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EXHIBIT 10.16
CONTRACT TO SELL AND PURCHASE
BY AND BETWEEN
▇▇▇▇▇ ADVERTISING COMPANY,
AS BUYER
AND
OUTDOOR EAST, L.P.
A LIMITED PARTNERSHIP,
AS SELLER
OCTOBER 9, 1996
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CONTRACT TO SELL AND PURCHASE
THIS AGREEMENT dated effective the 9th day of October, 1996, entered
into by and between Outdoor East, L.P., a Delaware limited partnership, doing
business in Georgia, North Carolina, South Carolina, Virginia, West Virginia
and Florida ("Seller"), TLC Properties, Inc. a Louisiana corporation ("TLC")
and ▇▇▇▇▇ Advertising Company, a Delaware corporation ("Buyer"):
WITNESSETH:
WHEREAS, Seller is the owner of certain property and contract rights and
has used such property and contract rights in conducting an outdoor advertising
business in the counties listed on Schedule "A" (hereinafter collectively
referred to as the "Area"); and
WHEREAS, Seller has agreed to sell such property and contract rights to
Buyer, which intends to use the same in conducting its outdoor advertising
business;
NOW, THEREFORE, in consideration of the covenants and agreements by the
parties and sums to be paid to Seller as set forth hereafter, Seller hereby
agrees to sell and Buyer hereby agrees to purchase from Seller its outdoor
advertising assets located in the Area, on certain terms and conditions, all as
set forth below:
1. PROPERTY TO BE SOLD.
1.1 Tangible and Intangible property. The tangible property of
Seller to be sold to Buyer and the intangible property of Seller to be
transferred by assignment or other means to Buyer pursuant to this Agreement
consist of all outdoor advertising assets presently owned by Seller and used in
Seller's outdoor advertising business in the Area including but not limited to
those assets described on Schedule "1A" attached hereto (which assets shall
hereinafter be separately referred to as the "Tangible Property" and
"Intangible Assets", respectively).
1.2 Real Property. The real property of the Seller to be sold to TLC
by means of a warranty deed as listed on Schedule "1B" attached hereto,
including the improvements located thereon (which assets shall be referred to
herein as the "Real Property").
1.3 Assignment of Options. Seller shall assign to Buyer and Buyer
shall receive an assignment from Seller of Seller's rights and interest in and
to the Option Agreement made and entered into as of the 31st day of May, 1996,
by and between Seller and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as trustee of the Chesapeake
Outdoor Enterprises, Inc. Voting Trust Agreement dated December 30, 1994 (the
"Option Agreement"). Such Option Agreement providing a first option to acquire
forty-eight and one-half shares (48.5) of the stock of Chesapeake Outdoor
Enterprises, Inc. ("Chesapeake"), being approximately thirty-eight and 8/10
(38.8%) percent of the issued and outstanding capital stock of Chesapeake, and
a second option to acquire an additional forty-eight and 5/10 (48.5) shares of
stock of Chesapeake, being approximately thirty-eight and 8/10 (38.8%) percent
thirty-eight and 8/10 (38.8%) percent of the issued and outstanding capital
stock of Chesapeake, such options being fully described in that certain Option
Agreement, and the amendment thereto, attached hereto as Schedule "1C".
1.4 Assignment of Agreement. Seller shall assign to Buyer all rights
of Seller, Seller's general partner and Seller's limited partners in and to
that certain agreement entitled "Chesapeake Owners Asset Option and
Reimbursement Agreement" dated May 31, 1996, such agreement providing an option
to Seller to purchase the assets of Tidewater Partners and PNE Media, Inc. A
copy of this
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agreement, and the amendment thereto, is attached hereto as Schedule "1D".
2. PURCHASE PRICE AND PAYMENT.
2.1 Purchase Price and Payment. The aggregate purchase price for the
Property to be paid to Seller (the "Purchase Price") is Sixty Million Five
Hundred Thousand and No/100 ($60,500,000.00) Dollars, payable as follows:
(a) Cash. The sum of SIXTY MILLION FIVE HUNDRED THOUSAND and NO/100
($60,500,000.00) DOLLARS, less the amount of the Seller Debt paid
by Buyer under (b) of this section, shall be delivered to Seller
by Buyer at the Closing in the form of a federal wire transfer to
a bank account designated in writing by Seller, or by delivery to
Seller of a bank certified or a cashier's check, payable to the
order of Seller, which amount includes the sum allocated to and
paid under the Non-Competition Agreements, being a total of Three
Hundred and No/100 ($300.00) Dollars.
(b) Payment of Seller Debt. As of Closing, Buyer shall pay the
outstanding indebtedness of Seller to Candyland, Inc., including
any prepayment penalty, pursuant to Seller's Promissory Note
payable to Candyland, Inc. dated June 1, 1989.
(c) At Closing, Seller shall be given credit for prepaid lease
payments. Taxes paid, taxes due and advertising contract
payments due on transferred assets will be prorated to date of
closing, the net amount to be deducted from purchase price if due
to the Buyer or added to the purchase price if due to Seller.
(d) Assumption of Obligations. As further consideration, Buyer shall
assume Seller's lease and loan obligations associated with
Seller's operating equipment and vehicles as listed on Schedule
2.1(d), such assumed obligations shall not exceed in the
aggregate ONE HUNDRED TWENTY FIVE THOUSAND AND NO/100
($125,000.00) DOLLARS.
2.2 Allocation of Purchase Price. Buyer and Seller agree that the
Purchase Price shall be allocated for state and federal income tax purposes in
the following manner and that an Internal Revenue Service Form 8594 in the form
and substance of Exhibit "2.2" attached hereto shall be timely filed with their
respective terms:
STRUCTURES $16,000,000.00
NON-COMPETITION AGREEMENTS $ 200,000.00
GOODWILL, CUSTOMER LISTS, LEASES, ETC. $44,300,000.00
In the event of a change in the Purchase Price, the parties agree to effect an
appropriate amendment of these allocations at Closing.
3. TRANSFER OF TITLE.
At the Closing, Seller agrees to execute a ▇▇▇▇ of Sale and Assignment
in the form and substance of Exhibit "3" attached hereto transferring fee
simple ownership to the Tangible Property, except the property listed on
Schedule 2.1(d), including but not limited to, (a) all billboard structures and
(b) all materials inventory, office equipment, operating equipment, automotive
equipment and construction equipment used in Seller's outdoor advertising
operations, free and clear of all liens and encumbrances, and transferring all
Intangible Assets held by Seller in the Area and
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used by Seller in conducting its outdoor advertising business in the Area
including but not limited to: (i) all leases of real property, including
without limitation, site leases given by landowners for the purpose of erection
of structures for advertising displays enumerated on the attached Schedule "1A"
("Leases"); (ii) except as otherwise provided on Schedule 3, all contracts with
third parties and rights of Seller pertaining thereto, including without
limitation all contracts for sales of outdoor advertising space and service
from the sites of such Leases ("Contracts"); (iii) all permits and tags issued
by state, county and city governmental authorities authorizing the outdoor
advertising operation conducted on the Lease sites in the Area held by Seller
("Permits"); (iv) all assignable non-competition agreements as they are
applicable to the Area, executed by former owners and existing or former
employees; and (v) all other intangible assets owned or held by Seller which
are used or useful in Seller's outdoor advertising business exclusively in the
Area. The originals of all of the Leases, Contracts, Permits, non-competition
agreements and all other documents evidencing Intangible Assets will be
delivered to Buyer at the offices of the Seller at the Closing Date. Except
accounts receivables, no cash or cash equivalents shall be transferred to
Buyer. Title to all Real Property of Seller shall be transferred by warranty
deed to TLC as of Closing.
4. REPRESENTATIONS AND WARRANTIES OF SELLER.
As a material inducement to Buyer to execute this Agreement and to
perform or cause the same to be performed, Seller represents and warrants to
Buyer that:
4.1 Existence. Seller is: (i) a limited partnership duly organized,
validly existing and in good standing under the laws of the State of Delaware;
(ii) has all necessary corporate powers to own its properties and to carry on
its business as now owned and operated by it; (iii) is duly qualified to
transact business and is doing business in the states of Georgia, Florida,
North Carolina, South Carolina, Virginia and West Virginia; (iv) is in good
standing in all other jurisdictions in which the nature of Seller's business or
of its properties makes such qualification necessary; and (v) First Carolina
Communications, Inc. is Seller's general partner, duly authorized to act on
behalf of Seller.
4.2 Litigation. Except as set forth on Schedule 4.2, there is not
pending, or, to the best knowledge of Seller, threatened, any suit, action,
arbitration, or legal, administrative, or other proceeding, or governmental
investigation against or affecting Seller or any of its businesses, assets, or
financial conditions, nor any circumstances known to exist by Seller which
would give rise to any action, suit or proceeding against Seller that would
affect the Property (a "Pending Claim"). Seller is not in default with respect
to any order or decree of any such governmental agency or instrumentality, and
Seller is not a party to any judgments, orders or decrees whatever which
adversely affect or pertain to its operations or the Property. Seller is not
presently engaged in any legal action to recover monies due Seller or damages
sustained by Seller that might cause a lien to be attached to the Property in
the future. Seller agrees to be solely responsible for any and all costs,
expenses, settlements, damages, fines and awards associated with any Pending
Claim.
4.3 Lessors, Advertisers and Zoning. To the best of Seller's
knowledge, Seller does not have any information indicating that: (a) any major
site lessors of Seller intend to breach or terminate any leases with Seller or
refuse to renew any leases with Seller upon expiration of the current term; (b)
any major advertisers of Seller intend to refuse to meet their current
obligations under any contract with Seller, and (c) to Seller's knowledge,
Seller has received no information from any governmental authority in the Area
declaring, or stating an intent to declare, a moratorium on the
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construction of outdoor advertising displays, or regarding the enactment of
ordinances or regulations relating to or creating more restrictive standards
with respect to the construction or location of outdoor advertising displays or
the outdoor advertising business in general.
4.4 Title to Property and Encumbrances. As of the Closing Date,
Seller shall have good, valid and marketable title to the Property subject to
no mortgage, pledge, lien, charge, security interest, encumbrance or
restriction of any kind, including without limitation any retained interest or
security interest of any conditional vendor; provided, however, that the
Property shall be subject to those certain liens and encumbrances set forth on
Schedule 2.1(d) and to certain prior claims under 4.2 for which Seller shall be
solely responsible. Seller has not heretofore obligated itself to dispose of
or assign any of the Property. The Property of Seller is in existence and is
in the sole possession of Seller.
4.5 Leases. To the best of Seller's knowledge, except as set forth
on Schedule 4.5: (i) substantially all of the leases are in writing; (ii) all
of the leases are valid and binding upon the parties except as to the proper
landowner, for which Seller represents and warrants substantially all Leases
are with the proper landowner; and (iii) all of the leases do not contain any
provision prohibiting assignment or requiring the consent of the lessor or
sublessor prior to assignment. Seller will deliver to Buyer copies of all of
its written ground Lease contracts for all leased locations at a reasonable
time prior to the Closing.
4.6 Condition of Property; Zoning. To the best of Seller's
knowledge, all of the outdoor advertising structures, panels and faces, and all
appurtenances thereto, being sold hereunder are in existence, as is all other
Tangible Property, and meet the material requirements of all existing outdoor
advertising Contracts assigned hereunder (including number of boards and
illumination). Further, to the best of Seller's knowledge, except as set forth
in Schedule 4.6, all of such outdoor advertising structures, panels and faces,
and all appurtenances thereto, being sold hereunder were built and are in
conformity in all respects with all building, zoning or other applicable
ordinances, regulations and laws, are legal and conforming or legal and
nonconforming, and all such structures have valid state, county and city (if
required) permits and tags. Except as otherwise noted in this Agreement, the
Property represents all of the assets used by Seller in the conduct of its
outdoor advertising business in the Area. Seller has not received notice,
whether from a third party or by independent investigation, to the effect that
any Panels (as defined hereinafter) or structures on which Panels are attached
make any encroachments on any property, public or private, not properly
authorized by a Lease.
4.7 Compliance with Laws. To the best of Seller's knowledge, Seller
has substantially complied with any applicable federal, state, or local
statutes, laws, or regulations (except to the extent compliance is limited by
the representations and warranties in Sections 4.3 and 4.6, above) affecting
the Property or the operation of Seller's business in the Area.
4.8 Panels Warranty. As of the Closing Date, Seller shall own and
operate and have available for renting to advertisers, a minimum of three
thousand eight hundred and fifty (3,850) panel faces in the Area and the
necessary structures and appurtenances to support these faces (herein sometimes
collectively referred to as the "Panels"), substantially all of which shall be
standing and in a condition suitable for leasing to advertisers in accordance
with past business practices of Seller, together with rights to erect, maintain
and operate such Panels as evidenced by the permits, leases and licenses
heretofore granted by the owners of the real
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Property upon which such Panels are located. Schedule 4.8 describes all
obligations of Seller for tradeouts or credits.
4.9 Contracts. To the best of Seller's knowledge, except as set
forth on Schedule 4.9, all of the advertising contracts: (i) are in writing;
(ii) are valid and binding upon the parties; and (iii) contain no provisions
prohibiting assignment or requiring the consent of the advertiser prior to
assignment.
4.10 Interests in Customers, Suppliers and Competitors. Neither
Seller nor, to the knowledge of Seller, any manager or employee of Seller, owns
outdoor advertising sites used by Seller for the structures described on
Schedule "1A" attached hereto, nor do any of them have any direct or indirect
interest in any competitor, supplier or customer of Seller in the Area, in any
person from whom Seller or any other person or entity leases sites for outdoor
advertising displays in the Area or in any other person or entity with whom
Seller is doing business within the Area.
4.11 Agreement Will Not Cause Breach or Violation. The execution,
delivery and performance of this Agreement by Seller and the consummation of
the actions contemplated hereby have been duly and effectively authorized by
the partners of Seller, as well as by all other requisite corporate action (if
any). The execution by Seller of this Agreement and any related agreement or
certificate executed in connection herewith: (a) will not cause Seller to
violate or contravene (i) any applicable provision of law, (ii) any rule or
regulation of any agency of government, or (iii) any order, writ, judgment,
injunction, decree, determination or award; (b) will not violate or be in
conflict with, result in a breach of or constitute (with or without notice or
lapse of time or both) a default under the partnership agreement of Seller, any
loan or credit agreement, note agreement, deed of trust, mortgage, pledge,
security agreement or other agreement, lease or other instrument, commitment or
arrangement to which Seller is a party or by which any of the properties,
assets or rights of Seller is bound or affected; and (c) will not be an event
that would permit any party to terminate any agreement or to accelerate the
maturity of any indebtedness or other obligation of Seller; and (3) will not
result in the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon any of the Property. The business and operations of
Seller have been and are being conducted substantially in accordance with all
applicable laws, rules and regulations of all authorities.
4.12 Authority and Consents. Except for those leases and contracts
noted as requiring consent to assignment on Schedules 4.5 and 4.9, Seller has
the right, power, legal capacity, and authority to enter into, and perform its
obligations under this Agreement, and no approvals or consents of any persons
other than Seller are necessary in connection with it; provided, however,
Seller and Buyer shall each be required to file a notification and report form
and related material with the Federal Trade Commission and the Antitrust
Division of the United States Department of Justice under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Act.
4.13 Proprietary Data. To the best of Seller's knowledge after
inquiry of its managers, Seller is the sole owner of its route lists, posting
guides, structure lists, lease lists, painting guides, trade secrets, and other
technical and proprietary data (the "Confidential Information"), free and clear
of any liens, encumbrances, restrictions, or legal or equitable claims of
others. Seller has taken all reasonable security measures to protect the
secrecy, confidentiality and value of these materials. Except as set forth on
Schedule 4.13 and to the best of Seller's knowledge, the Confidential
Information has not been used, divulged, or appropriated for the benefit of any
past or present employees or other persons, or to the detriment of Seller.
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4.14 Insurance. Seller maintains the insurance coverages as listed in
Schedule 4.14.
4.15 Absence of Undisclosed Liabilities. Except as listed on Schedule
4.2 and except for that certain indebtedness of Seller pursuant to that certain
Credit Agreement by and among Seller, Canadian Imperial Bank of Commerce and
certain other participating lenders, dated June 12, 1996, which shall be
satisfied prior to Closing, Seller does not have any debt, liability, or
obligation of any nature, whether accrued, absolute, contingent, or otherwise,
and whether due or to become due, which if not paid and satisfied at or prior
to the Closing would create a lien or already has created a lien or with
respect to which there is a lien securing the payment of said debt, on any or
all of the property.
4.16 Tax Returns. All federal, state, county, city and local tax
returns of Seller have been timely filed and all taxes shown to be due thereon
have been paid in full at the time of filing of such returns.
4.17 Labor Matters. Seller is not and has not in the past been a
party to collective bargaining agreements with a union. Seller has not
experienced any work stoppage or other concerted action by any employees of
Seller employed in the Seller's outdoor advertising business in the Area due to
labor disagreement.
4.18 Bulk Sales Law. Buyer shall not become liable to any creditors
of Seller for any liabilities of Seller pursuant to the bulk sales law of any
state as a result of this transaction.
4.19 Disclosure. Seller has, in connection with the sale of the
Property to Buyer, disclosed to Buyer all material information concerning the
Property and has not failed to disclose any information concerning such, which,
if known to Buyer, would materially and adversely affect the decisions of Buyer
with respect to this transaction.
4.20 Accuracy. None of the representations and warranties made by
Seller, or made in any certificate or memorandum furnished or to be furnished
by it, or on its behalf, contains or will contain any untrue statement of a
material fact, or omit any material fact the omission of which would be
misleading.
4.21 Real Property Title.
4.21.1 Legal Description. Seller does not own any real property in the
Area used or useful for outdoor advertising purposes except the Real Property
referred to in Schedule 1B. Schedule "1B" to this Agreement contains a
complete and accurate legal description of all of the real property owned by
Seller and a description of all buildings, fixtures, and other improvements
located on the Real Property.
4.21.2 (a) Hazardous Materials. Except as set forth on Schedule 4.21.2,
Seller has not installed any underground storage tanks on the Real Property,
and to the best of Seller's knowledge, there are no underground storage tanks
located on the Real Property, nor has there been any spill, disposal,
discharge, or release of any Hazardous Material into, upon, from, or over the
Real Property or into or upon ground or surface water on the Real Property. As
used in this paragraph, "Hazardous Material" means any hazardous or toxic
substance, material, or waste that is regulated by any Federal authority or by
any State or local governmental authority where the substance, material, or
waste is located. Seller shall provide copies of all written environmental
studies, surveys and testing reports which have been prepared for the Real
Property.
4.21.2 (b) To the extent any remediation of an environmental condition
on the Real Property is required, Seller shall be
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responsible for the costs incurred by Buyer for the remediation (including, but
not limited to, all damages, claims, losses, expenses, costs, obligations, and
liabilities (including without limitation, fines, penalties, reasonable
attorneys' fees and out-of-pocket expenses) incurred in connection with
investigation, clean-up and response) only to the extent Buyer demonstrates (1)
that the Seller breached its representation and warranty contained in Section
4.21.a, or (2) that such condition violates environmental laws or regulations
and (a) such condition was created by the Seller or (b) was created during the
Seller's ownership or operation of the Real Property. Notwithstanding any
provision of this Agreement to the contrary, Seller shall be responsible for
such remediation costs only to the extent such remediation is required by
environmental laws, regulations, orders or decrees.
4.22 Financial Statements. Attached hereto as Schedule 4.22 are the
following financial statements (collectively, the "Financial Statements"): (1)
audited balance sheets and statements of income, changes in partners' equity,
and cash flow as of and for the fiscal years ended December 31, 1995 and
December 31, 1994 for Seller; and (ii) unaudited balance sheets and statements
of income and cash flow (the "Most Recent Financial Statements") as of and for
the eight (8) months ended August 1996 (the "Most Recent Fiscal Month End") for
Seller. The Financial Statements (including the notes thereto) have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods covered thereby and present fairly the financial condition of Seller as
of such dates and the results of operations of Seller for such periods;
provided, however, that the Most Recent Financial Statements are subject to
normal year-end adjustments and lack footnotes and other presentation items.
Since the Most Recent Fiscal Month End, there has not been any material adverse
change in the financial condition of Seller taken as a whole.
4.23 Reliance. The foregoing representations and warranties are made
by Seller with the knowledge and expectation that for the purpose of executing
this Agreement Buyer shall rely thereon, and such representations and
warranties shall continue to and survive the Closing.
5. REPRESENTATIONS AND WARRANTIES OF BUYER.
As a material inducement to Seller to execute this Agreement and to
perform or cause the same to be performed, Buyer represents and warrants to
Seller that:
5.1 Corporate Existence. Buyer is a corporation, duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and qualified to do business in the States of Georgia, Florida, North Carolina,
South Carolina, Virginia and West Virginia.
5.2 Corporate Authority. Buyer has full power and authority to
execute and deliver this Agreement, and to perform the transactions
contemplated hereby and thereby and has taken all action necessary to authorize
the execution, delivery and performance thereof, except Buyer shall be required
to file a notification and report form and related material with the Federal
Trade Commission and the Antitrust Division of the United States Department of
Justice under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act.
5.3 No Legal Bar. The execution, delivery and performance of this
Agreement will not violate any provision of any existing law or regulation or
of any order, writ, judgment, injunction, decree, determination or award of any
court, arbitrator or governmental authority, or the articles of incorporation
or bylaws of Buyer and will not materially conflict with, or be inconsistent
with, any of the terms or provisions of or result in a material breach of, or
constitute a material default under, or result in the creation or
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imposition of any material lien on any assets of Buyer pursuant to any material
indenture, mortgage, loan or credit agreement, preferred stock provision, or
other agreement or instrument to which Buyer is a party or by which Buyer or
its assets may be bound or affected.
5.4 Binding Obligations. This Agreement has been executed and
delivered by duly authorized officers of Buyer, and constitutes the legal,
valid and binding obligations of Buyer, enforceable in accordance with its
terms.
6. COVENANTS OF SELLER.
Seller covenants with Buyer that:
6.1 Pre-Closing Covenants. Seller agrees as follows with respect to
the period between the execution of this Agreement and the Closing.
(a) Notices and Consents. Seller will file any Notification
and Report Forms and related material that he or it may be
required to file with the Federal Trade Commission and the
Antitrust Division of the United States Department of
Justice under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, will use his or
its reasonable best efforts to obtain a waiver from the
applicable waiting period, and will make any further
filings pursuant thereto that may be necessary, proper, or
advisable in connection therewith.
(b) Operation of Business. The Seller will not engage in any
practice, take any action, or enter into any material
transaction outside the ordinary course of business prior
to Closing, including any acts which would materially
compromise the existing security of the Proprietary
Information.
(c) Full Access. Seller will permit representatives of Buyer
to have access in a manner so as not to interfere with the
normal business operations of Seller at all reasonable
times to all premises, properties, personnel, books,
records (including tax records), contracts, and documents
of or pertaining to Seller.
6.2 Closing Documents. At the Closing, Seller shall deliver and/or
execute all other documents and items contemplated of it by this Agreement.
6.3 Non-Competition Agreements. In order to protect the unique
assets being acquired and for the consideration set forth therein, Seller shall
enter into a Non-Competition Agreement in the form and substance of Exhibit
"6.3A" attached hereto, and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇ shall enter into a Non-Competition Agreement in the form and substance
of Exhibit "6.3B" attached hereto, providing among other things that such
parties shall refrain from direct or indirect competitive activities within the
Area for a period of five (5) years following the Closing.
6.4 FIRPTA Certificate/Withholding. At the Closing, Seller shall
deliver to Buyer, a certificate made under penalty of perjury by Seller,
stating that Seller is not a non-resident alien, foreign corporation,
partnership, trust or estate as defined by the Internal Revenue Code (the
"IRC") and the regulations promulgated thereunder (the "Treas. Regs.") in the
form required by Treas. Regs. Section 1445 and otherwise comply with IRC
Section 1445.
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6.5 Representations and Warranties. All representations and
warranties shall survive the sale for a period of one (1) year from the date of
Closing, except representations and warranties of due authorization, taxes and
title to the Property which shall survive for a period of five (5) years from
the date of Closing.
7. DUE DILIGENCE PERIOD.
Until November 1, 1996, Buyer and its counsel, accountants, and other
representative of Buyer will have full access during normal business hours to
all properties, books, accounts, records, contracts, and documents of or
relating to the Seller. Seller will furnish or cause to be furnished to Buyer
and its representatives all data and information concerning the business,
records and properties of the Seller that may reasonably be requested.
8. TERMINATION BY BUYER.
If Seller materially defaults on any representations, warranties,
covenants or agreements under this Agreement, Buyer may on or before the
Closing Date give written notice of termination of the Agreement to Seller.
The notice shall specify the default or defaults on which the notice of
termination is based.
Seller and Buyer hereby agree that the failure to deliver to Buyer at
Closing legally binding rights to all of lessee's interests in those certain
forty-one (41) leases between Outdoor South, L.P. and Columbia Outdoor
Advertising, Inc., each dated May 1, 1990, on current terms shall constitute a
material default of a representation and warranty by Seller hereunder.
9. CLOSING.
9.1 Closing Date. Subject to the terms and conditions of this
Agreement, the closing pursuant to this Agreement shall occur on or before
December 15, 1996 (the "Closing" or "the Closing Date") and the conveyance and
assignment contemplated hereunder shall be effective as of Closing.
9.2 Execution and Delivery of Documents. At the Closing, the parties
shall execute and/or deliver, as appropriate, all instruments, certificates and
schedules required hereunder including but not limited to the following:
(a) Seller. Seller shall execute and/or deliver the following
documents and items:
(1) ▇▇▇▇ of Sale and Assignment as required under Article 3;
(2) A certified copy of the resolutions of the partners of
Seller authorizing the transactions contemplated hereunder
in the form and substance of Exhibit "9.2.(a)(2)" attached
hereto;
(3) A certified copy of the partnership agreement of Seller
authorizing the transactions contemplated hereunder in the
form and substance of Exhibit "9.2(a)(3) attached hereto;
(4) A certificate of good standing of Seller issued by the
Secretary of State's office of the state under whose laws
Seller was organized, and a certificate of qualification
issued by the Secretary of State's office of each state in
which the Seller is qualified to do business;
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(5) A certificate of good standing of Seller's general partner
issued by the Secretary of State's office of the State
under whose laws Seller's general partner was organized;
(6) The FIRPTA Certificate in the form and substance of
Exhibit "6.4" attached hereto;
(7) Opinion of Seller's counsel dated as of the date of
Closing, substantially in the form and substance of
Exhibit "9.2(a)(7)" attached hereto.
(b) Buyer. Buyer shall execute and/or deliver the following items:
(1) The Purchase Price described in paragraph 2.1(a) hereof
shall be placed in escrow pursuant to the terms of the
Escrow Agreement;
(2) A certified copy of the resolutions of the board of
directors of Buyer authorizing the transactions
contemplated hereunder in the form and substance of
Exhibit "9.2(b)(2) attached hereto;
(3) A certificate of good standing of Buyer issued by the
Secretary of State's office of the state under whose laws
Buyer was organized, and the certificate of qualification
issued by the Secretary of State of the States of Georgia,
Florida, North Carolina, South Carolina, Virginia and West
Virginia.
(c) Seller and Buyer. Seller and Buyer shall execute and/or deliver
the following items:
(1) The Non-Competition Agreement by and between Seller and
Buyer in the form and substance of Exhibit "6.3A" attached
hereto and the Non-Competition Agreements by and between
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and Buyer in the form and substance of Exhibit "6.3B"
attached hereto;
(2) The closing statement in the form of Exhibit "9.2(c)(2)"
attached hereto;
(3) The letter to be sent to the landlords under the Leases
("Landlord Letter") to be signed by Seller and Buyer in
the form and substance of Exhibit "9.2(c)(3)" attached
hereto; and
(4) The letter to be sent to the customers under the Contracts
("Customer Letter") signed by Seller and Buyer in the form
and substance of Exhibit "9.2(c)(4)" attached hereto.
(5) A letter informing the appropriate governmental entities
that issued Permits to Seller of the transfer of the
Permits from Seller to Buyer, in the form and
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substance of Exhibit "9.2(c)(5)" attached hereto;
9.3 Further Acts. At the Closing and as may be required from time to
time after the Closing, Seller shall execute any other assignments and
instruments of conveyance and transfer as shall be necessary to transfer to and
vest in Buyer all of Seller's right, title and interest in and to the Property.
10. INDEMNIFICATION.
10.1 (a) INDEMNITY BY SELLER. SELLER AGREES TO INDEMNIFY BUYER,
ITS DIRECTORS, AGENTS, AND EMPLOYEES, AGAINST, AND TO HOLD EACH OF THEM
HARMLESS FROM, ALL CLAIMS, SUITS, LOSSES, LIABILITIES, COSTS, DAMAGES AND
EXPENSES (INCLUDING BUT NOT LIMITED TO REASONABLE ATTORNEY FEES, INCLUDING
ATTORNEY FEES NECESSARY TO ENFORCE THEIR RIGHTS TO INDEMNIFICATION HEREUNDER)
ARISING FROM OR RESULTING BY REASON OF: (A) ANY ADVERSE AND INACCURATE
REPRESENTATION MADE BY OR ON BEHALF OF SELLER IN THIS AGREEMENT OR ANY
CERTIFICATE OR OTHER DOCUMENT DELIVERED PURSUANT HERETO; (B) THE BREACH OF ANY
OF THE WARRANTIES OR AGREEMENTS MADE BY OR ON BEHALF OF SELLER IN THIS
AGREEMENT OR ANY CERTIFICATE OR OTHER DOCUMENT DELIVERED PURSUANT HERETO; (C)
THE BREACH OR DEFAULT IN THE PERFORMANCE BY SELLER OF ANY OF THE OBLIGATIONS TO
BE PERFORMED BY IT HEREUNDER; (D) ANY CLAIM BY ANY PERSON THAT THE TRANSFER OF
THE PROPERTY TO BUYER HEREUNDER IS IN VIOLATION OF THE UNIFORM COMMERCIAL CODE
OR THE "BULK TRANSFER" PROVISIONS IN EFFECT IN ANY JURISDICTION; (E) ANY CLAIM
BY ANY PERSON THAT BUYER IS LIABLE FOR OBLIGATIONS OF SELLER, NOT EXPRESSLY
ASSUMED BY BUYER HEREUNDER, OR UNDER THE ▇▇▇▇ OF SALE AND ASSIGNMENT, AS A
SUCCESSOR CORPORATION PURSUANT TO THE CONTINUITY OF ENTERPRISE DOCTRINE; OR (F)
ALL OTHER INDEBTEDNESS, CLAIMS AND LIABILITIES, CONTINGENT OR OTHERWISE, OF
WHATEVER KIND OR NATURE, OF SELLER NOT EXPRESSLY ASSUMED BY BUYER HEREUNDER OR
UNDER THE ▇▇▇▇ OF SALE AND ASSIGNMENT, WHENEVER ARISING. THERE SHALL BE NO
CLAIM FOR LOST PROFITS.
10.1 (b) SELLER SHALL NOT HAVE ANY LIABILITY OR OBLIGATION UNDER
SECTION 10.1(a) WITH RESPECT TO ANY BREACH OF A REPRESENTATION OR WARRANTY MADE
BY SELLER (EXCEPT BREACHES WITH RESPECT TO SECTION 4.21.2(b) UNLESS THE
AGGREGATE OF ALL SUCH CLAIMS FOR WHICH SELLER WOULD, NOT FOR THIS PROVISION, BE
LIABLE EXCEEDS ON A CUMULATIVE BASIS FIVE HUNDRED THOUSAND AND NO/100
($500,000.00) DOLLARS, AND IF SUCH AMOUNT IS EXCEEDED, SELLER'S LIABILITY SHALL
INCLUDE ALL INDEMNITY AMOUNTS UNDER 10.1(a), AND SELLER SHALL NOT HAVE ANY
LIABILITY OR OBLIGATION UNDER SECTION 10.1(a) WITH RESPECT TO ANY BREACH OF A
COVENANT OF OR A REPRESENTATION OR WARRANTY MADE BY SELLER WITH RESPECT TO
SECTIONS 4.21.2(b) UNLESS, THE AGGREGATE OF ALL CLAIMS FOR WHICH SELLER WOULD,
BUT FOR THIS PROVISION, BE LIABLE EXCEEDS ON A CUMULATIVE BASIS TWENTY-FIVE
THOUSAND AND NO/100 ($25,000.00) DOLLARS. ANY PAYMENT MADE PURSUANT TO THE
REPRESENTATIONS AND WARRANTIES UNDER SECTION 4.21.2(b) SHALL NOT BE INCLUDED IN
THE CALCULATION OF AGGREGATE PAYMENTS UNDER SECTION 10.1(a). UNDER NO
CIRCUMSTANCES SHALL THE BUYER BE ENTITLED TO INDEMNIFICATION FOR CLAIMS UNDER
THIS AGREEMENT IN THE AGGREGATE FOR AN AMOUNT IN EXCESS OF FIVE MILLION
($5,000,000.00) DOLLARS.
10.2 BUYER SHALL INDEMNIFY SELLER, ITS OFFICERS, PARTNERS, AGENTS, AND
EMPLOYEES, AGAINST, AND TO HOLD EACH OF THEM HARMLESS FROM, ALL CLAIMS, SUITS,
LOSSES, LIABILITIES, COSTS, DAMAGES AND EXPENSES (INCLUDING BUT NOT LIMITED TO
REASONABLE ATTORNEY FEES, INCLUDING ATTORNEY FEES NECESSARY TO ENFORCE THEIR
RIGHTS TO INDEMNIFICATION HEREUNDER) ARISING FROM OR RESULTING BY REASON OF:
(A) ANY ADVERSE AND INACCURATE REPRESENTATION MADE BY OR ON BEHALF OF BUYER IN
THIS AGREEMENT OR ANY CERTIFICATE OR OTHER DOCUMENT DELIVERED PURSUANT HERETO;
(B) THE BREACH OR DEFAULT IN THE PERFORMANCE BY BUYER OF ANY OF THE
OBLIGATIONS OR COVENANTS TO BE PERFORMED BY IT HEREUNDER; (C) ANY OBLIGATION
OR LIABILITY OF SELLER EXPRESSLY ASSUMED BY BUYER PURSUANT TO THE TERMS OF THIS
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AGREEMENT OR THE ▇▇▇▇ OF SALE AND ASSIGNMENT; OR (D) ANY LIABILITY OR
OBLIGATION ARISING OUT OF THE OPERATION OF BUYER'S OUTDOOR ADVERTISING BUSINESS
IN THE AREA FROM AND AFTER THE CLOSING DATE.
10.3 Conditions of Indemnification. The obligations and liabilities
of Seller under Section 10.1 above with respect to claims resulting from the
assertion of liability by third parties shall be subject to the following terms
and conditions:
(a) Notice. Buyer will give notice of any such claim promptly after
Buyer receives notice thereof, and Seller will assume the
defense thereof by representatives of its own choosing.
However, at all times, Buyer shall have the right to participate
in the defense at its expense.
(b) Defense. In the event that the Seller, within a reasonable time
after notice of any such claim, but in no event later than
thirty (30) days after such notice, fails to defend against such
claim, Buyer will, upon notice to Seller, have the right to
undertake the defense at the reasonable expense of Seller,
subject to the right of the Seller to assume the defense of such
claim at any time prior to settlement, compromise or final
determination thereof.
(c) Injunctions. Anything in this paragraph 10.3 to the contrary
notwithstanding, (i) if there is any reasonable probability
that a claim may materially and adversely affect Buyer, other
than as a result of money damages or other money payments, Buyer
shall have the right, at its cost and expense, to defend,
compromise or settle such claim, and (ii) Seller shall not,
without the Buyer's written consent, settle or compromise any
claim or consent to entry of any judgment which does not include
an unconditional term by which the claimant or the plaintiff
gives to the Buyer a full and unconditional release from all
liability in respect of such claim.
10.4 Notice of Other Claims. In the event Buyer should have a claim
against Seller hereunder that does not involve a third party claim, the Buyer
shall notify Seller with reasonable promptness of the such claim, specifying
the nature of and specific basis for such claim and the amount of such claim.
Seller shall remit payment for the amount of such claim upon receipt of an
invoice therefor, or in the event of a dispute, Buyer and Seller shall proceed
in good faith to negotiate a resolution of such dispute, and if not resolved
through negotiations, such dispute shall be resolved by litigation in an
appropriate court of competent jurisdiction.
10.5 Liability of Seller's General Partner. The liability of Seller's
general partner for any indemnification claim arising from this Agreement shall
be limited to such general partner's share of the Purchase Price received with
respect to its partnership interest as a result of the transactions
contemplated hereunder.
11. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS.
All obligations of Seller under this Agreement are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions:
11.1 Buyer's Representations and Warranties. All of the
representations, warranties and covenants of Buyer contained in this Agreement
or in any certificate or document delivered
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pursuant to the provisions hereof or in connection with the transactions
contemplated hereby shall be true and shall have been complied with as of the
Closing as though made at such time.
11.2 Litigation. No action or proceeding shall have been instituted
or, to Buyer's knowledge, threatened, and no order, decree or judgment of any
court, agency, commission or authority shall be existing questioning the
validity of this Agreement or seeking to restrain the consummation of the
transactions contemplated by this Agreement that will render it impossible to
consummate the transactions provided for in this Agreement, provided that such
action or proceeding has not been instituted or threatened by Seller (or any
party or entity affiliated with or related to Seller), and provided further
that no such order, decree or judgment has resulted from an action or
proceeding instituted by Seller (or any party or entity affiliated with or
related to Seller).
11.3 Opinion of Buyer's Counsel. At the Closing, Buyer shall
deliver to Seller an opinion of Buyer's counsel, Kean, Miller, Hawthorne,
▇'▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, Attorneys at Law, Baton Rouge, Louisiana, dated
as of the Closing Date, substantially in the form and substance of Exhibit
"11.3" attached hereto.
12. OBLIGATIONS AND ACCOUNTS RECEIVABLE.
Accounts receivable are to be conveyed hereunder. Buyer does not
assume any obligations of Seller except obligations under the Leases, Contracts
and Structures described in Schedule "1A" attached hereto.
13. EMPLOYEE MATTERS.
13.1 Retention of Employees. Nothing in this Agreement (i)
obligates Buyer to hire any particular employee after the Closing, (ii)
requires Buyer to provide any employee any particular level of compensation or
benefits, (iii) restricts Buyer's right to terminate the employment of any
employee following the Closing, or (iv) obligates Buyer to assume any existing
union collective bargaining agreements.
13.2 Liability to or for Employees. Buyer shall not be liable for
any expense or liability that may arise from an employee's employment with or
termination by Seller prior to the Closing, and Seller agrees to indemnify
Buyer for any such expense or liability.
14. MISCELLANEOUS.
14.1 Brokerage. The parties severally represent to each other that
all negotiations relative to this Agreement and the transactions contemplated
hereby have been carried on by Seller directly with Buyer and without the
assistance of any broker, finder, agent or other originator who is entitled to
a fee or commission for such service, except for the brokerage agreement
between Seller and Communications Equity Associates for which Seller shall be
solely liable.
14.2 Payment of Expenses. Each party will bear all of its own costs
incurred in connection with the transactions contemplated by this Agreement,
including, but not limited to, any closing costs and attorneys' fees.
14.3 Integration and Assignment. This Agreement, including all
exhibits attached hereto or expressly referred to herein contains the entire
agreement between the parties hereto with respect to the transactions
contemplated herein and supersedes and supplants any and all prior agreements
with respect thereto. There shall be no assignment, modification or amendment
unless consented to in writing and signed by Seller and Buyer.
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14.4 Governing Law and Venue. This Agreement is made in and shall
be governed by and construed and enforced in accordance with the laws of the
State of South Carolina and venue for any action relating thereto shall be in
the State of South Carolina.
14.5 Cumulative Rights. The rights, powers and remedies of the
parties of this Agreement are cumulative and concurrent and in addition to
other rights, remedies and powers.
14.6 Sales Tax. Any sales tax or transfer tax liability arising
under the laws of any State in which Property hereunder is being transferred
shall be borne by Seller, which shall indemnify and hold harmless Buyer for any
such sales tax or transfer tax liability which may result from the transactions
contemplated hereunder.
14.7 Execution in Counterparts. For the convenience of the parties,
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 document.
14.8 Waivers. Any failure of any party hereto to comply with any of
its obligations, agreements or conditions as set forth herein may be expressly
waived in writing by the other party or parties.
14.9 Headings. The headings of the various Articles and Paragraphs
herein have been included for convenience of reference only and shall not
affect in any way the express provisions of this Agreement.
14.10 Severability. If any provision of this Agreement shall be held
invalid under any applicable laws, such invalidity shall not affect any other
provision of this Agreement that can be given effect without the invalid
provision, and, to this end, the provisions hereof are severable.
14.11 Definitions. All of the terms that are defined herein shall
have the definitions in the exhibits and schedules attached hereto unless
expressly modified in the exhibits and schedules.
14.12 Bulk Sales Law. Without admitting that the bulk sales law of
any state is applicable to the transactions contemplated by this Agreement, the
parties waive and agree not to comply with the bulk sales law of any state and
Seller shall indemnify and hold harmless Buyer, its stockholders, officer and
directors from and against any and all liabilities arising by reason of such
noncompliance in connection with the sale of the Property to Buyer.
14.13 Knowledge Defined. For the purposes of this agreement
"Seller's knowledge" or to the "best of Seller's knowledge" shall mean
information known to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇.▇. ▇▇▇▇▇▇▇, ▇▇. or ▇▇▇▇▇▇ ▇▇▇▇▇, and after reasonable inquiry of Seller's
managers.
15. Consulting
Buyer and ▇.▇. ▇▇▇▇▇▇▇, ▇▇. have agreed that ▇. ▇. ▇▇▇▇▇▇▇, ▇▇. will
provide consulting services to Buyer after Closing.
16. NOTICES.
Any notice, communication, request, reply or advice (hereinafter
severally and collectively called "Notice") provided or permitted to be given,
made or accepted by any party in this Agreement must be in writing and may be
given or served by depositing the same, postage prepaid and registered or
certified with return receipt requested, or by delivering the same in person to
the person to be notified. Notice deposited in the mail in the
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manner herein described shall be effective when so deposited. For purposes of
any Notice the address of the parties shall, until changed as hereinafter
provided, be as follows:
IF TO SELLER:
Outdoor East, L.P.
c/o First Carolina Communications, Inc.
Attn: ▇. ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: 970/▇▇▇-▇▇▇▇
With a copy to:
R. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
Suite 2800
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
IF TO BUYER:
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇ Advertising Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇▇
Facsimile: 923-0658
With a copy to:
▇▇. ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
KEAN, MILLER, HAWTHORNE, ▇'▇▇▇▇▇▇,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as Buyer or Seller may have advised the other in
writing.
IN WITNESS WHEREOF, Buyer and Seller have caused these presents to be
executed by themselves or their duly authorized officer as the case may be.
SELLER:
WITNESSES: OUTDOOR EAST, L.P.
BY: First Carolina Communications, Inc.,
its general partner
----------------------------- By:
----------------------------
▇. ▇. ▇▇▇▇▇▇▇, ▇▇., Chairman
-----------------------------
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BUYERS:
WITNESSES: ▇▇▇▇▇ ADVERTISING COMPANY
------------------------------ By:
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., President
------------------------------
TLC PROPERTIES, INC.
------------------------------ By:
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., President
------------------------------
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EXHIBITS:
2.2 IRS Form 8594
3.0 ▇▇▇▇ of Sale and Assignment
6.3A Non-Competition Agreement of Seller
6.3B Non-Competition Agreement of Partners of Seller
6.4 FIRPTA Certificate
9.2(a)(2) Resolutions of Seller
9.2(a)(3) Consent of Partners
9.2(a)(7) Opinion of Seller's Counsel
9.2(b)(2) Resolutions of Buyer
9.2(c)(2) Closing Statement
9.2(c)(3) Letter to Landlords
9.2(c)(4) Letter to Customers
9.2(c)(5) Acknowledgement of Transfer of Permits
SCHEDULES:
A List of Counties
1A(i) List of Structures
1A(ii) List of Contracts
1A(iii) List of Leases
1A(iv) List of Permits
1B List of Real Property
1C Stock Option Agreements; Amendment
1D Chesapeake Owners Asset Option and Reimbursement Agreement;
Amendment
2.1(d) Assumption of Obligations
3 Contracts Not Assigned to Buyer
4.2 Litigation
4.5 Lease Exceptions
4.6 Condition of Property; Zoning Exceptions
4.8 List of Tradeouts or Credits owed by Seller
4.9 Contract Exceptions
4.13 Proprietary Data Exceptions
4.14 List of Insurance
4.21.2 Hazardous Materials Exceptions
4.22 Financial Statements
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