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EXHIBIT 10.2
ASSET PURCHASE AGREEMENT
dated as of February 13, 1998
by and between
TRI-STATE OUTDOOR MEDIA GROUP, INC.
and
UNISIGN CORPORATION, INC.
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INDEX
1. DEFINITIONS.................................................................................... 1
2. PURCHASE AND SALE OF THE ASSETS; CLOSING....................................................... 1
2.1 Agreement to Purchase and Sell........................................................ 1
2.2 Purchased Assets...................................................................... 1
2.3 Agreement to Assume Certain Liabilities............................................... 3
2.4 Excluded Liabilities.................................................................. 3
2.5 Closing............................................................................... 4
2.6 Purchase Price........................................................................ 4
2.7 Transactions at the Closing........................................................... 4
2.8 Third Party Consents.................................................................. 5
3. REPRESENTATIONS AND WARRANTIES OF SELLER....................................................... 6
3.1 Organization and Good Standing........................................................ 6
3.2 Authority; No Conflict................................................................ 6
3.3 Solvency.............................................................................. 7
3.4 Books and Records..................................................................... 7
3.5 Structures............................................................................ 7
3.6 Permits............................................................................... 7
3.7 Site Leases and Advertising Contracts................................................. 7
3.8 Real Property......................................................................... 8
3.9 Title, Encumbrances................................................................... 8
3.10 Financial Statements.................................................................. 8
3.11 Taxes................................................................................. 9
3.12 Compliance with Legal Requirements.................................................... 10
3.13 Legal Proceedings; Orders............................................................. 10
3.14 Other Contracts....................................................................... 10
3.15 Insurance............................................................................. 10
3.16 Environmental Matters................................................................. 10
3.17 Intangible Property................................................................... 10
3.18 Relationships with Affiliates......................................................... 11
3.19 Brokers or Finders.................................................................... 11
3.20 Employee Benefits Matters............................................................. 11
3.21 Bulk Sales............................................................................ 11
3.22 Employees; Labor Matters.............................................................. 11
3.23 Indebtedness, Encumbrances and Security Interests..................................... 12
3.24 HSR................................................................................... 12
3.25 Disclosure............................................................................ 12
4. REPRESENTATIONS AND WARRANTIES OF BUYER........................................................ 12
4.1 Organization and Good Standing........................................................ 12
4.2 Authority; No Conflict................................................................ 13
4.3 Certain Proceedings................................................................... 13
4.4 Brokers or Finders.................................................................... 13
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5. COVENANTS OF SELLER............................................................................ 13
5.1 Access and Investigation.............................................................. 13
5.2 Omitted............................................................................... 13
5.3 Operation of the Purchased Assets..................................................... 14
5.4 Best Efforts.......................................................................... 14
5.5 Negative Covenant..................................................................... 14
5.6 Required Approvals and Consents....................................................... 14
5.7 Notification.......................................................................... 14
5.8 No Negotiation........................................................................ 14
5.9 Tax Clearance......................................................................... 15
6. COVENANTS OF BUYER............................................................................. 15
6.1 Required Approvals.................................................................... 15
6.2 Best Efforts.......................................................................... 15
6.3 Notification.......................................................................... 15
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE............................................ 15
7.1 Accuracy of Representations........................................................... 15
7.2 Seller's Performance.................................................................. 16
7.3 Consents.............................................................................. 16
7.4 Additional Documents.................................................................. 16
7.5 No Proceedings........................................................................ 16
7.6 No Prohibition........................................................................ 16
7.7 No Material Adverse Change............................................................ 16
7.8 Omitted............................................................................... 16
7.9 Satisfaction of Indebtedness.......................................................... 16
7.10 Billboard Income...................................................................... 17
8. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE........................................... 17
8.1 Accuracy of Representations........................................................... 17
8.2 Buyer's Performance................................................................... 17
8.3 Additional Documents.................................................................. 17
8.4 No Proceedings........................................................................ 17
8.5 No Prohibition........................................................................ 18
9. TERMINATION.................................................................................... 18
9.1 Termination Events.................................................................... 18
9.2 Effect of Termination................................................................. 18
10. INDEMNIFICATION; REMEDIES...................................................................... 19
10.1 Indemnification and Payment of Damages
by Seller and the Indemnifying Stockholders.......................................... 19
10.2 Indemnification and Payment of Damages by Buyer....................................... 19
10.3 Procedure for Indemnification -- Third Party Claims................................... 20
10.4 Procedure for Indemnification -- Other Claim.......................................... 20
10.5 Survival/Limitations.................................................................. 21
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11. NON-COMPETITION AND NON-SOLICITATION........................................................... 21
11.1 Non-Competition....................................................................... 21
11.2 Non-Solicitation...................................................................... 22
11.3 Enforcement........................................................................... 22
11.4 Non-Solicitation by Buyer............................................................. 22
11.5 Survival.............................................................................. 22
12. POST-CLOSING ESCROW FUND....................................................................... 23
12.1 Escrow Amount......................................................................... 23
12.2 Claims................................................................................ 23
12.3 Payment Date.......................................................................... 23
12.4 Escrow Agent Held Harmless............................................................ 24
12.5 Reliance on Notices................................................................... 24
12.6 Disputes.............................................................................. 24
12.7 No Limitation of Rights or Obligations................................................ 24
12.8 Survival.............................................................................. 24
13. GENERAL PROVISIONS............................................................................. 24
13.1 Expenses.............................................................................. 24
13.2 Headings; Construction................................................................ 25
13.3 Public Announcements; Confidentiality................................................. 25
13.4 Availability of Equitable Remedies.................................................... 25
13.5 Notices............................................................................... 25
13.6 Further Assurances.................................................................... 26
13.7 Waiver................................................................................ 27
13.8 Entire Agreement and Modification..................................................... 27
13.9 Assignments, Successors, and No Third-Party Rights.................................... 27
13.10 Severability.......................................................................... 27
13.11 Risk of Loss.......................................................................... 27
13.12 Post-Closing Access................................................................... 27
13.13 Applicable Law and Venue.............................................................. 28
13.14 Counterparts.......................................................................... 28
13.15 Proceedings........................................................................... 28
14. INTERSTATE 75 UNITS............................................................................ 29
14.1 Letter of Credit...................................................................... 29
14.2 Construction of Units................................................................. 30
14.3 Payment............................................................................... 30
14.4 Disputes.............................................................................. 31
14.5 Escrow Agent Held Harmless............................................................ 31
14.6 Reliance on Notices................................................................... 31
14.7 Survival.............................................................................. 31
15. ARBITRATION.................................................................................... 31
15.1 Appointment........................................................................... 31
15.2 Arbitration Procedure................................................................. 32
15.3 Jurisdiction.......................................................................... 32
15.4 Expenses.............................................................................. 32
15.5 Reference............................................................................. 32
15.6 Survival.............................................................................. 32
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is entered into as of
February __, 1998, by and between TRI-STATE OUTDOOR MEDIA GROUP, INC., a Kansas
corporation ("Buyer"), and UNISIGN CORPORATION, INC., a Kentucky corporation
("Seller") (Buyer and Seller are sometimes herein referred to individually as a
"Party" and collectively as the "Parties").
RECITALS
Seller is engaged in the business of owning and operating outdoor signs
and billboards and otherwise providing outdoor advertising services in the
states of Kentucky, West Virginia and Ohio (the "Business"), among other
business endeavors. Seller desires to sell and assign certain outdoor
advertising assets to Buyer, and Buyer desires to purchase such assets and to
assume certain liabilities associated with such assets, pursuant to the terms,
conditions, limitations and exclusions contained in this Agreement.
AGREEMENT
The Parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the terms listed on Exhibit A attached
hereto have the meanings specified or referred to in Exhibit A .
2. PURCHASE AND SALE OF THE ASSETS; CLOSING
2.1 AGREEMENT TO PURCHASE AND SELL. Subject to the terms and conditions
of this Agreement, Seller hereby agrees to grant, sell, assign, transfer, convey
and deliver all right, title and interest in and to the Purchased Assets, free
and clear of any Encumbrances or Security Interests, and Buyer hereby agrees to
buy and acquire the Purchased Assets from Seller, and to assume the Assumed
Liabilities upon the terms and conditions set forth in this Agreement.
2.2 PURCHASED ASSETS. The Purchased Assets are those assets of Seller
used in the Business listed below:
(a) all of the billboard displays and other out-of-home
advertising structures, together with all components, fixtures, parts,
appurtenances, and equipment attached to or made a part thereof that are
existing, under construction or for which Seller has any rights (including at
least 448 structures and 1,391 sign faces or places on structures for sign
faces) (collectively, the "Structures"), including, without limitation, all of
the Structures listed on Schedule 2.2(a);
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(b) all leases, licenses, easements, other rights of ingress
or egress, and all other grants of the right to place, construct, own, operate
or maintain billboard displays and other out-of-home advertising structures
(including, without limitation, the Structures) on land, buildings and other
real property owned by third parties, and all rights therein (collectively, the
"Site Leases"), including, without limitation, those Site Leases listed on
Schedule 2.2(b);
(c) all of the rights under existing and pending sales and
advertising contracts associated with the Business, all rights to the
advertising copy displayed on the Structures as of the Closing Date, all other
rights to collect and receive income from the use of the Structures and security
deposits, if any, with respect thereto (collectively, the "Advertising
Contracts"), including, without limitation, all of the Advertising Contracts
listed on Schedule 2.2(c);
(d) all state and local licenses or permits/tags which Seller
has or has an interest in with respect to the Business and all other
Governmental Authorizations that are required for the operation of the Business
(collectively, the "Permits"), including, without limitation, all of the Permits
listed on Schedule 2.2(d);
(e) the real property owned in fee by Seller and used in the
Business and any rights therein, and all buildings, fixtures, structures and
other improvements located thereon, listed on Schedule 2.2(e) ("Included Real
Property");
(f) all accounts receivable, prepaid items and other assets of
Seller as of the Closing Date used in the Business that would be reflected as
current assets on a balance sheet of Seller as of the Closing Date prepared in a
manner consistent with Section 3.10(a), but excluding cash and cash equivalents
(including certificates of deposit);
(g) all pertinent Books and Records;
(h) all tangible personal property owned by Seller and used in
the operation of the Business (collectively, the "Tangible Personal Property"),
including, without limitation, all of the Tangible Personal Property listed on
Schedule 2.2(h);
(i) all supplies used in connection with the Business,
including, without limitation, panels, moldings, steel components, sections,
parts, paint and painting supplies, appurtenances, equipment, electrical
connections, wiring and lighting components, as set forth on Schedule 2.2(i);
(j) the Intangible Property (it being understood that as to
Seller's trade name "Unisign", Buyer shall be entitled to use such name in
connection with its operation of the Purchased Assets and Seller shall be
entitled to retain the use of this name as its corporate name and in connection
with the operation by Seller of those businesses conducted by it which does not
constitute part of the Business); and
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(k) all rights (including any benefits arising therefrom),
causes of action, claims and demands of whatever nature (whether or not
liquidated) of Seller relating to the Purchased Assets, including, without
limitation, condemnation rights and proceeds, and all rights against suppliers
under warranties covering any of the Purchased Assets.
Notwithstanding the foregoing, the Purchased Assets shall not
include the following assets owned by Seller (the "Excluded Assets"):
(1) The land and improvements (including the office building)
located at Highway U.S. 23, Ivel, Kentucky (the "Office Property");
(2) Those parcels of real estate listed on Schedule 2.2(2)
annexed hereto (the "Excluded Real Property");
(3) Those assets used exclusively in Seller's commercial sign
construction business;
(4) Those assets used exclusively in Seller's commercial real
estate business (but not including the Included Real Property); or
(5) Seller's cash accounts (including certificates of
deposit).
Seller warrants and represents to Buyer that the Purchased Assets,
together with the Excluded Assets, constitute all the assets of the Business.
2.3 AGREEMENT TO ASSUME CERTAIN LIABILITIES. At the Closing, Buyer
shall assume and agree to discharge and perform only those liabilities and
obligations that are set forth on Schedule 2.3 or arise or are attributable to
events occurring on or after the Closing Date pursuant to the Site Leases and
the Advertising Contracts listed on Schedules 2.2(b) and 2.2(c), respectively
(the "Assumed Liabilities"), but to the extent and only to the extent that:
(a) Such obligations are performable on or after the Closing
Date; and
(b) Such obligations are attributable to periods arising on or
after the Closing Date.
The assumption by Buyer of any Assumed Liabilities shall not
be deemed to modify or amend Seller's representations and warranties contained
herein or in any way impair Buyer's right to rely upon such representations and
warranties or to obtain indemnification pursuant to Article 10 hereof for any
breach of such representations and warranties.
2.4 EXCLUDED LIABILITIES. All claims against and liabilities and
obligations of Seller not specifically assumed by Buyer pursuant to Section 2.3,
including, without limitation, the following
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claims against and liabilities of Seller (the "Excluded Liabilities"), are
excluded, and shall not be assumed or discharged by Buyer, and shall be
discharged in full when due by Seller:
(a) Any liabilities to the extent not attributable to the
Purchased Assets;
(b) Any liability for Taxes arising prior to or as a result of
the sale of the Purchased Assets under this Agreement;
(c) Any liabilities for or related to indebtedness of Seller
to banks, financial institutions, or other Persons;
(d) Any liabilities of Seller for or with respect to any
employees of Seller, including, without limitation, any liabilities pursuant to
any compensation, collective bargaining, pension, retirement, severance,
termination, or other benefit plan, agreement or arrangement;
(e) Any liabilities of Seller with respect to its commercial
sign construction business and commercial real estate business; and
(f) Any other liabilities of Seller, whether absolute or
contingent, that are attributable to or arise from facts, events, or conditions
that occurred or came into existence prior to the Closing (except to the extent
that Buyer shall assume the Assumed Liabilities as set forth in Section 2.3),
whether or not such liabilities are asserted or claimed prior to the Closing or
thereafter.
2.5 CLOSING. The purchase and sale of the Purchased Assets (the
"Closing") provided for in this Agreement will take place at the offices of
Buyer or its lender on February 27, 1998 or such earlier or later time and place
as the Parties may agree in writing. The effective time of the Closing shall be
12.01 a.m., Eastern Standard Time, on the Closing Date.
2.6 PURCHASE PRICE. In consideration for the Purchased Assets, Buyer
shall assume the Assumed Liabilities, and pay an amount (the "Purchase Price")
equal to Twenty-Two Million Dollars ($22,000,000.00). The Parties agree to
cooperate with each other in determining and reaching an agreement in writing on
the allocation of the Purchase Price among the Purchased Assets on or prior to
Closing.
2.7 TRANSACTIONS AT THE CLOSING. The following transactions shall take
place at the Closing:
(a) Seller shall enter into (as applicable) and/or deliver to
Buyer: (i) the ▇▇▇▇ of Sale, Assignment and Assumption Agreement; (ii) the Deeds
and all applicable documentary stamps or real estate transfer taxes payable in
connection with the conveyance of the Included Real Property; (iii) a lease
covering the Office Property in the form of Exhibit D annexed hereto (the
"Office Lease"); (iv) a lease or leases covering the Excluded Real Property in
the form(s) of Exhibit E annexed hereto (the "Parcel Lease"); (v) Required
Consents; (vi) satisfactory evidence of the release of any
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Encumbrances or Security Interests on the Purchased Assets; (vii) all applicable
Tax Clearances; and (viii) other instruments of transfer, and all other related
documents as may be necessary to effect the sale and assignment of the Purchased
Assets in accordance with the terms hereof; provided, however, that Buyer, by
written notice to Seller, may elect not to acquire any one (1) or more of the
parcels of Included Real Property (in which case Buyer, at its sole option, may
elect to deem any one (1) or more of such parcels as Excluded Real Property and
lease the same pursuant to the Parcel Lease on the terms applicable to each
other individual parcel of Excluded Real Property as set forth in the Parcel
Lease). Seller shall also deliver to Buyer all Books and Records with respect to
the Purchased Assets, including the originals of the Advertising Contracts, Site
Leases and Permits.
(b) Prior to the execution of this Agreement, Buyer delivered
to the Escrow Agent the sum of $250,000.00 (the "Deposit") as a deposit against
the Purchase Price, which amount is being held by the Escrow Agent pursuant to
the terms of that certain Escrow Agreement dated January 9, 1998 between Buyer,
Seller and the Escrow Agent, a copy of which is annexed hereto as Schedule
2.7(b) (the "Deposit Escrow Agreement") and incorporated herein by reference
(and in the event of any conflict between this Agreement and the Deposit Escrow
Agreement, the terms of this Agreement shall control). If the Closing shall
occur, the Escrow Agent shall deliver the Deposit to Seller at the Closing.
Buyer shall deliver the balance of the Purchase Price ($21,750,000.00) at the
Closing, as follows:
(i) $21,500,000.00 (subject to any required
adjustments) shall be delivered to an account or accounts
designated by Seller by wire transfer of immediately available
funds; and
(ii) the $250,000.00 Escrow Amount (as described in
Section 12.1) shall be delivered to the Escrow Agent by wire
transfer of immediately available funds to be held in
accordance with the provisions of Section 12 of this
Agreement.
(c) Buyer shall enter into (as applicable) and deliver to
Seller: (i) the ▇▇▇▇ of Sale, Assignment and Assumption Agreement, (ii) the
Office Lease, (iii) the Parcel Lease, and (iv) other assumption agreements,
instruments and other documents as may be reasonably necessary to evidence the
assumption by Buyer of the Assumed Liabilities.
(d) The Parties shall also deliver to each other the
agreements, instruments, opinions, certificates, and other documents referred to
in this Agreement.
2.8 THIRD PARTY CONSENTS. To the extent that Seller's rights under any
Advertising Contract, Site Lease, Permit or other interest in the Purchased
Assets may not be assigned without the consent of a third party and such consent
has not been obtained, this Agreement shall not constitute an agreement to
assign the same if an attempted assignment would constitute a breach thereof or
be unlawful, and Seller and Buyer, to the maximum extent permitted by law and
any terms of or limitations relating to such asset, shall use their Best Efforts
to obtain for Buyer the benefits thereunder, and shall cooperate to the maximum
extent permitted by law and any terms of or
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limitations relating to such asset in any reasonable arrangement designed to
provide such benefits to Buyer, including any sublease or subcontract or similar
arrangement, and if Buyer has obtained such benefits, Buyer shall discharge
Seller's obligations thereunder arising from and after the Closing Date, except
for those obligations arising because of Seller's breach.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 ORGANIZATION AND GOOD STANDING. Seller is a corporation duly
organized, validly existing and in good standing under the laws of Kentucky,
with full power and authority to conduct the Business as it is now being
conducted, to own or use the Purchased Assets, and to perform all its
obligations. Seller has delivered to Buyer true and complete copies of its
Organizational Documents, as currently in effect. Seller is duly qualified to do
business and in good standing in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification necessary, except where such failure to be qualified would
not have a Material Adverse Effect on Seller or the Business. The Business is
operating only in the Commonwealth of Kentucky and in the states of Ohio and
West Virginia. Seller has no subsidiaries.
3.2 AUTHORITY; NO CONFLICT.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Seller, enforceable against it in accordance with its terms. Upon
the execution and delivery by Seller of any documents to be executed at Closing
pursuant to this Agreement (collectively, the "Closing Documents"), such Closing
Documents will constitute the legal, valid, and binding obligations of Seller,
as applicable, enforceable against it in accordance with its terms. Seller has
the absolute and unrestricted right, power and authority to execute and deliver
this Agreement and the Closing Documents to which it is a party and to perform
its obligations thereunder. The Indemnifying Stockholders are all the
shareholders, beneficially and of record, of Seller. The execution, delivery and
performance of this Agreement has been specifically authorized by all the
shareholders and directors of Seller.
(b) Except as set forth in Part 3.2(b) of the Disclosure
Schedule, neither the execution and delivery by Seller of this Agreement nor the
consummation or performance by Seller of any of the Contemplated Transactions
will:
(i) conflict with, violate or result in a breach of
(A) any provision of the Organizational Documents of Seller; (B) any
Order or Legal Requirement to which Seller, the Business or any of the
Purchased Assets may be subject; or (C) any Governmental Authorization
held by Seller or that otherwise relates to the Business or the
Purchased Assets; or
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(ii) (A) contravene, conflict with, or result in a
violation or breach of any provision of, or give any Person the right
to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate, or modify, any
material Contract to which Seller is a party or any material interest
or rights of Seller in or to the Purchased Assets; or (B) result in the
imposition or creation of any Encumbrance upon or with respect to any
of the Purchased Assets.
(c) Except as set forth in Part 3.2(c) of the Disclosure
Schedule, Seller is not and will not be required to give any notice to or obtain
any Consent from any Person in connection with the execution and delivery of
this Agreement or the consummation or performance of any of the Contemplated
Transactions.
3.3 SOLVENCY. By consummating the transactions contemplated hereby,
Seller does not intend to hinder, delay or defraud any of Seller's present or
future creditors. Before giving effect to the transactions contemplated hereby,
Seller has been paying its debts as they become due in the Ordinary Course of
Business and, after giving effect to the transactions contemplated hereby,
Seller will have paid or discharged all of its debts (or made adequate provision
for the payment thereof) with respect to the Purchased Assets.
3.4 BOOKS AND RECORDS. The books of account, and other Books and
Records of Seller maintained in connection with the Purchased Assets, are
complete and correct in all material respects and have been maintained in
accordance with sound business practices. Buyer shall have full access to the
Books and Records (and the right to make copies of same) prior to, at and after
the Closing, and this provision shall survive the Closing.
3.5 STRUCTURES. Seller owns all of the Structures. Except as set forth
in Part 3.5 of the Disclosure Schedule, each Structure (a) has a written Site
Lease and is located entirely on property covered by a Site Lease or is located
entirely on the Real Property, (b) complies in all material respects with the
terms of the Permits and applicable Legal Requirements pertaining to it, (c) is
in condition to accept faces and in adequate condition and repair for its
current use, and (d) is not currently the subject of any dispute with any
lessor, any lessee or owner of adjacent property or any other Person.
3.6 PERMITS. Except as set forth in Part 3.6 of the Disclosure
Schedule, (a) the Permits constitute all necessary licenses, permits,
registrations and approvals necessary pursuant to all applicable Legal
Requirements to install, operate and maintain the Structures for off-premises
advertising, (b) Seller is in material compliance with the terms of the Permits;
(c) each Permit is in full force and effect and Seller is not aware of any fact
or event which constitutes a material violation of any Permit, and (d) Seller
has not received written notice that any Governmental Body issuing any Permit
intends to cancel, terminate, modify or amend any Permit.
3.7 SITE LEASES AND ADVERTISING CONTRACTS. Seller has delivered to
Buyer true and complete copies of all Advertising Contracts and the Site Leases
to which Seller is a party or by
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which Seller or any of the Purchased Assets is bound, and all Site Leases and
Advertising Contracts are listed on Schedules 2.2(b) and 2.2(c), respectively.
Except as set forth on Part 3.7 of the Disclosure Schedule, all sales made to
advertisers in connection with the Structures have been made pursuant to
Advertising Contracts. The Site Leases and the Advertising Contracts are in full
force and effect, and are binding upon the parties thereto. Except as set forth
in Part 3.7 of the Disclosure Schedule, (x) to the Knowledge of Seller, no
default by Seller or any other Person has occurred under the Site Leases or
Advertising Contracts and (y) to the Knowledge of Seller, no event, occurrence
or condition exists which (with or without notice or lapse of time or the
happening of any further event or condition) would become a default by Seller
thereunder or would entitle any other party to terminate a Site Lease or
Advertising Contract to make a claim or set-off against Seller or otherwise to
amend such Site Lease or Advertising Contract or prevent such Site Lease or
Advertising Contract from being renewed in accordance with its terms. Except as
set forth in Part 3.7 of the Disclosure Schedule, Seller has not received any
written notice of default, termination or non-renewal under any Site Lease or
Advertising Contract. On the Closing Date all Site Lease rents and other charges
and all liabilities with respect to the Purchased Assets obligations shall be
paid in full through the calendar month in which the Closing occurs.
3.8 REAL PROPERTY. Seller has good and marketable record title to the
surface of the Real Property, such title being a fee interest as to the surface
of the Real Property. Seller has not granted or agreed to grant to any Person
any option, agreement or other right to purchase, sell, lease or occupy any of
the Real Property.
3.9 TITLE, ENCUMBRANCES.
(a) Seller has good title to all of the Purchased Assets.
There are no existing agreements, options, commitments or rights with, of or to
any Person to acquire any of the Purchased Assets or any interest therein. All
of the Purchased Assets are owned by Seller free and clear of all Encumbrances
and Security Interests. With respect to the Site Leases, Seller makes no
representations as to the ownership interests of the lessors under such Site
Leases (however Seller is not aware that any such lessors do not own the real
property which is the subject of a Site Lease to which it is a party).
(b) Except as set forth in Part 3.9(b) of the Disclosure
Schedule, none of the Structures, Site Leases or the Real Property are or, to
the Knowledge of Seller, will be, subject to zoning, use, or building code
restrictions that will prohibit the continued effective ownership, leasing or
other use of such assets as currently owned and used by Seller. Seller has not
received any notice of pending or Threatened claims, Proceedings, planned public
improvements, annexations, special assessments, reasonings or other adverse
claims affecting the Site Leases or the Real Property.
3.10 FINANCIAL STATEMENTS.
(a) Seller has delivered to Buyer the following financial
statements (copies of which are annexed hereto as Schedule 3.10):
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(i) the unaudited balance sheets of Seller at
December 31, 1997 (the "Base Balance Sheet") and statements of income,
retained earnings and cash flows for the one (1) year then ended,
including the notes thereto, certified by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, independent
certified public accountant;
(ii) the unaudited balance sheets of Seller at
December 31, 1997, and an income statement for the twelve (12) month
period then ended; and
(iii) the unaudited operating statement of Seller for
the twelve (12) months ended December 31, 1997.
The Financial Statements have been prepared using generally accepted accounting
principles consistently applied during the periods covered thereby and are (i)
complete and correct in all material respects, and (ii) present fairly in all
material respects the financial condition of Seller at the dates of said
statements and the results of Seller's operations and cash flows for the periods
covered thereby (subject in the case of the unaudited Financial Statements to
normal year-end adjustments and the absence of footnotes). There has been no
Material Adverse Change in the financial condition of the Business or Purchased
Assets since the date of the Base Balance Sheet.
(b) As of the date hereof and as of the Closing Date, Seller
had and will have no liabilities with respect to the Business or the Purchased
Assets (which liabilities, when taken individually or in the aggregate are
material) of any nature, whether accrued, absolute, contingent or otherwise,
asserted or unasserted, known or unknown (including, without limitation,
liabilities as guarantor or otherwise with respect to obligations of others, or
liabilities for Taxes due or then accrued or to become due or contingent or
potential liabilities relating to activities of Seller with respect to the
Business prior to the date hereof or the Closing, as the case may be, regardless
of whether claims in respect thereof had been asserted as of such date), except
(i) liabilities reflected in the Financial Statements or the notes thereto, or
(ii) liabilities incurred in the Ordinary Course of Business since December 31,
1997.
(c) At Closing Seller shall deliver to Buyer an unaudited
balance sheet as at the date immediately preceding the Closing Date and an
income statement for the partial fiscal year then ended, certified by Seller's
chief financial officer.
3.11 TAXES. With respect to the Purchased Assets and the Business:
(a) Seller has filed or caused to be filed all Tax Returns
that are or were required to be filed by Seller, pursuant to applicable Legal
Requirements. Seller has paid, or made provision for the payment of, all Taxes
that have or may have become due pursuant to those Tax Returns or otherwise, or
pursuant to any assessment received by Seller.
(b) No unpaid Taxes create an Encumbrance on the Purchased
Assets.
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(c) Buyer shall not be liable for any Taxes of Seller as a
result of the Contemplated Transactions.
3.12 COMPLIANCE WITH LEGAL REQUIREMENTS. Except as set forth in Part
3.12 of the Disclosure Schedule, (a) Seller has complied with all Legal
Requirements applicable to Seller's ownership or use of the Purchased Assets and
operation of the Business, and (b) Seller has not received any notice (written
or oral) of any violation or failure to comply with any Legal Requirements
relating to the Business, the Purchased Assets or their use or operation which
violation or failure has not been cured.
3.13 LEGAL PROCEEDINGS; ORDERS. Except as set forth in Part 3.13 of the
Disclosure Schedule, there is no Proceeding pending or, to the Knowledge of
Seller, Threatened against Seller or affecting any of the Purchased Assets and
there is no Order to which Seller or the Purchased Assets is subject.
3.14 OTHER CONTRACTS. Seller is not a party to or bound by any Other
Contract, except as disclosed in Part 3.14 of the Disclosure Schedule.
3.15 INSURANCE. Seller maintains (and shall through and including the
Closing Date maintain) in full force and effect policies of fire and other
casualty, liability, title and other forms of insurance covering the Purchased
Assets and the Business, and the operation thereof, of the types and with the
amounts of coverage as are consistent with industry standards for outdoor
advertising businesses comparable to the Business.
3.16 ENVIRONMENTAL MATTERS. Except as set forth in Part 3.16 of the
Disclosure Schedule with respect to the Purchased Assets and the Real Property
and the use or operation thereof: (a) Seller is, and has been, in compliance
with all Environmental Laws; (b) Seller has timely filed all reports, obtained
all required approvals and permits relating to the Business, and generated and
maintained all data, documentation and records under any applicable
Environmental Laws; (c) to the Knowledge of Seller, there has not been any
Release of Hazardous Materials at or in the vicinity of the Business (including
the Real Property and any real property covered by a Site Lease or on which a
Structure is located) or in areas for which Seller would have responsibility
under Environmental Laws; (d) Seller has not received any written notice from
any Governmental Body or private or public entity advising it that it is or may
be responsible for response costs with respect to a Release, a threatened
Release or clean up of Hazardous Materials produced by, or resulting from, its
Business, operations or processes; and (e) Seller has delivered to Buyer true
and complete copies and results of any reports, studies, analyses, tests, or
monitoring possessed or accessible by Seller pertaining to Hazardous Materials
in, on, or under the properties included in the Purchased Assets.
3.17 INTANGIBLE PROPERTY. Seller uses no Intangible Property in
connection with the operation of the Purchased Assets except for the Permits,
the Books and Records, the trade name "Unisign" and licenses for commonly
available software programs under which Seller is the licensee.
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3.18 RELATIONSHIPS WITH AFFILIATES. Except as set forth on Part 3.18 of
the Disclosure Schedule, Seller is not a party to any contract with a Related
Person of Seller relating to the Purchased Assets or the Business associated
therewith. Neither Seller nor any Related Persons of Seller is the owner (of
record or as a beneficial owner) of an equity interest or any other financial or
profit interest in, a Person (other than Seller) that has business dealings or a
material financial interest in any transaction with Seller involving the
Purchased Assets or the Business associated therewith. Seller has not, in the
three (3) years immediately preceding the date hereof, entered into any
agreement with or engaged in any transaction with Affiliates of Seller or a
Related Person of Seller for the provision of any services or the purchase, sale
or other transfer of assets.
3.19 BROKERS OR FINDERS. Seller and its shareholders, directors, and
Representatives have not incurred any obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions or other
similar payment in connection with this Agreement, other than to ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
& Co., L.L.C. (which shall be paid a fee by Seller pursuant to a separate
agreement).
3.20 EMPLOYEE BENEFITS MATTERS Except as disclosed on Part 3.20 of the
Disclosure Schedule, with respect to Seller:
(a) Seller does not maintain and has never maintained an
"employee benefit pension plan" within the meaning of ERISA Section 3(2), that
is or was subject to Title IV of ERISA.
(b) Seller does not have and has not ever had, any past,
present or future obligation or liability to contribute any "multiemployer
plan," as defined in ERISA Section 3(37).
(c) Seller does not have any written or oral employee benefit
plans, contracts, agreements, incentives or arrangements, including without
limitation, pension and profit sharing plans, savings plans, incentive
compensation, medical, life, dental or disability plans or severance agreements.
For purposes of this Section 3.20, the term "Seller" shall be deemed to include
any other corporation, trade, business or other entity, other than Seller, which
would, together with Seller, now or in the past constitute a single employer
within the meaning of Section 414 of the IRC.
3.21 BULK SALES. Neither the sale by Seller to Buyer of the Purchased
Assets nor the transfer by Seller to Buyer of the Assumed Liabilities as
contemplated in this Agreement constitutes a "bulk sale" (as that term is
defined by the Uniform Commercial Code), and the completion of the transactions
contemplated in this Agreement shall not subject Buyer to any (i) claims
relating to or liabilities resulting from the operations or obligations of
Seller, or (ii) liabilities or obligations with respect to state or local sales,
transfer or similar taxes, all of which liabilities and obligations shall be the
sole responsibility of Seller.
3.22 EMPLOYEES; LABOR MATTERS. All employees of Seller are employees at
will. Except as disclosed on Part 3.22 of the Disclosure Schedule, no employee,
agent or consultant of
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Seller is a party to any agreement governing such employee's agent's or
consultant's employment or engagement, as the case may be, with Seller. As of
the date hereof Seller employs (and as of the Closing Date Seller shall employ)
less than fifty (50) employees. Seller has made no warranty, representation or
agreement, either in writing or orally, to any employee of Seller that Buyer
intends to employ such employee on or after the Closing Date. Seller consents to
Buyer communicating with the employees, consultants and independent contractors
of Seller on or prior to the Closing Date, and Seller shall cooperate in
connection therewith. Seller is not a party to any collective bargaining
agreement with respect to any of its employees nor are any employees of Seller
covered by any collective bargaining agreement. No labor organization or group
of employees has made a demand for recognition, has filed a petition seeking a
representation proceeding or given Seller notice of any intention to hold an
election of a collective bargaining organization. There are no known writs,
actions, claims or legal, administrative, arbitration or other proceedings or
governmental investigations pending or Threatened or involving or alleging civil
rights violations, unfair labor investigations practice claims, back pay orders
or other similar claims or proceedings. Seller is in material compliance with
all federal, state and local laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and is not
engaged in any unfair labor practice; there is no unfair labor practice
complaint against Seller pending before the National Labor Relations Board;
there is no labor strike, dispute, slowdown, or stoppage pending or threatened
against or involving the employees of Seller; no grievance or any arbitration
proceeding is pending or threatened against Seller and no claim therefor exists.
3.23 INDEBTEDNESS, ENCUMBRANCES AND SECURITY INTERESTS. Set forth on
Schedule 3.23 attached hereto is a list of all Encumbrances, Security Interests
and all indebtedness of the Seller, including the respective names and addresses
of the obligors and obligees, amount of the indebtedness and security for the
indebtedness, and the secured parties, debtor and collateral with respect to any
Security Interests, as applicable, if any. All such Encumbrances, Security
Interests and indebtedness shall be satisfied and discharged at or before the
Closing.
3.24 HSR. The Contemplated Transactions are not subject to the
reporting requirements under the HSR Act.
3.25 DISCLOSURE. No representation or warranty of Seller in this
Agreement and no statement in the Disclosure Schedule contains an untrue
statement of material fact or omits to state a material fact necessary to make
the statements herein or therein, in light of the circumstances in which they
were made, not misleading.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 ORGANIZATION AND GOOD STANDING Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Kansas.
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4.2 AUTHORITY; NO CONFLICT
(a) This Agreement constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
Upon the execution and delivery by Buyer of the Closing Documents to which Buyer
is a party, such Closing Documents will constitute the legal, valid, and binding
obligations of Buyer, enforceable against Buyer in accordance with their
respective terms. Buyer has the absolute and unrestricted right, power, and
authority to execute and deliver this Agreement and the Closing Documents and to
perform its obligations under this Agreement and the Closing Documents to which
Buyer is a party.
(b) Neither the execution and delivery of this Agreement by
Buyer nor the consummation or performance of any of the Contemplated
Transactions by Buyer will give any Person the right to prevent, delay, or
otherwise interfere with any of the Contemplated Transactions pursuant to (i)
any provision of Buyer's Organizational Documents; (ii) any resolution adopted
by the board of directors or the stockholders of Buyer; (iii) any Legal
Requirement or Order to which Buyer may be subject; or (iv) any material
Contract to which Buyer is a party or by which Buyer may be bound.
4.3 CERTAIN PROCEEDINGS. There is no pending Proceeding that has been
commenced against Buyer and that challenges, or may have the effect of
preventing, making illegal, or otherwise interfering with, any of the
Contemplated Transactions. To Buyer's Knowledge, no such Proceeding has been
Threatened and no event has occurred or circumstance exists that may give rise
to or serve as a basis for the commencement of any Proceeding.
4.4 BROKERS OR FINDERS. Buyer has not incurred any obligation or
liability, contingent or otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection with this Agreement.
5. COVENANTS OF SELLER
5.1 ACCESS AND INVESTIGATION. Between the date of this Agreement and
the Closing Date, Seller will, and will cause its Representatives to, afford
Buyer and its Representatives reasonable access during normal business hours to
Seller's personnel, properties, Books and Records, and other documents and data
relating to the Purchased Assets and the Business, and furnish Buyer and its
Representatives with copies of the same. In addition to the foregoing, Seller
(without additional consideration therefor to be paid to Seller, but with any
reasonable out-of-pocket expenses payable to non-Affiliates incurred by Seller
to be paid by Buyer), shall, at all reasonable times before the Closing if
called upon by Buyer, use reasonable efforts to cooperate with and assist Buyer
in the preparation of financial statements by Buyer which may include the
operation of the Business prior to the Closing Date.
5.2 OMITTED.
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5.3 OPERATION OF THE PURCHASED ASSETS. Between the date of this
Agreement and the Closing Date, Seller will:
(a) operate the Business only in the Ordinary Course of
Business;
(b) use its Best Efforts to maintain the Purchased Assets, and
maintain the relations and good will with advertisers, landlords and others
associated with the operation of the associated Business;
(c) not enter into any new Advertising Contract or Site Lease
not in the Ordinary Course of Business; and
(d) not ▇▇▇▇ any party for payments (or accept any payments)
under any Advertising Contract for any period after the end of the calendar
month in which the Closing Date occurs, and if Seller receives any such payments
it shall promptly pay the same to Buyer.
5.4 BEST EFFORTS. Between the date of this Agreement and the Closing
Date, Seller will use its Best Efforts to cause the conditions in Section 7 to
be satisfied.
5.5 NEGATIVE COVENANT. Except as otherwise expressly permitted by this
Agreement, between the date of this Agreement and the Closing Date, Seller will
operate the Business consistent in all material respects with past practice,
except as otherwise provided in this Agreement.
5.6 REQUIRED APPROVALS AND CONSENTS. As promptly as practicable after
the date of this Agreement, Seller will make all filings required by Legal
Requirements to be made by it in order to consummate the Contemplated
Transactions and use its Best Efforts to obtain such of the Consents identified
in Section 3.2(c) for the transfer of the Purchased Assets.
5.7 NOTIFICATION. Between the date of this Agreement and the Closing
Date, Seller will promptly notify Buyer in writing if Seller become aware of any
fact or condition that causes or constitutes a breach of any of Seller's
representations and warranties as of the date of this Agreement, or if Seller
becomes aware of the occurrence after the date of this Agreement of any fact or
condition that would (except as expressly contemplated by this Agreement) cause
or constitute a breach of any such representation or warranty had such
representation or warranty been made as of the time of occurrence or discovery
of such fact or condition. During the same period, Seller will promptly notify
Buyer of the occurrence of any breach of any covenant of Seller in this Section
5 or of the occurrence of any event that may make the satisfaction of the
condition in Section 7 impossible or unlikely.
5.8 NO NEGOTIATION. Until such time, if any, as this Agreement is
terminated pursuant to Section 9, neither Seller nor any Affiliate will, nor
will it permit its Representatives to, directly or indirectly solicit, initiate,
or encourage any inquiries or proposals from, discuss or negotiate with, provide
any non-public information to, or consider the merits of any unsolicited
inquiries or proposals
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from, any Person (other than Buyer or its Representatives) relating to or
affecting any transaction involving the sale of the Purchased Assets.
5.9 TAX CLEARANCE. Seller shall obtain certificates of clearances for
Taxes ("Tax Clearances") from the States of Kentucky, West Virginia and Ohio,
and applicable local jurisdictions (if any), certifying as to the payment by or
on behalf of Seller of all Taxes due on or prior to the Closing Date (including,
without limitation, in connection with the Contemplated Transactions).
6. COVENANTS OF BUYER
6.1 REQUIRED APPROVALS As promptly as practicable after the date of
this Agreement, Buyer will make all filings required by Legal Requirements to be
made by it to consummate the Contemplated Transactions.
6.2 BEST EFFORTS. Between the date of this Agreement and the Closing
Date, Buyer will use its Best Efforts to cause the conditions in Section 8 to be
satisfied, provided that this Agreement will not require Buyer to dispose of or
make any change in any portion of its business or to incur any other burden to
obtain a Governmental Authorization.
6.3 NOTIFICATION. Between the date of this Agreement and the Closing
Date, Buyer will promptly notify Seller in writing if Buyer becomes aware of any
fact or condition that causes or constitutes a breach of any of Buyer's
representations and warranties as of the date of this Agreement, or if Buyer
becomes aware of the occurrence after the date of this Agreement of any fact or
condition that would (except as expressly contemplated by this Agreement) cause
or constitute a breach of any such representation or warranty had such
representation or warranty been made as of the time of occurrence or discovery
of such fact or condition. During the same period, Buyer will promptly notify
Seller of the occurrence of any breach of any covenant of Buyer in this Section
6 or of the occurrence of any event that may make the satisfaction of the
conditions in Section 8 impossible or unlikely.
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Purchased Assets and to take the
other actions required to be taken by Buyer at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Buyer, in whole or in part):
7.1 ACCURACY OF REPRESENTATIONS. Seller's representations and
warranties in this Agreement must have been accurate in all material respects as
of the date of this Agreement, and must be accurate in all material respects as
of the Closing Date as if made on the Closing Date, and Buyer shall have
received a certificate of an executive officer of Seller in the form of Exhibit
F annexed hereto, dated as of the Closing Date, as to such accuracy.
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7.2 SELLER'S PERFORMANCE. The covenants and obligations that Seller is
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing must have been performed and complied with in all material respects,
and Buyer shall have received a certificate of an executive officer of Seller in
the form of Exhibit F annexed hereto, dated as of the Closing Date, as to such
compliance.
7.3 CONSENTS. Each of the Consents required pursuant to Section 3.2(c)
shall have been obtained and shall be in full force and effect.
7.4 ADDITIONAL DOCUMENTS. Each of the following documents must have
been delivered to Buyer:
(a) an opinion of ▇▇▇▇▇ ▇▇▇▇▇ May, Esq. dated the Closing Date
in the form of Exhibit G annexed hereto,
(b) the deliveries required from Seller in Section 2.7;
(c) resolutions of all the shareholders and directors of
Seller confirming the authorization of the execution and delivery of this
Agreement and the Contemplated Transactions; and
(d) such other documents as Buyer may reasonably request for
the purpose of (i) evidencing the satisfaction of any condition referred to in
this Section 7, or (ii) otherwise facilitating the consummation or performance
of any of the Contemplated Transactions.
7.5 NO PROCEEDINGS. Since the date of this Agreement, there must not
have been commenced and pending or Threatened by any Person any Proceeding (i)
involving any challenge to, or seeking damages or other relief in connection
with, any of the Contemplated Transactions, (ii) that prevents, makes illegal,
or otherwise materially interferes with any of the Contemplated Transactions or
seeks to do any of the foregoing, or (iii) that involves any material claim
against Seller.
7.6 NO PROHIBITION. There must not be in effect any Legal Requirement
or any injunction or other Order that prohibits or restricts the consummation of
the Contemplated Transactions.
7.7 NO MATERIAL ADVERSE CHANGE. There shall not have been a Material
Adverse Change since the date hereof.
7.8 OMITTED.
7.9 SATISFACTION OF INDEBTEDNESS. At or prior to the Closing, Seller
shall have repaid in full all outstanding indebtedness of Seller to the extent
affecting the Purchased Assets and shall cause all Security Interests affecting
the Purchased Assets to be extinguished.
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7.10 BILLBOARD INCOME. (i) For the calendar month in which the Closing
occurs the paint revenues for the Business must be $280,000.00 or more and the
poster revenues for the Business must be $35,000.00 or more, and (ii) there
shall be no Material Adverse Change in the financial condition of the Business
for the twelve (12) month period ended December 31, 1997 as shown on the
financial statement to be prepared by Buyer's independent accountant, as
compared to the financial statement described in Section 3.10(a)(iii).
8. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
Seller's obligation to sell the Purchased Assets and Seller's
obligation to take the other actions required to be taken by Seller at the
Closing is subject to the satisfaction, at or prior to the Closing, of each of
the following conditions (any of which may be waived by Seller, in whole or in
part):
8.1 ACCURACY OF REPRESENTATIONS. Buyer's representations and warranties
in this Agreement must have been accurate in all material respects as of the
date of this Agreement and must be accurate in all material respects in all
respects as of the Closing Date as if made on the Closing Date, and Seller shall
have received a certificate of an executive officer of Buyer in the form of
Exhibit H annexed hereto, dated as of the Closing Date, as to such accuracy.
8.2 BUYER'S PERFORMANCE. The covenants and obligations that Buyer is
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing must have been performed and complied with in all material respects,
and Seller shall have received a certificate of an executive officer of Buyer in
the form of Exhibit H annexed hereto, dated as of the Closing Date, as to such
compliance.
8.3 ADDITIONAL DOCUMENTS. Buyer must have caused the following
documents to be delivered to Seller:
(a) an opinion of St. ▇▇▇▇ & ▇▇▇▇▇, L.L.C., dated the Closing
Date in the form of Exhibit I annexed hereto;
(b) the deliveries required from Buyer in Section 2.7;
(c) resolutions of all the directors of Buyer confirming the
authorization of the execution and delivery of this Agreement and the
Contemplated Transactions; and
(d) such other documents as Seller may reasonably request for
the purpose of (i) evidencing the satisfaction of any condition referred to in
this Section 8, or (ii) otherwise facilitating the consummation of any of the
Contemplated Transactions.
8.4 NO PROCEEDINGS. Since the date of this Agreement, there must not
have been commenced and pending or Threatened any Proceeding (i) involving any
challenge to, or seeking damages or other relief in connection with, any of the
Contemplated Transactions, or (ii) that
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prevents, makes illegal, or otherwise materially interferes with any of the
Contemplated Transactions or seeks to do any of the foregoing.
8.5 NO PROHIBITION. There must not be in effect any Legal Requirement
or any injunction or other Order that prohibits or restricts the consummation of
the Contemplated Transactions.
9. TERMINATION
9.1 TERMINATION EVENTS. This Agreement may, by notice given prior to or
at the Closing, be terminated:
(a) by mutual written consent of Buyer and Seller;
(b) (i) by Buyer if any of the conditions in Section 7 has not
been satisfied as of the Closing Date or if satisfaction of such a condition is
or becomes impossible (other than through the failure of Buyer to comply with
its obligations under this Agreement) and Buyer has not waived in writing such
condition on or before the Closing Date (in which case the Deposit shall be
immediately returned to Buyer); or (ii) by Seller if any of the conditions in
Section 8 has not been satisfied as of the Closing Date or if satisfaction of
such a condition is or becomes impossible (other than through the failure of
Seller to comply with its obligations under this Agreement) and Seller has not
waived in writing such condition on or before the Closing Date; or
(c) by Buyer, on the one hand, or Seller, on the other hand,
if the Closing has not occurred (other than through the failure of the other
Party seeking to terminate this Agreement to comply fully with its obligations
under this Agreement) on or before April 1, 1998, or such later date as the
Parties may agree upon.
9.2 EFFECT OF TERMINATION. Each Party's right of termination under
Section 9.1 is in addition to any other rights it may have under this Agreement.
If this Agreement is terminated pursuant to Section 9.1, all further obligations
of the Parties under this Agreement will terminate and the Deposit shall be
immediately returned to Buyer, except that the obligations in Sections 13.1 and
13.3 will survive; provided, however, if (a) Seller shall default in its
obligations under this Agreement to consummate the Contemplated Transactions
(other than as a result of Buyer's default under this Agreement), and Seller
shall fail to cure such default within fourteen (14) days after receipt of
written notice of default from Buyer, then Buyer shall have the right to pursue
any or all legal and equitable remedies, separately or simultaneously
(including, without limitation, (1) the right to terminate this Agreement and
receive the return of the Deposit, or (2) specific performance), which will
survive the termination unimpaired, and the obligations in Sections 13.1 and
13.3 will survive; and (b) Buyer shall default in its obligations under this
Agreement to consummate the Contemplated Transactions (other than as a result of
Seller's default under this Agreement), and Buyer shall fail to cure such
default within fourteen (14) days after receipt of written notice of default
from Seller, then Seller, as Seller's sole remedy (in lieu of any and all
remedies), shall be entitled to receive the Deposit as agreed and liquidated
damages for such termination and/or failure to close by Buyer, and the
obligations in
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Sections 13.1 and 13.3 will survive. The remedies set forth in this Section 9.2
apply only to the failure of Buyer or Seller to consummate the Contemplated
Transactions, and not with respect to any obligations specified herein that
survive the Closing or termination of this Agreement.
10. INDEMNIFICATION; REMEDIES
10.1 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLER AND THE
INDEMNIFYING STOCKHOLDERS. Seller and the Indemnifying Stockholders will,
jointly and severally, indemnify and hold harmless Buyer and its stockholders,
controlling Persons and Affiliates (collectively, the "Seller Indemnified
Persons") for, and will pay to the Seller Indemnified Persons the amount of, any
loss, liability (whether absolute or contingent), claim, damage, expense
(including reasonable costs of investigation and defense and reasonable
attorneys' fees), whether or not involving a third-party claim (collectively,
"Damages"), arising, directly or indirectly, from or in connection with:
(a) any breach of any representation or warranty made by
Seller in this Agreement, the Disclosure Schedule, or any other certificate or
document delivered by Seller pursuant to this Agreement;
(b) any breach by Seller of any covenant or obligation of
Seller in this Agreement or an certificate or document delivered by Seller
pursuant to this Agreement;
(c) the failure of Seller to satisfy and discharge any
Excluded Liabilities;
(d) any default by Seller under any Site Lease, Advertising
Contract or Permit which occurred or accrued prior to the Closing;
(e) the failure of Seller to comply with bulk sales or other
similar laws in any applicable jurisdiction; and
(f) facts, events or conditions that occurred or came into
existence prior to the Closing (except to the extent that Buyer shall have
assumed the same as set forth in Section 2.3), whether or not such Damages are
asserted or claimed prior to the Closing or thereafter.
10.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER. Buyer will
indemnify and hold harmless Seller and its stockholders, controlling Persons and
Affiliates (collectively, the "Buyer Indemnified Persons") for, and will pay to
the Buyer Indemnified Persons the amount of, any Damages arising, directly or
indirectly, from or in connection with:
(a) any breach of any representation or warranty made by Buyer
in this Agreement or in any certificate or document delivered by Buyer pursuant
to this Agreement; and
(b) the failure to pay Assumed Liabilities after the Closing.
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10.3 PROCEDURE FOR INDEMNIFICATION -- THIRD PARTY CLAIMS.
(a) Promptly after receipt by an Indemnified Person under
Section 10.1 or 10.2 of notice of any claim against it, such Indemnified Person
will, if a claim is to be made against an Indemnifying Party under such Section,
give notice to the Indemnifying Party of the commencement of such claim, but the
failure to notify the Indemnifying Party will not relieve the Indemnifying Party
of any liability that it may have to any Indemnified Person, except to the
extent that the Indemnifying Party demonstrates that the defense of such action
is prejudiced by the Indemnifying Party's failure to give such notice.
(b) If any claim referred to in Section 10.3(a) is brought
against an Indemnified Person and it gives written notice to the Indemnifying
Party of such claim, the Indemnifying Party may, at its option, assume the
defense of such claim with counsel satisfactory to the Indemnified Person and,
after written notice from the Indemnifying Party to the Indemnified Person of
its election to assume the defense of such claim, the Indemnifying Party will
not, as long as it diligently conducts such defense, be liable to the
Indemnified Person under this Article 10 for any fees of other counsel or any
other expenses with respect to the defense of such claim subsequently incurred
by the Indemnified Person in connection with the defense of such claim, other
than reasonable costs of investigation. If the Indemnifying Party assumes the
defense of a claim, (i) no compromise or settlement of such claim may be
effected by the Indemnifying Party without the Indemnified Person's consent
unless (A) there is no finding or admission of any violation of Legal
Requirements or any violation of the rights of any Person, and (B) the sole
relief provided is monetary damages that are paid in full by the Indemnifying
Party; and (ii) the Indemnified Person will have no liability with respect to
any compromise or settlement of such claims effected without its consent.
Subject to Section 10.3(c), if notice is given to an Indemnifying Party of any
claim and the Indemnifying Party does not, within ten (10) days after the
Indemnified Person's notice is given, give notice to the Indemnified Person of
its election to assume the defense of such claim, the Indemnifying Party will be
bound by any determination made in such Proceeding or any compromise or
settlement effected by the Indemnified Person.
(c) Notwithstanding the foregoing, if an Indemnified Person
determines in good faith that there is a reasonable probability that a claim may
adversely affect it or its Affiliates other than as a result of monetary damages
for which it would be entitled to indemnification under this Agreement, the
Indemnified Person may, by notice to the Indemnifying Party, assume the
exclusive right to defend, compromise, or settle such claim, but the
Indemnifying Party will not be bound by any determination of a claim so defended
or any compromise or settlement effected without its consent (which may not be
unreasonably withheld or delayed).
10.4 PROCEDURE FOR INDEMNIFICATION -- OTHER CLAIM. A claim for
indemnification for any matter not involving a third-party claim shall be
asserted by written notice to the Indemnifying Party from whom indemnification
is sought.
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10.5 SURVIVAL/LIMITATIONS.
(a) The Parties hereto agree that (i) the covenants and
agreements contained in this Agreement (including, without limitation, Section
10.1(c)) and any document delivered pursuant hereto and the representations and
warranties contained in Sections 3.1, 3.2(a), 3.3, 3.11, 3.16, 3.18, 4.1,
4.2(a), 4.3 and 4.4 shall survive until ninety (90) days after the expiration of
all applicable statutes of limitation with respect to the subject matter
thereof, (ii) the representations and warranties contained in Sections 3.2(b),
3.2(c), 3.10, 3.12, 3.13, 3.14, 3.19, 3.20, 3.22, 3.23 and 4.2(b) shall survive
until five (5) years following the Closing Date, (iii) all other representations
and warranties shall survive until eighteen (18) months following the Closing
Date (however to the extent that an indemnification claim for a breach of any of
such other representations and warranties is based on a claim of fraud on the
part of Seller and/or the Indemnifying Stockholders, such representations and
warranties shall be deemed to survive for a period of five (5) years following
the Closing Date), and (iv) any indemnification claim for a breach of the
foregoing must be made in writing in accordance with the provisions of this
Article 10 within the applicable survival period for the underlying
representation, warranty or covenant. The expiration of the applicable survival
period will not extinguish an indemnification claim properly made prior to such
expiration in accordance with this Article 10.
(b) Notwithstanding anything to the contrary set forth in this
Article 10, in no event shall Seller's and the Indemnifying Stockholders'
obligation to indemnify the Seller Indemnified Persons pursuant to a claim or
claims for Damages pursuant to Section 10.1(a) (but not including any of the
representations and warranties in Section 3.11, 3.16 or 3.18) made after the
date which is thirty (30) months after the Closing Date exceed $3,000,000.00 in
the aggregate.
(c) Omitted.
(d) Except with respect to any claim, Proceeding or dispute in
connection with an actual or suspected Release of Hazardous Substances or other
actual or suspected violation of an Environmental Law, Buyer's sole and
exclusive remedy after the Closing has occurred for any breach of this Agreement
or for Damages shall be under this Section 10.
11. NON-COMPETITION AND NON-SOLICITATION.
11.1 NON-COMPETITION. Seller and the Indemnifying Stockholders each
hereby agrees that for a period of five (5) years after the Closing Date, such
Person will not, without the prior written consent of Buyer, directly or
indirectly, engage or participate in, be employed by or assist in any manner or
in any capacity, or have any interest in or make any loan to any person, firm,
corporation or business which engages in outdoor advertising activities
(including the ownership and/or operation of outdoor signs and billboards) in
those areas cross-hatched on Exhibit C annexed hereto; provided, however, the
foregoing shall not prevent any such entity or person from owning beneficially
or of record up to one percent (1%) of the outstanding securities of a
publicly-held corporation which engages in competitive activities.
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11.2 NON-SOLICITATION. For a period of five (5) years after the Closing
Date, Seller and the Indemnifying Stockholders each agree that he or it will (i)
not solicit, recruit or hire, or attempt to solicit, recruit or hire, directly
or indirectly, any of the employees of Buyer or its Affiliates; (ii) refrain
from soliciting, or attempting to solicit, directly or indirectly, any business
from any customer of Buyer, or actively pursue prospective customers, with whom
Buyer had material contact at any time during the previous five (5) years for
purposes of providing outdoor (including, without limitation, out-of-home
advertising) products or services of the type offered or provided by Buyer
(Buyer's customers to include customers of Seller); and (iii) refrain from
soliciting, or attempting to solicit, directly or indirectly, any real estate
location used by Buyer from any land owner (or its successor or assigns) who
leases to Buyer (including without limitation land owners under the Site
Leases), or actively pursue prospective land owners with whom Buyer or Seller
had material contact during the previous five (5) years.
11.3 ENFORCEMENT. Seller and the Indemnifying Stockholders acknowledge
that a breach of the covenants in this Section 11 would cause irreparable harm
to Buyer and its Affiliates for which there is not adequate remedy at law.
Seller and the Indemnifying Stockholders consent to the issuance of an
injunction in favor of Buyer and its Affiliates enjoining the breach of this
provision. Notwithstanding the foregoing, in addition to any equitable remedies
available to Buyer, Buyer shall be entitled to any and all remedies at law,
including, without limitation, injunctive relief, monetary damages, an
accounting for profits and/or the imposition of a constructive trust. In the
event that any court of competent jurisdiction should construe any geographical
limitation, the scope, or the time period contained in this restrictive covenant
to be too broad, so as to be unenforceable, it is the intention of the parties
that the court should modify the covenant(s) to provide that the restrictions as
herein contained shall apply and be enforceable to the maximum extent permitted
by law for such restrictions, and further upon such determination, to enforce
the covenant as so modified.
11.4 NON-SOLICITATION BY BUYER. In the event of the termination of this
Agreement, Buyer agrees that for a period of five (5) years after the effective
date of termination it shall refrain from soliciting, or attempting to solicit,
directly or indirectly, any real estate location which is the subject of a Site
Lease as of the date hereof. Buyer acknowledges that a breach of the covenant in
this Section 11.4 would cause irreparable harm to Seller for which there is not
adequate remedy at law. Buyer consents to the issuance of an injunction in favor
of Seller enjoining the breach of this provision. Notwithstanding the foregoing,
in addition to any equitable remedies available to Seller, Seller shall be
entitled to any and all remedies at law, including, without limitation,
injunctive relief, monetary damages, an accounting for profits and/or the
imposition of a constructive trust. In the event that any court of competent
jurisdiction should construe the scope or the time period contained in this
restrictive covenant to be too broad, so as to be unenforceable, it is the
intention of the parties that the court should modify the covenant to provide
that the restriction as herein contained shall apply and be enforceable to the
maximum extent permitted by law for such restrictions, and further upon such
determination, to enforce the covenant as so modified.
11.5 SURVIVAL. This provision shall survive the Closing.
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12. POST-CLOSING ESCROW FUND.
12.1 ESCROW AMOUNT. At the Closing hereof, the sum of Two Hundred Fifty
Thousand Dollars ($250,000.00) (the "Escrow Amount") shall be deposited in an
interest bearing escrow account reasonably acceptable to Buyer and Seller (the
"Escrow Fund") with the Escrow Agent. The Escrow Fund shall be held by the
Escrow Agent for a period not to exceed one (1) year from the Closing Date (the
"Escrow Period"), subject to the terms hereof.
12.2 CLAIMS. In the event that, at any time during the Escrow Period,
Buyer shall claim that Seller has breached any of its representations,
warranties or covenants hereunder, or any claim is made against Buyer by a
creditor of Seller with respect to a liability of Seller or the Business
accruing prior to the Closing Date or if Buyer shall incur any Damages, it shall
provide notice thereof to Seller, with a copy to the Escrow Agent, such notice
to set forth with particularity the specifics of any such claim, and Seller
shall have the right to cure same, or to dispute or contest any such claim. In
the event that Seller does not dispute or contest any such claim or fails to
cure same within thirty (30) days after receipt of Buyer's notice (or such
longer period not to exceed one hundred eighty (180) days in the case of a
Damage which cannot with due diligence be cured within thirty (30) days and the
continuance of which for the period required for cure will not subject any of
the Seller Indemnified Persons to the risk of civil or criminal liability or the
imposition of any Encumbrance on the Purchased Assets, provided Seller commences
the cure within such initial thirty (30) day period and thereafter diligently
prosecutes the cure), Buyer may thereafter furnish to the Escrow Agent a duly
executed and notarized affidavit setting forth the specifics of any such claim,
including, without limitation, the amount thereof and basis therefor, the date
of the notice thereof to Seller and a certification that Seller has not disputed
or contested same or has failed to cure same within the time provided for
herein. Unless Seller has paid to Buyer the amount of such claim within ten (10)
days after receipt by Escrow Agent of the certification of Buyer, the Escrow
Agent shall on the tenth (10th) day after receipt promptly deliver to Buyer from
the Escrow Fund, a check in the amount of any such claim. In the event, however,
that Seller shall elect to dispute or contest any such claim, it shall be
required, within thirty (30) days of Buyer's initial notice hereunder, to
provide notice thereof to Buyer, with a copy to the Escrow Agent, which notice
shall set forth with particularity the specifics of any such dispute or contest
as between the parties hereto or their successors or representatives. In the
event of any such dispute or contest, Buyer and Seller hereby agree that any
such dispute or contest shall be settled by arbitration in accordance with the
provisions of Article 15 of this Agreement. The Escrow Agent shall retain the
portion of the Escrow Fund covered by any such dispute until its receipt of a
certified copy of any such arbitration decision or award in favor of Buyer, at
which time it shall promptly deliver to Buyer from the Escrow Fund a check in
the amount of any such judgment or award.
12.3 PAYMENT DATE. On the one (1) year anniversary of the Closing Date
(the "Payment Date"), the Escrow Agent shall pay to Seller the balance of the
Escrow Fund (plus accrued interest) reduced by any amounts due to Buyer pursuant
to the terms of this Agreement and any amounts which are the subject of an
Unresolved Claim (as hereinafter defined). The term "Unresolved Claim" shall
mean any claim which may be made against the Escrow Fund in accordance with this
Section 12, until such time as such claim has been paid in full or otherwise
fully settled, compromised or adjusted by the parties and the Escrow Agent.
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12.4 ESCROW AGENT HELD HARMLESS. The parties to this Agreement
acknowledge and agree that the Escrow Agent shall not be liable for any error or
judgment or for any mistake of fact, law or for anything which it may do or
refrain from doing in connection herewith, except its own gross negligence or
willful misconduct. Seller and Buyer agree to indemnify, hold harmless and
defend the Escrow Agent from any loss, damage, claim, liability, judgment,
expense (including attorneys' fees and disbursements) or other charge incurred
or sustained by it by reason of any act or omission performed or omitted
hereunder, but this indemnity shall not be applicable to any loss, liability,
damage, claim, judgment, expense or other charge resulting from the gross
negligence or willful misconduct of the Escrow Agent.
12.5 RELIANCE ON NOTICES. The Escrow Agent shall have the right to rely
conclusively upon the notices delivered hereunder, and shall be under no
obligation to ascertain the authenticity of such notices, nor to determine the
factual accuracy thereof.
12.6 DISPUTES. The Escrow Agent is acting as a stakeholder only with
respect to the Escrow Fund. If there is any dispute as to whether the Escrow
Agent is obligated to deliver the Escrow Fund (or any portion thereof) and/or to
whom it should be delivered, the Escrow Agent shall not make any delivery, but
in such event the Escrow Agent shall hold the Escrow Fund until receipt by the
Escrow Agent of an authorization in writing signed by all parties having an
interest in such dispute, directing the disposition of same, or in the absence
of such authorization the Escrow Agent shall hold the Escrow Fund until the
final determination of the rights of the parties in an appropriate proceeding.
If such written authorization is not given, or proceedings for such
determination are not begun within a reasonable period of time and diligently
continued, the Escrow Agent shall have the right, at any time thereafter, to
commence an action or proceeding, at the sole cost and expense of Seller and
Buyer, in the nature of interpleader in any court having jurisdiction thereof,
and to deposit the Escrow Fund with such court, and thereupon, be discharged
from any and all further liability hereunder.
12.7 NO LIMITATION OF RIGHTS OR OBLIGATIONS. The provisions of this
Section 12 (including the amount of the Escrow Fund) shall not limit Buyer's
rights nor Seller's obligations under this Agreement (including, without
limitation, Section 10).
12.8 SURVIVAL. The provisions of this Section 12 shall survive the
Closing.
13. GENERAL PROVISIONS
13.1 EXPENSES. Except as otherwise expressly provided in this
Agreement, each Party to this Agreement will bear its respective expenses
incurred in connection with the preparation, execution, and performance of this
Agreement and the Contemplated Transactions, including all fees and expenses of
agents, representatives, brokers or finders, counsel, and accountants. In the
event of termination of this Agreement, the obligation of each Party to pay its
own expenses will be subject to any rights of such Party arising from a breach
of this Agreement by another Party. Each Party hereto shall indemnify the other
for its failure to pay any brokerage or finders' fees or agents'
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commission or similar payment incurred by such Party or its Representatives in
connection with this Agreement.
13.2 HEADINGS; CONSTRUCTION. The headings of Sections in this Agreement
are provided for convenience only and will not affect its construction or
interpretation. All words used in this Agreement will be construed to be of such
gender or number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words or terms.
13.3 PUBLIC ANNOUNCEMENTS; CONFIDENTIALITY. Any public announcement or
similar publicity with respect to this Agreement or the Contemplated
Transactions will be issued, if at all, at such time and in such manner as Buyer
and Seller agree in writing, provided that the parties shall reasonably
cooperate in such announcements, and provided further that nothing contained
herein shall prevent any party from at any time furnishing information required
by a Governmental Body. Unless consented to by Buyer and Seller in advance or
required by Legal Requirements, prior to the Closing, each Party shall, and
shall cause their respective Representatives to, keep this Agreement strictly
confidential and may not make any disclosure of this Agreement to any Person.
All confidential information and documents made available to the Buyer by Seller
or its Representatives with respect to the Business shall be kept in strict
confidence, and not made available to any third party other than absolutely
necessary for the purposes of concluding the Contemplated Transactions. In the
event the Contemplated Transactions for any reason are not concluded, all
documents or documents compiled from information supplied or obtained hereunder,
and copies thereof, shall be returned to Seller and the Confidential Information
obtained shall in no way be used by the Buyer or communicated to any third
party, except as required by law or court order. This representation shall
survive the termination of this Agreement.
13.4 AVAILABILITY OF EQUITABLE REMEDIES. The Parties acknowledge and
agree that (i) a breach of the provisions of this Agreement could not adequately
be compensated by money damages, and (ii) any Party shall (except as otherwise
expressly provided in this Agreement) be entitled, either before or after the
Closing, in addition to any other right or remedy available to it, to an
injunction restraining such breach and to specific performance of this
Agreement, and no bond or other security shall be required in connection
therewith.
13.5 NOTICES. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by telecopier (with written confirmation of receipt), provided that a copy
is mailed by certified mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
Party may designate by notice to the other Parties):
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If to Seller:
Unisign Corporation
▇.▇. ▇▇▇ ▇▇
▇.▇. ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇ ▇▇▇▇▇ May, Esq.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer, to:
Tri-State Outdoor Media Group, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
St. ▇▇▇▇ & ▇▇▇▇▇, L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Notices given by an attorney for a Party shall be deemed to be a notice given by
such Party.
13.6 FURTHER ASSURANCES. The Parties agree (i) to furnish upon request
to each other such further information, (ii) to execute and deliver to each
other such other documents, and (iii) to do
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such other acts and things, all as the other Party may reasonably request for
the purpose of carrying out the intent of this Agreement and the documents
referred to in this Agreement.
13.7 WAIVER. Neither the failure nor any delay by any Party in
exercising any right, power, or privilege under this Agreement or the documents
referred to in this Agreement will operate as a waiver of such right, power, or
privilege, and no single or partial exercise of any such right, power, or
privilege will preclude any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or privilege.
13.8 ENTIRE AGREEMENT AND MODIFICATION. This Agreement supersedes all
prior agreements between the Parties with respect to its subject matter
(including, without limitation, a certain letter of intent signed by Buyer on
December 29, 1997 and by Seller on December 30, 1997 and amendments thereto
signed by Buyer and Seller on January 9, 1998, January 29, 1998 and February 6,
1998) and constitutes (along with the documents referred to in this Agreement) a
complete and exclusive statement of the terms of the agreement between the
Parties with respect to its subject matter. This Agreement may not be amended
except by a written agreement executed by the Party to be charged with the
amendment.
13.9 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS. No Party may
assign any of its rights under this Agreement without the prior consent of the
other Parties except that Buyer may assign any of its rights under this
Agreement to any Affiliate of Buyer (provided that Buyer shall remain liable for
the obligations of such assignee under this Agreement). This Agreement will
apply to, be binding in all respects upon, and inure to the benefit of the
Parties, and their successors, by liquidation or otherwise, and their permitted
assigns. Nothing expressed or referred to in this Agreement will be construed to
give any Person other than the Parties to this Agreement any legal or equitable
right, remedy, or claim under or with respect to this Agreement or any provision
of this Agreement.
13.10 SEVERABILITY. If any provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
13.11 RISK OF LOSS. Except as otherwise expressly provided in this
Agreement, material risk of loss or damage to the Purchased Assets from any
cause whatsoever prior to the Closing shall be borne by Seller, and after the
Closing shall be borne by Buyer.
13.12 POST-CLOSING ACCESS. Buyer agrees that all Books and Records
delivered to Buyer by Seller pursuant to this Agreement shall be maintained open
for inspection by Seller at any time during regular business hours upon
reasonable notice for a period of six (6) years (or for such longer period as
may be required by applicable Legal Requirements) following the Closing and
that, during such period, Seller, at its expense, may make such copies thereof
as it may reasonably desire. Seller agrees that all books and records relating
to the Purchased Assets and retained by Seller shall be
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maintained open for inspection by Buyer at any time during regular business
hours for a period of six (6) years (or for such longer period as may be
required by applicable Legal Requirements) following the Closing and that,
during such period, Buyer, at its expense, may make such copies thereof as it
may reasonably desire. In addition to the foregoing, Seller (without additional
consideration therefor to be paid to Seller, but with any reasonable
out-of-pocket expenses payable to non-Affiliates incurred by Seller to be paid
by Buyer), shall, at all reasonable times after the Closing if called upon by
Buyer, use reasonable efforts to cooperate with and assist Buyer in the
preparation of financial statements by Buyer which may include the operation of
the Business prior to the Closing Date. Nothing contained in this Section 13.12
shall obligate any Party hereto to make available any books and records if to do
so would violate the terms of any Contract or Legal Requirement to which it is a
party or to which it or its assets are subject. This provision shall survive the
Closing.
13.13 APPLICABLE LAW AND VENUE. Any dispute that relates to any real
property included in the Purchased Assets shall be resolved according to the law
of the state in which such real property is located. In all other respects, this
Agreement is made in and shall be governed by and construed and enforced in
accordance with the laws of the State of Kentucky. Venue shall be proper in the
state where the real property is located concerning disputes that relate to any
real property included in the Purchased Assets. For all other matters venue
shall be proper in the State of Kentucky. Seller and Buyer hereby consent to the
personal jurisdiction of such courts for all matters relating to or arising from
this Agreement.
13.14 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
13.15 PROCEEDINGS. (a) If, on or before the date which is eighteen (18)
months after the Closing Date, there shall be entered, issued, made or rendered
any Order in any of the Proceedings listed in Part 3.13 of the Disclosure
Schedule requiring the removal of a Structure or Structures, Seller at its sole
expense and as soon as practicable shall (i) remove said Structure(s), and (ii)
replace the removed Structure(s) with new Structures of like construction and
size (so that the same is ready for the painting of advertising copy thereon)
and which shall be covered by valid Site Leases and such Permits (all in the
name of Buyer, or assignable to Buyer, and otherwise in form and substance and
on terms reasonably acceptable to Buyer) as are required for the ongoing
operation and maintenance of such new Structures by Buyer for outdoor
advertising purposes, and the locations of which new Structures shall be
substantially similar to the locations for the applicable removed Structures and
otherwise reasonably acceptable to Buyer.
(b) Prior to the Closing, Seller at its expense shall use its
Best Efforts to defend the subject Proceedings listed in Part 3.13 of the
Disclosure Schedule so as to avoid any Material Adverse Effect. After the
Closing, the parties agree that such Proceedings shall be defended as follows:
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(i) As to the Proceedings listed in Paragraphs 1-13,
15, 16 and 18, Buyer shall maintain the defense thereof.
(ii) As to the Proceedings listed in Paragraphs 14,
17, 19 and 20, Seller shall maintain the defense thereof.
The parties shall cooperate and regularly communicate with
each other in the defense of these matters.
(c) Buyer shall not, with respect to the Proceedings listed in
Part 3.13 of the Disclosure Schedule, have any claim against Seller under
Sections 10.1(d) or (f) of this Agreement (except to the extent that in any such
Proceeding there shall be entered, made, issued, rendered or agreed to any
monetary fine, judgment, penalty, imposition or other cost [for which Seller
shall be responsible], in which case and to such extent the foregoing limitation
shall not apply).
(d) Notwithstanding the foregoing provisions of this Section
13.15, the provisions of Section 13.15(a)(ii) shall not apply to the matters
described in Paragraphs 19 or 20 in Part 3.13 of the Disclosure Schedule, which
matters shall be governed by the provisions of Article 14 of this Agreement
(Seller hereby warranting and representing to Buyer that such matters relate
solely to the Permits required with respect to the East Units).
14. INTERSTATE 75 UNITS
14.1 LETTER OF CREDIT. At the Closing hereof, a standby letter of
credit in the amount of $1,250,000.00 having an expiration date of twenty-five
(25) months of the Closing Date and payable to the Escrow Agent (the "Letter of
Credit") shall be delivered by Buyer to the Escrow Agent to be held in
accordance with the terms of this Section 14. The Letter of Credit shall be
drawable solely by the Escrow Agent, and solely upon a circumstance which would
entitle Seller to receive all or a portion of the proceeds of the Letter of
Credit as set forth in this Section 14. The Letter of Credit shall not in any
event be drawn upon without at least five (5) business days' prior written
notice to Buyer within which period Buyer in its sole discretion shall be
entitled to deposit with the Escrow Agent an amount of cash in lieu of the
Escrow Agent's drawing upon the Letter of Credit. If there shall be any dispute
as to whether Seller is entitled to all or any portion of the proceeds of the
Letter of Credit, or whether Buyer is entitled to the return of the Letter of
Credit or any part thereof, the Escrow Agent shall not make any delivery, but in
such event the Escrow Agent shall hold the Letter of Credit (or the cash
proceeds thereof) until receipt by the Escrow Agent of an authorization in
writing signed by all parties having an interest in such dispute, directing the
disposition of same, or in the absence of such authorization the Escrow Agent
shall hold the Letter of Credit until the final determination of the rights of
the parties in an appropriate proceeding. If such written authorization is not
given, or proceedings for such determination are not begun within a reasonable
period of time and diligently continued, the Escrow Agent shall have the right,
at any time thereafter, to commence an action or proceeding, at the sole cost
and expense of Buyer and Seller, in the nature of an interpleader in any court
having jurisdiction thereof, and to deposit the Letter of Credit (or the
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proceeds thereof) with such court, and thereupon be discharged from any and all
further liability hereunder. Notwithstanding the foregoing if there shall be a
dispute as to the disposition of the Letter of Credit and the Letter of Credit
by its terms is subject to expire within five (5) business days, then and only
then the Escrow Agent shall be entitled to draw upon the Letter of Credit
(provided the Escrow Agent shall have given to Buyer at least five (5) business
days' prior written notice thereof, within which period Buyer in its sole
discretion shall be entitled to deposit with the Escrow Agent an amount of cash
in lieu of the Escrow Agent's drawing upon the Letter of Credit, or a substitute
letter of credit expiring not less than six (6) months after the then current
expiration date of the Letter of Credit). At Buyer's election at any time, and
from time to time, Buyer shall be entitled to deposit with the Escrow Agent an
amount of cash equal to the then balance of the Letter of Credit, and
vice-versa. If and to the extent that the Escrow Agent is holding cash in lieu
of the Letter of Credit as hereinbefore provided, such cash deposit shall be
placed in an interest bearing account with the Escrow Agent reasonably
acceptable to Buyer and Seller, and interest shall accrue for the benefit of
Buyer.
14.2 CONSTRUCTION OF UNITS.
(a) Promptly after the Closing, Seller, at its sole expense,
shall commence and thereafter diligently prosecute the Completion of eight (8)
outdoor advertising structures adjacent to Interstate 75 in Georgetown, Kentucky
(the "Units"), four (4) of which shall be located on the east side of Interstate
75 (the "East Units") and four (4) of which shall be located on the west side of
Interstate 75 (the "West Units"). The location of the Units, and the plans and
specifications therefor, are set forth on Exhibit J annexed hereto (the
"Specifications"). A Unit shall be deemed completed upon its construction in
accordance with the Specifications (so that the same is ready for the painting
of advertising copy thereon), and shall be covered by a valid Site Lease and
such Permits (all in the name of Buyer, or assignable to Buyer, and otherwise in
form and substance and on terms reasonably acceptable to Buyer) as are required
for the ongoing operation and maintenance by Buyer of a Unit for outdoor
advertising purposes ("Completion").
(b) When Seller is of the opinion that the Completion of the
East Units or the West Units, as the case may be, has occurred, Seller shall
send written notice thereof to Buyer. Buyer agrees that upon receipt of such
written notice, Buyer will promptly (and not later than ten (10) business days
after receipt of Seller's said notice) inspect the East Units or West Units, as
the case may be, and furnish to Seller a written statement either (i) confirming
that the Completion has occurred, or (ii) that the Completion has not occurred
and specifying those items to be completed in order for the Completion to occur
(the "Punch List"). Seller, at its sole expense, shall promptly complete any
Punch List items. Seller shall execute all documents reasonably required by
Buyer to convey all right, title and interest in and to the Units, all Site
Leases, Permits and Advertising Contracts with respect to such Units, and all
development rights with respect to the locations covered thereby, to Buyer.
14.3 PAYMENT. Upon Completion (by written agreement of the parties or
by determination pursuant to the provisions of Article 15 of this Agreement) of
either the East Units or West ▇▇▇▇▇,
▇▇
35
as the case may be, Seller shall be entitled to receive the sum of $625,000.00;
in which case the Escrow Agent shall draw upon the Letter of Credit up to
$625,000.00 (provided that it shall give Buyer at least five (5) business days'
prior written notice of its intention to draw upon such Letter of Credit during
which period of time Buyer may elect to replace the Letter of Credit, in whole
or in part, with cash). Notwithstanding anything to the contrary herein
contained, if, within two (2) years after the Closing Date the Completion of the
(a) East Units shall not have occurred, Seller shall no longer be entitled to,
and shall forfeit, the $625,000.00 payable in respect of the Completion of the
East Units, and (b) West Units shall not have occurred, Seller shall no longer
be entitled to, and shall forfeit, the $625,000.00 payable in respect of the
Completion of the West Units (and Buyer shall have no further remedies against
Seller for such failure [including under Article 10 or Section 13.15], except
that Buyer shall be entitled to all future development rights with respect to
such locations and all improvements thereon [including, without limitation, the
Units, to the extent constructed], and all rights with respect to all Site
Leases, Advertising Contracts and Permits covering such Units, and Seller shall
execute all documents reasonably required by Buyer to convey and assign such
rights).
14.4 DISPUTES. In the event of any dispute as to the nature or
existence of any Punch List item or as to whether the Completion of the East
Units or West Units, as the case may be, has occurred, such disputes shall be
settled by arbitration in accordance with the provisions of Section 15 of this
Agreement.
14.5 ESCROW AGENT HELD HARMLESS. The parties to this Agreement
acknowledge and agree that the Escrow Agent shall not be liable for any error or
judgment or for any mistake of fact, law or for anything which it may do or
refrain from doing in connection herewith, except its own gross negligence or
willful misconduct. Seller and Buyer agree to indemnify, hold harmless and
defend the Escrow Agent from any loss, damage, claim, liability, judgment,
expense (including attorneys' fees and disbursements) or other charge incurred
or sustained by it by reason of any act or omission performed or omitted
hereunder, but this indemnity shall not be applicable to any loss, liability,
damage, claim, judgment, expense or other charge resulting from the gross
negligence or willful misconduct of the Escrow Agent.
14.6 RELIANCE ON NOTICES. The Escrow Agent shall have the right to rely
conclusively upon the notices delivered hereunder, and shall be under no
obligation to ascertain the authenticity of such notices, nor to determine the
factual accuracy thereof.
14.7 SURVIVAL. The provisions of this Section 14 shall survive the
Closing.
15. ARBITRATION
15.1 APPOINTMENT. In the event that any contest or dispute set forth in
Article 12 or 14 of this Agreement is to be settled by arbitration, the Party
invoking the arbitration procedure (the "First Party") shall give a notice
("Arbitration Notice") to the other Party, and shall in such Arbitration Notice
appoint an arbitrator on its behalf. Within fifteen (15) days after its receipt
of such Arbitration Notice, the other Party by notice to the First Party shall
appoint an arbitrator on its behalf;
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and if the second arbitrator shall not be so appointed within such fifteen (15)
days, the First Party shall appoint the second arbitrator. The two arbitrators
appointed pursuant to the above shall try to appoint the third arbitrator. If,
within twenty (20) days after the appointment of the second arbitrator, they
have not agreed upon the appointment of a third arbitrator, then either Party
may apply to the presiding judge of appropriate jurisdiction in ▇▇▇▇▇ County,
Kentucky (the "Court") for the appointment of such third arbitrator and the
other Party shall not raise any question as to the Court's full power and
jurisdiction to entertain the application and make the appointment. Each
arbitrator shall have at least ten (10) years' experience in a calling
pertaining to the matter in dispute. The third arbitrator is herein called the
"Umpire", and the date on which the Umpire is appointed is referred to as the
"Appointment Date".
15.2 ARBITRATION PROCEDURE. As soon as practicable after the
Appointment Date, the matter in dispute shall be arbitrated by the Parties in
accordance with the commercial rules then in force of the American Arbitration
Association ("AAA"). The resolution of the dispute shall be determined by the
decision of majority of the three (3) arbitrators, shall constitute an "award"
within the meaning in the applicable rules of the AAA and applicable law, and
judgment may be entered thereon in any court of competent jurisdiction.
15.3 JURISDICTION. Buyer and Seller hereby submit to the in personam
jurisdiction of the AAA in the State of Kentucky and agree that any process in
any arbitration proceeding hereunder may be personally served upon Buyer or
Seller within or outside of the State of Kentucky. The arbitration shall be
conducted at a location in Lexington, Kentucky mutually acceptable to Buyer and
Seller.
15.4 EXPENSES. Each Party shall pay its own fees and expenses relating
to the arbitration (including, without limitation, the fees and expense of its
counsel, its arbitrator and any experts or witnesses retained by it). Each Party
shall pay one-half (1/2) of its fees and expenses of the Umpire and of the AAA.
15.5 REFERENCE. For purposes of this Section 15, all references to
Seller shall be deemed to include, collectively, Seller and the Indemnifying
Stockholders.
15.6 SURVIVAL. The provisions of this Section 15 shall survive the
Closing.
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IN WITNESS WHEREOF, the Parties have executed, seated and delivered
this Agreement as of the date first written above.
BUYER:
TRI-STATE OUTDOOR MEDIA GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Title: President
----------------------------------
SELLER:
UNISIGN CORPORATION, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Title: President
----------------------------------
INDEMNIFYING STOCKHOLDERS:
(As to Articles 10, 11, 12 and 15 only)
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
ESCROW AGENT:
TRANSFINANCIAL BANK
(As to Sections 2.7(b), 12 and 14 only)
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Title: Corporate Regional Manager
----------------------------------
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EXHIBITS
Exhibit A - Definitions
Exhibit B - ▇▇▇▇ of Sale, Assignment and Assumption Agreement
Exhibit C - Areas of Non-Competition
Exhibit D - Office Lease
Exhibit E - Parcel Lease
Exhibit F - Seller's Compliance Certificate
Exhibit G - Opinion of Seller's Counsel
Exhibit H - Buyer's Compliance Certificate
Exhibit I - Opinion of Buyer's Counsel
Exhibit J - Interstate 75 Units
SCHEDULES
Schedule 2.2(a) - Structures
Schedule 2.2(b) - Site Leases
Schedule 2.2(c) - Advertising Contracts
Schedule 2.2(d) - Permits
Schedule 2.2(e) - Included Real Property
Schedule 2.2(h) - Tangible Personal Property
Schedule 2.2(i) - Supplies
Schedule 2.2(2) - Excluded Real Property
Schedule 2.3 - Certain Liabilities
Schedule 2.7(b) - Deposit Escrow Agreement
Schedule 3.10 - Financial Statements
Schedule 3.23 - Indebtedness
DISCLOSURE SCHEDULE
Part 3.2(b)
Part 3.2(c)
Part 3.5
Part 3.6
Part 3.7
Part 3.9(b)
Part 3.12
Part 3.13
Part 3.14
Part 3.16
Part 3.20
Part 3.22
39
EXHIBIT A
DEFINITIONS
"AAA" -- as defined in Section 15.2.
"Advertising Contracts" -- as defined in Section 2.2(c).
"Affiliates" -- when used with reference to a specified Person, any
other Person that directly, or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with the Specified
Person. For purposes of this definition of Affiliate, "control" means the
possession, directly or indirectly, of the power to direct or to cause the
direction of management and policies of the Person in question, whether through
the ownership of voting securities or by contract or otherwise.
"Appointment Date" -- as defined in Section 15.1.
"Arbitration Notice" -- as defined in Section 15.1.
"Assumed Liabilities" -- as defined in Section 2.3.
"Base Balance Sheet" -- as defined in Section 3.10(a)(i).
"Best Efforts" -- the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances.
"▇▇▇▇ of Sale" -- the ▇▇▇▇ of Sale, Assignment and Assumption Agreement
in the form of Exhibit B attached hereto.
"Books and Records" -- All of Seller's books and records relating to
the Purchased Assets, including, without limitation, all Site Lease files,
Advertising Contract files, Permit files, maintenance and other records for the
Structures, logs, advertiser, customer and supplier lists.
"Business" -- as defined in the Recitals of this Agreement.
"Buyer" -- as defined in the first paragraph of this Agreement.
"Closing" -- as defined in Section 2.5.
"Closing Date" -- the date and time as of which the Closing actually
takes place.
"Closing Documents" -- as defined in Section 3.2(a).
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40
"Completion" -- as defined in Section 14.2(a).
"Confidential Information" -- any information concerning the businesses
and affairs of Seller that is not generally available to the public.
"Consent" -- any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"Contemplated Transactions" -- all of the transactions contemplated by
this Agreement, including: (a) the purchase of the Purchased Assets by Buyer
from Seller and assignment to and assumption by Buyer of the Assumed
Liabilities, and (b) the performance by Buyer and Seller of their respective
covenants and obligations under this Agreement.
"Contract" -- any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
"Court" -- as defined in Section 15.1.
"Damages" -- as defined in Section 10.1.
"Deeds" -- warranty deeds (or the statutory equivalent thereof), in
recordable form, with respect to the Real Property.
"Deposit" -- as defined in Section 2.7(b).
"Deposit Escrow Agreement" -- as defined in Section 2.7(b).
"Disclosure Schedule" -- the disclosure schedule, delivered by Seller
to Buyer concurrently with the execution and delivery of this Agreement.
"East Units" -- as defined in Section 14.2(a).
"Encumbrance" -- any charge, claim, condition, equitable interest,
lien, option, pledge, security interest, right of first refusal, or restriction
of any kind, including any restriction on use, transfer, receipt of income, or
exercise of any other attribute of ownership affecting the Purchased Assets.
"Environment" -- soil, land surface or subsurface strata, surface
waters, groundwaters, drinking water supply, stream sediments, ambient air
(including indoor air), plant and animal life, and any other environmental
medium or natural resource.
"Environmental Law" -- any Legal Requirement pertaining to
environmental discharges, Release, emissions or spills or the manufacture, sale,
processing, handling, transportation, storage or disposal of Hazardous
Materials, or relating to any environmental processes or condition, including,
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without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), the Clean Air Act, the Clean Water Act, the Resource
Conservation and Recovery Act ("RCRA"), the Endangered Species Act, the Federal
Insecticide, Fungicide and Rodenticide Act, the Hazardous Materials
Transportation Act, the Surface Mining Control and Reclamation Act, The
Emergency Planning and Community Right to Know Act, the Safe Drinking Water Act,
the Toxic Substances Control Act, the Coastal Zone Management Act, the National
Environmental Policy Act, the Noise Control Act. As used in this Agreement,
Environmental Laws shall mean any of such laws or regulations as the same exist
now or at the Closing Date.
"ERISA" -- the Employee Retirement Income Security Act of 1974 or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"Escrow Agent" -- Transfinancial Bank, having an address of ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Escrow Amount" -- as defined in Section 12.1.
"Escrow Fund" -- as defined in Section 12.1.
"Escrow Period" -- as defined in Section 12.1.
"Excluded Assets" -- as defined in Section 2.2.
"Excluded Liabilities" -- as defined in Section 2.4.
"Excluded Real Property" -- as defined in Section 2.2(2).
"Financial Statements" -- those financial statements of Seller
described in Sections 3.10(a)(i), (ii) and (iii).
"First Party" -- as defined in Section 15.1.
"Governmental Authorization" -- any approval, consent, license, permit,
waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body, or pursuant to any
Legal Requirement.
"Governmental Body" -- any federal, state, local, municipal, foreign,
or other government; or governmental or quasi-governmental authority of any
nature (including any governmental agency, branch, department, official, or
entity and any court or other tribunal).
"Hazardous Materials" -- any waste or other substance that is listed,
defined, designated, or classified as, or otherwise determined to be, hazardous,
radioactive, or toxic or a pollutant or a
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contaminant under or pursuant to any Environmental Law, and specifically
including petroleum and all derivatives thereof or synthetic substitutes
therefor and asbestos or asbestos-containing materials.
"HSR Act" -- the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended, and any regulations and rules promulgated thereunder.
"Included Real Property" -- as defined in Section 2.2(e).
"Indemnified Person" -- any of the Seller Indemnified Persons or the
Buyer Indemnified Persons, as the context requires.
"Indemnifying Party" -- the Buyer, or the Seller and the Indemnifying
Stockholders, as the context requires.
"Indemnifying Stockholders" -- ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
"Intangible Property" -- All right, title and interest in and to the
goodwill and other intangible property (except for Seller's corporate name) (but
including Seller's trade names) used in connection with the Purchased Assets,
all licenses, permits and authorizations pertaining to the Purchased Assets or
the right to own and operate the Purchased Assets and all right, title and
interest in and to (i) any intellectual property used in connection with the
Purchased Assets, and (ii) all records and data relating specifically to the
Purchased Assets.
"IRC" -- the Internal Revenue Code of 1986, as amended from time to
time, or any successor law, and regulations issued by the IRS pursuant to the
Internal Revenue Code or any successor law.
"IRS" -- the United States Internal Revenue Service and, to the extent
relevant, the United States Department of the Treasury.
"Knowledge" -- a Person will be deemed to have "Knowledge" of a
particular fact or other matter only if such Person is actually aware of such
fact or other matter without making any independent inquiry or investigation. A
Person (other than an individual) will be deemed to have "Knowledge" of a
particular fact or other matter if any individual who is serving as a director,
officer, partner, member, executor, or trustee of such Person (or in any similar
capacity) has Knowledge of such fact or other matter.
"Legal Requirement" -- any federal, state, local, municipal, foreign,
international, multinational, or other administrative Order, constitution, law,
ordinance, principle of common law, regulation, statute, or treaty.
"Letter of Credit" -- as defined in Section 14.1.
"Material Adverse Change" -- a change that will probably cause a
Material Adverse Effect.
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"Material Adverse Effect" -- a material adverse effect on the Purchased
Assets, the associated Business or operations or conditions (financial or
otherwise) relating thereto, taken as a whole.
"Office Property" -- as defined in Section 2.2(1).
"Office Lease" -- as defined in Section 2.7(a)(iii).
"Order" -- any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator,
"Ordinary Course of Business" -- an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" if such action is
consistent with the past custom and practices of such Person and is taken in the
ordinary course of the normal day-to-day operations of such Person (including
with respect to quantity and frequency).
"Organizational Documents" -- (a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) the partnership agreement and
any statement of partnership of a general partnership; (c) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership; (d) the articles or certificate of organization and the operating
agreement of any limited liability company; (e) any charter or similar document
adopted or filed in connection with the creation, formation, or organization of
a Person; and (f) any amendment to any of the foregoing.
"Other Contract" -- any Contract (other than a Site Lease or
Advertising Contract) relating to or affecting the Purchased Assets, the
Business or the operation thereof (i) under which Seller has or may acquire, any
rights, (ii) under which Seller has or may become subject to any obligation or
liability, or (iii) by which Seller or any of the Purchased Assets is or may
become bound.
"Parcel Lease" -- as defined in Section 2.7(a)(iv).
"Party" -- as defined in the first paragraph of this Agreement.
"Payment Date" -- as defined in Section 12.3.
"Permits" -- as defined in Section 2.2(d).
"Person" -- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, limited
liability partnership, joint venture, estate, trust, association, organization,
labor union, or other entity or Governmental Body.
"Proceeding" -- any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard, by or before, or otherwise
involving, any Governmental Body or arbitrator.
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"Punch List" -- as defined in Section 14.2(b).
"Purchase Price" -- as defined in Section 2.6.
"Purchased Assets" -- as defined in Section 2.2.
"Real Property" -- collectively, the Included Real Property, the
Excluded Real Property and the Office Property.
"Related Person" -- with respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by such
individual or one or more members of such individual's Family.
(c) any Person in which such individual or members of such
individual's Family hold (individually or in the aggregate) a
Material Interest; and
(d) any Person with respect to which such individual or one or
more members of such individual's Family serves as a director,
officer, partner, executor. or trustee (or in a similar
capacity).
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is directly
or indirectly controlled by, or is directly or indirectly
under common control with such specified Person;
(b) any Person that holds a Material Interest in such specified
Person;
(c) each Person that serves as a director, officer, partner,
manager, executor, or trustee of such specified Person (or in
a similar capacity);
(d) any Person in which such specified Person holds a Material
Interest;
(e) any Person with respect to which such specified Person serves
as a general partner or a trustee (or in a similar capacity);
and
any Related Person of any individual described in clause (b) or (c).
For purposes of this definition, (a) the "Family" of an individual includes (i)
the individual, (ii) the individual's spouse, (iii) any other natural person who
is related to the individual or the individual's spouse within the second
degree, and (iv) any other natural person who resides with such individual,
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and (b) "Material Interest" means direct or indirect beneficial ownership (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934) of voting
securities or other voting interests representing at least 5 % of the
outstanding voting power of a Person or equity securities or other equity
interests representing at least 5 % of the outstanding equity securities or
equity interests in a Person.
"Release" -- any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping, or other releasing into the Environment, whether
intentional or unintentional.
"Representative" -- with respect to a particular Person, any director,
officer, partner, employee, agent, consultant, advisor, or other representative
of such Person, including legal counsel, accountants, and financial advisors
(including, in the case of Buyer, its lenders).
"Security Interest" -- any mortgage, pledge, lien, encumbrance, charge
or other security interest or option or right of any third party with respect
thereto.
"Seller" -- as defined in the first paragraph of this Agreement.
"Seller Indemnified Persons" -- as defined in Section 10.1.
"Site Leases" -- as defined in Section 2.2(b).
"Specifications" -- as defined in Section 14.2(a).
"Structures" -- as defined in Section 2.2(a).
"Tangible Personal Property" -- as defined in Section 2.2(h).
"Tax" -- shall mean any tax (including income tax, capital gains tax,
value added tax, sales tax, property tax, deed tax, transfer tax, real property
transfer tax or intangibles tax), levy assessment, tariff, duty, deficiency or
other fee and any related charge or amount (including fine, penalty and
interest) imposed, assessed or collected by or under the authority of any
Governmental Body.
"Tax Clearances" -- as defined in Section 5.9.
"Tax Return" -- any return (including any information return), report,
statement, schedule, notice, form or other document or information filed with or
submitted to, or required to be filed with or submitted to, any Governmental
Body in connection with the determination, assessment, collection, or payment of
any Tax or in connection with the administration, implementation, or enforcement
of or compliance with any Legal Requirement relating to any Tax.
"Threatened" -- a claim, Proceeding or dispute will be deemed to have
been "Threatened" if any demand or statement has been made or any notice has
been given that would lead a prudent Person
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to conclude that such a claim, Proceeding or dispute is likely to be asserted,
commenced, taken, or otherwise pursued in the future.
"Units" -- as defined in Section 14.2(a).
"Umpire" -- as defined in Section 15.1.
"Unresolved Claim" -- as defined in Section 12.3.
"West Units" -- as defined in Section 14.2(a).
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EXHIBIT B
▇▇▇▇ OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT
This ▇▇▇▇ of Sale, Assignment and Assumption Agreement (this
"Agreement") is executed and delivered effective as of __________________, 1998,
by UNISIGN CORPORATION, INC., a Kentucky corporation ("Seller"), and TRI-STATE
OUTDOOR MEDIA GROUP, INC., a Kansas corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Asset Purchase Agreement dated
February ___, 1998 by and among Seller, Buyer and the Indemnifying Stockholders
named therein (the "Purchase Agreement"), Seller desires to sell to Buyer and
Buyer wishes to purchase from Seller, for the consideration and upon the terms
and conditions set forth in the Purchase Agreement, the Purchased Assets (as
defined in the Purchase Agreement), subject to the assumption by Buyer of the
Assumed Liabilities (as defined in the Purchase Agreement);
NOW, THEREFORE, in consideration of the premises, and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed that:
1. Conveyance of Assets. Seller does hereby sell, grant, convey,
assign, transfer and deliver to Buyer all right, title and interest of Seller in
and to all of the Purchased Assets, subject to the Assumed Liabilities.
2. Assumption of Liabilities. Buyer does hereby assume and agree to
pay, discharge and perform, as appropriate, the Assumed Liabilities in
accordance with and to the extent required by the terms of the Purchase
Agreement.
3. Power of Attorney. Seller hereby constitutes and appoints Buyer its
true and lawful attorney-in-fact, with full power of substitution of Buyer in
the name or stead of Seller (a) to demand, collect, and receive for the account
of Seller or Buyer any or all of the Purchased Assets hereby sold, granted,
conveyed, transferred, assigned, and delivered to Buyer or intended so to be;
(b) from time to time to institute or prosecute, in the name of Seller or
otherwise, all proceedings that Buyer, in its sole discretion, may deem
necessary or convenient in order to realize upon, affirm, or obtain title to or
possession of, or to collect, assert, or enforce any claim, right or title of
any kind in or to the Purchased Assets; (c) to endorse the name of Seller on any
and all checks, notes, drafts or other instruments of commercial paper that may
be payable or endorsed to the order or orders of Seller and that constitute or
represent all or any part of the Purchased Assets; (d) to defend and compromise
any and all actions, suits or proceedings in respect of any of the Purchased
Assets; and (e) to do all such other acts and things in relation to the
Purchased Assets as Buyer, in its sole discretion, deems
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desirable. Seller agrees that the foregoing powers are coupled with an interest
and shall not be revocable by Seller for any reason whatsoever.
4. Execution and Delivery of Instruments. Seller shall duly execute and
deliver or cause to be executed and delivered all instruments of sale,
conveyance, transfer and assignment, and all notices, releases, acquittances and
other documents that may be necessary more fully to grant, convey, transfer,
assign, and deliver to and vest in Buyer the Purchased Assets hereby granted,
conveyed, transferred, assigned, and delivered or intended so to be.
5. Governing Law. This Agreement shall be governed by the laws of the
State of Kentucky.
6. Conflict. Nothing in this Agreement supersedes or extinguishes any
of the obligations, agreements, covenants or warranties of Seller or Buyer
contained in the Purchase Agreement. If any conflict exists between this
Agreement and the Purchase Agreement, then the terms of the Purchase Agreement
shall govern and control.
IN WITNESS WHEREOF, Seller and Buyer have caused this Agreement to be
executed and delivered as of the date first above written.
SELLER:
UNISIGN CORPORATION, INC.
By: ____________________________________
Title:__________________________________
BUYER:
TRI-STATE OUTDOOR MEDIA GROUP, INC.
By: ____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
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49
EXHIBIT C
AREAS OF NON-COMPETITION
50
EXHIBIT D
OFFICE LEASE
51
EXHIBIT E
PARCEL LEASE
52
EXHIBIT F
UNISIGN CORPORATION
COMPLIANCE CERTIFICATE
The undersigned hereby certifies as follows:
1. He is President of Unisign Corporation, Inc., a corporation duly
organized, validly existing and in good standing under the laws of the State of
Kentucky (the "Seller").
2. The representations and warranties of the Seller contained in
Section 3 of the Asset Purchase Agreement dated as of February __, 1998 (the
"Purchase Agreement") by and among Tri-State Outdoor Media Group, Inc., Seller,
and the Indemnifying Stockholders identified therein, are true and correct in
all material respects at and as of the date hereof with the same effect as
though all such representations and warranties were made at and as of the date
hereof.
3. The Seller has performed or complied, in all material respects, with
all of the covenants and obligations required by the Purchase Agreement to be
performed or complied with by the Seller at or prior to the date hereof.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of this _____ day of February, 1998.
________________________________________
Name:
53
EXHIBIT G
OPINION OF SELLER'S COUNSEL
54
EXHIBIT H
TRI-STATE OUTDOOR MEDIA GROUP, INC.
COMPLIANCE CERTIFICATE
The undersigned hereby certifies as follows:
1. He is President of Tri-State Outdoor Media Group, Inc., a
corporation duly organized, validly existing and in good standing under the laws
of the State of Kansas (the "Buyer").
2. The representations and warranties of Buyer contained in Section 4
of the Asset Purchase Agreement dated as of February __, 1998 (the "Purchase
Agreement") by and among the Buyer, Unisign Corporation, Inc. and the
Indemnifying Stockholders identified therein, are true and correct in all
material respects at and as of the date hereof with the same effect as though
all such representations and warranties were made at and as of the date hereof.
3. Buyer has performed or complied, in all material respects, with all
of the covenants and obligations required by the Purchase Agreement to be
performed or complied with by Buyer at or prior to the date hereof.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of this _____ day of February 1998.
________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
55
EXHIBIT I
OPINION OF BUYER'S COUNSEL
February __, 1998
Unisign Corporation
▇.▇. ▇▇▇ ▇▇
▇.▇. ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as counsel to Tri-State Outdoor Media Group, Inc., a
Kansas corporation (the "Company"), in connection with the Company's purchase of
certain assets of Unisign Corporation, Inc., a Kentucky corporation ("Seller")
and related transactions contemplated by the Asset Purchase Agreement (the
"Purchase Agreement") dated as of February __, 1998 among the Company, Seller
and the Indemnifying Stockholders. Capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed to such terms in
the Purchase Agreement. The Purchase Agreement, together with the ▇▇▇▇ of Sale,
Assignment and Assumption Agreement and the other Closing Documents, are
sometimes collectively referred to herein as the "Agreements". This opinion is
being delivered to you pursuant to Section 8.3(a) of the Purchase Agreement.
We have acted as counsel to the Company in connection with the
Agreements and the transactions contemplated thereby. As such counsel, we have
made such examinations of laws and have examined certificates of officers and
representatives of the Company, originals or copies, certified or otherwise
authenticated to our satisfaction, of all such records, agreements and other
instruments, certificates and orders of public officials, and other documents
that we have deemed necessary to render the opinions hereinafter set forth
including, but not limited to:
(a) the Certificate of Incorporation and By-laws of the Company;
(b) resolutions of the Directors of the Company authorizing, among
other things, the Agreements and the transactions contemplated
thereby; and
(c) executed copies of the Agreements.
In such examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity
to the originals thereof of all documents submitted to us as certified or
photostatic copies, and the authenticity of the originals of such latter
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56
Unisign Corporation
February ___, 1998
Page -2-
documents. As to any fact relevant to any such opinion, we have relied, to the
extent that relevant facts are not independently established by us, and to the
extent we deem reliance proper, on certificates of public officials and
certificates, oaths and declarations of officers and other representatives of
the Company on which we believe that we and you are justified in relying. We
have not, except as specifically identified herein, been retained or engaged
for, nor have we performed, any independent review or investigation of any
statutes, orders, rules or regulations of any court or governmental agency
having jurisdiction over the Company. This letter and the opinions set forth
herein are given, and all statements herein "to our knowledge" are made, in the
context of the foregoing.
As used in this opinion letter, the phrase "to our knowledge" means the
actual knowledge (that is, the conscious, awareness of facts or other
information) of lawyers in the firm who have given substantive legal attention
to representing the Company in connection with the transactions contemplated by
the Agreements.
We are qualified to practice law only in the States of New York and New
Jersey and we do not purport to be experts on any laws other than the laws of
the States of New York and New Jersey and the Federal laws of the United States.
We express no opinion as to the laws of any jurisdiction other than the Federal
laws of the United States, and the laws of the State of New Jersey. For purposes
of this opinion we assume that Kansas and Kentucky law in all relevant aspects
are substantively identical to New Jersey law.
Based and relying upon the foregoing and subject to all of the
qualifications contained in this letter, we are of the opinion that as of the
date hereof:
(i) The Company is a corporation duly incorporated and validly existing
in good standing under the laws of the State of Kansas with full corporate power
and authority to conduct its business as it is currently conducted, to own or
use the Purchased Assets, and to perform its obligations under the Agreements.
(ii) The Company has the absolute and unrestricted right, power and
authority to execute and deliver each of the Agreements to which it is a party
and to perform each of its obligations thereunder. Each of the Agreements has
been duly authorized, executed and delivered by the Company. Each of the
Agreements is a valid, legal and binding agreement of the Company, enforceable
in accordance with its terms, subject to the qualification that the
enforceability thereunder may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium, and other laws relating to or affecting
creditors' rights generally and by general equitable principles.
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Unisign Corporation
February ___, 1998
Page -3-
(iii) Neither the execution and delivery of the Agreements by the
Company nor the consummation or performance by the Company of any of the
transactions contemplated thereby does or will conflict with, violate or result
in a breach of:
(A) any provision of the Organizational Documents of the
Company; and
(B) the resolutions adopted by the board of directors of the
Company authorizing the Contemplated Transactions.
This opinion is being furnished solely to Seller and is solely for the
benefit of Seller and may not be relied upon for any other purpose, or furnished
to, quoted to or relied upon by any other person for any purpose without our
prior written consent.
Very truly yours,
St. ▇▇▇▇ & ▇▇▇▇▇, L.L.C.
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58
EXHIBIT J
INTERSTATE 75 UNITS
Eight (8) single pole, back to back bulletin structures equal in size,
construction and type as currently erected on said property referred to as the
"Rock Quarry" owned by ▇▇. ▇▇ ▇▇▇▇▇, located north of Lexington, Kentucky
fronting both the west side and east side of I-75 North; in the city of
Georgetown, Kentucky and ▇▇▇▇▇ County.
East Units: Four (4) 14' x 48' back to back, single face, North and South
read (i.e., two (2) faces on each structure), steel single
pole structures completely erected with lights and platform
constructed with clear visibility to I-75 traffic, constructed
on the East side of I-75 on the "Rock Quarry" property. Two of
the proposed structures have been constructed; a third
location has the base single pole erected in concrete, with
top construction including faces (14' x 48') and electrical
remaining; and a fourth site currently has the hole dug, steel
located on site to be assembled and erected.
West Units: Four (4) 14' x 48' back to back, single face, North and South
read (i.e., two (2) faces on each structure), steel single
pole structures completely erected with lights and platform
constructed with clear visibility to I-75 traffic, constructed
on the West side of I-75 on the "Rock Quarry" property.