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EXHIBIT 99.3
SIGNBOARD EASEMENTS
SALE AGREEMENT
THIS AGREEMENT ("Agreement") is entered into this ______ day of March,
1997 between THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY, a Delaware
corporation ("Seller") and OUTDOOR SYSTEMS, INC., a Delaware corporation
("Buyer").
WHEREAS, Seller and Seller's affiliates own certain interests in real
property underlying certain outdoor advertising facilities located in the
various states served by Seller's rail system;
WHEREAS, Seller or Seller's affiliates are licensor in many signboard
license agreements related to such outdoor advertising facilities;
WHEREAS, these signboard license agreements are managed for Seller by:
(1) ▇▇▇▇▇▇▇▇ Enterprises of Orlando Inc. ("▇▇▇▇▇▇▇▇"), under the terms of an
agreement between Seller's predecessor and ▇▇▇▇▇▇▇▇ dated October 1,1993; and
(2) Transportation Displays, Incorporated ("TDI"), under the terms of an
agreement between Seller's predecessor and TDI dated May 23, 1995 (collectively,
"Management Agreements");
WHEREAS, Seller's affiliates will convey to Seller multiple easements
allowing Seller to construct, operate, illuminate, maintain, modify, replace and
remove outdoor advertising facilities, over specific real estate parcels
involving signboard license agreements now managed by ▇▇▇▇▇▇▇▇;
WHEREAS, Seller desires: (1) to convey to Buyer multiple easements, as
described herein, over specific real estate parcels underlying existing outdoor
advertising facilities, each easement allowing Buyer to construct, operate,
illuminate, maintain, modify, replace and remove outdoor advertising facilities;
and (2) to assign to Buyer Seller's signboard license agreements;
WHEREAS, completing the conveyances from Seller's affiliates to Seller,
and identifying the specific boundaries of the easements described above, will
take considerable time and work, so that this sale will be progressed as two
separate closings; and Seller desires that, in the interim, Buyer shall take
assignment of the Management Agreements and manage for Seller the signboard
license agreements to be assigned at the second Closing;
WHEREAS, Seller desires that Buyer use commercially reasonable efforts
to locate additional outdoor advertising facilities on other real property in
which Seller has an ownership interest, and enter into additional signboard
license agreements with respect to such facilities, after which Seller would
sell to Buyer similar easements for such new sites; and
WHEREAS, Buyer desires to purchase from Seller the easements over
specific real estate
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parcels underlying existing outdoor advertising facilities to allow Buyer to
construct, operate, illuminate, maintain, modify, replace and remove outdoor
advertising facilities, to receive assignment of Seller's signboard license
agreements, to manage Seller's signboard license agreements, and to use
commercially reasonable efforts to locate new outdoor advertising facilities on
real property in which Seller has an ownership interest, enter into additional
signboard license agreements with respect to such new facilities, and then
purchase from Seller similar easements for such new sites, all on the terms and
conditions set forth in this Agreement and Exhibits attached hereto;
NOW, THEREFORE, Seller and Buyer agree as follows:
Article I. Description of Rights to be Conveyed
Section 1.1 Conveyance of Easements.
(a) Except as modified in Section 1.1(b), at each of the
two Closings specified in this Agreement Seller shall
convey to Buyer multiple easements, each such
easement, or such lesser rights to the greatest
extent that Seller's ownership interest will support,
to be permanent and exclusive, except to the extent
set forth herein and therein, and to extend only over
a real property parcel in which Seller has an
ownership interest, which parcel underlies, or is
within one foot of the outside boundaries of, certain
outdoor advertising facilities, together with the
airspace occupied by or within three feet of, the
outdoor advertising facility structure (except the
one foot/three foot envelope for the land parcel and
the airspace shall be reduced or eliminated to the
extent it comes within 15 feet of the nearest rail of
any active railroad track); which easement shall
grant to Buyer the right to enter onto a specific
real property parcel described using the standard set
forth above ("Parcel") for the purpose of
constructing, operating, illuminating, maintaining,
modifying, replacing or removing any outdoor
advertising facilities located, or to be located, on
the Parcel, together with related rights to cross any
additional real property in which Seller has an
ownership interest as necessary to access such
Parcel, or provide electricity to such outdoor
advertising facilities, in a manner that does not
interfere with any business activities conducted on
or near the Parcel by Seller or any other party
having a right from Seller to conduct such activities
(and which access shall not cross any active railroad
track or come within 25 feet of such track without
Seller's prior written consent) ("Easement"). Each
Easement shall be subject to all encumbrances on the
Parcel (including Seller's mortgages) which Seller
has placed, or in the future will place, on the
Parcel, and any and all other easements, leases,
licenses, permits or agreements which now or in the
future relate to the Parcel. Each Easement shall
require that no outdoor advertising facilities may be
constructed,
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modified or replaced without prior written approval
of Seller, which approval Seller can withhold only
for reasons specified in the Easement. Easement shall
terminate automatically in the event that no outdoor
advertising facility has been present on the Parcel,
in functional condition, for twelve consecutive
months (except in circumstances where Buyer is using
its best efforts to replace a functional outdoor
advertising facility on the Parcel). On the date such
Easement terminates, Buyer shall deliver to Seller
two executed copies of Termination of Easement for
the parcel, on the form attached as Exhibit G, and
Seller shall execute both copies and return one such
copy to Buyer. Each Easement also shall be subject to
the other specific terms and conditions set forth in
Seller's Signboard Easement, attached hereto as
Exhibit A, and to Seller's right to terminate the
Easement on the terms and conditions set forth in
this Agreement. Buyer shall have the right to seek
compensation from any condemning authority for the
value of its Easement interest.
(b) The two groups of Easements to be conveyed are
identified in Exhibits B and C. The Easements
identified in Exhibit B will be conveyed at and after
the first Closing, as set forth in this subsection.
Initially, at the first Closing, Seller shall deliver
to Buyer an executed original copy of one Easement
that identifies the geographic location of the
parcels subject to the Easement by attaching Exhibit
B. Buyer and Seller acknowledge that: (1) the real
property descriptions attached to this Easement will
be incomplete and may not be legally sufficient; (2)
a few of the Easement locations listed in Exhibit B
and attached to the Easement actually are owned by
Seller's affiliates and not by Seller; and
accordingly (3) that this Easement shall contain
additional language stating: "The boundaries of this
Easement (and, for a few sites, the correct Grantor)
are not certain at this time, but definite boundaries
acceptable to Grantor will be developed promptly by
Grantee, at which time Grantor will grant multiple
replacement Easements to Grantee for each parcel
identified in Attachment 1, and this Easement then
shall become null and void." Accordingly, Buyer
agrees that this Easement shall not be recorded. For
each parcel identified in Exhibit B where Buyer's
investigation reveals that the ownership interest is
held by an affiliate of Seller, Buyer promptly shall
prepare complete and accurate property boundary
descriptions, and related exhibit prints, including
specific identification of each signboard located on
any bridge or overpass, or on any building owned by
Seller (collectively "Property Descriptions") subject
to review by Seller, and shall attach correct
property boundary descriptions to recordable form
Easements, on the form set forth as Exhibit A, except
that each such Easement shall be modified to be a
conveyance from Seller's affiliate to Seller (and
Seller acknowledges that, for any Easement, a quarter
quarter, section, township, range, meridian, county
and state description, together with an accurate
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exhibit print, is a sufficient property boundary
description). Seller shall assist Buyer in utilizing
Seller's outside engineering vendor to prepare
Property Descriptions for all of the individual
Easements. Seller shall arrange for these Easements
to be executed promptly by Seller's affiliates and
delivered to Seller, and Seller shall reimburse Buyer
the cost of preparing Property Descriptions, and
ascertaining the appropriate Seller affiliate
Grantor, for each of the Easements to be conveyed
from Seller's affiliates to Seller. Buyer shall use
its best efforts to record all Easements from
Seller's affiliates to Seller and promptly shall
provide to Seller evidence of these recordings.
Seller shall reimburse Buyer all recording fees, and
any transfer taxes, that are incurred by Buyer in
recording all Easements from Seller's affiliates to
Seller. Also, promptly after the first Closing Buyer,
shall prepare for each parcel identified in Exhibit B
complete and accurate Property Descriptions, subject
to review by Seller, and attach correct property
boundary descriptions to recordable form Easements on
the form set forth as Exhibit A. Promptly after
Seller has become the owner of all Easements that are
now owned by one of Seller's affiliates and Buyer has
prepared and delivered to Seller recordable form
Easements for each parcel identified in Exhibit B,
Seller shall execute and deliver to Buyer original
copies of all of these replacement Easements that are
approved by Seller. Buyer shall have the right, but
not the obligation, to record any or all of these
replacement Easements, each recording to be made at
Buyer's cost.
(c) For each parcel identified in Exhibit C, Buyer by
June 15, 1997 shall prepare complete and accurate
Property Descriptions, subject to review by Seller,
and shall attach correct property boundary
descriptions to recordable form Easements on the form
set forth as Exhibit A. At the second Closing, Seller
shall deliver to Buyer executed original copies of
all of these Easements that are approved by Seller.
Buyer shall have the right, but not the obligation,
to record any or all of these Easements, each
recording to be made at Buyer's cost.
Section 1.2 Assignment of Signboard License Agreements.
(a) At the first Closing, Seller shall assign to Buyer,
by execution and delivery to Buyer of two original
copies of the Assignment of Signboard Licenses
attached hereto as Exhibit D (one original copy of
which shall be executed by Buyer signifying Buyer's
acceptance of the assignment), all then effective
signboard license agreements of Seller that are
related to the outdoor advertising locations listed
in Exhibit B.
(b) At the second Closing, Seller shall assign to Buyer,
by execution and delivery to Buyer of two original
copies of the Assignment of Signboard Licenses
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attached hereto as Exhibit D (one original copy of
which shall be executed by Buyer and delivered to
Seller signifying Buyer's acceptance of the
assignment), all then effective signboard license
agreements of Seller that are related to the outdoor
advertising locations listed in Exhibit C.
Section 1.3 Assignment of Management Agreements.
Seller hereby assigns to Buyer, effective on the date
of the first Closing, all of Seller's rights and obligations
under the Management Agreements; and Buyer hereby accepts such
assignment effective on that date. Seller shall cooperate with
Buyer in obtaining files and Seller's signboard license
agreements now in the custody of ▇▇▇▇▇▇▇▇ and TDI. Seller
shall reimburse Buyer any shipping cost paid by Buyer in
collecting these documents from ▇▇▇▇▇▇▇▇ and TDI. Seller
hereby affirms that each Management Agreement may be cancelled
without cause with thirty days advance written notice to the
signboard license manager, and that Buyer may elect to cancel
the Management Agreement at any time after the date of the
first Closing.
Article II. Closings of Signboard Easements Sales
Section 2.1 Date and Place of Closings.
The first Closing shall occur on or before Wednesday,
March 26, 1997. The second Closing shall occur on or before
either Friday, June 27, 1997 or Friday, July 11, 1997 as may
be mutually agreed by Seller and Buyer, depending, among other
things, on Buyer's ability to prepare, and Seller's execution
of, the many specific Easements to be executed by Seller and
delivered to Buyer at the second Closing. Each Closing shall
take place at Seller's offices at 2650 ▇▇▇ ▇▇▇▇ Drive, Fort
Worth, Texas, or some other mutually agreeable location.
Section 2.2 Purchase Price.
The purchase price for the Easements to be conveyed
at the first Closing is SEVENTEEN MILLION DOLLARS
($17,000,000.00). On the date of this Agreement, Buyer shall
pay to Seller a non-refundable ▇▇▇▇▇▇▇ money deposit toward
the purchase price, in the amount of $100,000.00. This amount
shall be applied toward the purchase price for the Easement to
be conveyed at the first Closing, so long as the first Closing
occurs on or before March 26, 1997. If for any reason (except
for Seller's failure to deliver to Buyer on March 26 the
documents specified in Section 2.3) the first Closing does not
occur on or before March 26, 1997, Seller shall retain the
▇▇▇▇▇▇▇ money deposit as liquidated damages. The purchase
price for the Easements to be conveyed at the second Closing
is TWELVE MILLION, FIVE HUNDRED THOUSAND DOLLARS
($12,500,000.00). Except for the
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nonrefundable ▇▇▇▇▇▇▇ money deposit described above, the
purchase price payable for Easements conveyed at each Closing
shall be paid on the date of each Closing, by wire transfer of
immediately available funds, to either Seller or Federated
Services Company, or an alternative escrow agent, as specified
by Seller. Federated Services Company would be acting as
escrow agent for Apex Property & Track Exchange, Inc. ("APEX")
as Seller's intended assignee of Seller's right to receive
payment of the purchase price for the Easements. The wire
transfer by Buyer shall be made in accordance with written
wire transfer instructions provided by Seller. APEX is a
qualified intermediary within the meaning of Section 1031 of
the Internal Revenue Code of 1986, as amended, and Treasury
Regulation e1.103(k)-l(g). Seller intends to assign to APEX
Seller's right to receive payment of the purchase prices for
the Easements for the purpose of Seller completing two
tax-deferred like-kind exchanges of property. Buyer shall
cooperate with Seller with respect to these tax-deferred
exchanges and shall execute such documents as may be required
to effect any tax-deferred exchange of property. Seller shall
indemnify, defend and hold harmless Buyer against all
reasonable and necessary additional costs and liabilities
which Buyer incurs as a result of any such tax-deferred
exchange of property.
Section 2.3 Deliveries at Each Closing.
(a) At the first Closing, Seller shall deliver to Buyer
the following documents:
(1) An executed original copy of an Easement for
the locations specified in Exhibit B, which
later shall be replaced by multiple specific
Easements for each location specified in
Exhibit B; and
(2) Two executed original copies of the
Assignment of Signboard Licenses, as
described in Section 1.2(a).
(b) At the first Closing, Buyer shall deliver the
purchase price of $17,000,000.00, in the manner set
forth in Section 2.2, to either Seller or an escrow
agent for APEX, as specified by Seller. Buyer also
shall deliver to Seller a fully executed original
copy of the Assignment of Signboard Licenses, as
described in Section 1.2(a).
(c) At the second Closing, provided that Buyer has
completed the document preparation work specified in
Article I, Seller shall deliver to Buyer the
following documents:
(1) An executed, original copy of multiple
Easements for each location specified in
Exhibit C; and
(2) Two executed, original copies of the
Assignment of Signboard
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Licenses, as described in Section 1.2(b).
(d) At the second Closing, Buyer shall deliver the
purchase price of $12,500,000.00, in the manner set
forth in Section 2.2, to either Seller or an escrow
agent for APEX, as specified by Seller. Buyer also
shall deliver to Seller a fully executed original
copy of the Assignment of Signboard Licenses, as
described in Section 1.2(b).
Section 2.4 Responsibility for Closing and Recording Costs.
Buyer shall be responsible to pay all costs of
Closing and recording the Easements, including but not limited
to, any and all escrow and service fees, real estate interest
transfer taxes, documentary stamp taxes, recording fees for
all Easements from Seller to Buyer, and any sales taxes
associated with any of the conveyances governed by this
Agreement.
Article III. Interim Management of Signboard License Agreements
Section 3.1 Interim Management Term and Compensation to
Buyer.
Commencing on the date of the first Closing, until
the date of the second Closing or July 11, 1997 (or prior to
any Closing covered by Article IV, as applicable), Buyer shall
manage, as Seller's agent, all of the signboard license
agreements to be assigned by Seller to Buyer at the second
Closing (or such subsequent Closing) and shall enter into any
new signboard licenses during the interim management period
only in accordance with the procedures set forth in Section
4.2. Buyer's fee for such management shall be one-fourth (25%)
of all signboard license income attributable to this
management period. As owner of the property interest related
to the signboard license agreements, Seller, for the period of
Buyer's interim management, shall be responsible for paying
any and all real estate taxes or assessments which may be
levied on this property upon or on account of these signboard
license agreements.
Section 3.2 Interim Management Duties of Buyer.
As interim manager of these signboard license
agreements, Buyer shall be responsible: (a) to maintain, or
obtain if necessary, all rights and privileges, including any
necessary zoning approvals, for any and all outdoor
advertising conducted under the signboard license agreements;
(b) to enforce compliance by licensees with the terms of the
signboard license agreements; (c) to ▇▇▇▇ and collect all
license fees coming due under the terms of the signboard
license agreements, and to forward to Seller 75% of all fees
so collected; (d) to notify Seller promptly of any tax or land
use
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issues, or potential contractual, environmental or other
liability of Seller, of which Buyer becomes aware, in
connection with any of the property subject, or adjacent, to
these signboard licenses; (e) to use its best efforts to
prevent any mechanic's liens or other liens being placed on
any of Seller's property interests for any work or activity
connected in any way with the outdoor advertising facilities
or the signboard license agreements; (f) to pay for all
electrical equipment and power necessary to illuminate any
outdoor advertising facilities, to the extent such payments
are not made by the licensees under the signboard license
agreements; (g) to keep complete and accurate records of all
license fees received, all transactions completed, and all
notices received, in connection with the signboard license
agreements, and forward any of these records and reports to
Seller upon Seller's request; (h) to pursue prompt removal of
any advertisements that are offensive to a significant portion
of the population, and not to permit any advertisements for
political candidates; (i) to assure to the extent reasonable
that the outdoor advertising facilities comply with all
applicable federal, state and local laws, rules, ordinances
and regulations, and to pursue the prompt removal of any
equipment or advertising that is not in such compliance; (j)
to ensure to the extent reasonable that outdoor advertising
facilities are properly maintained; (k) to pursue to the
extent reasonable the removal of any dilapidated or likely
permanently unused outdoor advertising facilities, and where
any such removal occurs, to restore, or insure that others
restore, Seller's property to a reasonable condition under the
circumstances, free of any and all debris from any outdoor
advertising facilities; and (l) to take care that neither
Buyer, nor any of its employees, contractors, representatives
or invitees, nor any licensee under any signboard license
agreement, nor any of its employees, contractors, agents,
representatives or invitees, in the course of any inspections,
activities or presence on Seller's property, proceed in any
unsafe manner, or interfere with any business activities
conducted on the premises underlying or near the outdoor
advertising facilities by Seller or any other party having a
right from Seller to conduct such activities.
Section 3.3 Allocation of Liability
Commencing on, and following, the date of the first
Closing, Buyer shall be responsible for all losses and damages
to Seller, and shall indemnify and defend Seller from and
against all lawsuits and actions, that result from any claim
of losses, damages, costs, injuries or deaths to any person or
property, or result from any claim of any violation of any
federal, state or local law, rule, ordinance or regulation, to
the extent such losses and damages result from the acts or
omissions, or presence on or near any signboard licensee site,
of Buyer, or any of its employees, or any of Buyer's
contractors, agents, representatives or invitees, or any of
their employees, or in connection with Buyer's exercise or
failure to exercise any of Buyer's duties specified in Section
3.2, regardless of any contributory negligence of Seller,
except to the extent such losses and damages are caused by
Seller's gross negligence or intentional
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misconduct. In addition, commencing on, and following, the
date of the first Closing, Buyer shall be responsible for all
losses and damages to Seller, and shall indemnify and defend
Seller from and against all lawsuits and actions, that result
from any claim of losses, damages or costs in connection with
any actual or alleged infringement by Buyer or any signboard
licensee of any patent, trademark, service ▇▇▇▇ or copyright,
or arising from any actual or alleged unfair competition or
similar claims based on Buyer's business or Buyer's activities
under this Article III. Except as otherwise set forth in this
Agreement, Seller shall be responsible to Buyer for all losses
and damages to Buyer, that result from any claim of losses,
damages, costs, injuries or deaths to any person or property
as a result of the negligence or intentional conduct of Seller
or its employees.
Section 3.4 Buyer's Liability Insurance
On and after the date of Closing, for so long as any
Easement shall remain in effect Buyer, and each licensee under
a signboard license agreement, shall obtain and maintain
liability insurance with a deductible no higher than $25,000
per occurrence, from an insurance company (or companies)
licensed to do business in each state where the signboard
licenses are located, and possessing a current Best's
Insurance Guide Rating of B and Class X, or better, commercial
general liability insurance in an amount not less than Three
Million Dollars ($3,000,000.00) combined single limit per
occurrence, for any and all bodily injury, or death, and
property damage, with Seller named as an additional insured.
Buyer also either shall provide, and cause each applicable
licensee to provide, Railroad Protective Liability Insurance
in the event of, and during the course of, any construction or
demolition work undertaken within 25 feet of any active
railroad track; such insurance to contain a deductible no
higher than $25,000.00 per occurrence, and to be obtained from
an insurance company licensed to do business in the state
where this work is being performed, and possessing a current
Best's Insurance Guide Rating of B and Class X, or better, in
an amount not less than THREE MILLION DOLLARS ($3,000,000.00)
combined single limit per occurrence, for any and all bodily
injury, or death, and property damage, with Seller named as an
additional insured. Buyer, and any of its contractors working
on or near any signboard license agreement site, also shall
maintain Worker's Compensation and Employee's Liability
Insurance as required by applicable law, and such worker's
compensation insurance shall contain a waiver of subrogation
against Seller. Upon request, Buyer shall provide to Seller a
copy of insurance certificates and/or insurance policies
showing that Buyer has effective insurance as required by this
Section 3.4.
Article IV. Signboard Marketing and Future Signboard Easement Sales
Section 4.1 Buyer's Signboard Marketing Rights.
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Commencing on the day following the first Closing,
Buyer shall have the exclusive rights to market for use by
licensees of outdoor advertising facilities, and to enter into
signboard license agreements covering, any real property in
which Seller then has a sufficient ownership interest
(including land acquired by Seller in the future that is not
already encumbered by any signboard right or agreement, except
not including any land acquired in a merger involving Seller),
subject to Seller's prior approval of any specific signboard
license agreement and the terms and conditions in this Article
IV ("Buyer's Signboard Marketing Rights").
Buyer's Signboard Marketing Rights shall extend for a
period of ten years following the date of the first Closing,
except that: (a) if, after five years, Buyer has not purchased
new Easements from Seller, as described in Section 4.3, that
have resulted in Buyer paying to Seller aggregate purchase
prices of at least $500,000.00 (unless this is prevented by
Seller rejecting New Signboard License Agreements as permitted
under Section 4.2(b)) Seller, at its sole option may terminate
Buyer's Signboard Marketing Rights after providing to Buyer at
least 30 days' written notice of such termination, provided
that during this 30 day period Buyer does not cure this
breach; and (b) if, after eight years, Buyer has not purchased
such new Easements from Seller, as described in Section 4.3,
that have resulted in Buyer paying to Seller aggregate
purchase prices of at least $700,000.00 (unless this is
prevented by Seller rejecting New Signboard License Agreements
as permitted under Section 4.2(b)), Seller, at its sole
option, may terminate Buyer's Signboard Marketing Rights after
providing to Buyer at least 30 days' written notice of such
termination, provided that during this 30 day period Buyer
does not cure this breach. Either the five year, or the eight
year period referenced in the preceding sentence shall be
extended by any period during which federal law prevents
construction of new outdoor advertising facilities. If Buyer's
Signboard Marketing Rights continue for ten years, Seller
shall negotiate in good faith first with Buyer to extend
Buyer's Signboard Marketing Rights for another possible ten
year term; and if this negotiation does not result in an
agreement between Buyer and Seller on or before March 26, 2007
to extend Buyer's Signboard Marketing Rights, then Buyer shall
have a 30 day right of first refusal to match any bona fide
offer made by any third party to Seller, within the three
years after March 26, 2007, to market or purchase signboard
easements or licenses; and if Buyer does not match the offer,
in writing, on the same terms within 30 days of receiving
written notice from Seller of the terms of the third party's
offer, Buyer shall have no further rights with respect to
marketing signboards on real property in which Seller has an
ownership interest. By December 1 of each year Buyer shall
submit to Seller Buyer's written business plan for generating
at least $100,000.00 in new Easement purchases from Seller
during the following calendar year. For so long as Buyer has
Buyer's Signboard Marketing Rights, Seller shall not grant
rights to third parties, or exercise any rights on its own
behalf, to construct, operate, maintain, modify, replace and
remove outdoor advertising facilities on any real property in
which Seller has an ownership interest.
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Section 4.2 Signboard Marketing Procedures.
(a) Buyer shall have the exclusive rights, and the duty
to use commercially reasonable efforts, to locate
potential users and potential sites for outdoor
advertising facilities to be placed on real property
in which Seller has an ownership interest. Buyer
shall negotiate with a potential signboard licensee
the terms of new signboard license agreements, which
agreements initially shall be between Seller and the
licensee, and which agreements shall be consistent
with, and substantially in the form of, Seller's
standard form Signboard License Agreement attached
hereto as Exhibit E, and specifically must include
licensor's ability to terminate the signboard license
agreement upon no more than 30 days' prior written
notice to the licensee ("New Signboard License
Agreement"). Buyer also shall require each potential
signboard licensee to complete a Sign Site
Application containing the information specified on
Seller's standard form Sign Site Application attached
hereto as Exhibit F.
(b) Buyer first shall forward to Seller's Operating
Department and Engineering Department, for their
preliminary approval, as promptly as practicable, and
then shall forward to Seller's Assistant Vice
President-Property Management, or his designee, for
final approval or disapproval by Seller, each
proposed New Signboard License Agreement and Sign
Site Application. Buyer may not obligate Seller to
enter into any New Signboard License Agreement.
Seller, before 30 days following any submission for
final approval, shall review and either disapprove
the New Signboard License Agreement by written
notification to Buyer, or execute the agreement.
Seller's disapproval of the New Signboard License
Agreement must be reasonable and may be based only on
one or more of the following grounds: (1) the
proposed outdoor advertising facilities could
interfere with Seller's railroad operations or
maintenance, or with other current or reasonably
foreseeable activities of either Seller or any other
party having, or who foreseeably could have, a right
from Seller to conduct such activities; (2) the
proposed outdoor advertising facilities, or the use
of access rights to construct, operate, maintain,
modify, replace and remove such facilities, could
create a safety hazard; (3) the proposed outdoor
advertising facilities, to Seller's knowledge, could
violate one or more applicable federal, state or
local law, rule, ordinance or regulation; (4) the
proposed advertising material, exhibit material,
announcements, advertisements, or their manner of
presentation, likely would be offensive to a
significant portion of the population; and (5) the
proposed annual signboard license fee, which shall
include all compensation payable by licensee to
Buyer, with one third of any administrative and other
one-time only fees considered to be part of the
annual signboard license fee ("Signboard License
Fee"), in Seller's reasonable judgement is below the
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market value for such fees in such area.
(c) From the date any New Signboard License Agreement is
signed between Seller and the signboard licensee,
until the date of Subsequent Closing, as defined in
Section 4.3, the terms of Article III of this
Agreement shall apply, and Buyer shall be the interim
manager of such New Signboard License Agreement, as
agent for Seller.
Section 4.3 Purchase of New Signboard Easement.
On June 1 and December 1 of each year, commencing on
December 1, 1997, during which Buyer has the exclusive
signboard marketing rights described in Section 4.1, Buyer
shall have the right and the obligation to acquire from Seller
an Easement, on the form set forth in Exhibit A attached
hereto, over the real property parcels in which Seller has an
ownership interest, which parcels underly the outdoor
advertising facilities covered by each New Signboard License
Agreement entered into by Buyer on or before the immediately
preceding May 15 or November 15, respectively. The purchase
price for each such Easement shall be determined initially by
multiplying by 9.0 the Signboard License Fee in all New
Signboard License Agreements applicable to the Easement
parcel. This initially determined amount shall be paid to
Seller, or an escrow agent for APEX, as directed by Seller, at
the Subsequent Closing. This initially determined amount shall
be subject to adjustment on the third anniversary of the
Subsequent Closing, with Buyer obliged to pay to Seller on
that date for each Easement an additional amount determined by
multiplying by 9.0 any portion of the then current Signboard
License Fee that is in excess of 110% of the Signboard License
Fee on the date of the Subsequent Closing. Seller shall have
the right to audit Buyer's records to confirm Buyer's
compliance with this provision. Buyer shall prepare complete
and accurate Property Descriptions for each such Easement,
subject to review by Seller, and shall attach correct property
boundary descriptions to recordable form Easements on the form
set forth as Exhibit A. Each such June 1 and December 1
closing ("Subsequent Closing") shall be governed by the terms
set forth in Article III, as applicable to the second Closing,
except for: (a) a different Closing date; and (b) a different
purchase price.
Article V. Seller's Termination of Signboard Easements and Assistance
in Relocating Signboards
Section 5.1 Easement Termination Procedures.
Seller, by providing written notice to Buyer
identifying the Easement that Seller desires to terminate, may
terminate any Easement, at any time, only for a
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reason in one of the following categories: (a) to accommodate
a railroad related activity of Seller; (b) to accommodate a
real estate sale, lease, non-advertising license, permit or
development activity of Seller; (c) to accommodate any
industrial or business development activity of any of Seller's
customers or potential customers; or (d) in response to any
legal restrictions or problems. Seller agrees that Seller will
not terminate any Easement in order to sell a similar Easement
to another party. Within 10 days of receipt of such notice,
Buyer shall provide to Seller complete copies of any and all
currently effective signboard license agreements affecting
each Easement to be terminated ("Terminated Easement"), and
any and all other documents in Buyer's possession that relate
to the Terminated Easement or such signboard license
agreements, and Buyer shall disclose to Seller any other
information known to Buyer that relates to the Terminated
Easement, the Terminated Easement property or such signboard
license agreements. Thirty days, where practicable, and
otherwise within 60 days, after Buyer's receipt of such
notice, or some other date mutually agreeable to the parties
("Easement Termination Date"), Buyer and Seller shall execute
two original copies of Termination of Easement in recordable
form, on the form attached as Exhibit G to this Agreement, and
each party shall retain one fully executed original copy of
such Termination of Easement. Also on the Easement Termination
Date Buyer shall deliver to Seller two executed original
copies of an Assignment of Signboard Licenses, on the form
attached as Exhibit D, assigning to Seller any and all
signboard license agreements applicable to the Terminated
Easement property, and Seller shall execute one original copy
of such assignment and deliver it to Buyer, signifying
Seller's acceptance of this assignment.
Section 5.2 Easement Termination Price.
On each Easement Termination Date Seller shall
deliver to Buyer, or to Buyer's assignee, in accordance with
Buyer's payment instructions, an easement termination price
for each Terminated Easement. Each easement termination price
shall be determined by multiplying by 9.0 the then current
Signboard License Fee in all signboard license agreements
applicable to the Terminated Easement parcel. In the
alternative, Seller upon termination of any Easement may
provide to Buyer free of charge a substitute Easement at a
different location, provided such substitution is mutually
agreed between Buyer and Seller.
Section 5.3 Seller's Assistance in Relocating Signboards
If, after any Closing, a successful legal action is
brought by a third party based on either a claim that the
physical condition of the Parcel or Seller's ownership rights
to the Parcel are such, and were such on the date of that
Closing, that Buyer after the legal action is unable to use
the Parcel for outdoor advertising purposes, then Seller shall
use its best efforts to locate an alternative site for outdoor
advertising facilities
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on other real estate in which Seller has an ownership
interest, and shall convey to Buyer an Easement for this
alternative site, at no charge to Buyer; or where Seller can
not locate such an alternative site for outdoor advertising
facilities, then Seller will give to Buyer a credit toward the
purchase of one or more new Easements under Section 4.3, as
appropriate, in an amount determined by multiplying by 9.0 the
then current Signboard License Fee for all signboard licenses
included within the Easement Parcel, to the extent they are
included within the Easement Parcel.
Article VI. Representations and Warranties
Section 6.1 Representations and Warranties of Seller.
Seller hereby represents and warrants to Buyer the
following facts:
(a) Seller is a corporation duly organized, validly
existing, and in good standing;
(b) Seller has the corporate power and authority to enter
into this Agreement and carry out its obligations
under this Agreement;
(c) The execution and performance of this Agreement have
been duly authorized and approved by all necessary
corporate actions of Seller, and no further corporate
proceedings of Seller are required to complete the
transactions covered by this Agreement;
(d) All of Seller's obligations set forth in this
Agreement constitute legal, valid and binding
obligations of Seller which are enforceable against
Seller in accordance with their terms, except as
enforcement may be limited by law;
(e) There is no provision in the Certificate of
Incorporation or By-Laws of Seller which prohibits
the execution of this Agreement or consummation of
any of the transactions covered by this Agreement;
(f) The negotiations related to this Agreement have been
handled by Seller on its own behalf, without
intervention of any agent or other person, so that no
party has a valid claim on this basis for any
finder's fee, brokerage commission, or other similar
payment in connection with any of the transactions
covered by this Agreement;
(g) The officer executing this Agreement on behalf of
Seller is fully authorized to do so and his execution
of this Agreement thereby will bind Seller to its
terms;
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(h) The report attached hereto as Exhibit H lists what
Seller's business records report to be the total
actual gross revenue received during calendar year
1996 from all licensees under all signboard license
agreements to be assigned by Seller to Buyer at
either the first Closing or the second Closing; and
Seller has no reason to believe that this report is
not materially complete and accurate; and
(i) To Seller's actual knowledge, Seller having made no
investigation or inquiry whatsoever, Seller has not
furnished to Buyer any information that was
inaccurate in any material respect; nor has Seller
omitted to disclose any information actually known by
Seller that would materially adversely affect Buyer's
rights as contemplated in this Agreement.
Section 6.2 Buyer's Representations and Warranties.
(a) Buyer is a corporation duly organized, validly
existing, and in good standing;
(b) Buyer has the corporate power and authority to enter
into this Agreement and carry out its obligations
under this Agreement;
(c) Buyer has the financial capability to pay the agreed
purchase price for these Easements on the Closing
dates specified in this Agreement, without any delay
of any such Closing date;
(d) The execution and performance of this Agreement have
been duly authorized and approved by all necessary
corporate actions of Buyer, and no further corporate
proceedings of Buyer are required to complete the
transactions covered by this Agreement;
(e) All of Buyer's obligations set forth in this
Agreement constitute legal, valid and binding
obligations of Buyer which are enforceable against
Buyer in accordance with their terms, except as
enforcement may be limited by law;
(f) There is no provision in the Certificate of
Incorporation or By-Laws of Buyer which prohibits the
execution of this Agreement or consummation of any of
the transactions covered by this Agreement;
(g) The negotiations related to this Agreement have been
handled by Buyer on its own behalf, without
intervention of any agent or other person, so that no
party has a valid claim on this basis for any
finder's fee, brokerage commission, or other similar
payment in connection with any of the transactions
covered by this Agreement; and
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(h) The officer executing this Agreement on behalf of
Buyer is fully authorized to do so and his execution
of this Agreement thereby will bind Buyer to its
terms.
Article VII. Proration
Section 7.1 Proration of Payments from Licensees.
Except as set forth in Section 3.1, Seller shall be
entitled to all signboard license fees and other payments due
under each signboard license agreement to be assigned to Buyer
under the terms of this Agreement, for the period up to and
through the date on which such agreement is assigned to Buyer.
Buyer shall be entitled to all signboard license fees and
other payments due under each such signboard license agreement
commencing the day following the date on which such agreement
is assigned to Buyer. To the extent license fees under a
signboard license agreement have been prepaid, Seller shall
transfer to Buyer, within 60 days following the date of
assignment of such license agreement to Buyer, the amount to
which Buyer is entitled by the terms of this Section, together
with a statement showing how the amount was calculated. With
respect to: (a) license fees and payments due under some of
the signboard license agreements, which fees or payments are
payable after the use period; and (b) Signboard License Fees
collected by Buyer under the terms of Section 3.1, or Section
4.2(c), for which Seller is entitled to a portion of the
amounts payable, or collected, respectively, by the terms of
this Section, Buyer promptly shall determine and then shall
forward to Seller the amounts to which Seller is entitled,
together with a statement showing how these amounts were
calculated. Seller shall have the right to audit Buyer's
records to confirm Buyer's compliance with this provision.
Section 7.2 Ad Valorem Taxes.
To the extent any Easement after any Closing is
separately assessed and taxed, or to the extent after any
Closing Seller is taxed on either the Easement or any outdoor
advertising facilities on any Easement, Buyer shall pay any
and all such taxes that are due as they are due and shall
indemnify and defend Seller from and against all lawsuits and
actions that result therefrom. Seller, or its successors or
assignees, shall be responsible for paying any property taxes
on property interests that Seller, or its successors or
assignees, continue to own.
Article VIII. Certain Post Closing Obligations
Section 8.1 Seller's General Cooperation with Buyer.
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Seller reasonably shall assist and cooperate with
Buyer, and timely shall respond to Buyer's requests, after any
of the Closings, with respect to any and all matters affecting
any Easement or signboard license agreement assigned by Seller
to Buyer. Such cooperation shall include assistance in dealing
with government authorities who have taken, or may take,
actions that likely would materially adversely affect the
aggregate value to Buyer of the Easements or signboard license
agreements. Buyer, at Seller's request, shall reimburse Seller
its direct costs in providing such cooperation.
Section 8.2 Seller to Furnish Valuation or Engineering Maps
to Buyer.
At any time after December 31, 1997, Seller shall
furnish to Buyer, upon Buyer's request and after payment by
Buyer of reasonable copying and delivery costs, copies of
Seller's then current valuation or engineering maps which
reflect information known by Seller about the real property
where, and adjacent to, any Easement conveyed at the first and
second Closing. Seller also agrees to provide to Buyer, on the
same terms, at any time after 30 days following any Subsequent
Closing, copies of such valuation maps relating to any
Easement transferred to Buyer at any Subsequent Closing. Buyer
acknowledges that any valuation maps provided by Seller are
provided without any warranty that they are current, complete
or accurate.
Section 8.3 Buyer's General Cooperation with Seller.
Buyer reasonably shall assist and cooperate with
Seller, and timely shall respond to Seller's requests after
any of the Closings, with respect to any matters related to
Buyer's signboard license agreements or any outdoor
advertising facilities on any Easement. Seller, at Buyer's
request, shall reimburse Buyer its direct costs in providing
such cooperation.
Section 8.4 Buyer to Deliver Drawings to Seller.
Upon request from Seller, Buyer shall provide to
Seller, at no cost to Seller, any and all as built drawings in
its possession showing any outdoor advertising facilities
present on any Easement, including related structures and
connecting electrical lines.
Article IX. Buyer's Liability to Seller
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Section 9.1 Liability and Indemnification
Buyer shall be responsible for all losses and damages
to Seller, and shall indemnify and defend Seller from and
against all lawsuits and actions, that result from any claim
of losses, damages, costs, injuries or deaths to any person or
property, or result from any claim of any violation of any
federal, state or local law, rule, ordinance or regulation, to
the extent such losses and damages result from the acts or
omissions, or presence on or near any Parcel, of Buyer, or any
of its employees, or any of Buyer's contractors, agents,
representatives or invitees, or any of their employees, or any
signboard licensee, or any of its employees, or any
contractor, agent, representative or invitee of such licensee,
or any of their employees, or in connection with Buyer's
exercise or failure to exercise any of Buyer's duties under
this Agreement, regardless of Seller's negligence, except to
the extent such losses and damages are caused by Seller's
gross negligence or intentional misconduct.
Article X. Disclaimer of Seller's Liability
Section 10.1 Inspection and Conditions of Easement Property
(a) By signing this Agreement, Buyer expressly
acknowledges that: (1) Seller has made no
representation whatsoever to Buyer concerning the
state or condition of any real property in which
Seller has an ownership interest, the nature or
extent of Seller's ownership interest, or the state
or condition of any outdoor advertising facilities
present on real property in which Seller has an
ownership interest (collectively, "Seller Property");
(2) Buyer has not relied upon any statement or
declaration of Seller, oral or in writing, as an
inducement to entering into this Agreement, other
than as stated in this Agreement; and (3) the sole
consideration for execution of this Agreement by
Buyer is set forth in this Agreement.
(b) SELLER HEREBY DISCLAIMS ANY REPRESENTATION OR
WARRANTY, WHETHER EXPRESS OR IMPLIED, AS TO THE
DESIGN OR CONDITION OF ANY SELLER PROPERTY, ITS
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE, THE QUALITY OF THE MATERIAL OR WORKMANSHIP
OF THE SELLER PROPERTY, OR THE CONFORMITY OF ANY
SELLER PROPERTY TO ITS INTENDED USES. SELLER SHALL
NOT BE LIABLE TO BUYER FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN
TORT) WITH RESPECT TO THE DESIGN, CONDITION, QUALITY,
SAFETY, MERCHANTABILITY, OR FITNESS FOR ANY
PARTICULAR PURPOSE, OF ANY SELLER PROPERTY, OR THE
CONFORMITY OF
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ANY SELLER PROPERTY TO ITS INTENDED USES. SELLER
OFFERS, AND BUYER ACCEPTS, ANY AND ALL RIGHTS TO ANY
SELLER PROPERTY INTERESTS CONVEYED UNDER THE TERMS OF
THIS AGREEMENT IN "AS IS, WHERE IS" AND "WITH ALL
FAULTS" CONDITION, AND SUBJECT TO ALL LIMITATIONS ON
SELLER'S RIGHTS, INTERESTS, AND TITLE TO ANY SELLER
PROPERTY.
Article XI. Miscellaneous Provisions
Section 11.1 Surviving Provisions.
All provisions of this Agreement shall survive the
Closings under this Agreement.
Section 11.2 Time is of the Essence.
Time is of the essence in this Agreement.
Section 11.3 Entire Agreement.
This Agreement, together with all Exhibits attached
hereto, constitutes the entire agreement and understanding
between Buyer and Seller with respect to the subject matters
hereof. Any other prior or contemporaneous agreements,
understandings, representations or statements, whether oral or
written, relating to this transaction are merged herein.
Section 11.4 Relationship of Parties.
This Agreement shall not create a partnership, joint
venture, or employer/employee relationship between the
parties, nor any agency relationship except to the extent
addressed herein, and nothing in this Agreement shall be
deemed to authorize either party to act for, represent or bind
the other party.
Section 11.5 Amendment.
This Agreement may be amended only by a written
amendment agreement signed by both Buyer and Seller.
Section 11.6 Assignment.
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Seller may assign its rights and obligations under
this Agreement, provided that Seller after such assignment
shall remain liable for all obligations hereunder, unless
expressly released therefrom by Buyer. Buyer may assign or
pledge its rights under this Agreement to: (a) a financial
institution assisting Buyer in its Easement acquisition
financing: (b) an affiliate of Buyer; or (c) a successor to
Buyer by merger; provided that: (i) any such assignment or
pledge agreement does not in any way diminish Seller's rights
under this Agreement; and (ii) Buyer after such assignment
shall continue to remain liable for all obligations hereunder
unless expressly released therefrom by Seller. Buyer shall
make no other assignment of this Agreement without Seller's
prior written consent, which shall not be unreasonably
withheld or delayed. Following any such assignment, Buyer
shall continue to be responsible for Buyer's obligations under
this Agreement, except to the extent expressly released
therefrom by Seller. Following any assignment by either Buyer
or Seller, the party receiving such assignment shall be bound
by all terms of this Agreement. This Agreement shall be
binding upon any successor(s) or permitted assignee(s) of
Buyer or Seller.
Section 11.7 Effect of Waiver.
Any waiver by either Buyer or Seller, or failure of
either Buyer or Seller to insist upon full and complete
performance by Seller or Buyer of its obligations set forth in
this Agreement, shall not constitute a waiver or release of
such party's right to insist upon full and complete
performance of any other obligations in this Agreement, or a
waiver or release of such party's right to insist upon full
and complete performance of the obligations that were waived
or not enforced for periods prior to, or following, the waiver
or failure to insist upon full and complete performance.
Section 11.8 Notices.
All notices and other communications under this
Agreement shall be in writing and deemed properly served if
delivered by hand to the party addressed or, if mailed, when
received by the United States Postal Service in registered or
certified mail, postage prepaid, or, if sent by a national
overnight service, when received by the carrier service in a
prepaid mailer, return receipt requested, addressed as
follows:
Seller: ▇▇. ▇▇▇▇▇ ▇. ▇'▇▇▇▇
Assistant Vice President
Property Management
BNSF
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
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Buyer: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Either party hereto may change its address or
addresses to which notices are to be given by providing
written notice of the change to the other party.
Section 11.9 Confidentiality.
Except to the extent that the terms of this Agreement
are required to be disclosed by order of any court of
competent jurisdiction or any governmental agency, or by
parties involved in financing this purchase, each party to
this Agreement shall not disclose the contents of this
Agreement to any other party, without the prior written
consent of the other party to this Agreement. To the extent
permitted by law, any party who learns of any of the terms of
this Agreement shall be required by the party to this
Agreement who is disclosing the information not to disclose
those terms to any other party without the prior written
consent of both parties to this Agreement.
Section 11.10 Applicable Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas. Applicable law
to determine Buyer's Easement property rights shall be the law
of the state where the Easement Parcel is located. Venue for
any legal action to determine the meaning or application of
any terms of this Agreement shall be exclusively in state or
federal court in Tarrant County, Texas.
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IN WITNESS WHEREOF, authorized representatives of the parties have
executed this Agreement as of this ____ day of March, 1997.
THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY,
a Delaware corporation
By: __________________________________________
Title: _________________________________________
OUTDOOR SYSTEMS, INC.
a Delaware corporation
By: __________________________________________
Title: _________________________________________
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