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EXHIBIT 10.11
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ASSET PURCHASE AGREEMENT
dated as of June 26, 1998
by and between
TRI-STATE OUTDOOR MEDIA GROUP, INC.
and
XXXX X. XXXXXX, XX., TRADING AS XXXXXX OUTDOOR ADVERTISING
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INDEX
1.DEFINITIONS .........................................................1
2.PURCHASE AND SALE OF THE ASSETS; CLOSING ............................1
2.1Agreement to Purchase and Sell .....................................1
2.2 Purchased Assets ..................................................1
2.3Agreement to Assume Certain Liabilities ............................3
2.4Excluded Liabilities ...............................................3
2.5Closing ............................................................4
2.6Purchase Price. ..................................................4
2.7Transactions at the Closing ........................................4
2.8Third Party Consents. ............................................4
3. REPRESENTATIONS AND WARRANTIES OF SELLER ..........................5
3.1Organization and Good Standing .....................................5
3.2Authority; No Conflict .............................................5
3.3Solvency. .........................................................6
3.4Books and Records ..................................................6
3.5Structures. .......................................................6
3.6Permits. ..........................................................6
3.7Site Leases and Advertising Contracts ..............................6
3.8Omitted ............................................................7
3.9Title, Encumbrances ................................................7
3.10Financial Statements ..............................................7
3.11Taxes. ...........................................................8
3.12Compliance with Legal Requirements ................................8
3.13Legal Proceedings; Orders .........................................8
3.14Other Contracts. .................................................8
3.15Insurance .........................................................8
3.16Environmental Matters. ...........................................8
3.17Intangible Property. .............................................9
3.18Relationships with Affiliates .....................................9
3.19Brokers or Finders. .............................................9
3.20Employee Benefits Matters ........................................9
3.21Bulk Sales .......................................................10
3.22Employees; Labor Matters. ......................................10
3.23Indebtedness, Encumbrances and Security Interests. .............10
3.24HSR ..............................................................11
3.25Billboard Income .................................................11
3.26Phoenix Contract .................................................11
3.27Disclosure .......................................................11
4.REPRESENTATIONS AND WARRANTIES OF BUYER ...........................11
4.1Organization and Good Standing ..................................11
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4.2Authority; No Conflict ............................................11
4.3Certain Proceedings. ............................................12
4.4Brokers or Finders. .............................................12
5.COVENANTS OF SELLER ................................................12
5.1Access and Investigation. .......................................12
5.2Due Diligence .....................................................12
5.3Operation of the Purchased Assets .................................12
5.4Best Efforts. ...................................................13
5.5Negative Covenant .................................................13
5.6Required Approvals and Consents. ................................13
5.7Notification. ...................................................13
5.8No Negotiation ....................................................13
5.9Tax Clearance. ..................................................13
6.COVENANTS OF BUYER ................................................14
6.1Required Approvals ...............................................14
6.2Best Efforts ......................................................14
6.3Notification ......................................................14
7.CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE ................14
7.1Accuracy of Representations. .....................................14
7.2Seller's Performance. ...........................................14
7.3Consents. ........................................................14
7.4Additional Documents ..............................................15
7.5No Proceedings ....................................................15
7.6No Prohibition ....................................................15
7.7No Material Adverse Change ........................................15
7.8Due Diligence .....................................................15
7.9Satisfaction of Indebtedness. ...................................15
8.CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE ...............16
8.1Accuracy of Representations .......................................16
8.2Buyer's Performance. .............................................16
8.3Additional Documents ..............................................16
8.4No Proceedings ....................................................16
8.5No Prohibition ....................................................16
9.TERMINATION ........................................................17
9.1Termination Events ................................................17
9.2Effect of Termination .............................................17
10.INDEMNIFICATION; REMEDIES .........................................18
10.1Indemnification and Payment of Damagesby Seller and the
Indemnifying Stockholders ............................................18
10.2Indemnification and Payment of Damages by Buyer ..................18
10.3Procedure for Indemnification -- Third Party Claims ..............18
10.4Procedure for Indemnification -- Other Claim .....................19
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10.5Survival/Limitations. ..........................................19
11.NON-COMPETITION AND NON-SOLICITATION ..............................20
11.1Non-Competition. ................................................20
11.2Non-Solicitation. ...............................................20
11.3Enforcement. ...................................................20
11.4Survival. .......................................................20
12.POST-CLOSING ESCROW FUND ..........................................21
12.1Escrow Amount. .................................................21
12.2Claims. ........................................................21
12.3Payment Date .....................................................22
12.4Escrow Agent Held Harmless. ....................................22
12.5Reliance on Notices. ...........................................22
12.6Disputes. .......................................................22
12.7Waiver of Conflict ...............................................22
12.8No Limitation of Rights or Obligations ...........................22
12.9Survival. .......................................................22
13.GENERAL PROVISIONS ................................................23
13.1Expenses. ......................................................23
13.2Headings; Construction ...........................................23
13.3Public Announcements; Confidentiality ............................23
13.4Availability of Equitable Remedies. ............................23
13.5Notices ..........................................................23
13.6Further Assurances. .............................................25
13.7Waiver. ........................................................25
13.8Entire Agreement and Modification. .............................25
13.9Assignments, Successors, and No Third-Party Rights. ............25
13.10 Severability. ................................................26
13.11Risk of Loss. .................................................26
13.12Post-Closing Access. ..........................................26
13.13Applicable Law and Venue. ......................................26
13.14Counterparts. .................................................26
14.ARBITRATION .......................................................27
14.2Arbitration Procedure ............................................27
14.3Jurisdiction .....................................................27
14.4Expenses .........................................................27
14.5Survival .........................................................27
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EXHIBITS
Exhibit A - Definitions
Exhibit B - Xxxx of Sale, Assignment and
Assumption Agreement
Exhibit C - Areas of Non-Competition
Exhibit D - Seller's Compliance Certificate
Exhibit E - Opinion of Seller's Counsel
Exhibit F - Buyer's Compliance Certificate
Exhibit G - Opinion of Buyer's Counsel
SCHEDULES
Schedule 2.2(a) - Structures
Schedule 2.2(b) - Site Leases
Schedule 2.2(c) - Advertising Contracts
Schedule 2.2(d) - Permits
Schedule 2.3 - Phoenix Contract
Schedule 3.10 - Financial
Statements
DISCLOSURE SCHEDULE
Part 3.2(b) Part 3.9(b)
Part 3.20
Part 3.2(c) Part 3.12
Part 3.22
Part 3.5 Part 3.13
Part 3.23
Part 3.6 Part 3.14
Part 3.7 Part 3.16
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is entered into as of 6-26-98,
1998, by and between TRI-STATE OUTDOOR MEDIA GROUP, INC., a Kansas corporation
("Buyer"), and XXXX X. XXXXXX, XX., TRADING AS XXXXXX OUTDOOR ADVERTISING
("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 (the
"Business") in the following counties in Georgia: Baldwin, Butts, Bleckley,
Dodge, Emanuel, Hancock, Houston, Jefferson, Johnson, Jones, Laurens, Lamar,
Monroe, Pulaski, Putnam, Treutlen, Xxxxxx, Washington and Xxxxxxxxx (the
"Territory"). 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, Security Interests or indebtedness, 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.
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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 106
structures and 246 sign faces) (collectively, the "Structures"), including,
without limitation, all of the Structures listed on Schedule 2.2(a);
(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) 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;
(f) all pertinent Books and Records;
(g) the Intangible Property; and
(h) 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.
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Notwithstanding the foregoing, the Purchased Assets shall not
include the following assets owned by Seller:
(i) The land and improvements located at 000 Xxxxxxxxx Xxx,
Xxxxxxxxxxxxx, Xxxxxxx; and
(ii) One (1) billboard structure located at 000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxxxxx, Xxxxxxx, to be used only for on-premises advertising purposes in
connection with Seller's restaurant 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 attributable to events occurring on or after the Closing Date pursuant
(1) to the Site Leases, Advertising Contracts and Permits listed on Schedules
2.2(b), 2.2(c) and 2.2(d), respectively, and (2) the May 28, 1998 contract
between Seller and Phoenix Structures & Service, Inc., a copy of which is
annexed hereto as Schedule 2.3 (the "Phoenix Contract") (the "Assumed
Liabilities"), but to the extent and only to the extent that:
(a) Such obligations are performable on or after the Closing Date;
(b) Such obligations are attributable to periods arising on or after
the Closing Date; and
(c) With respect to the Phoenix Contrct, Buyer's liability shall not
exceed $200,000.00 in the aggregate, except as may be permitted under the
provision entitled "Subsurface Clause".
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 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;
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(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 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 on the
date which is twenty-one (21) days after the full execution of this Agreement,
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 Three Million Six Thousand One Hundred Dollars ($3,006,100.00). 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 Xxxx of Sale; (ii) Required Consents; (iii) satisfactory evidence of the
release of any Encumbrances or Security Interests on the Purchased Assets; (iv)
all applicable Tax Clearances; and (v) 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. 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) Buyer shall deliver the Purchase Price at the Closing, as
follows:
(i) $ 2,906,100.00 (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 $ 100,000.00 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 Xxxx of Sale, and (ii) 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 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.
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3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization and Good Standing. Seller is an individual 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.
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.
(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:
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(i) conflict with, violate or result in a breach of (A) any Order or
Legal Requirement to which Seller, the Business or any of the Purchased Assets
may be subject; or (B) any Governmental Authorization held by Seller or that
otherwise relates to the Business or the Purchased Assets; or
(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 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, (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 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.
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3.8 Omitted.
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.
(b) Except as set forth in Part 3.9(b) of the Disclosure Schedule,
none of the Structures or Site Leases 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 structures or Site Leases.
3.10 Financial Statements.
(a) Seller has delivered to Buyer certain financial statements with
respect to the Business,copies of which are annexed hereto as Schedule 3.10. 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 the Business at the dates of said
statements and the results of the operations of the Business and cash flows for
the periods covered thereby. There has been no Material Adverse Change in the
financial condition of the Business or Purchased Assets since June 13, 1998.
(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 June 13, 1998.
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(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.
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.
(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. Neither the Business nor the Purchased Assets is
bound by any Other Contract, except (a) as disclosed in Part 3.14 of the
Disclosure Schedule, and (b) the Phoenix Contract.
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.
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3.16 Environmental Matters. Except as set forth in Part 3.16 of the
Disclosure Schedule with respect to the Purchased Assets 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 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 "Xxxxxx Outdoor Advertising" 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. 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. 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.
3.20 Employee Benefits Matters Except as disclosed on Part 3.20 of the
Disclosure Schedule, with respect to the Business:
(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.
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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 the Business are employees
at will. Except as disclosed on Part 3.22 of the Disclosure Schedule, no
employee, agent or consultant of 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. Except as set
forth on Part 3.23 of the Disclosure Schedule, all of the Purchased Assets are
owned by Seller free and clear of and Encumbrance, Security Interest or
indebtedness. All such Encumbrances, Security Interests and indebtedness shall
be satisfied and discharged at or before the Closing.
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3.24 HSR. The Contemplated Transactions are not subject to the reporting
requirements under the HSR Act.
3.25 Billboard Income. The net monthly xxxxxxxx on Advertising Contracts
with an original term of at least six (6) months in effect as of the date hereof
and on the Closing Date are, and on the Closing Date shall be, not less than
$49,500.00 (such amount to include not more than $5,000.00 in poster contract
xxxxxxxx).
3.26 Phoenix Contract. Seller has delivered to Buyer a true and complete
copy of the Phoenix Contract The Phoenix Contract is in full force and effect,
and is binding upon the parties thereto. Except as set forth in Part 3.7 of the
Disclosure Schedule, (x) no default by Seller or any other Person has occurred
under the Phoenix Contract and (y) 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 the Phoenix Contract, to make a claim or set-off
against Seller or otherwise to amend the Phoenix Contract. Except as set forth
in Part 3.7 of the Disclosure Schedule, Seller has not received any written
notice of default or under the Phoenix Contract.
3.27 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.
4.2 Authority; No Conflict
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(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.
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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 Purchased Assets prior to the Closing Date.
5.2 Due Diligence. Buyer shall have the right, and Seller shall afford
access to Buyer and its Representatives, at all reasonable times upon advance
notice to perform due diligence on the Purchased Assets.
5.3 Operation of the Purchased Assets. Between the date of this Agreement
and the Closing Date, Seller will:
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(a) operate the Purchased Assets 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 Purchased Assets;
(c) not enter into any new Advertising Contract or Site Lease not in
the Ordinary Course of Business; and
(d) not xxxx 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 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 State of Georgia, 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).
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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.
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 D 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.
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7.4 Additional Documents. Each of the following documents must have been
delivered to Buyer:
(a) an opinion of Xxxx Xxxxx dated the Closing Date in the form of
Exhibit E 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 Due Diligence. On or before the date which is ten (10) days after the
full execution of this Agreement, Buyer's due diligence investigation and review
of the Purchased Assets and the Assumed Liabilities shall not reveal any fact or
circumstance not acceptable to Buyer in Buyer's sole and absolute discretion.
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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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 F
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 F 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. Xxxx & Xxxxx, L.L.C., dated the Closing Date
in the form of Exhibit G 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 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.
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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 July 31, 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 Buyer shall pay to
Seller, as Seller's sole remedy (in lieu of any and all remedies), the sum of
$5,000.00, which sum shall constitute the agreed and liquidated damages for such
termination and/or failure to close by Buyer, and the obligations in 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.
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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 or the Phoenix Contract 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.
10.3 Procedure for Indemnification -- Third Party Claims.
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(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.
10.5 Survival/Limitations. The Parties hereto agree that (i) the covenants
and agreements contained in this Agreement and any document delivered pursuant
hereto and the representations and warranties contained in this Agreement shall
survive until ninety (90) days after the expiration of all applicable statutes
of limitation with respect to the subject matter thereof, and (ii) 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.
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11. NON-COMPETITION AND NON-SOLICITATION.
11.1 Non-Competition. Seller and Xxxx X. Xxxxxx, Xx. each hereby agrees
that for a period of ten (10) 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
identified 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.
11.2 Non-Solicitation. For a period of ten (10) years after the Closing
Date, Seller and Xxxx X. Xxxxxx, Xx. 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 ten (10) 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 ten (10) years.
11.3 Enforcement. Seller and Xxxx X. Xxxxxx, Xx. 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 Xxxx X.
Xxxxxx, Xx. 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 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 One Hundred Thousand
Dollars ($100,000.00) (the "Escrow Amount") shall be deposited in an interest
bearing escrow account reasonably acceptable to Buyer and Seller (the "Escrow
Fund") with St. Xxxx & Xxxxx, L.L.C. (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 ninety (90) 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 14 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.
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12.3 Payment Date. One the six (6) month anniversary of the Closing Date
(the "First Payment Date"), the Escrow Agent shall pay to Seller from the Escrow
Fund the sum of FIFTY THOUSAND DOLLARS ($50,000.00), 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). On the one (1) year
anniversary of the Closing Date (the "Second 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. 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.
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 Waiver of Conflict. Seller acknowledges that the Escrow Agent is a
law firm which represents Buyer, and the Escrow Agent shall be entitled to
represent Buyer in any and all matters arising, directly or indirectly, out of
this Agreement and the Contemplated Transactions, including, without limitation,
the disposition of the Escrow Fund.
12.8 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).
12.9 Survival. The provisions of this Section 12 shall survive the
Closing.
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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' 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.
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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):
If to Seller:
Xxxx X. Xxxxxx, Xx.
X.X. Xxx 0000
Xxxxxxxxxxxxx, Xxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to:
Xxxx Xxxxx
000 Xxxxx Xxxxxxxxx Xx.
Xxxxxxxxxxxxx, XX 00000
Attention: _____________, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Internet No.: xxx.xxxxxxxx.xxx/@/Xxxxxxxxxx
If to Buyer, to:
Tri-State Outdoor Media Group, Inc.
X.X. Xxx 0000
0000 Xxxxxxx 00 Xxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to:
St. Xxxx & Xxxxx, L.L.C.
Xxx Xxxx Xxxxx Xxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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 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
June 11, 1998 and Seller on June 10, 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.
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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 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. This Agreement is made in and shall be
governed by and construed and enforced in accordance with the laws of the State
of Georgia. Seller and Buyer hereby consent to the personal jurisdiction of the
courts of Georgia in Tift County for all matters relating to or arising from
this Agreement.
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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.
14. ARBITRATION
14.1 In the event that any contest or dispute set forth in Article 12 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; 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 Tift County, Georgia (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".
14.2 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.
14.3 Jurisdiction. Buyer and Seller hereby submit to the in personam
jurisdiction of the AAA in the State of Georgia 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 Georgia. The arbitration shall be
conducted at a location in Tifton, Georgia mutually acceptable to Buyer and
Seller.
14.4 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.
14.5 Survival. The provisions of this Section 14 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/ Xxxxxx X. May
Title: Manager Acquisition
Department-6/26/98
SELLER:
/s/ Xxxx X. Xxxxxx, Xx.
-----------------------
Xxxx X. Xxxxxx, Xx.
/s/ Xxxx X. Xxxxxx, Xx.
-----------------------
Xxxx X. Xxxxxx, Xx.
(As to Article 11 only)
ESCROW AGENT:
ST. XXXX & XXXXX, L.L.C.
(As to Sections 2.7(b)(ii) and 12 only)
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Member
