Exhibit 2.7
FORM OF
ASSET PURCHASE AGREEMENT
THIS AGREEMENT, made and entered into this ______ day of______, 1996, by
and among MOUNTAIN MEDIA, INC., a Pennsylvania corporation doing business as
Iowa Outdoor Displays ("IOD") and XXXXXX X. XXXXXXX, ("Xxxxxxx")(IOD and Xxxxxxx
are collectively referred to as "Seller") and UNIVERSAL OUTDOOR, INC., an
Illinois corporation, ("Buyer").
W I T N E S S E T H :
In consideration of the respective representations, warranties and
covenants contained in this Agreement and other good and valuable consideration,
the sufficiency and receipt of which is hereby acknowledged, Buyer and Seller
agree as follows:
l. Transfer of Assets.
1.1 Buyer agrees that at the Closing it shall acquire all of the
business and assets of Seller, whether disclosed or undisclosed,
wherever located, which are used in the outdoor advertising business
in the market described in Exhibit 1.1, ("Market"), including, but not
limited to, those assets listed on Exhibits or Schedules attached to
this Agreement ("Assets"), and Seller agrees to transfer, assign,
convey and deliver to Buyer all of the Assets, in exchange solely for
the consideration specified under the provisions of Section 1.4 herein
("Purchase Price"), plus the assumption of certain obligations of
Seller as specified.
1.2 The consideration payable by Buyer, as specified in Section 1.1,
includes any applicable sales taxes or other taxes imposed upon the
transfer of the Assets to Buyer.
1.3 The Assets shall include, but shall not be limited to, the
following, all of which are located in the Market:
1.3.1 All interest in and to real property as described on
Exhibit 1.3.1 including all leasehold interests of Seller in
and to real property, and all easements and licenses,
including prepaid ground rents.
1.3.2 All sign structures, whether owned or leased, and any
fixtures and leasehold
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interests in sign structures, and all lights, electrical
hook ups, catwalks and other appurtenant equipment in the
Market which are described in Exhibit 1.3.2.
1.3.3 All rights and entitlement of Seller in and to
advertising contracts which are listed in Exhibit 1.3.3.
1.3.4 All other contract rights and entitlements related to
the business of Seller, whether oral or written in excess of
$5,000, including those set forth in 1.3.4.
1.3.5 All rights and obligations of Seller in and to sign
constructions. All such rights and a list of any
contractors are listed in Exhibit 1.3.5. For purposes of
this subsection "sign constructions" shall mean any
locations as to which Seller has a perfected or partial
right or expectancy to construct signs.
1.3.6 All governmental permits, licenses, approvals or
authorizations necessary for Seller to conduct its outdoor
business within the Market. Seller shall cooperate with
Buyer in the assignment and transfer to Buyer of all such
governmental permits, licenses, approvals or authorizations,
including state and local sign permits. All such sign
permits and all other material permits, licenses, approvals
or authorizations are listed in Exhibit 1.3.1 and 1.3.6.
1.3.7 All other assets and property of Seller used in the
Market in Seller's outdoor advertising business, such as
motor vehicles, office equipment and machinery, sign panels,
lighting fixtures, furniture, inventories of raw materials,
supplies, customer lists, business records, and work in
progress. A list of all other material assets is set out in
Exhibit 1.3.7.
1.3.8 All deposits from customers held by Seller arising from
transactions in the Market. A list of all deposits from
customers is set forth in Exhibit 1.3.8.
1.3.9 All telephone numbers and listings used by Seller in
the Market. Seller will not change said telephone numbers.
A list of all
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telephone numbers and listings is attached as Exhibit 1.3.9.
1.3.10 [Intentionally Deleted]
1.3.11 Data regarding lessors, advertisers and other business
data in machine-readable form.
1.3.12 All accounts receivables and prepaid expenses of IOD
attached as Exhibit 1.3.12.
1.4 Buyer shall pay to Seller a Purchase Price for the Assets of: (a)
One Million Seven Hundred Twenty-Five Thousand Dollars ($1,725,000) in
cash or by wire transfer at Closing at Seller's direction as shown on
Exhibit 1.4(a) and (b) Seventy-Five Thousand Dollars ($75,000) payable
into escrow pursuant to the terms of the Escrow Agreement attached
Exhibit 1.4(b). The Purchase Price set forth herein is subject to the
following adjustments:
1.4.1 [Intentionally Deleted]
1.4.2 Minus the amounts which will credit Buyer for the
following:
1.4.2.1 $1000 for the Construction of one face on
Xxxxx 00, Xxxxxxxxxx.
1.4.2.2 Any advertising services delivered after Closing
for which Seller has already received payment as
reflected on Exhibit 1.3.8.
1.4.3 Other than as provided for in Section 1.4.2, all items
of income and expense listed below relating to the Assets
will be prorated as of the Closing Date, with Seller liable
to the extent such items relate to any time period up to and
including the Closing Date, and Buyer liable to the extent
such items relate to periods on or subsequent to the Closing
Date: (a) personal property, real estate, occupancy and
water taxes, if any, on or with respect to the Assets; (b)
rents, taxes and other items payable by Seller under any
contract to be assigned to or assumed by Buyer; (c) the
amount of sewer rents and charges for water, telephone,
electricity and other utilities and fuel; and (d)
[Intentionally Deleted] (e) all
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items paid or payable on or after the Closing Date under any
of the Assumed Obligations (as such term is defined in
Section 4.1 herein) to the extent not specifically
referenced in clauses (a) - (d) above which are normally
prorated in connection with similar transactions;
The net aggregate amount of the prorations described in
(a) - (d) shall be added to or subtracted from the base
amount payable by Buyer to Seller on the Closing Date. If
current payments with respect to items to be prorated
pursuant to this Section 1.4.3 are not ascertainable on or
before the Closing Date, such payments shall be prorated on
the basis of the most recently ascertainable xxxx therefor
and shall be reprorated between Seller and Buyer when the
current bills with respect to such items have been issued
and a cash settlement shall be made within thirty (30) days
thereafter.
The prorated items known to the parties at Closing are
as listed on Exhibit 1.4.3
1.5 The Purchase Price will be paid by Buyer plus or minus the
amount, if any, by which the Purchase Price is adjusted pursuant to
subsection 1.4 of this Agreement
1.6 The parties hereto agree that the allocated Asset values attached
hereto, designated Exhibit 1.6, fairly and accurately represent the
respective values of the Asset categories of Seller purchased by Buyer
pursuant to the Asset Agreement.
1.7 At the Closing, Seller shall execute the Non-Competition, Non-
Solicitation and Non-Disclosure Agreement substantially in the form
set forth in Exhibit 1.7(a).
If Seller violates this Section 1.7 and the Non-competition, Non-
Solicitation and Non-Disclosure Agreement referenced herein, and Buyer
obtains a final judgment or arbitration award or a settlement is
reached with Seller for damages as a result of this violation, Buyer
may offset the amount of this judgment, arbitration award or
settlement against any amounts owed by Buyer. "Final" shall mean any
judgment for which no appeal has been filed during the thirty (30)
days following the entry of the judgment order. Provided, however,
Buyer's
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claim shall not be limited to the amount of any offset available.
1.8 After the Closing, Buyer shall have the right to use the name
Iowa Outdoor Displays and all other trade names used by Seller in the
Market. Buyer shall also have the right for one year from the Closing
Date to endorse the name Iowa Outdoor Displays to all checks which,
pursuant to the terms of this Agreement, are the property of Buyer.
2. Representations and Warranties of Seller. Seller represents and warrants
to Buyer as an inducement to Buyer to purchase the Assets of Buyer pursuant
to the terms of this Agreement as follows:
2.1 IOD is a Pennsylvania corporation, duly organized, validly
existing and in good standing under the laws of that state, and has
the corporate power to own its property and carry on its business as
now being conducted, and to execute and deliver the Asset Purchase
Agreement and any other agreements to be entered into by Seller in
connection with the Asset Purchase Agreement.
2.2 Seller is properly qualified as a foreign corporation to do
business in the jurisdictions listed in the attachment hereto
designated as Exhibit 2.2. These are the only jurisdictions where
Seller is required to be qualified as a foreign corporation in order
to conduct business in the Market.
2.3 To the best of Seller's knowledge, except as set forth on Exhibit
2.3, there are no violations of applicable laws or regulations,
including, but not limited to, zoning regulations and building permits
or other permits related to sign structures have occurred that would
have a material adverse effect on the future operation of any Asset.
2.4 Attached as Exhibit 2.4 are unaudited balance sheets and
comparative operating statements of Seller's business in the Market as
of July 31, 1996 (the "Financial Statements"). These Financial
Statements are in accordance with the books and records of Seller and
fairly and accurately present its financial position as of that date
in accordance with generally accepted accounting principles.
2.5 Since the date of the Financial Statements, except as disclosed
in Exhibit 2.5 attached hereto, to the best of Seller's knowledge
there have been no material adverse changes in the general affairs,
management or financial
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position or financial condition of Seller with respect to the Market.
2.6 The Exhibits attached to this Agreement are correct in all
material respects including specifically the following:
2.6.1 The information about contracts attached as Exhibit 1.3.3
and Exhibit 1.3.4 to this Agreement is true and correct as of the date
set forth in said Exhibit. Except as set forth in Exhibit 2.6.1, said
contracts (1) are in full force and effect (2) have not been breached
by Seller or to the best of Seller's knowledge, any of the parties
thereto; and (3) all payments required under said contracts have been
made except those not yet due and payable provided the current portion
of which is included as a Current Liabilities. Seller has no
"percentage rental" leases.
2.6.2 All sign leases to which Seller is a Lessee are in full
force and effect.
2.6.3 [Intentionally Deleted]
2.6.4 Exhibit 2.6.4 lists agreements, whether oral or written
requiring payments or performance by IOD after Closing other than
Lease payments and the following agreements:
(a) Each material contract, agreement or commitment for the sale
or lease of Seller's Assets, products or services, excluding
advertising contracts and contracts to provide advertising allowances
or promotional services which are listed in Exhibit 1.3.4.
(b) Each contract with any dealer, distributor, broker, agent or
sales representative.
(c) Employment contracts, including union contracts, executed by
any officer, director, employee or consultant of Seller.
2.7 There are no unfair labor practice charges pending, or to the
best of Seller's knowledge, threatened against Seller. Seller has not
engaged in any unfair labor practices, and there is no strike,
dispute, request for representation or work stoppage pending or
threatened against Seller by or with respect to any such employees.
2.8 The execution, delivery and performance of this Agreement by
Seller, including, without limitation, all conveyances, transfers,
assignments and deliveries
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contemplated herein, have been duly and effectively authorized and
approved by IOD's board of directors and shareholders and all other
persons, businesses, banks and governmental bodies or courts whose
approval is required. This Agreement and each and every instrument
executed and delivered hereunder by Seller shall constitute a valid
and binding obligation of Seller enforceable according to their terms.
2.9 The performance of this Agreement by Seller will not conflict
with or violate the provisions of any material agreement or instrument
binding upon Seller
2.10 Except as set forth in Exhibit 2.10, there is no suit, action,
arbitration or legal, administrative or other proceeding or
governmental investigation pending or, after due inquiry, to the best
of Seller's knowledge, threatened against or affecting the business,
Assets or financial conditions of Seller within the Market which would
have any material adverse effect on Seller's performance of this
Agreement and the transactions contemplated herein. Seller is not in
default with respect to any order, writ, injunction or decree of any
federal, state, local or foreign court, department, agency or
instrumentality.
2.11 Except as set forth on Exhibit 2.11, at Closing Seller will
convey good and merchantable title to all Assets and Seller's title to
all property included in the Assets required to be disclosed in the
Exhibits to this Agreement is not encumbered in any manner other than
for liens for taxes not yet due.
2.12 All Assets are useable in the ordinary course of business in
accordance with industry standards except those listed in Exhibit
2.12. Seller has no knowledge of any defects in the condition of any
of the said Assets, ordinary wear and tear excepted.
2.13 Seller represents and warrants to Buyer that as of the date of
this Agreement the following environmental representations and
warranties are true:
2.13.1 Seller has not caused or permitted its operations on
any real estate owned or leased by Seller to generate,
manufacture, refine, transport, treat, store, handle,
dispose, transfer, produce or process hazardous substances
or other dangerous or toxic substances or solid wastes,
except in compliance with all applicable federal, state and
local laws or regulations, and has not
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caused or to the best of Seller's knowledge permitted and
has no knowledge of the release of any hazardous substances
that have gone onto or offsite of any real estate owned or
leased by Seller (other than the disposal of paints, pastes
and similar chemicals through approved channels) and Seller
has no knowledge that any person or entity has in the past
utilized any real estate owned or leased by Seller in a
manner which has created any hazardous substance on or off
any real estate owned or leased by Seller. There are no
pending and, to the best of Seller's knowledge, no
threatened claims, suits, administrative proceedings, or
other actions by a Court or governmental entity with regard
to hazardous substances on any real estate owned or leased
by Seller except as set forth in Exhibit 2.13.1.
2.13.2 Seller agrees to indemnify and hold harmless Buyer, its
successors, and assigns against and in respect of any and
all damages, claims, losses, liabilities and expenses,
including, without limitation, reasonable legal, accounting,
consulting, engineering and other expenses, which may be
imposed upon or incurred by Buyer, its successors or
assigns, or asserted against the Buyer, their successors or
assigns by any other party or parties (including, without
limitation, a governmental entity), arising out of or in
connection with any environmental condition, resulting from
activity of Seller prior to Closing. The indemnification
obligations of Seller in this Section 2.13.2 shall survive
and extend to the fifth anniversary of Closing subject to
the limits stated in Section 10.5.
2.14 As of the date of this Agreement, Seller knows of no individual,
partnership, corporation or other entity in the Market who makes it a
practice to destroy billboards as part of a campaign or concerted
effort to damage billboard companies.
2.15 Except current liabilities incurred or paid in the ordinary
course of business and obligations under contracts entered into or
performed in the ordinary course of business Seller has not since the
date of the Financial Statements attached as Exhibit 2.4:
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2.15.1 incurred or become subject to any obligations or
liabilities (absolute or contingent) which have a material
adverse effect on the Assets;
2.15.2 mortgaged, pledged or subjected to any lien, charge or
encumbrance any of its assets covered by this Agreement
(other than liens for taxes not yet due;
2.15.3 entered into any transaction other than in the ordinary
course of business in any way affecting the Assets, except
for this Agreement and the transactions contemplated
hereunder;
2.15.4 increased, without the knowledge of Buyer, the general
rate of compensation payable to any of its employees or made
or accrued for any new employee benefit plans for employees.
A list of employees who work on a full time basis and all
compensation and bonus arrangements for these employees is
set forth in Exhibit 2.15.4;
2.15.5 made, accrued or become liable in any way for any
bonus, profit sharing, pension, incentive compensation or
other similar payments to any employee; or
2.15.6 suffered any other event or condition of any character
which has materially adversely affected Seller's business.
2.16 The accounts receivable of Seller reflected in the Financial
Statements attached hereto as Exhibit 2.4 and the accounts receivable
of Seller resulting from its business operations through the Closing
Date have been or, to the best of Seller's knowledge, will be
collected in the ordinary course of business, considering the offset
for the reserve for doubtful accounts on the same basis as used by
Seller in the past. Seller shall continue through the Closing Date
its normal and customary collection efforts with regard to such
accounts receivable and shall not make any operational changes in
anticipation of this transaction. Said accounts receivable arose out
of bona fide transactions in the ordinary course of business and are
not subject to any right of offset or counterclaim except for any
barter or lease trade out arrangements disclosed in Section 2.21.
2.17 Except as set forth in Exhibit 2.17, Seller does not sponsor or
participate in any (i) life, health, accident
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or disability or any other "employee welfare benefit plan" as defined
in Section 3(l) of ERISA, or (ii) any "employee pension benefit plan"
as defined in Section 3(2) of ERISA. Exhibit 2.17 also discloses the
Seller's vacation, sick leave and holiday policies.
2.18 Pursuant to the terms of this Agreement, is delivering to Buyer
all Assets used in the Market by Seller to operate its business except
Seller's Automobile.
2.19 Seller has paid all federal and municipal taxes, including real
and personal property, sales and use taxes it is required to pay.
2.20 Seller has not sublet any property except as disclosed in
Exhibit 2.20.
2.21 Seller has not engaged in any "bartering" or "lease trade outs"
of accounts receivable or advertising space except as set forth in
Exhibit 2.21.
2.22 The supplies owned by Seller being purchased by Buyer, which are
current assets, are useable by Buyer, both as to quality and quantity,
in the ordinary course of business in accordance with industry
standards.
2.23 [Intentionally Deleted]
2.24 [Intentionally Deleted]
2.25 Seller has all permits and licenses needed to operate the Assets
being purchased by Buyer and no one has challenged the validity of
those permits and licenses except as set forth in Exhibit 2.25.
2.26 No Major Advertiser of Seller has advised Seller that it will not
renew or it is going to breach or terminate its advertising contracts
when it is assigned to Buyer. The term "Major Advertiser" as used
herein shall mean any advertiser whose annual payments are Five
Thousand Dollars ($5,000.00) in the aggregate or more. No group of
advertisers whose annual payments exceed Forty Thousand Dollars
($40,000) have advised Seller they will not renew or are going to
breach or terminate their advertising contracts when they are assigned
to Buyer.
2.27 Seller has not received notice of any tax audits against Seller.
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2.28 Seller shall be responsible for providing any notice of layoff or
plant closing required in connection with the transaction contemplated
herein pursuant to the Federal Worker Adjustment and Retraining
Notification Act of 1988, any successor federal law, and any
applicable state or local plant closing notification statute, and
Seller shall bear any liability or obligation that may rise or accrue
as the result of improper or untimely notice or that may arise from
any person claiming wrongful termination or change of employment as a
result of any action or omissions of Seller with respect to the
transactions set forth in this Agreement.
2.29 All dues owed by Seller to any outdoor advertising association
have been paid.
2.30 There are no agreements or undertakings pursuant to which any
third party has or may have the right to acquire from Seller any of
the stock or (except in the ordinary course of business) Assets of
Seller.
2.31 To the best of Seller's knowledge, except as set forth on Exhibit
2.31, after Closing Buyer will have the exclusive right to use the
Seller's name and all other trade names used by Seller in the outdoor
advertising business in the outdoor advertising market area where
Seller currently transacts business.
2.32 To the best of Seller's knowledge, in the five years prior to
Closing, no employee of Seller, lessor, business invitee, or other
person has suffered personal injury or property damage as a result of
any action involving the business or Assets of Seller within the
Market such that a claim has been or may be raised against Seller
directly or indirectly or under the xxxxxxx'x compensation laws of any
state except as set forth in Exhibit 2.32.
2.33 Seller shall have delivered to Buyer under this Agreement sign
structures containing, in the aggregate, at least 155 advertising
faces.
2.34 Except as disclosed on Exhibit 2.34, following Closing, neither
Seller nor any affiliates, officers, directors or shareholders of IOD
nor any person related to or affiliated with Xxxxxxx will have any
direct, indirect or beneficial ownership of any real or personal
property which is in any way involved with or related to the operation
of the Assets and property of Seller used in the Market in Seller's
outdoor advertising business being purchased by Buyer.
3. Representations and Warranties of Buyer. Buyer represents and
warrants to Seller as follows:
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3.1 Buyer has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Illinois,
with full power and authority to own its properties and carry on its
business as now being conducted and to execute and deliver this Asset
Purchase Agreement and any other Agreements to be entered into by
Buyer in connection with this Asset Purchase Agreement.
3.2 The performance of this Agreement by Buyer will not conflict with
or violate the provisions of any material agreement or instrument
binding upon Buyer; and the execution, delivery and performance of
this Agreement shall have been duly and effectively authorized by
Buyer prior to Closing. This Agreement and each and every instrument
executed and delivered by Buyer shall constitute a valid and binding
obligation of Buyer.
3.3 There is no suit, action, arbitration or legal, administrative or
other proceeding or governmental investigation pending or, to the best
of Buyer's knowledge, threatened against or affecting the business,
assets or financial conditions of Buyer which would have any material
adverse effect on Buyer's performance of this Agreement and the
transactions contemplated. Buyer is not in default with respect to
any order, writ, injunction or decree of any federal, state, local or
foreign court, department, agency or instrumentality.
3.4 Buyer shall use its best efforts to perform and fulfill all
conditions and obligations on its part to be performed and fulfilled
under this Agreement, to the end that the transactions contemplated by
this Agreement shall be fully carried out.
4. Assumption of Obligations.
4.1 Buyer does not assume any obligations or liabilities of Seller of
any kind or nature, except as to those post-closing matters specified
below.
4.1.1 Post-closing liabilities under leases affecting the
Assets or within the Market; and which have not been paid,
performed or discharged by Seller.
4.1.2 Post-closing obligations to deliver advertising
services pursuant to advertising contracts purchased
pursuant to this Agreement in the Market.
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4.2 Anything to the contrary notwithstanding, it is expressly
understood that Buyer shall not assume any of the following
obligations or liabilities of Seller:
4.2.1 Any city, state or federal tax liabilities for any kind
of tax for any period prior to and including the Closing
Date. Real and personal property taxes shall be prorated as
of the Closing Date, based upon bills received, when
received.
4.2.2 Any income tax liability arising from the sale of
Assets to Buyer or conveyance of Assets to Buyer or any
liquidation and dissolution of Seller.
4.2.3 Any obligation, commitment or liability of or claim
against Seller which constitutes or arises from a breach by
Seller of any representation, warranty or covenant.
4.2.4 Any obligation, commitment or liability of or claim
against Seller which may arise from Seller's operation of
the Assets prior to the Closing Date.
4.2.5 Any obligation, commitment or liability of or claim
against Seller which may arise from the rendering of
professional, legal, accounting, appraisal, engineering or
other similar services to Seller in connection with the
transactions.
4.2.6 Any liability of Seller under profit-sharing or similar
employee benefit plans or any other employee benefit
collective bargaining agreement, employment agreement or
salary or bonus arrangement.
4.3 Seller herewith agrees that it shall pay promptly when due, or
contest, any and all liabilities of Seller arising in the Market not
assumed by Buyer at Closing or discharged by Seller prior to Closing,
if Seller's failure to pay would have a material adverse effect on
Buyer, provided that Seller may contest the assertion of any such
liability to the extent reasonably prudent and Buyer shall cooperate
fully in any such contest. If Seller elects to contest any such
liability and fails to succeed in such contest after any appeals, then
Seller shall promptly pay such liability. Seller shall give Buyer
written notice before Seller begins contesting any such liability
unless Seller does not have adequate time,
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in which event, Seller shall give Buyer said written notice within
five (5) business days after Seller begins contesting any such
liability.
In the event that Seller is contesting any liability not assumed
by Buyer under the terms of the Asset Agreement, Seller shall make it
clear to the third party that Seller and not Buyer is the entity
disputing the matter.
4.4 Installments of special assessments levied against real estate
included in the Assets shall be the obligation of Seller if due on or
before the Closing Date and the obligation of Buyer if due after the
Closing Date.
4.5 Prior to the Closing and for six months thereafter, Seller shall
cooperate with Buyer to obtain all consents, approvals, and
certificates and licenses and permits, and other documents required or
appropriate in connection with the performance by it of this Agreement
and the consummation of the transactions contemplated hereby or
otherwise required in order to prevent the breach of any
representation and warranty set forth herein; provided, however, that
no contact will be made by the Seller with any third party to obtain
any Consent except in accordance with arrangements previously agreed
to by Buyer.
4.6 Excluding workmen's compensation, Seller shall be responsible for
all claims associated with health, illness or injury insofar as they
relate to events or conditions existing on or before the Closing Date
and relating to employees or their dependents (or others) to the
extent that event or condition has been reported on or before the
Closing Date to Seller or to a medical professional or as to which
medical treatment has been obtained on or before the Closing Date;
provided, however, that Buyer's health plans will (to the extent they
would cover medical expenses for a condition arising after the Closing
Date) cover medical expenses for continuing employees incurred after
the Closing Date to the extent said medical expenses result from a
medical condition existing on or before the Closing Date that have not
been so reported or the subject of such treatment.
Seller shall be responsible for all workmen's compensation claims
associated with health, illness or injury insofar as they relate to
events occurring on or before the Closing Date.
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4.7 Seller shall offer continuation coverage under its applicable
group health plans to all employees of Seller and their covered
dependents who incur a "qualifying event" (within the meaning of
section 4980(B) of the Code and section 603 of ERISA) as a result of
or in connection with the transactions contemplated by this Agreement.
Such coverage shall comply with the continuation coverage requirements
(including any applicable notice provisions) of section 4980(B) of the
Code and Part 6 of Title I of ERISA and any applicable state law
continuation coverage requirements.
5. Conduct of Business Pending Closing. Seller represents, warrants and
agrees that from the date of this Agreement until the Closing as to the
Markets and Assets:
5.1 The business of Seller will be conducted in the usual and
ordinary course, the character of the business will not change, no
different business will be undertaken within the Market, and Seller
will, in accordance with its past practices, preserve for Buyer the
relationship with suppliers, customers and others having business
relations with Seller, including those employees of Seller which Buyer
intends to hire after Closing.
5.2 Except in the ordinary course of business, Seller will not enter
into any contract, agreement, commitment or understanding with respect
to employing any agents, wholesalers, dealers, brokers or consultants
in the development and sale of their services which requires an
expenditure of more than $5,000 without the prior written
authorization of Buyer.
5.3 As to the Market or Assets in the Market, Seller will not:
(i) mortgage, pledge or subject to any lien, charge or
encumbrance any of its Assets in the Market;
(ii) sell or transfer any of its Assets in the Market, except in
the ordinary course of business, or any permits, licenses, approvals,
or authorization or except in the ordinary course of business, cancel
any debts or claims;
(iii) knowingly enter into any transaction outside the ordinary
course of business.
(iv) make, accrue or become liable in any way for any bonus
(other than those which Seller shall pay in full), profit-sharing,
pension, incentive compensation or other similar payments to any
employee in the Market
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inconsistent with prior practices or other than as shown on a Schedule
or Exhibit to this Agreement;
(v) make or permit any amendment or early termination of any
contract, except in the ordinary course of business;
(vi) through negotiations or otherwise, make any commitment
affecting the Market or incur any liability affecting the Market to
labor organizations without the prior written approval of Buyer;
(vii) make any material alteration to the normal and customary
pricing in the Market or terms and conditions of sale extended to
Seller's customers; or
(vii) discharge or satisfy any lien or encumbrance affecting the
Market or pay any obligation or liability affecting the Market
(absolute or contingent), except as required or allowed hereunder.
5.4 Seller shall maintain books of account consistent with past
accounting practices as described in Section 2.4. Seller will not
materially alter its current insurance coverage without the prior
written consent of Buyer.
5.5 Prior to this Agreement, Seller has made available to Buyer and
its representatives certain information and records relating to the
business and affairs of Seller as requested by Buyer. During the
normal business hours throughout the period from this date to the
Closing Date, Seller will give to Buyer and its accountants, counsel,
appraisers and other representatives full access to all properties,
contracts, commitments, books and records or Seller pertaining to the
Market. Buyer will keep such information confidential and not
disclose or use such information except for purposes of this Agreement
until Closing.
5.6 Prior to Closing, Buyer shall not have the risk of loss with
respect to the Assets to be conveyed pursuant to this Agreement. In
the event, between the date of this Agreement and the Closing Date,
any parcel of improved real property or personal property being
purchased, or leased as a part of this transaction, including but not
limited to, the office furniture and equipment, fixtures, leasehold
improvements, equipment, vehicles or other personal property is
materially damaged or destroyed by fire or other casualty or in the
event that the sign structures to be purchased are materially damaged
or destroyed by fire or other casualty, and if as a result the Assets
are materially diminished in value,
16
Buyer may elect to terminate this Agreement, and all obligations of
the parties shall cease and neither party shall have any further
rights against the other. Seller shall have the right within thirty
(30) days to remedy or repair such damage or destruction and (subject
to the terms and conditions of this Agreement) thereupon require Buyer
to close. Seller shall immediately notify the Buyer in writing of the
occurrence of any fire or other casualty. Buyer shall notify Seller
in writing within two days of Buyer's receipt of Seller's notice
whether Buyer elects to consummate this transaction.
6. Conditions to Obligations of Buyer to Consummate the Transaction. The
obligations of Buyer to be performed at the Closing shall be subject to the
satisfaction or the waiver in writing by Buyer on or prior to the Closing
Date of the following conditions:
6.1 Buyer shall have received an opinion from counsel for Seller in
the form attached as Exhibit 6.1 which shall be reasonably
satisfactory to Buyer, dated the Closing Date, to the effect that;
6.1.1 IOD is a corporation duly organized, existing and in
good standing under the laws of the State of Pennsylvania
and has the corporate power to carry on its business as now
being conducted in the Market, and is not required to
qualify to do business in any state where the nature of its
business or assets require qualification.
6.1.2 Such counsel does not know of any pending or threatened
lawsuits against Seller other than those described in
Exhibit 2.10 or elsewhere in this Agreement.
6.1.3 The execution, delivery and performance of this
Agreement by Seller has been duly authorized and approved by
its Board of Directors and this Agreement and each
instrument executed and delivered herewith by Seller has
been duly executed by and constitute valid and binding
obligations of Seller on the Closing Date enforceable
according to their terms except to the extent enforceability
is limited by applicable bankruptcy and insolvency laws and
by general principles of equity. Counsel may take exception
to the enforceability of the noncompetition and
nonsolicitation provisions of the instruments and other
generally accepted exceptions.
17
6.1.4 This Agreement and each instrument have been duly
executed and delivered by Seller.
6.1.5 [Intentionally Deleted]
6.1.6 [Intentionally Deleted]
6.1.7 When the Xxxx of Sale or other conveyance instruments
shall have been delivered to Buyer by Seller, such delivery
will transfer to Buyer good title to the Assets, and the
Assets to the best of counsel's knowledge will be free and
clear of all liens, encumbrances, claims, charges and
assessments whatsoever, other than any incurred by Buyer.
6.2 Buyer shall not have discovered and given notice to Seller prior
to closing of any material error, misstatement or omission in the
representations and warranties made by Seller which alone or in the
aggregate are materially adverse to Seller or to Buyer if the
transaction is completed, unless Seller has covered the same to
Buyer's reasonable satisfaction. The representations and warranties
and Exhibits or Schedules of Seller contained in this Agreement shall
be true on and as of the Closing Date with the same effect as though
such representations and warranties have been made on and as of such
date, except for any variations resulting from actions contemplated or
permitted by this Agreement, which variations shall not be materially
adverse, and each and all of the covenants to be performed by Seller
on or before the Closing Date pursuant to the terms shall have been
duly performed in all material respects. Seller shall deliver to
Buyer a certificate to that effect, dated the Closing Date, certifying
to all the foregoing, and executed by an authorized officer of Seller.
6.3 All contracts, leases and options, permits and rights employed by
Seller in the conduct of its business in the Market, to the extent
assignable by Seller, shall be assigned to Buyer at Closing, and
Seller will use reasonable business efforts to obtain and provide to
Buyer at Closing any third parties' consents required for such
assignments.
6.4 If required by law, Seller shall have
18
complied with all requirements imposed by such agencies of the U. S.
Government as may be necessary for the valid and legal consummation of
the transactions contemplated by this Agreement.
6.5 No court or governmental agency shall have issued an order,
binding on Buyer, enjoining the closing of the transactions
contemplated herein, and no proceeding shall be pending or threatened
that could result in such order.
6.6 [Intentionally Deleted]
6.7 Seller shall have delivered a certificate that there has been no
material adverse change in the exhibits prepared for this Agreement
between the date of the exhibit and the Closing Date.
6.8 There shall be no existing or threatened suit, action,
arbitration or legal, administrative or other proceeding or
governmental investigation pending or, after due inquiry, to the best
of Seller's knowledge, threatened against or affecting the business,
assets or financial conditions of Seller within the Market which would
have any material adverse effect on Seller's performance of this
Agreement and the transactions contemplated, including that listed in
Exhibit 2.10 or elsewhere in this Agreement.
6.9 Seller shall deliver a certified copy of the Board of Directors
resolution approving this transaction and the execution of this
Agreement.
6.10 Seller shall deliver an Incumbency Certificate to Buyer as to
Seller.
6.11 Seller shall deliver to Buyer copies of all books, records and
documents relating to the Assets at the Closing. Seller shall retain
its minute books and Corporate records.
6.12 Seller shall have terminated or reassigned all of Seller's
employees in the Market.
7. Conditions to Obligations of Seller to Consummate the Transaction.
The obligations of Seller to be performed at the Closing shall be subject
to the satisfaction or the waiver in writing by Seller on or prior to the
Closing Date of the following conditions:
7.1 Seller shall have received an opinion of Buyer's counsel in the
form attached as Exhibit 7.1 and which shall be reasonably
satisfactory to Seller, dated the
19
Closing Date, to the effect that:
7.1.1 Buyer is a corporation duly organized, existing and in
good standing under the laws of the State of Illinois and
has the corporate power to carry on its business as now
being conducted.
7.1.2 The execution, delivery and performance of this
Agreement by Buyer has been duly authorized and approved;
and this Agreement and each instrument executed and
delivered by Buyer have been duly executed by and constitute
valid and binding obligations of Buyer enforceable according
to their terms subject, however, to any state or federal
laws for debtor relief or general principles of equitable
relief.
7.1.3 All actions and proceedings required by law or this
Agreement to be taken by Buyer at or prior to the Closing in
connection with this Agreement and the transactions provided
for have been duly and validly taken or waived by Seller.
7.2 Seller shall not have discovered any material error, misstatement
or omission in the representations and warranties made by Buyer which
alone or in the aggregate to Buyer or Seller if this transaction is
completed unless Buyer has covered the same to Seller's reasonable
satisfaction. The representations and warranties of Buyer contained
in this Agreement shall be true on and as of the Closing Date with the
same effect as though such representations and warranties had been
made on and as of such date, except for any variations therein
resulting from actions permitted by this Agreement, which variations
shall not be materially adverse to Buyer and each and all the
covenants to be performed by Buyer on or before the Closing Date shall
have been duly performed in all material respects. Buyer shall
deliver to Seller a certificate to that effect, dated the Closing
Date, and executed by an authorized officer of Buyer.
7.3 If required by law, Buyer shall have complied with all
requirements imposed by such agencies of the U. S. Government as may
be necessary for the valid and legal consummation of the transactions
contemplated hereby.
7.4 No court of competent jurisdiction or governmental agency shall
have issued an order, binding on Seller, enjoining the closing of the
transactions contemplated herein, and no proceeding shall be pending
or threatened
20
that could result in such order.
7.5 There shall be no existing or threatened suit, action,
arbitration or legal, administrative or other proceeding or
governmental investigation pending or, after due inquiry, to the best
of Buyer's knowledge, threatened against or affecting the business,
assets or financial conditions of Buyer within the Market which would
have any material adverse effect on Buyer's performance of this
Agreement and the transactions contemplated, including that listed in
Exhibit 2.10 or elsewhere in this Agreement.
7.6 Buyer shall deliver an Incumbency Certificate to Seller as to
Buyer.
8. Closing.
8.1 The transactions required under this Agreement to be consummated
at the Closing shall take place at such date ("Closing Date"), and
time as Seller and Buyer may agree, as close as possible to the
execution of this agreement, but in no event later than
September 30, 1996.
8.2 In addition to, and without limiting any other provision of this
Agreement, Seller agrees to do, perform and deliver at the date of
Closing the following:
8.2.1 The opinion of counsel of Seller as specified in
Section 6.1;
8.2.2 Execution by Seller of the requisite instruments of
conveyance, including, but not limited to, a Xxxx of Sale
and assignments;
8.2.3 Appropriate instruments of transfer to Buyer all
parcels of real estate or leaseholds covered by this
Agreement.
8.2.4 Evidence satisfactory to Buyer showing compliance with
provisions of any applicable requirement of the U.S.
Government or any state or local government.
8.2.5 Such other instruments as counsel for Buyer may
reasonably request.
8.2.6 A certificate that there has been no material adverse
change in the Exhibits prepared for this Agreement, between
the date of the Exhibit and the Closing Date.
21
8.3 In addition to, and without limiting any other provisions of this
Agreement, Buyer agrees to do, perform and deliver at the Closing the
following:
8.3.1 The opinion of Buyer's counsel as specified in
Section 7.01;
8.3.2 The amount specified in Section 1.4 in the form of an
interbank transfer of immediately available funds;
8.3.3 Deposit of the amount specified in Section 1.4 in
escrow pursuant to the Escrow Agreement.
8.3.4 Evidence satisfactory to Seller showing compliance with
provisions of any applicable requirement of the U.S.
Government or any state or local government.
8.3.5 Such other instruments as counsel for Seller may
reasonably request.
9. Post-Closing Covenants.
9.1 Buyer and Seller agree to retain and permit each other access to
relevant pre-closing accounting records and corporate books of Seller
regarding the Assets for a period of six (6) years following the
Closing Date for any proper purpose. "Proper purpose" means the
preparation and review of any federal, state or local tax filing or
governmental report, filing, or application and defending or enforcing
rights against third parties or defending or enforcing rights under
this Agreement.
9.2 Seller and Buyer agree to cooperate in the preparation of any
governmental reports and to furnish reasonably requested information
needed for the preparation of governmental reports.
9.3 Consents. To the extent that the assignment of any contract,
license, lease or other agreement to be assigned to Buyer herein shall
require the consent of any person other than Seller, this Agreement
shall not constitute an agreement to assign the same if an attempted
assignment would constitute a breach thereof. Of any such consent is
not obtained before the Closing Date, Seller agrees to cooperate with
Buyer thereafter in any reasonable arrangement (such as
subcontracting, sublicensing or subleasing) designed to provide for
Buyer
22
the benefits under the applicable contract, license, lease or other
agreement, as the case may be including without limitation,
enforcement, at the cost to and for the benefit of Buyer, of any all
rights of Seller against the other parties thereto arising out of the
breach or cancellation thereof by such other parties or otherwise.
9.4 Waiver of Bulk Transfer Laws. The Buyer and Seller each hereby
agrees to waive compliance by the other with the provisions of the
bulk transfer law of any jurisdiction.
10. Indemnity.
10.1 Seller agrees to indemnify Buyer against all claims, losses,
expenses, obligations, damages and liabilities (including, without
limitation, costs and expenses of litigation and reasonable attorneys'
fees) occurring or arising from the following: (1) any breach of any
representation or warranty or failure to do and perform any covenant
or agreement of Seller contained in this Agreement; (2) any
obligation, debt or liability of Seller or any claim based upon any
other occurrence arising from the operation of the Assets anywhere, or
from the operation of Seller's entire business anywhere, prior to the
Closing, the obligation for which is not expressly assumed or agreed
to be assumed by Buyer; or (3) any claim of any finder or broker
engaged by Seller or owed compensation by Seller as a result of the
transactions contemplated in this Agreement.
10.2 Buyer hereby agrees to indemnify Seller against all claims,
losses, expenses, obligations, damages and liabilities (including,
without limitation, costs and expenses of litigation and reasonable
attorneys' fees) occurring or arising from the following: (1) any
breach of any representation or warranty or failure to do and perform
any covenant or agreement of Buyer contained in this Agreement; (2)
any obligation, debt or liability of Seller or any claim based upon
any other occurrence arising from the operation of the Assets
anywhere, or from the operation of Buyer's entire business anywhere,
after the Closing, the obligation for which is not expressly assumed
or agreed to be assumed by Seller; or (3) any claim of any finder or
broker engaged by Buyer or owed compensation by Buyer as a result of
this transaction.
10.3 Within a reasonable time after receipt of notification of a
claim, the indemnified party shall notify the indemnifying party of
any claim or demand which the indemnified party has determined has
given rise
23
to a right of indemnification. Such notice shall specify the
agreement, representation or warranty with respect to which the claim
is made, the facts giving rise to the claim, the alleged basis for the
claim, and the amount (to the extent then determinable) of liability
for which indemnity is asserted. Failure to give the foregoing
notice shall not be deemed a waiver of any claim or a bar to the
assertion of such claim unless and to the extent an indemnifying party
is able to establish damage or prejudice arising from the delay, in
which case such failure shall be a waiver and bar only to the extent
of such damage or prejudice. In the event any action, suit or
proceeding is brought against the indemnified party with respect to
which it may make a claim for indemnification, the indemnifying party
shall assume the defense of such action, suit or proceeding and shall
hire attorneys and other professionals reasonably acceptable to the
indemnified party. The defense shall include all settlement
negotiations and arbitration, trial, appeal or other proceedings which
indemnifying party's counsel shall deem appropriate, all of which
shall be at the discretion of and conducted by the indemnifying party.
The indemnified party shall have the right to be represented by
advisory counsel and accountants, at its expense, and shall be kept
informed of such action, suit or proceeding at reasonable times at all
stages thereof, whether or not so represented. The parties agree to
make available to each other, their counsel and accountants all
information and documents reasonably available to them which relate to
such proceedings or litigation, and the parties further agree to
render to each other such assistance as they may reasonably require of
each other in order to ensure the proper and adequate defense of any
such action, suit or proceeding. Each party shall promptly notify the
other party of any audit or examination of its books and records
undertaken by federal or state tax authorities and the results of any
such audit or examination, if such audit or examination is reasonably
expected to impact the other party.
10.4 In the event that any party does not provide indemnification as
required by the terms of this Article 10, and an indemnified party
shall pay or suffer a loss due to an indemnified liability, the party
or parties failing to provide indemnification shall pay all expenses
suffered by the indemnified party including reasonable legal expenses
of compelling the indemnifying party or parties to provide
indemnification to so provide.
If any party brings a legal action to compel an indemnification
and loses, the losing party or parties shall pay all reasonable costs
of litigation and the
24
legal expenses of the defendant in that action.
10.5 Limits on Indemnification. No claim for indemnification or
damages shall be made by Buyer hereunder unless the aggregate
cumulative amount of claims of Buyer (or any person or entity claiming
through Buyer) exceeds $7,500 and then only to the extent such claims
exceeds such amount. Notwithstanding anything in this Agreement
to the contrary, Seller shall not be liable to Buyer or any person
claiming through Buyer for an aggregate cumulative amount in excess of
$250,000.
10.6 Arbitration. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof shall be settled by final and
binding arbitration in accordance with the then prevailing rules of
the American Arbitration Association, and judgment upon the award
rendered may be entered in any court having jurisdiction thereof. The
arbitration proceedings shall be held in Des Moines, Iowa, before a
single arbitrator.
11. Finders. Except with respect to Xxxxxxx, Xxxxxx & Co., which shall be paid
solely by Seller, Seller and Buyer each represent and warrant to the other
that they have not dealt with any finder or broker, they have not had
communications with any individual acting in such capacity with regard to
these transactions, and they are not in any way obligated to compensate any
such person.
12. Miscellaneous.
12.1 This Agreement may be amended or modified by, and only by, a
written document executed by all of the parties.
12.2 The titles of the sections of this Agreement are for convenience
of reference only and are not to be considered in construing this
Agreement.
12.3 This Agreement and any documents specifically referred to
constitute the entire understanding between the parties with respect
to the subject matter, superseding all negotiations, prior discussions
and preliminary agreements. This Agreement may be executed in any
number of counterparts.
12.4 The representations and warranties by the parties shall survive
the Closing for a period of two (2) years, all covenants and
agreements shall also survive the
25
Closing for a period of two (2) years unless they expire by their
terms on or before Closing. Except as set forth in Section 2.13, no
claim for indemnification shall be allowed after such two year period.
12.5 It is expressly understood and agreed that Buyer and Seller or
their respective officers or agents have not made any warranty or
agreement, express or implied, except as are expressly provided, as to
the tax consequences of this transaction or the tax consequences of
any transaction pursuant to or arising out of this Agreement.
12.6 Other than to a subsidiary or affiliate of Buyer, this Agreement
may not be assigned without the prior written consent of the other
party. This Agreement will be binding upon and inure to the benefit
of the parties, their successors or permitted assigns, and the parties
agree for themselves, their successors or permitted assigns, to
execute any instrument and to perform any acts which may be necessary
or proper to carry out the purposes of this Agreement.
12.7 The Exhibits to this agreement shall be as of the date of this
Agreement unless otherwise stated, but Seller shall provide Buyer with
the certification provided for in Section 6.7.
12.8 All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if
delivered in person or by electronic facsimile with receipt
acknowledged and copies sent by mail as provided below to the
respective persons named below or if mailed by Express, certified or
registered mail, postage prepaid, return receipt requested:
If to Seller:
Xxxxxx X. Xxxxxxx
Iowa Outdoor Displays, Inc.
X.X.Xxx 00
000 X. Xxxxxxxxxx
Xxxxxxx, XX 00000
(Phone: 000-000-0000)
(Fax: 000-000-0000)
With a copy to:
Xxxxx X. Xxxxxxxxx, Esq.
Day, Xxxxx & Xxxxxx
Xxx Xxxxxxxxxx Xxxxx
00
Xxxxxxxx, XX 00000
(Phone: 000-000-0000)
(Fax: 000-000-0000)
If to Buyer:
Xxxxx X. Xxxxxxx
Xxxx X. Xxxxx
Universal Outdoor, Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
12.9 After the execution of this Agreement, Buyer may issue such press
releases and prepare and file documents containing such information
regarding this Agreement and the transactions contemplated as Buyer
deems appropriate.
12.10 This Agreement may be executed in one or more counterparts, each
of which need not contain the signatures of all parties, and all of
such counterparts taken together shall constitute one Agreement.
Signatures on facsimile copies of this Agreement are acceptable.
IN WITNESS WHEREOF, all of the parties hereto have executed and
delivered this Agreement as of the day and year first above written.
BUYER:
UNIVERSAL OUTDOOR, INC.
By:
----------------------------------
Its:
----------------------------------
SELLER:
MOUNTAIN MEDIA INC., D/B/A
IOWA OUTDOOR DISPLAYS
By:
----------------------------------
Its
----------------------------------
--------------------------------------
XXXXXX X. XXXXXXX
27
