xxxxxxxxx Xxxxxxxx
-------------------------------------------------
Xxxx Xxxxxxxxx Xxxxxxxx
/s/ Xxxxxxxx Xxxxx
-------------------------------------------------
Xxxxxxxx Xxxxx
(SIGNATURE PAGE TO INVESTORS AGREEMENT)
17
CIBC WG ARGOSY MERCHANT FUND 2, L.L.C.
By /s/ Xxx Xxxxxx
--------------------------------------------
Its Managing Director
-------------------------------------------
THL -- CCI LIMITED PARTNERSHIP
By /s/ Xxxxx Xxxxxx
--------------------------------------------
Its Treasurer
-------------------------------------------
XXXXXX X. XXX EQUITY FUND III, L.P.
By /s/ Xxxxxx X. Xxxxx, Xx.
--------------------------------------------
Its
-------------------------------------------
XXXXXX X. XXX FOREIGN FUND III, L.P.
By /s/ Xxxxxx X. Xxxxx, Xx.
--------------------------------------------
Its
-------------------------------------------
/s/ Xxxxx X. Xxxxxxx
-----------------------------------------------
Xxxxx X. Xxxxxxx
THE 1995 HARKINS GIFT TRUST
By /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------
Xxxxxxx Xxxxxxx
Its Trustee
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------------
Xxxxxx X. Xxxxxxxx
(SIGNATURE PAGE TO INVESTORS AGREEMENT)
18
/s/ Xxxxx X. Xxxxxx
-----------------------------------------------
Xxxxx X. Xxxxxx
/s/ X. Xxxxxx Xxxx
-----------------------------------------------
X. Xxxxxx Xxxx
/s/ Xxxxx X. Xxxxxxxx
-----------------------------------------------
Xxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. XxXxxx
-----------------------------------------------
Xxxxxxx X. XxXxxx
/s/ Xxxxxx X. Xxxxxxx
-----------------------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxx, Xx.
-----------------------------------------------
Xxxxxx X. Xxxxx, Xx.
/s/ Xxxx X. Xxxxx
-----------------------------------------------
Xxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------------------
Xxxxxx X. Xxxxxxxxx
/s/ Xxxx X. Xxxxxx
-----------------------------------------------
Xxxx X. Xxxxxx
/s/ Xxxxxxxx X. Xxxxxx
-----------------------------------------------
Xxxxxxxx X. Xxxxxx
/s/ Xxxx X. Xxxxxxxx
-----------------------------------------------
Xxxx X. Xxxxxxxx
/s/ Xxxxx X. Xxxxxx
-----------------------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxxx
-----------------------------------------------
Xxxxxx X. Xxxxxxx
-----------------------------------------------
By
-------------------------------------------
Its
-------------------------------------------
(SIGNATURE PAGE TO INVESTORS AGREEMENT)
19
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------------
Xxxxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxx Xxxxxx
-----------------------------------------------
Xxxxx Xxxxxx
WCS TRUSTEE XXXXXX XXXXX IRR. FAMILY TRUST
By /s/ Xxxxxx X. Xxxxx, Xx.
--------------------------------------------
Its Trustee
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxx Xxxxxxxxx
-----------------------------------------------
Xxxxx Xxxxxxxxx
/s/ Xxxxxxx X. Xxx
-----------------------------------------------
Xxxxxxx X. Xxx
(SIGNATURE PAGE TO INVESTORS AGREEMENT)
20
XXXXXXX XXXXX GIFT TRUST
By /s/ Xxxxx X. Xxxxx
--------------------------------------------
Xxxxx X. Xxxxx
Its Trustee
XXXXX XXXXX GIFT TRUST
By /s/ Xxxxx X. Xxxxx
--------------------------------------------
Xxxxx X. Xxxxx
Its Trustee
XXXXXXX XXXXXX 1995 TRUST
By /s/ Xxxxxxx Xxxxxx
--------------------------------------------
Xxxxxxx Xxxxxx
Its Trustee
(SIGNATURE PAGE TO INVESTORS AGREEMENT)
