ASSET PURCHASE AGREEMENT
THIS AGREEMENT, made and entered into as of the 25th day of March, 1997, by and
among TRANSAD ADVERTISING, L.P., a Tennessee limited partnership whose F.E.I.N.
is 00-0000000 ("Transad"), Transad's general partner, TRANSAD, INC., a Tennessee
corporation ("General"), Transad's Limited Partners, Memphis Venture Partners, a
Tennessee general partnership composed of Xxxx X. Xxxxxxx, Xx., X. Xxxxx
Xxxxxxx, Xxxxx X. Xxxxx, and Xxxxx X. Xxxxxxxx, as "Limited Partner A," and
Xxxxxxx X. Xxxxxx as "Limited Partner B," E. Xxxxx Xxxxxxx as "Limited Partner
C," and Xxxx X. Xxxxxx as "Limited Partner D" (collectively "Limited") (Transad,
General and Limited 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 herein and other good and valuable consideration, the sufficiency and
receipt of which is hereby acknowledged, Buyer and Seller agree as follows:
1. TRANSFER OF ASSETS.
1.1 At the Closing, Buyer shall acquire from Seller all of the business
and assets of Seller, whether disclosed or undisclosed, wherever located
and used in the bus shelter advertising market described in Exhibit 1.1
("Market"), including, 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
("Purchase Price"), plus the assumption of certain obligations of Seller as
specified herein. The Assets should specifically exclude cash, cash
equivalencies and accounts receivable, as of Closing, which shall remain
property of Seller.
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 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 bus shelters ("Shelters") and bus shelter advertising
panels ("Panels"), whether owned or leased, and any fixtures, and all
lights, electrical hook ups, and other appurtenant equipment in the
Market ("Displays"). The Displays which are
owned by Seller are described in Exhibit 1.3.2(a). The Panels which
are owned by Seller but attached to Shelters owned by others are
listed on Exhibit 1.3.2(b).
1.3.3 All future rights and entitlement of Seller in and to
advertising contracts which are listed in Exhibit 1.3.3.
1.3.4 All of Transad's right title, interest and obligations in and
to the contract between Transad and the Memphis Area Transit Authority
("XXXX") dated March 13, 1992 as amended January 14, 1997 ("Bus
Shelter Contract") and all other contract rights, entitlement and
obligations of Seller, whether oral or written in excess of Five
Thousand Dollars ($5,000), including those set forth in Exhibit 1.3.4.
1.3.5 All rights and obligations of Seller in and to unbuilt Displays
and sign locations ("Unbuilt Locations"). All such rights to Unbuilt
Locations are listed in Exhibit 1.3.5.
1.3.6 All XXXX approvals or authorizations necessary for Seller to
conduct its bus shelter business within the Market. Seller, before and
after Closing, shall cooperate with Buyer in the assignment and
transfer to Buyer of all such approvals or authorizations. All such
approvals or authorizations are listed in Exhibit 1.3.6.
1.3.7 All other assets and property of Seller used in the Market in
Seller's bus shelter advertising business, such as motor vehicles,
office equipment and machinery, bus shelter ad panels, equipment,
furniture, inventories of raw materials, supplies, customer lists,
business records, and work in progress. A list of all other assets is
set out in Exhibit 1.3.7.
1.3.8 All deposits from advertisers or other 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
telephone numbers and listings is attached as Exhibit 1.3.9.
1.3.10 [Intentionally omitted]
1.3.11 [Intentionally Omitted]
1.4 Buyer shall pay to Seller a purchase price for the Assets of: (a)
Eight Million Five Hundred Thousand Dollars ($8,500,000) to be paid as
follows: Seven Million Four Hundred Thousand Dollars ($7,400,000) (plus or
minus adjustments stated below) paid to Seller at Closing; Five Hundred
Thousand Dollars ($500,000) paid to Seller in ten (10) semi-annual
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installments of Fifty Thousand Dollars ($50,000) beginning six (6) months
after closing; and Six Hundred Thousand Dollars ($600,000) paid to XXXX at
Closing for approval of the Assignment of the Bus Shelter Agreement
(collectively the "Purchase Price"). The portion of the Purchase Price to
be paid to Seller at Closing is subject to the following adjustments:
1.4.1 Plus an amount which will credit Seller for payments by Seller
to XXXX which have been paid in advance for time periods following
Closing ("Prepaid Leases").
1.4.1.1 Plus Ten Thousand Dollars ($10,000) which will credit
Seller for payments made by Seller for the construction of and
improvements to Displays for the time period from February 1,
1997 to Closing.
1.4.2 Minus the amounts which will credit Buyer for the following:
1.4.2.1 Any lease payments for which Buyer becomes obligated
relating to any period of time prior to Closing.
1.4.2.2 Any advertising services delivered after Closing for
which Seller has already billed or otherwise receives payment.
Such Services are listed on Exhibit 1.4.2.2.
1.4.3 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 subsequent to the Closing Date; including without limitation
(a) personal property, real estate, occupancy and other 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) all 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)-(c) 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 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.
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1.5 The Purchase Price to 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 or other provisions of this Agreement, shall be paid by wire
transfer at Closing as designated by Seller on Exhibit 1.5.
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 (except in
the case of Limited Partner A, Limited Partner C and Limited Partner D, the
Non-Interference), Non-Solicitation and Non-Disclosure Agreements
substantially in the form set forth in Exhibit 1.7(a) and 1.7(b).
If Seller violates this Section 1.7 and the Agreements 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 claim
shall not be limited to the amount of any offset available.
1.8 After the Closing, Buyer has the right to use the name Transad 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 Transad to all
checks, which pursuant to the terms of this Agreement, are the property of
Buyer. Buyer shall indemnify and hold harmless Seller, its successors and
assigns from any claims, judgements, lawsuits, causes of action, costs and
expenses, including reasonable attorneys fees, arising from Buyer's use of
the name Transad subsequent to the Closing Date.
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 (each representation and warranty in this Section 2 except Section
2.1 and 2.2 is made only as to the Assets and the Market):
2.1 Transad is a Tennessee limited partnership and General is a Tennessee
corporation, both of which are duly organized, validly existing in good
standing under the laws of that state, and has the requisite authority 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.
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2.2 Transad and General are properly qualified to do business in Shelby
County, Tennessee. These are the only jurisdictions where Transad and
General are required to be qualified in order to conduct business in the
Market.
2.3 To the best of the Seller's knowledge, there are no violations of
applicable laws or regulations, including, but not limited to, zoning
regulations and building permits or other permits related to the Displays.
2.4 Attached as Exhibit 2.4 are unaudited balance sheets and comparative
operating statements of Transad's business in the Market as of December 31,
1996 (the "Financial Statements"). These Financial Statements are in
accordance with the books and records of Seller as kept in the ordinary
course of Seller's business and fairly and accurately present its financial
position as of that date.
2.5 To the best of the Seller's knowledge, since the date of the Financial
Statements, except as disclosed in Exhibit 2.5, there have been no material
adverse changes in the general affairs, management or financial position or
financial condition of Seller with respect to the Market.
2.6 The Exhibits attached to this Agreement are correct in all respects
including specifically the following:
2.6.1 The information about the Bus Shelter Contract and other
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
Exhibits. Said contracts are (1) in full force and effect; (2) have
not been breached by Seller or, to the best of the Seller's knowledge,
any of the parties to the Contracts; and (3) all payments required
under said contracts have been made except those not yet due and
payable as provided in the financial statements.
2.6.2 Exhibit 2.6.2 lists agreements relating to the assets, whether
oral or written requiring payments or performance by Seller or Buyer
after Closing and the following agreements:
(a) Each 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.
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2.7 There are no unfair labor practice charges pending, or to the best of
Seller's knowledge, threatened against Seller. To the best of the Seller's
knowledge, 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 contemplated in this Agreement, have been duly and effectively
authorized and approved by Seller's board of directors, shareholders and
partners and all other persons, business, 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.
2.9 The performance of this Agreement by Seller will not conflict with or
violate the provisions of any agreement or instrument binding upon Seller.
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
Seller or the business. Assets or financial conditions of Seller within the
Market. To the best of the Seller's knowledge, 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 provided in Exhibit 2.11, on the Closing Date, Seller will
convey good and merchantable title to the Assets, which title, except as
provided in Exhibit 2.11, will not be encumbered at such time.
2.12 All Assets are useable in the ordinary course of business with the
exception of ordinary wear and tear, except those listed in Exhibit 2.12.
Seller has no knowledge of any defects in the condition of any of the said
Assets.
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 caused or permitted and has no
knowledge of the release of any hazardous substances that have gone
onto or off-site of any real estate owned or leased by Seller and
Seller has no knowledge that any person or entity has in the past
utilized any real estate owned or leased by Seller in
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a manner which has created any hazardous substance on or off any real
estate owned or leased by Seller. There are no pending and no
threatened claim, suit, administrative proceeding, or other action 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.
2.14 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 so as to preserve and expand their ongoing
business or otherwise disclosed in Exhibit 2.14 attached to this Agreement,
or as otherwise incurred or performed in the ordinary course of business,
Seller has not since the date of the Financial Statements attached as
Exhibit 2.4:
2.14.1 incurred or become subject to any obligations or liabilities
(absolute or contingent) which have a material adverse effect on the
Assets;
2.14.2 mortgaged, pledged or subjected to any lien, charge or
encumbrance any of its assets covered by this Agreement;
2.14.3 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;
2.14.4 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 2.14.4;
2.14.5 made, accrued or become liable in any way for any bonus,
profit sharing, pension, incentive compensation or other similar
payments to any employee;
2.14.6 To the best of the Seller's knowledge, the Seller has not
suffered any other event or condition of any character which has
materially adversely affected Seller's business.
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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 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
Exhibit 2.20.
Buyer Shall collect Seller's accounts receivable existing on the
Closing Date using Buyer's normal and customary collection efforts.
Within ten (10) days following the close of each calendar month ending
after the Closing Date, Buyer shall forward to Seller a complete list
of all Seller's accounts receivable on which or with respect to which
Buyer is charged with collection on behalf of Seller. Buyer shall
forward to Seller, along with such list, a check in the full amount of
the collection of Seller's accounts receivable. Seller reserves the
right to assume the duties of collection for any portion of such
accounts receivable upon written notice to Buyer.
2.16 Except as set forth in Exhibit 2.16, Seller does not sponsor or
participate in any (i) life, health, accident or disability or any other
"employee welfare benefit plan" as defined in Section 3(1) 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.
2.17 Pursuant to the terms of this Agreement, Seller is delivering to
Buyer substantially all of the assets used in the Market by Seller to
operate its business.
2.18 Seller has paid all federal and municipal taxes, including real and
personal property, sales and use taxes it is required to pay.
2.19 Seller has not sublet any property except as disclosed in Exhibit
2.19.
2.20 Seller has not engaged in any "bartering" or "lease trade outs" of
accounts receivable or advertising space except as set forth in Exhibit
2.20.
2.21 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, ordinary wear and tear excepted.
2.22 [Intentionally Omitted]
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2.23 To the best of Seller's knowledge, 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.
2.24 [Intentionally Omitted.]
2.25 To the best of the Seller's knowledge, with respect to the assets
conveyed, Seller has paid all taxes of whatever kind owed when due and
filed all tax returns or other tax reports when due. To the best of the
Seller's knowledge, there are no tax audits threatened or pending against
Seller.
2.26 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 the transaction
set forth in this Agreement.
2.27 All dues owed by Seller to any outdoor advertising association have
been paid and shall be prorated between Seller and Buyer as of the closing
date.
2.28 Except in the ordinary course of business, 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 Assets of Seller.
2.29 To the best of the 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.
2.30 Seller shall have delivered to Buyer under this Agreement Displays
containing, in the aggregate, at least 512 advertising faces.
2.31 Following Closing, neither Seller nor any Affiliate, officer,
director or shareholder of Seller 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 being purchased by
Buyer.
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3. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants to Seller as follows:
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. Buyer is duly qualified to conduct business in the
state of Tennessee.
3.2 The performance of this Agreement by Buyer will not conflict with or
violate the provisions of any 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 Except as listed in Exhibit 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 within the
Market which would have any material adverse effect on Buyer's performance
of this Agreement and the transactions contemplated herein. 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 reasonable business 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 the Bus Shelter Contract,
contracts or other agreements affecting the Assets; and which have not
been paid, performed or discharged by Seller.
4.1.2 Post-closing obligation to deliver advertising services
pursuant to advertising contracts purchased pursuant to this Agreement
in the Market.
4.1.3 Buyer shall assume the obligations of Seller associated with
the lease agreements listed on Exhibit 1.3.1 for a period of ninety
(90) days, which period shall begin on the Closing Date.
Notwithstanding the foregoing sentence, Buyer agrees to vacate the
leased premises upon thirty (30) days' written notice from the
landlord.
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4.1.4 Buyer shall assume the obligations of Seller associated with
the agreements listed on Exhibit 2.6.2.
4.1.5 Buyer agrees to employ the employees of Seller listed on
Exhibit 2.14.4 upon the terms and conditions set forth in the sole
discretion of Buyer for a period of ninety (90) days, such period to
begin on the Closing Date.
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
arrangements.
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,
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 and in the sole opinion of counsel an appeal of
such contest is without merit, 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, in
which event, Seller shall give Buyer said written notice within five (5)
business days after Seller begins contesting any such liability.
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In the event that Seller is contesting any liability not assumed by
Buyer under the terms of this Agreement, Seller shall make it clear to the
third party that Seller and not Buyer is the entity disputing the matter.
4.4 [Intentionally Omitted.]
4.5 Prior to the Closing Date and for a period of six months therefrom,
the 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;
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.
Buyer shall be responsible for all workmen's compensation claims associated
with health, illness or injury insofar as they relate to events occurring
after the Closing Date.
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.
4.7 Buyer has obtained all necessary XXXX approvals or authorizations
necessary for Buyer to conduct a bus shelter business within the market.
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5. CONDUCT OF BUSINESS PENDING CLOSING.
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 Five Thousand Dollars ($5,000) without the prior written
authorization of Buyer.
5.3 Except in the ordinary course of business, 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, or any permits,
licenses, approvals, or authorization or cancel any debts or
claims;
(iii) knowingly enter into any transaction affecting the Market
which would have an adverse effect on the Assets Buyer is
purchasing;
(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 inconsistent with prior practices or other
than as shown on a Schedule or Exhibit to this Agreement;
(v) make or permit any amendment or termination of any contract;
(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
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(viii) 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.
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
provide, at Seller's place of business, to Buyer and its accountants,
counsel, appraisers and other representatives full access to all
properties, contracts, commitments, books and records of Seller pertaining
to the Market.
Buyer acknowledges that pursuant to the right to inspect Seller's books and
records and other documents and materials that Buyer may become privy to
Seller's Confidential Information, as herein defined, and that
communications of such Confidential Information to third parties could
injure Seller's business if the transactions in this Agreement are not
completed. Buyer, therefore, shall ensure that such information about the
Business obtained by the Buyer or any of its employees, officers, agents,
attorneys or representatives, shall remain confidential and not be
disclosed or revealed to third parties. "Confidential Information" includes
information ordinarily known only to Seller's personnel and includes such
information as financial information, customer lists, trade secrets,
inventory records and other information normally understood to be
confidential or otherwise designated as such by Seller. Notwithstanding
anything contained herein to the contrary, this paragraph shall remain in
effect even in the event that Closing is not consummated.
5.5 [Intentionally Omitted]
5.6 Prior to the Closing Date, 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 hereof and the Closing Date, any parcel of improved
real property being leased as a part of this transaction and the contents
thereof, 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 bus shelters to be purchased herein are materially
damaged or destroyed by fire or other casualty, Buyer or Seller 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. However,
notwithstanding anything contained herein to the contrary, Seller shall
have the right to remedy or repair any such damage within a period of sixty
(60) days and require Buyer to close in accordance with all other
provisions of this Agreement. Seller shall immediately notify the Buyer in
writing of the occurrence of any fire or other casualty. Buyer shall notify
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Seller in writing of Buyer's receipt of Seller's notice and whether or not
Buyer elects to consummate this transaction. For purposes of this paragraph
"material damage" shall mean damage in the excess of Seventy-Five Thousand
Dollars ($75,000).
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 [Intentionally Omitted.]
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 adequately resolved such error,
misstatement or omission. 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.
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, Buyer and Seller 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.
6.5 No court of competent jurisdiction or governmental agency shall have
issued an order, binding on Buyer, enjoining the closing of the
transactions contemplated herein.
6.6 Seller shall have delivered to Buyer the consent of XXXX to the
assignment from Seller to Buyer of the Bus Shelter Agreement and an
estoppel certificate by XXXX in a form satisfactory to Buyer.
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.
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6.8 There shall be no existing suit, action, arbitration or legal,
administrative or other proceeding or governmental investigation pending
or, after due inquiry, to the best of Seller's or Buyer'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 which has not been listed in Exhibit 2.10
or elsewhere in this Agreement.
6.9 Seller shall deliver a certified copy of the Board of Directors of
General approving this transaction and the execution of this Agreement and
such other documents reasonably requested by Buyer counsel.
6.10 Seller shall deliver to Buyer all books, records and documents
relating to the Assets at the Closing.
6.11 Seller shall have terminated or reassigned all of Seller's employees
in the Market.
6.12 Seller shall have delivered to Buyer the executed Non-Competition
(except in the case of Limited Partner A, Limited Partner C and Limited
Partner D, the Non-Interference), Non-Solicitation and Non-Disclosure
Agreements in the form attached as Exhibit 1.7(a) and 1.7(b).
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 [Intentionally Omitted]
7.2 Seller shall have not discovered any material error, misstatement or
omission in the representations and warranties made by Buyer which alone or
in the aggregate are materially adverse to Buyer or Seller if this
transaction is completed, unless Buyer has adequately resolved such error,
misstatement or omission. 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 has 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 pursuant to the terms hereof shall
have been duly performed in all material respects.
7.3 If required by law, Buyer and Seller 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.
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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.
8. CLOSING.
8.1 The transactions required under this Agreement to be consummated at
the Closing shall take place as of March 25, 1997 or such other date (the
"Closing Date"), and time as Seller and Buyer may agree.
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 [Intentionally Omitted]
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 Such other instruments as counsel for Buyer may reasonably
request.
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 [Intentionally Omitted]
8.3.2 The amount specified in Section 1.4 in the form of an interbank
transfer of immediately available funds to account #0000000 at
National Bank of Commerce Memphis, Tennessee;
8.3.3 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 accounting records and corporate books of Seller for a period of
three (3) 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 enforcing rights
against third parties or enforcing rights under this Agreement.
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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.
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 attorney's 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 claiming to have been engaged by Seller or owed
compensation by Seller as a result of the transactions contemplated herein.
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 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 Buyer
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 claiming to have been 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 to a right
of indemnification hereunder. 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 hereunder, 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
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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 hereto 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 results thereof, 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 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 legal expenses of the defendant in that action.
10.5 No claim for indemnification or damages shall be available to Buyer
under this Section 10 unless and only to the extent such claim(s), in the
aggregate, exceed Twenty Thousand Dollars ($20,000). Notwithstanding,
anything contained herein to the contrary, Seller shall not be liable to
Buyer for any claim(s) which in the aggregate, exceed Two Hundred Fifty
Thousand Dollars ($250,000).
11. FINDERS.
Except with respect to Xxxxxxx, Xxxxxx & Co., which shall be paid solely by
Seller, Seller and Buyer represent and warrant 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.
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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 one (1) year, all covenants and agreements shall
also survive the Closing for a period of one (1) year unless they expire by
their terms on or before Closing. No claim for indemnification shall be
available to Buyer after such one (1) 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 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 purpose of this Agreement.
12.7 [Intentionally Omitted.]
12.8 The Exhibits to this Agreement shall be as of the Closing Date unless
otherwise stated.
12.9 This Agreement constitutes the final agreement between the parties
and is controlling over the terms of any prior agreements which are
inconsistent with the terms of this Agreement.
12.10 Buyer and Seller hereby expressly agree to waive compliance with the
applicable bulk transfers law, if any, in any jurisdiction.
12.11 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 certified or registered mail, postage prepaid, return
receipt requested:
If to Seller: Xxxxxxx X. Xxxxxx
Transad
0000 Xxxxxxxxx Xxxxxx Xxxxx, #0
Xxxxxxx, Xxxxxxxxx 00000
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With a Copy to: Memphis Venture Partners
00 Xxxxx Xxxxx Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
If for Buyer to: Xxxxx X. Xxxxxxx
Xxxx X. Xxxxx
Universal Outdoor, Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
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: /s/ Xxxxxx X. Xxxxx
---------------------------
As Its: President
-------------------
SELLERS:
TRANSAD ADVERTISING, L.P.
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ E. Xxxxx Xxxxxxx
--------------------------- -----------------------------
As Its: General Partner/President As Its: General Partner/Vice President
------------------------- --------------------------------------
TRANSAD, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
As Its: President
--------------------
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MEMPHIS VENTURE PARTNERS,
Limited Partner A
By: /s/ E. Xxxxx Xxxxxxx By: /s/ Xxxx X. Xxxxxxx, Xx. by: E. Xxxxx Xxxxxxx
------------------------ -------------------------------------------------
X. Xxxxx Xxxxxxx Xxxx X. Xxxxxxx, Xx. Power of Attorney
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxx
------------------------ -----------------------------------------
Xxxxx X. Xxxxxxxx Xxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxxx /s/ E. Xxxxx Xxxxxxx
------------------------------------ -----------------------------------
Xxxxxxx X. Xxxxxx, Limited Partner B E. Xxxxx Xxxxxxx, Limited Partner C
/s/ Xxxx X. Xxxxxx
---------------------------------
Xxxx X. Xxxxxx, Limited Partner D
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