________________________________________________________________________________
ASSET PURCHASE AGREEMENT
BY AND AMONG
XXXXXXX OUTDOOR ADVERTISING ACQUISITION CO., L.P.
XXXXXXX ACQUISITION CORPORATION
AND
UNIVERSAL OUTDOOR, INC.
DATED AS OF DECEMBER 10, 1996
________________________________________________________________________________
TABLE OF CONTENTS
Page
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ARTICLE I
PURCHASE AND SALE OF ASSETS
AND ASSUMPTION OF CERTAIN LIABILITIES. . . . . . . . . 1
Section 1.1 Payment of Deposit. . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Application of Deposit. . . . . . . . . . . . . . . . . . . . 1
Section 1.3 Purchase and Sale . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.4 Consideration . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 1.5 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 1.6 Deliveries by the Seller. . . . . . . . . . . . . . . . . . . 6
Section 1.7 Deliveries by the Parent and the Buyer and Release of the
Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.8 Lease Payment Related Adjustments to Cash Purchase Price. . . 8
Section 1.9 AR Amount and Adjustments to Purchase Price . . . . . . . . . 9
Section 1.10 Use of Name . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 1.11 Use of Corporate Headquarters . . . . . . . . . . . . . . . . 11
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER . . . . . . . 12
Section 2.1 Organization. . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.3 Interests in Other Entities; Formation. . . . . . . . . . . . 13
Section 2.4 Consents and Approvals; No Violations . . . . . . . . . . . . 13
Section 2.5 Financial Statements. . . . . . . . . . . . . . . . . . . . . 14
Section 2.6 Absence of Undisclosed Liabilities. . . . . . . . . . . . . . 15
Section 2.7 Absence of Adverse and Other Changes. . . . . . . . . . . . . 15
Section 2.8 Title, Ownership and Related Matters. . . . . . . . . . . . . 17
Section 2.9 Properties and Assets Necessary for Conduct of Business . . . 18
Section 2.10 Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2.11 Displays. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.12 Intangible Property . . . . . . . . . . . . . . . . . . . . . 19
Section 2.13 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.14 Compliance with Applicable Law; Permits . . . . . . . . . . . 20
Section 2.15 Certain Contracts and Arrangements. . . . . . . . . . . . . . 20
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Section 2.16 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.17 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . 22
Section 2.18 Taxes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 2.19 Environmental Matters . . . . . . . . . . . . . . . . . . . . 26
Section 2.20 Certain Fees. . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.21 Affiliate Transactions. . . . . . . . . . . . . . . . . . . . 27
Section 2.22 Labor Agreements. . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE
PARENT AND THE BUYER . . . . . . . . . . . . . 29
Section 3.1 Organization and Authority of the Parent and the Buyer. . . . 29
Section 3.2 Consents and Approvals; No Violations . . . . . . . . . . . . 30
Section 3.3 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 3.4 Certain Fees. . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE IV
COVENANTS. . . . . . . . . . . . . . . . 31
Section 4.1 Conduct of the Business; Capital Expenditures . . . . . . . . 31
Section 4.2 Access to Information; Confidentiality. . . . . . . . . . . . 31
Section 4.3 Regulatory Compliance . . . . . . . . . . . . . . . . . . . . 33
Section 4.4 Consents; Assignments . . . . . . . . . . . . . . . . . . . . 34
Section 4.5 Reasonable Best Efforts . . . . . . . . . . . . . . . . . . . 35
Section 4.6 Non-competition . . . . . . . . . . . . . . . . . . . . . . . 35
Section 4.7 Press Releases. . . . . . . . . . . . . . . . . . . . . . . . 37
Section 4.8 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 4.9 Environmental Studies; Title. . . . . . . . . . . . . . . . . 37
Section 4.10 Supplemental Disclosure . . . . . . . . . . . . . . . . . . . 37
Section 4.11 No Solicitation of Transactions . . . . . . . . . . . . . . . 38
Section 4.12 Liabilities, Obligations and Debts of the Seller. . . . . . . 38
Section 4.13 Obligations of the Buyer. . . . . . . . . . . . . . . . . . . 38
Section 4.14 Letter of Credit. . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE V
CERTAIN TAX MATTERS . . . . . . . . . . . . . 39
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Section 5.1 Tax Certificates. . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.2 Allocation of Consideration . . . . . . . . . . . . . . . . . 39
Section 5.3 Seller's Responsibility . . . . . . . . . . . . . . . . . . . 40
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF THE PARTIES . . . . . . . . 40
Section 6.1 Conditions to Each Party's Obligation . . . . . . . . . . . . 40
Section 6.2 Conditions to Obligations of the Seller . . . . . . . . . . . 41
Section 6.3 Conditions to Obligations of the Parent and the Buyer . . . . 42
ARTICLE VII
TERMINATION; AMENDMENT; WAIVER. . . . . . . . . . . 43
Section 7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 7.2 Procedure and Effect of Termination . . . . . . . . . . . . . 43
Section 7.3 Amendment, Modification and Waiver. . . . . . . . . . . . . . 44
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION . . . . . . . 44
Section 8.1 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 8.2 Seller's Agreement to Indemnify . . . . . . . . . . . . . . . 45
Section 8.3 Notice and Opportunity to Defend. . . . . . . . . . . . . . . 45
ARTICLE IX
DEFINITIONS . . . . . . . . . . . . . . . 47
ARTICLE X
MISCELLANEOUS. . . . . . . . . . . . . . . 57
Section 10.1 Further Assurances. . . . . . . . . . . . . . . . . . . . . . 57
Section 10.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.3 Severability. . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 10.4 Binding Effect; Assignment. . . . . . . . . . . . . . . . . . 59
Section 10.5 No Third Party Beneficiaries. . . . . . . . . . . . . . . . . 60
Section 10.6 Interpretation. . . . . . . . . . . . . . . . . . . . . . . . 60
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Section 10.7 Jurisdiction and Consent to Service . . . . . . . . . . . . . 60
Section 10.8 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . 60
Section 10.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 10.10 Specific Performance. . . . . . . . . . . . . . . . . . . . . 61
Section 10.11 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 10.12 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 61
EXHIBIT A - Form of Xxxx of Sale
EXHIBIT B - Form of Undertaking
EXHIBIT C - Form of Lease Assignment
EXHIBIT D - Form of Waiver
EXHIBIT E - Form of Consulting Agreement
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DISCLOSURE SCHEDULE
SECTION
Section 1.3(a)(i) - Displays
Section 1.3(a)(iii) - Sign Location Leases
Section 1.3(a)(vi) - Unbuilt Signs
Section 1.3(c) - Excluded Assets
Section 2.3(a) - Interests in Other Entities
Section 2.4 - Exception to Consents and Approvals; No Violations
Provision
Section 2.5 - Financial Statements
Section 2.6 - Undisclosed Liabilities
Section 2.7 - Exception to Absence of Adverse and Other Changes
Provision
Section 2.8 - Title; Ownership and Related Matters
Section 2.10 - Leases
Section 2.12 - Intangible Property
Section 2.13 - Litigation
Section 2.15 - Certain Contracts and Arrangements
Section 2.16 - Insurance
Section 2.17 - Employee Benefit Plans
Section 2.18 - Taxes
Section 2.19 - Environmental Matters
Section 2.21 - Affiliate Transactions
Section 2.22 - Labor Agreements
Section 5.1 - Tax Certificates
Section 9 - Counties
BUYER DISCLOSURE SCHEDULE
SECTION
Section 3.2 - Exception to Consents and Approvals; No Violations
Provision
Section 5.2 - Allocation of Consideration
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of December 10, 1996, by and among
Xxxxxxx Outdoor Advertising Acquisition Co., L.P. (the "Seller"), a Delaware
limited partnership, Xxxxxxx Acquisition Corporation (the "Buyer"), a Delaware
corporation, and Universal Outdoor, Inc. (the "Parent"), an Illinois
corporation.
WHEREAS, pursuant to the terms and conditions of this Agreement, the
Seller desires to sell to the Buyer, and Buyer desires to purchase from the
Seller, the Assets of the Seller.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
AND ASSUMPTION OF CERTAIN LIABILITIES
Section 1 PAYMENT OF DEPOSIT. Concurrently with the execution and
delivery of this Agreement, the Buyer has paid a deposit to the Seller in the
amount of $250,000 (the "Deposit"). The Deposit shall be deposited by the
Seller into a segregated, interest-bearing account at the Merchants Bank of
Bangor, PA.
Section 2 APPLICATION OF DEPOSIT. In the event that the transactions
contemplated by this Agreement are consummated, at the Closing Date the Deposit
and the interest earned thereon through the Closing Date shall be applied to the
Cash Purchase Price payable by the Buyer at the Closing. In the event that this
Agreement is terminated pursuant to Article VII and the transactions
contemplated hereby are not consummated for any reason other than the failure of
the Seller to satisfy the conditions to Closing set forth in Article VI of this
Agreement, the Seller shall have the right to retain the Deposit and the
interest earned thereon. In the event that this Agree-
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ment is terminated pursuant to Article VII and the transactions contemplated
hereby are not consummated by reason of the failure of the Seller to satisfy
the conditions to Closing set forth in Article VI of this Agreement, the
Seller shall have the right to retain the Deposit and the interest earned
thereon. In the event that this Agreement is terminated pursuant to Article
VII and the transactions contemplated hereby are not consummated by reason of
the failure of the Seller to satisfy the conditions to Closing set forth in
Article VI of this Agreement, the Deposit and the interest earned thereon
shall be returned to the Buyer.
Section 3 PURCHASE AND SALE.
(a) Subject to the terms and conditions of this Agreement, at
the Closing, the Seller will sell, convey, assign, transfer and deliver or cause
to be sold, conveyed, assigned, transferred and delivered to the Buyer, and the
Buyer will purchase, acquire and accept from the Seller, all of the Seller's
rights, title and interests in and to the Assets, free and clear of all Liens,
other than Permitted Liens, including, without limitation, the following:
(i) all personal property owned and used in the
operation of the existing bulletin, junior poster, thirty-sheet
painted walls or any other outdoor advertising displays (the
"Displays") as such Displays are more fully described by location in
Section 1.3(a)(i) of the Disclosure Schedule, including all sign
structures and any fixtures and leasehold interests in sign
structures, and all lights, electrical hook ups, catwalks and other
appurtenant equipment related thereto;
(ii) all of the real property owned in fee (the "Owned
Real Property") and
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any rights in and to all facilities, easements, rights-of-way, licenses,
permits and other appurtenances thereunto belonging and all buildings,
facilities, structures, fixtures, leasehold and other improvements located
thereon;
(iii) all of the rights and incidents of ownership in
and to all leases, including Sign Location Leases for the locations
listed on Section 1.3(a)(iii) of the Disclosure Schedule, and all
leases and subleases for real property and any rights in and to all
easements, rights-of-way, licenses, permits and other appurtenances
thereon belonging and all buildings, facilities, structures, fixtures
and leasehold improvements located thereon and any prepaid ground
rents thereunder;
(iv) all rights and entitlement in and to the
advertising contracts (the "Advertising Contracts");
(v) all necessary and requisite consents, permits,
licenses, franchises, approvals or authorizations (including any
vegetation removal permits) of any governmental or regulatory agency
or authority (collectively, the "Permits");
(vi) any complete or partially complete Displays and
any Sign Location Leases, Advertising Contracts or Permits, as well as
any perfected or partial right, title, interest, or expectancy in any
location within the existing counties of operation of the Business on
the Closing Date where the Seller has planned, contemplated or worked
upon the possibility of outdoor advertising at any time prior
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to the date of this Agreement but which have not yet been constructed
(including those described in Section 1.3(a)(vi) of the Disclosure
Schedule);
(vii) all raw materials, work-in process, finished
goods, supplies and other inventories and fixtures and the leasehold
improvements, plant and equipment located on any of the Real
Properties;
(viii) all rights in, to and under all other
contracts, licenses, leases, commitments, purchase orders, entitlement
and other agreements, whether oral or written, except as specifically
excluded under an express statement herein or in any Section of the
Disclosure Schedule;
(ix) all customer lists of whatever nature;
(x) all trademarks, trade names, service marks,
service names, logos, assumed names, copyrights, patents,
registrations and applications for the foregoing, trade secrets and
confidential business information (including ideas, research and
development, know-how, technical data, designs, drawings and
specifications) and all licenses thereof, and all other intellectual
property rights (together, the "Intangible Property"), but excluding
the Intangible Property listed on Section 1.3(c) of the Disclosure
Schedule and thereby deemed an Excluded Asset;
(xi) to the extent related to the Business, the
Assets or the Assumed Liabilities: (a) all of the books and records of
the
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Seller including, but not limited to, all files, computer generated or
stored data, advertising and customer information, correspondence,
memoranda, telephone numbers and listings, personnel and payroll records
and the like; and (b) all books and records in connection with or to any
extent relating to Taxes (including without limitation accounting and tax
records and information pertaining to events occurring prior to or after
the Closing Date) (collectively, the "Books and Records");
(xii) all accounts and other receivables and prepaid
expenses existing as of the Closing;
(xiii) all other files, indices, market research
studies, surveys, reports, analyses and similar information;
(xiv) all other assets and property, including sign
panels, computer hardware and software, machinery, equipment,
furniture, office equipment, communications equipment, vehicles,
storage tanks, spare and replacement parts, fuel and other tangible
property, to the extent used in the Business;
(xv) all deposits from customers held ("Customer
Deposits");
(xvi) all right, title and interest to (including all
permits, licenses, leases, contracts, arrangements and understandings
with respect thereto) any cellular communications towers or similar
structures or any cellular communications equipment located on any
Display;
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(xvii) all rights under any non-compete agreements;
(xviii) all rights, claims, credits, causes of action,
condemnation proceedings or rights of set-off against third parties
and any compensation from condemnation proceedings (whether in cash,
permits or otherwise);
(xix) the goodwill in or arising from the Assets or
the Business; and
(xx) all other assets which would be reflected on a
balance sheet of the Business as of the Closing Date prepared in
accordance with GAAP.
(b) Such sale, assignment, transfer and delivery of the Assets
will be effected by delivery by the Seller to the Buyer of (i) the Xxxx of Sale,
(ii) the Lease Assignments, (iii) the Deeds, and (iv) the Other Instruments.
(c) Notwithstanding anything to the contrary contained in
paragraphs (a) or (b) of this Section 1.3, the following assets shall be
considered Excluded Assets: (i) the consideration delivered by the Buyer
pursuant to this Agreement and the Seller's rights under this Agreement and (ii)
the assets listed on Section 1.3(c) of the Disclosure Schedule.
(d) Anything contained in this Agreement to the contrary
notwithstanding, this Agreement shall not, unless and until, and to the extent
the Buyer notifies the Seller otherwise, constitute an agreement to assign any
right, title or interest in, to or under any contract, license, lease,
commitment, sales order, purchase order or other agreement or any claim or right
to
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any benefit arising thereunder or resulting therefrom if an attempted assignment
thereof, without the consent of a third party thereto, would constitute a breach
thereof, or in any way adversely affect the rights of the Buyer or the Seller
thereunder, and such consent is not obtained.
Section 4 CONSIDERATION. Subject to the terms and conditions of this
Agreement, the consideration for the Assets to be acquired shall be (i) the sum
of (A) $40,000,000 in cash (the "Cash Purchase Price") and (B) 70% of the AR
Amount (the "AR Closing Payment"), as adjusted pursuant to Section 1.8(b)
hereof, (the "Closing Payment"), as further adjusted pursuant to Section 1.9(c)
hereof (the Closing Payment as so finally adjusted, the "Purchase Price") and
(ii) assumption of liabilities consummated pursuant to the Undertaking.
Section 5 CLOSING. The Closing hereunder (the "Closing") shall take
place at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 919 Third
Avenue, New York, New York, at 10:00 a.m. on January 6, 1997 or, as soon
thereafter as practicable following the date on which each of the conditions to
Closing set forth in Article VI hereof have been satisfied or waived. The date
of the Closing is referred to herein as the Closing Date.
Section 6 DELIVERIES BY THE SELLER. At the Closing, the Seller will
deliver or cause to be delivered to the Buyer the following:
(a) the Deeds;
(b) the Lease Assignments;
(c) a duly executed Xxxx of Sale;
(d) a duly executed Undertaking;
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(e) the Other Instruments, if any;
(f) the Books and Records;
(g) a duly executed Consulting Agreement;
(h) the certificate of the Seller signed by Xxxxx X. XxXxxxxx,
president of the General Partner of the Seller referred to in Section 6.3
hereof;
(i) a certificate of the General Partner of the Seller
certifying that appropriate approvals have been obtained from the Partners of
the Seller to authorize the execution and delivery of this Agreement and the
Related Agreements and the transactions contemplated hereby;
(j) an opinion of counsel to the Seller, dated as of the Closing
Date, in form and substance reasonably satisfactory to the Buyer;
(k) the Final Proration Schedule;
(l) the Estimated AR Schedule; and
(m) all other documents, instruments and writings required to be
delivered by the Seller at or prior to the Closing pursuant to this Agreement or
otherwise required in connection herewith. All such documents, instruments and
writings to be delivered by the Seller at the Closing shall be in form and
substance reasonably satisfactory to the Buyer.
Section 7 DELIVERIES BY THE PARENT AND THE BUYER AND RELEASE OF THE
DEPOSIT.
(a) At the Closing, the Buyer will deliver or cause to be
delivered to the Seller the following:
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(i) the Closing Payment, minus the sum of (x) the
Deposit and (y) the interest earned on the Deposit through the Closing
Date, delivered by wire transfer of immediately available funds to
such bank account as shall be specified by the Seller prior to the
Closing;
(ii) a duly executed Undertaking;
(iii) the Other Instruments, if any;
(iv) a duly executed Consulting Agreement;
(v) the certificate of the Parent and the Buyer signed
by an officer of the Parent and the Buyer referred to in Section 6.2
hereof;
(vi) an opinion of counsel to the Buyer dated as of
the Closing Date, in form and substance reasonably satisfactory to the
Seller;
(vii) certificates of the Secretaries of Parent and
Buyer as to the authorization of the execution and delivery of this
Agreement and the Related Agreements and the transactions contemplated
hereby; and
(viii) all other documents, instruments and writings
required to be delivered by the Parent or the Buyer at or prior to the
Closing pursuant to this Agreement or otherwise required in connection
herewith. All such documents, instruments and writings to be de-
9
livered by Parent or Buyer shall be in form and substance reasonably
satisfactory to Seller.
(b) At the Closing, the Deposit and the interest earned thereon
through the Closing Date will be released to the Seller in accordance with the
provisions of Section 1.2 hereof.
Section 8 LEASE PAYMENT RELATED ADJUSTMENTS TO CASH PURCHASE PRICE.
(a) Five days prior to the Closing Date, the Seller shall
prepare and deliver to the Buyer a schedule (the "Proration Schedule") showing
the (i) pre-paid lease expenses plus $22,500, (ii) pre-paid property Taxes,
(iii) deposits in respect of Leases, and (iv) pre-payment of fees on new Permits
which are due on January 1, 1997, in each case, of the Seller as of the Closing
Date (together, the "Prepaid Expenses") and the (x) liability for accrued
percentage lease payments, (y) the Notes and Mortgages referred to in clause (c)
of the definition of Assumed Liabilities set forth in Article IX hereof and (z)
the loans payable set forth as item (i)(b) (except for subsections (i), (iv),
(vi), (viii), (x), (xi), (xiv) and (xv)) of Section 2.15 of the Disclosure
Schedule) and other accrued liabilities of the Seller as of the Closing Date
that have not been noted as Assumed Liabilities in the Disclosure Schedule
hereto and that are reasonably agreed to by the parties hereto prior to the
Closing (together, the "Accruals"). The Buyer shall have an opportunity to
participate in the preparation of the Proration Schedule and to comment on and
review such schedule. The parties hereto shall use their best efforts to
resolve any disputes with respect to the Proration Schedule prior to the Closing
Date. On the Closing Date, the Seller shall prepare and deliver to the Buyer an
updated Proration Schedule (the "Final Proration Schedule") revised to the
extent necessary such that the information set forth therein shall be true,
complete and
10
accurate in all respects as of the Closing Date. The Proration Schedule and the
Final Proration Schedule shall be prepared in all material respects in
accordance with GAAP consistent with the Balance Sheet and based upon the books
and records of the Seller.
(b) For purposes of calculating the Closing Payment, the Cash
Purchase Price shall be (i) increased to the extent the Prepaid Expenses exceed
the Accruals, in each case as set forth on the Final Proration Schedule or (ii)
decreased to the extent the Accruals exceed the Prepaid Expenses, in each case
as set forth on the Final Proration Schedule.
Section 9 AR AMOUNT AND ADJUSTMENTS TO PURCHASE PRICE.
(a) Five days prior to the Closing Date, the Seller shall
prepare and deliver to the Buyer a schedule showing an estimate of the book
value of the accounts receivables and of the reserve for doubtful accounts of
the Seller as of the Closing Date (the "AR Schedule"). The parties hereto shall
use their best efforts to resolve any disputes with respect to the AR Schedule
prior to the Closing Date. On the Closing Date, the Seller shall prepare and
deliver to the Buyer an updated AR Schedule (the net amount of such accounts
receivables net of such reserves reflected on such schedule being herein
referred to as the "AR Amount", and the schedule being herein referred to as the
"Estimated AR Schedule"), on the basis of the most current information available
such that the information set forth therein shall be true, complete and accurate
in all respects as of the date of such information which shall in no event be
more than two business days prior to the Closing Date. Within seven days after
the Closing, Seller shall deliver to Buyer a final AR Schedule showing all
accounts receivables of the Seller as of the Closing Date (the "Final AR
Schedule")and such schedule shall be true, complete and
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correct in all respects. The AR Schedule, the Estimated AR Schedule and the
Final AR Schedule shall be prepared in all material respects in accordance with
GAAP consistent with the Balance Sheet and based upon the books and records of
the Seller. The Buyer shall have an opportunity to participate in the
preparation of the AR Schedule, the Estimated AR Schedule and the Final AR
Schedule and to comment on and review such schedules.
(b) Within 75 days following the Closing Date, the Buyer shall
prepare and deliver to the Seller a schedule setting forth in reasonable detail
the accounts receivables identified on the Final AR Schedule which have been
paid to the Buyer within the period from the Closing Date through and until 60
days following the Closing Date (the amounts so paid to the Buyer being herein
referred to as the "AR Collections"). The Buyer shall deliver, at the same time
it delivers the schedule of AR Collections, an assignment to Seller of all
accounts receivable identified on the Final AR Schedule which are not reflected
as having been collected in the schedule of AR Collections. The Seller shall
have 5 Business days following the delivery of such schedule during which to
notify the Buyer of any dispute of any item contained in the schedule, and the
parties hereto shall use their best efforts to resolve any disputes with respect
to the AR Collections following the delivery by the Buyer to the Seller of a
notice of a dispute. The AR Collections, as modified by the Buyer and Seller,
shall be the Final AR Collections.
(c) To the extent that the aggregate amount of the Final AR
Collections exceeds the AR Closing Payment, the Buyer shall pay the difference
to the Seller as soon as practicable after the determination thereof by wire
transfer of immediately available funds to an account designated by the Seller.
To the extent that the AR Closing Payment exceeds the Final AR Collections, the
Seller shall pay the difference to the Buyer as soon as
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practicable after the determination thereof by wire transfer of immediately
available funds to an account designated by the Buyer.
(d) The Parent's and the Buyer's rights to indemnification
pursuant to Article VIII hereof shall not be deemed to limit, supersede or
otherwise affect the Buyer's rights to a payment pursuant to this Section 1.9.
Section 10 USE OF NAME. Seller hereby grants to Buyer and Parent a
non-exclusive royalty-free license to use the names and marks set forth on
Section 1.11 of the Disclosure Schedule (collectively, the "Licensed Marks") in
connection with the operation of the Business following the Closing Date, each
for an initial term (the "Initial Term") of six months following the Closing
Date in a manner consistent with the use of such Licensed Marks by the Seller in
connection with the Business prior to the Closing Date, such grant of rights to
Buyer and Parent being subject to Buyer's and Parent's obligation not to use the
Licensed Marks in any manner which would materially degrade the quality or value
of such Licensed Marks. Following the Initial Term, such license shall continue
thereafter, on the same terms and conditions as provided above, until such time
as Seller shall have notified Buyer and Parent of its intent to terminate the
license; PROVIDED, HOWEVER, that such notification shall be in writing and shall
be given at least sixty days prior to the intended date of termination.
Section 11 USE OF CORPORATE HEADQUARTERS. As additional
consideration for the Purchase Price, Seller hereby grants to Buyer and Parent
the use and access, to the extent reasonably required by Buyer and Parent in the
operation of the Business following the Closing Date, of Seller's corporate
headquarters located at 000 X Xxxxx Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxx for a
period of 60 days following the Closing Date.
13
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Buyer and the Parent on the
date hereof and as of the Closing Date as follows:
Section 1 ORGANIZATION. The Seller is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority to own, lease and operate the
properties owned, leased and operated by it and to carry on the operations of
the Business as now being conducted by it. The Seller is duly qualified or
licensed and in good standing to do business in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification necessary. The Seller has previously made
available to the Buyer complete and correct copies of its partnership agreement
(the "Partnership Agreement") and certificate of limited partnership; PROVIDED,
HOWEVER, THAT, certain provisions of the Partnership Agreement relating to
economic matters applicable to the Partners have been redacted.
Section 2 AUTHORIZATION. The Seller has the power and authority to
execute and deliver this Agreement and the Related Agreements and to consummate
the transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and the Related Agreements and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary action on the part of the Seller, and no other
proceedings on the part of the Seller are necessary to authorize the execution,
delivery and performance of this Agreement and the Related Agreements or the
consummation of the transactions contemplated hereby and thereby. This
Agreement has been duly executed and delivered by
14
the Seller and constitutes, and when executed and delivered, each of the Related
Agreements to be executed and delivered by the Seller pursuant hereto will
constitute, a valid and binding obligation of the Seller, enforceable against
the Seller in accordance with its terms.
Section 3 INTERESTS IN OTHER ENTITIES; FORMATION.
(a) Except as set forth in Section 2.3(a) of the Disclosure
Schedule, the Seller, directly or indirectly, (i) has no interest in the
outstanding stock of any corporation or in any partnership, joint venture,
limited liability company or other entity or (ii) is not party to nor is it
bound by any agreement, understanding, contract or commitment relating to an
interest in any such entity or the Seller's investment therein or which would
require the Seller to make any investment therein. Except for the Assets and
the Excluded Assets, the Seller holds no other assets used in connection with
the Business.
(b) (i) The Seller was formed on December 29, 1995, (the
"Formation Date"). Pursuant to an Asset Purchase Agreement, between Xxxxxxx
Outdoor Advertising Inc. ("MOA"), Pocono and the Seller, dated December 29,
1995, the Seller acquired (the "Purchase") all of the assets and liabilities of
MOA (the "Purchase Agreement"). The Seller has heretofore delivered to the
Buyer and the Parent accurate and complete copies of the Purchase Agreement.
(ii) The execution and delivery of the Purchase Agreement
and the consummation of the transactions contemplated thereby (including,
without limitation, the Purchase) were duly and validly authorized by all
necessary action on the part of the Seller. Pursuant to the Purchase Agreement,
the Seller received all of the assets and liabilities of MOA primarily related
to the
15
Business. The Purchase Agreement was duly and validly executed on behalf of the
Seller and constituted the valid and binding agreement of the Seller,
enforceable against the Seller in accordance with its terms.
(c) Prior to the Purchase, the Seller had conducted no business
and incurred no liabilities, other than in connection with its formation and all
such liabilities have been paid or discharged.
Section 4 CONSENTS AND APPROVALS; NO VIOLATIONS. Except for
applicable requirements of the HSR Act, and as set forth in Section 2.4 of the
Disclosure Schedule, neither the execution and delivery of this Agreement or the
Related Agreements nor the consummation by the Seller of the transactions
contemplated hereby and thereby will (a) conflict with or result in any breach
of any provision of the Partnership Agreement or certificate of limited
partnership of the Seller; (b) require any filing with, or the obtaining of any
permit, license, action, waiver, authorization, consent, filing, registration or
approval of, any governmental or regulatory authority, PROVIDED, HOWEVER, THAT,
no representation in this clause (b) is made by reason of facts pertaining
specifically to the Parent or the Buyer; (c) result in a breach of, or
constitute a default (whether by notice or lapse of time or by both) under, or
violate or conflict with or give rise to any right of amendment, termination,
cancellation or acceleration, or to a loss of any benefit to which the Seller is
entitled, or require any consent to assign, under any of the terms, conditions
or provisions of, any note, mortgage, other evidence of indebtedness, guarantee,
license, agreement, lease or other contract, instrument or obligation to which
the Seller is party or to which the Seller or any of the Assets are bound (or
result in the imposition of any Lien upon any of the Assets); or (d) violate or
conflict with any order, injunction, decree, statute, rule or regulation
applicable to the Seller or to the Assets.
16
Section 5 FINANCIAL STATEMENTS. Section 2.5 of the Disclosure
Schedule contains true and accurate copies (collectively, the "Financial
Statements") of (i) audited balance sheets (including notes thereto) for the
years ended December 31, 1995, December 31, 1994 and December 31, 1993 and
related statements of earnings for the periods then ended for the Seller or its
predecessors, MOA and Pocono Outdoor Advertising Company Inc. (n/k/a "PA
Outdoor, Inc.") ("Pocono," and together with MOA, its "Predecessors"), and (ii)
an unaudited balance sheet and statement of earnings as of September 30, 1996 of
the Seller (the "Balance Sheet"). The Financial Statements have been prepared
in accordance with GAAP, consistently applied (other than for statements of cash
flows and footnotes otherwise required by GAAP) and have been prepared on a
basis consistent with the financial and other books and records of the Seller.
The Financial Statements fairly present the financial position and the results
of operations of such entities as of the respective dates and periods thereof,
subject in the case of interim financial statements to normal year-end
adjustments. The Financial Statements have not been adjusted to reflect the
Pocono Sale, which occurred after the date of issuance of the Financial
Statements.
Section 6 ABSENCE OF UNDISCLOSED LIABILITIES. Except for liabilities
and obligations (a) incurred since September 30, 1996 in the ordinary course of
business and consistent with past practice, (b) disclosed in Section 2.6 of the
Disclosure Schedule or specifically identified as an undisclosed liability or
obligation on any other Section of the Disclosure Schedule, or (c) provided for
in the Balance Sheet, the Seller has no liabilities or obligations of any kind
whatsoever (whether direct, indirect, accrued or contingent) and there is no
existing condition or situation which could reasonably be expected to result in
any such liabilities or obligations.
17
Section 7 ABSENCE OF ADVERSE AND OTHER CHANGES. Except as set forth
in Section 2.7 of the Disclosure Schedule or as otherwise contemplated by this
Agreement, since September 30, 1996, (a) there has not been any event or
occurrence which has resulted in or could reasonably be expected to result in,
an adverse change in the Business or in the business, assets, results of
operations, prospects or condition (financial or otherwise) of the Seller, taken
as a whole, (b) the Business and all other business operations of the Seller
have been conducted in the ordinary course consistent with past practices, and
(c) there has not been (i) any increase in the compensation of or other benefits
payable to any of the officers or employees of the Seller, except such increases
as are granted in the ordinary course of business in accordance with its
customary practices (which shall include normal periodic performance reviews and
related compensation and benefit increases), (ii) any incurrence, assumption or
guarantee by the Seller in connection with the Business of any indebtedness for
borrowed money; (iii) any creation or other incurrence of any Lien (other than a
Permitted Lien) on any Asset; (iv) any transaction or commitment made, or any
contract or agreement entered into, by the Seller in connection with the
Business (including with respect to the acquisition or disposition of any
assets) or any relinquishment by the Seller in connection with the Business of
any contract or other right, in either case, other than in the ordinary course
of the Seller's business and for fair consideration; (v) any change in any
method of accounting or accounting practice by the Seller; (vi) any (A)
employment, deferred compensation, severance, retirement or other similar
agreement entered into with any employee of the Seller (or any amendment to any
such existing agreement), (B) grant of any severance or termination pay to any
such employee or (C) any loan or advance to such employee; (vii) any change in
the methods of operation of the Business other than in the ordinary course of
the Seller's business consistent with past practice; (viii)
18
any loss or damage to the properties of the Business or the Assets other than
losses or damages which can be reasonably repaired or replaced; (ix) any capital
expenditure (or series of related capital expenditures) in excess of $10,000
individually or $100,000 in the aggregate by the Seller in connection with the
Business; (x) any acceleration, termination, modification, or cancellation of
any contract, agreement, lease, license or understanding by the Seller in
connection with the Business, outside of the ordinary course of the Seller's
business consistent with past practice; (xi) any capital investment in, or any
loan to, any other Person by the Seller in connection with the Business; (xii)
any delay or postponement of the payment of any accounts payable or other
liabilities or obligations by the Seller in connection with the Business other
than in the ordinary course of the Seller's business consistent with past
practice, but in no event to or in connection with an Affiliate of the Seller;
(xiii) any cancellation, waiver or release of any right or claim by the Seller
in connection with the Business, other than in the ordinary course consistent
with past practice; (xiv) any grant or any license or sublicense of any rights
under or with respect to any Intangible Property; (xv) any transaction with,
payment to or repurchase of any interest in (or any amounts in respect of
interests in), any partner or Affiliate of the Seller (other than one involving
Excluded Assets); (xvi) any settlement or payment of any amount to any other
Person with respect to any liability or obligation, outside the ordinary course
of the Seller's business; (xvii) any dividend, distribution or allocation to any
Partner of the Seller in respect of such Partner's interest in the Seller (other
than one involving Excluded Assets); or (xviii) any agreement or any commitment
to take any of the actions described in this Section 2.7.
19
Section 8 TITLE, OWNERSHIP AND RELATED MATTERS.
(a) Section 2.8(a) of the Disclosure Schedule sets forth a list
and briefly describes (and specifies the owner of) all Real Property owned (and
any options to purchase) by the Seller in connection with the Business, and any
title insurance policies and surveys with respect thereto, and any Liens
thereon.
(b) Except as set forth in Section 2.8(b) of the Disclosure
Schedule, as of the Closing, the Seller will have, and will deliver to the
Buyer, good and marketable title to all Assets other than the leased Real
Property, and in the case of any leased Real Property, has, and will deliver a
valid fee simple or leasehold interest in, all of the leased Real Property, in
each case free and clear of all Liens, except for Permitted Liens.
(c) There are no material defects in the physical condition of
buildings, structures, and other improvements included within the Real Property
(the "Improvements") that would interfere with the use or occupancy of the
Improvements in the ordinary conduct of the Business. The Improvements have
access to all utility services that are necessary for and currently used in the
conduct of the Business. Except as set forth in Section 2.10 of the Disclosure
Schedule, there are no leases, subleases, licenses, concessions or other
agreements, written or oral, granting to any party or parties the right of use
of occupancy of any portion of any Real Property and Seller has not granted any
outstanding options or rights of first refusal to purchase any Real Property or
interest therein owned by the Seller. Except as set forth on Section 2.8(c) of
the Disclosure Schedule, no condemnation or eminent domain proceeding, or sale
or disposition in lieu thereof, against any of the Real Properties is pending
or, to the knowledge of Sell-
20
er, threatened or any other matter affecting adversely the current use,
occupancy or value thereof. Except as set forth in Section 2.8(c) of the
Disclosure Schedule, the Seller has not received any written notice of any
violation of any law, regulation or ordinance relating to (i) the physical
condition of the Improvements or (ii) the current use of the Real Property.
Each parcel of Real Property abuts on or has vehicular access (without violating
the rights of third parties) to a public road. Notwithstanding anything to the
contrary, all references in this Section 2.8 to leased office space are made to
the knowledge of Seller.
Section 9 PROPERTIES AND ASSETS NECESSARY FOR CONDUCT OF BUSINESS.
The Assets to be transferred to the Buyer pursuant to this Agreement are all the
properties and assets (i) owned by the Seller (except for Excluded Assets), and
(ii) necessary to permit the Business to be conducted as currently conducted.
Section 10 LEASES. Section 2.10 of the Disclosure Schedule sets
forth a true, complete and correct list, as of the date hereof, of all Leases
(including the Sign Location Leases), the name of the lessor or sublessor, the
primary lease term and any Liens thereon. True and complete copies of the
Leases and all written riders, addenda, amendments and any other agreements in
the Seller's possession relating thereto have been made available to the Buyer.
Except as set forth in Section 2.10 of the Disclosure Schedule, the Seller has a
valid leasehold interest in such Lease free and clear of all Liens, other than
Permitted Liens. Except as set forth in Section 2.10 of the Disclosure
Schedule, no consent is required of any landlord or other third party to any
Lease to consummate the transactions contemplated hereby and upon consummation
of the transactions contemplated hereby, each Lease will continue to entitle the
Buyer to the use and possession of the real property specified in such Leases
and for the purposes for which such real
21
property is now being used by the Seller. The Seller is not in default beyond
any applicable notice or grace period and has not received written notice of
default still outstanding on the date hereof under any such Lease, and to the
Seller's knowledge, there exists no uncured default thereunder by any third
party. With respect to any Leases whereon there exists a Display, unless
otherwise set forth in Section 2.10 of the Disclosure Schedule, said Display is
owned by the Seller and is conveyed in accordance with this Agreement. Except
as set forth on Section 2.10 of the Disclosure Schedule and except as would not
individually or in the aggregate have a Material Adverse Effect, the Seller is
not aware of any dispute, oral modification or forebearance program regarding
any Lease and has not received any notice of any lessor's intention to terminate
any Lease (either at present or in the future) prior to the expiration of its
term.
Section 11 DISPLAYS. Except as set forth in Section 2.11 of the
Disclosure Schedule, the Displays and all related equipment are in good working
order and repair, and, except for Displays with respect to which variances have
been granted, comply with all applicable building codes, zoning or other
promulgations of entities having jurisdiction over the construction and
maintenance of the Displays and are fit for intended purpose in accordance with
commercially reasonable industry practices. There are a total of approximately
1,000 advertising faces being purchased by the Buyer.
Section 12 INTANGIBLE PROPERTY. Section 2.12 of the Disclosure
Schedule hereto contains a complete and correct list of the Intangible Property
used by the Seller in connection with the Business, and each license or other
agreement relating thereto. Each of the Intangible Properties is owned or
licensed by the Seller and is owned or licensed free and clear of all Liens.
There has been no claim asserted in writing, which is still
22
pending, or otherwise threatened, that any of the foregoing is invalid or
conflicts with the asserted rights of others, or, to the knowledge of the
Seller, otherwise challenging the Seller's ownership or use thereof. The
Seller's rights in and to the Intangible Property other than the Intangible
Property listed on Section 1.3(c) of the Disclosure Schedule used in and
material to the conduct of the Business as currently conducted, to the extent
protectible under applicable law, have not been invalidated or committed to the
public domain by any action of the Seller. The Seller possesses all Intangible
Property necessary for the conduct of the Business as currently conducted. To
the knowledge of the Seller, the use by the Seller of such rights does not
violate any proprietary right of any third party.
Section 13 LITIGATION. Except as set forth in Section 2.13 of the
Disclosure Schedule, there is no claim, action or proceeding pending or, to the
knowledge of the Seller, threatened against the Seller or any of its operations
by or before any court, governmental or regulatory authority.
Section 14 COMPLIANCE WITH APPLICABLE LAW; PERMITS.
(a) Except as disclosed in Section 2.8(a) of the Disclosure
Schedule, the Seller is not in violation of, nor has been threatened to be
charged with or given notice of any violation of, or to the Seller's knowledge,
is under investigation with respect to, any applicable laws, ordinances, rules
and regulations of any federal, state, local or foreign governmental authority.
(b) Except as set forth in Section 2.8(c) of the Disclosure
Schedule, the Seller has obtained all necessary Permits (including, without
limitation, vegetation removal permits) and other federal, state and local
authorizations necessary to allow the continued presence
23
of the Displays where located; all applicable fees for such Permits have been
paid; all such Permits are valid and in effect and are fully transferable; and
neither the execution nor the consummation of this Agreement and the
transactions contemplated hereby will terminate any Permit.
Section 15 CERTAIN CONTRACTS AND ARRANGEMENTS. Section 2.15 of the
Disclosure Schedule sets forth as of the date hereof and, other than with
respect to clauses (i), (ii), (iii), and (iv) hereof, as of the Closing Date,
the following agreements to which the Seller is a party or in connection with
the Business, (i) any agreements relating to indebtedness for borrowed money
(whether incurred, assumed, guaranteed or secured by any asset), (ii) all
Advertising Contracts, (iii) any agreement (or group of related agreements) for
the lease of personal property to or from any Person providing for lease
payments in excess of $10,000 per annum, (iv) any agreement (or group of related
agreements) for the purchase or sale of raw materials, commodities, supplies,
products, or other personal property, or for the furnishing or receipt of
services, the performance of which will extend over a period of more than one
year, result in a material loss to the Seller, or involve consideration in
excess of $25,000, (v) any agreement concerning a partnership or joint venture
other than those which will not bind the Parent or the Buyer or any of the
Assets or the Business following the Closing Date, (vi) any agreement concerning
confidentiality other than those which will not bind the Parent or the Buyer or
any of the Assets or the Business following the Closing Date, (vii) any (A)
profit sharing, partnership interest option, partnership interest purchase or
partnership interest appreciation right, other than those which will not bind
the Parent or the Buyer or any of the Assets or the Business or for which any of
them will have any liability, obligation or responsibility following the Closing
Date, or (B) deferred compensation, severance, or other material plan or
arrangement
24
for the benefit of the current or former employees of the Seller, (viii) any
collective bargaining agreement, (ix) any agreement for the employment of any
individual on a full-time, part-time, consulting, or other basis providing
annual compensation in excess of $1,000 or providing severance benefits, (x) any
agreement under which it has advanced or loaned any amount to any of the
employees or Affiliates of the Seller, (xi) any agreement providing for
indemnification of or by the Seller, (xii) any non-compete agreement applicable
to the Seller, (xiii) any agreement by the Seller providing products or services
to any Person for consideration other than cash or receiving consideration from
any Person in products or services in lieu of cash, and (xiv) any other
agreement (or group of related agreements) the performance of which involves
consideration in excess of $10,000 (such contracts and agreements, together with
the Leases, the Sign Location Lease and the Insurance Policies, the "Material
Agreements"). The Seller has delivered to the Buyer a correct and complete copy
of each written Material Agreement and a written summary setting forth the terms
and conditions of each oral Material Agreement. Except as set forth in Section
2.10 (as to the Leases) or in Section 2.15 of the Disclosure Schedule, all
Material Agreements that are Assumed Liabilities are valid, binding and
enforceable in accordance with their terms and will continue to be so on
identical terms immediately following the consummation of the transactions
contemplated by this Agreement and the Related Agreements, and neither the
Seller nor, to the knowledge of the Seller, any other party thereto, is in
default under any of such agreements, nor, to the knowledge of the Seller, has
any event or circumstance occurred that, with notice or lapse of time or both,
would constitute any event of default by the Seller or any other party thereto.
None of the Parent, the Buyer, the Assets or the Business will have any
liability under the CIBC Credit Agreement. Section 2.15 of the Disclosure
Schedule will be updated as of the Closing Date with respect to clauses (i),
(ii), (iii) and (iv) of the first
25
sentence hereof, and each agreement included thereon shall be deemed a Material
Agreement as of the Closing Date for purposes hereof.
Section 16 INSURANCE. Section 2.16 of the Disclosure Schedule sets
forth a complete and accurate list of all policies and fidelity bonds (including
their respective expiration dates) of fire, liability, product liability,
worker's compensation, and other forms of insurance presently in effect with
respect to the Business and its operations (the "Insurance Policies"). There is
no claim pending under any of such policies or bonds as to which coverage has
been questioned, denied or disputed by the underwriters of such policies or
bonds or in respect of which such underwriters have reserved their rights. All
premiums payable under all such policies and bonds have been timely paid and the
Seller has otherwise complied fully with the terms and conditions of all such
policies and bonds. Such policies of insurance and bonds (or other policies and
bonds providing substantially similar insurance coverage) have been in effect
since January 1, 1996 and remain in full force and effect. Such policies and
bonds are of the type and in amounts customarily carried by Persons conducting
businesses similar to the Business.
Section 17 EMPLOYEE BENEFIT PLANS.
(a) Section 2.17(a) of the Disclosure Schedule contains a true
and complete list of each bonus, deferred compensation, incentive compensation,
partnership interest purchase, partnership interest option, severance or
termination pay, hospitalization or other medical, life or other insurance,
supplemental unemployment benefits, profit-sharing, pension, or retirement plan,
program, agreement or arrangement, each employment, termination or severance
contract and each other employee benefit plan, program, agreement or
arrangement, sponsored, maintained or contributed to or required to be
26
contributed to by the Seller or any ERISA Affiliate for the benefit of any
employee or terminated employee of the Seller or any ERISA Affiliate, whether
formal or informal and whether legally binding or not (the "Plans"). Neither
the Seller nor any ERISA Affiliate has any formal plan or commitment, whether
legally binding or not, to create any additional Plan or modify or change any
existing Plan that would affect any employee or terminated employee of the
Seller or any ERISA Affiliate.
(b) With respect to each Plan, the Seller has heretofore
delivered to the Buyer true and complete copies of each of the following
documents to the extent applicable: (i) a copy thereof (including all
amendments thereto); (ii) a copy of the most recent annual report, if required
under ERISA; (iii) a copy of the most recent actuarial report, if required under
ERISA; (iv) a copy of the most recent report prepared with respect thereto in
accordance with Statement of Financial Accounting Standards No. 87, Employer's
Accounting for Pensions; (v) a copy of the most recent Summary Plan Description;
(vi) if the Plan is funded through a trust or any third party funding vehicle, a
copy of the trust or other funding agreement (including all amendments thereto);
and (vii) the most recent determination letter received from the Internal
Revenue Service with respect to each Plan that is intended to be qualified under
section 401 of the Code.
(c) To the knowledge of the Seller, other than the terminations
contemplated hereby, there has been no termination or partial termination,
withdrawal or partial withdrawal with respect to any of the Plans that the
Seller maintains or contributes to or has maintained or contributed to. Neither
the Seller nor any ERISA Affiliate has incurred any material liability under
Title IV of ERISA with respect to any of the Plans, other than liability for
premiums due the Pension Benefit Guaranty Corporation, which payments have been
made or will be
27
made when due. With respect to each Plan that is a multiemployer plan, (i)
other than the terminations contemplated hereby, neither the Seller nor any
ERISA Affiliate has made or suffered a complete or partial withdrawal, as such
terms are respectively defined in sections 4203 and 4205 of ERISA, (ii) neither
the Seller nor any ERISA Affiliate has any contingent liability under section
4204 of ERISA, and (iii) the aggregate withdrawal liability of the Seller and
the ERISA Affiliates, computed as if a complete withdrawal by the Seller and the
ERISA Affiliates had occurred under each such Plan on the date hereof, would not
be material. To the extent operated or administered by Seller, each of the
Plans has been operated and administered in all material respects in accordance
with applicable laws, including but not limited to ERISA and the Code.
(d) Except as set forth in Section 2.17(d) of the Disclosure
Schedule, no amounts payable under the Plans will fail to be deductible for
federal income tax purposes by virtue of section 280G of the Code. Except as
set forth in Section 2.17(d) of the Disclosure Schedule, the consummation of the
transactions contemplated by this Agreement will not, either alone or in
combination with a second event, (i) entitle any current or former employee or
officer of the Seller to severance pay, unemployment compensation or any other
payment or (ii) accelerate the time of payment or vesting, or increase the
amount of compensation due any such employee or officer. There are no pending,
threatened or anticipated claims by or on behalf of any Plan, by any employee or
beneficiary covered under any such Plan, or otherwise involving any such Plan
(other than routine claims for benefits).
Section 18 TAXES.
(a) The Seller and each Controlled Affiliate (i) have each
timely filed or will timely file with
28
the appropriate Tax Authority all Tax Returns required to be filed by each such
person on or prior to the Closing Date (including extensions of time to file),
and all such Tax Returns are true, correct and complete in all material
respects, (ii) have each timely paid in full (or adequately provided for on the
Balance Sheet) all Taxes that are due or claimed to be due from such person by
any Tax Authority with respect to periods (or any portion thereof) ending on or
before the Closing Date, and (iii) are not required to file any state Tax
Returns other than as set forth in Section 2.18 of the Disclosure Schedule.
(b) No Tax in an amount in excess of $10,000 is required to be
withheld by the Buyer from the Purchase Price as a result of the transfers
contemplated by this Agreement or the Related Agreements. The Buyer will not be
liable for any Tax of any of the Seller or its Partners as a result of the
transactions contemplated hereby.
(c) No deficiency for any Taxes has been proposed, asserted or
assessed against the Seller or any Controlled Affiliate which has not been
resolved and paid in full; neither the Seller nor any Controlled Affiliate has
received any notice of deficiency or assessment from any Tax Authority with
respect to liability for Taxes of a Partner of the Seller relating to income of
the Seller or relating to a liability of the Seller which has not been resolved
and paid in full; no Partner of the Seller, officer, or employee responsible for
Tax matters of the Seller, or any Controlled Affiliate expects any Tax Authority
to propose, assert, or assess any additional Taxes for any period for which Tax
Returns have been filed; neither the Seller, any Controlled Affiliate nor any
Partner of the Seller has signed or filed any written requests, agreements,
consents or waivers to extend any statutory period of limitations with respect
to Taxes of the Seller or any Controlled Affiliates.
29
(d) No audit or other proceeding by any Tax Authority is
presently pending with respect to any Taxes or Tax Return of the Seller or any
Controlled Affiliate. There are no liens, security interests or other
encumbrances for Taxes upon any of the assets of the Seller or any Controlled
Affiliate other than liens, security interests or other encumbrances for Taxes
not yet due or payable. From the date of its formation, the Seller has at all
times been classified as a partnership for all Tax purposes; the Seller has
filed all forms and taken all actions necessary to maintain such status (and to
so qualify and maintain such status in Delaware and any other state where such
qualification is necessary). Neither the Seller nor any Partner of the Seller
has taken or will have taken or permitted any action, or omitted to take any
action, which action or omission could result in the loss of the Seller's
classification as a partnership for any period on or before the Closing Date.
The Seller and any Controlled Affiliates have complied (and until the Closing
will comply) in all material respects with all applicable laws, rules and
regulations relating to the payment and withholding of Taxes (including, without
limitation, withholding of Taxes pursuant to Sections 1441 and 1442 of the Code
or similar provisions under any foreign laws) and have, within the time and in
the manner prescribed by law, withheld from employee wages and paid over to the
proper governmental authorities all amounts required to be so withheld and paid
over under all applicable law.
(e) Neither the Seller nor any Controlled Affiliate is a party
to, is bound by, nor has any obligation under any Tax sharing, allocation,
indemnity, or similar contract or arrangement, or is liable for the Taxes of any
other person. No power of attorney has been granted by the Seller or any
Controlled Affiliate with respect to any matter relating to Taxes which is
currently in force. No assumed liability or indebtedness of the Seller to be
assumed by Buyer is an obligation to make a
30
payment that would not be deductible under Section 280G of the Code.
Section 19 ENVIRONMENTAL MATTERS. Except as set forth in Section 2.19
of the Disclosure Schedule: (a) (i) the Seller is in substantial compliance
with all Environmental Permits, and with all applicable Environmental Laws and
no notice, notification, demand, request for information, citation, summons,
complaint or order has been issued, no complaint has been filed, no penalty has
been assessed and no investigation or review (collectively, "Environmental
Notices") is pending, or to the Seller's knowledge, threatened by any
governmental entity or other Person with respect to any (A) alleged violation by
the Seller of any Environmental Law or liability thereunder or (B) alleged
failure by the Seller to have any Environmental Permit; (ii) the Seller has not
received any written request for information, nor has the Seller been notified
in writing or, to the actual knowledge of the Seller, orally, that it is a
potentially responsible party, under the federal Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, the New Jersey
Spill Compensation and Control Act, as amended, or any other similar federal or
state law with respect to any on-site or off-site location; (iii) there have
been no discharges, emissions or releases of Hazardous Substances which are or
were reportable under Environmental Laws by the Seller; and (iv) the Seller has
no liability (and has not handled or disposed of any substance, arranged for the
disposal of any substance, exposed any employee or other individual to any
substance or condition, or owned or operated any property in any manner that
could form the basis for any present or future action, suit, proceeding,
investigation, charge, complaint, claim or demand against the Seller, which
could reasonably be expected to result in any liability) for any damage to any
site, location, or body of water, for any illness or personal injury to any
employee or other individual, or for any reason under any
31
Environmental Law and (v) the execution of this Agreement will not trigger any
obligations on the part of either party pursuant to the New Jersey Industrial
Site Recovery Act.
(b) There has been no environmental investigation, study, audit,
test, review or other analysis (including all Phase I environmental assessments)
conducted of which the Seller has knowledge and possession in relation to any
Real Property which has not been delivered to the Buyer prior to the date
hereof. Except as set forth in Section 2.19 of the Disclosure Schedule, the
Seller is not subject to any judgment, decree or order relating to compliance
with, or the cleanup of regulated substances under, any applicable Environmental
Law.
Section 20 CERTAIN FEES. Except in connection with the retention of
CVF Investors ("CVF") (whose fees shall be the sole responsibility of the
Seller), the Seller has not (i) employed any financial advisor or finder, or
(ii) incurred any liability for any financial advisory or finders' fees, in each
case, in connection with this Agreement or the Related Agreements or the
transactions contemplated hereby or thereby.
Section 21 AFFILIATE TRANSACTIONS. Section 2.21 of the Disclosure
Schedule sets forth all contracts, agreements and arrangements relating to the
Business or reflected in the Financial Statements in effect on or after January
1, 1996 between the Seller or its Predecessors, on the one hand, and any
Affiliates, associates, Partners or Affiliates or associates of Partners of the
Seller ("Affiliate Transactions"). All such contracts, agreements and
arrangements have been entered into on an arm's length basis and are
commercially reasonable. Except as set forth in Section 2.21 of the Disclosure
Schedule, neither any Partner of the Seller nor any Affiliates or associates of
the Seller or any such Part-
32
ner has 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
Displays or any other Real Property to be conveyed pursuant to the terms of this
Agreement. Except as set forth in Section 2.21 of the Disclosure Schedule,
since September 30, 1996, no payment, compensation, loan, advance or
distribution has been made to any Affiliates, associates, Partners or Affiliates
or associates of Partners of the Seller, by the Seller on account of or in
connection with the Business except for compensation paid to employees of the
Seller in the ordinary course of business consistent with past practices.
Section 22 LABOR AGREEMENTS.
(a) Except as set forth in Section 2.22 of the Disclosure
Schedule, (i) the Seller is not a party to or bound by any labor or collective
bargaining agreement and there are no labor or collective bargaining agreements
which pertain to employees of the Seller; (ii) there are no pending or, to the
Seller's knowledge, threatened strikes, work stoppages, slowdowns, lockouts,
unfair labor practice charges or complaints, grievances or arbitrations arising
out of a collective bargaining agreement, or other labor disputes against the
Business and during the past three years there has not been any such action or
proceeding; (iii) there are no pending or, to the Seller's knowledge, threatened
complaints, charges or claims against the Seller with any public or governmental
authority, arbitrator or court based upon the employment or termination of
employment by the Seller of any individual; (iv) the Seller is in compliance
with all laws, regulations and orders relating to the employment of labor,
including all such laws, regulations and orders relating to terms and conditions
of employment, wages, hours, collective bargaining, discrimination, civil
rights, safety and health, workers' compensation and the collection and payment
of withholding and/or social
33
security taxes and any similar tax and the Seller is not and has not been for
the past two (2) years engaged in any unfair labor practice as defined in the
National Labor Relations Act or other applicable law, ordinance or regulation;
(v) except as previously provided to the Buyer, the Seller has no written
personnel policies applicable to employees; and (vi) no union organization
campaign is presently in progress or has occurred in the past three (3) years
and no representation question exists with respect to the employees of the
Seller.
(b) Since the enactment of the Worker Adjustment and Retraining
Notification Act (the "WARN Act"), the Seller has not effectuated (i) a "plant
closing" (as defined in the WARN Act) affecting any site of employment or one or
more facilities or operating units within any site of employment or facility of
the Seller; (ii) a "mass layoff" (as defined in the WARN Act) affecting any site
of employment or facility of the Seller; nor has the Seller been affected by any
transaction or engaged in layoffs or employment terminations sufficient in
number to trigger application of any similar state, local or foreign law or
regulation. Except as set forth in Section 2.22 of the Disclosure Schedule,
none of the Seller's employees has suffered an "employment loss" (as defined in
the WARN Act) during the 90 day period prior to the date of this Agreement and
prior to the Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE
PARENT AND THE BUYER
The Parent and the Buyer jointly and severally represent and warrant
to the Seller on the date hereof and as of the Closing Date as follows:
34
Section 1 ORGANIZATION AND AUTHORITY OF THE PARENT AND THE BUYER.
(a) Each of the Parent and the Buyer are a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each of the Parent and the Buyer has heretofore
delivered to the Seller complete and correct copies of its respective
certificate of incorporation and by-laws as currently in effect.
(b) Each of the Parent and the Buyer has the corporate and other
power and authority to execute and deliver this Agreement and the Related
Agreements and consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Related Agreements and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by the Board of Directors of each of the Parent and the
Buyer and no other corporate or other proceedings on the part of either of the
Parent or the Buyer are necessary to authorize the execution, delivery and
performance of this Agreement and the Related Agreements or the consummation of
the transactions contemplated hereby or thereby. This Agreement has been duly
executed and delivered by each of the Parent and the Buyer and constitutes, and
when executed and delivered each of the Related Agreements to be executed and
delivered by each of the Parent and the Buyer pursuant hereto will constitute, a
valid and binding obligation of each of the Parent and the Buyer, enforceable
against each of the Parent and the Buyer in accordance with its terms.
Section 2 CONSENTS AND APPROVALS; NO VIOLATIONS. Except for
applicable requirements of the HSR Act and as set forth in Section 3.2 of the
Buyer Disclosure Schedule, neither the execution and delivery of this Agreement
or the Related Agreements nor the consummation by the Parent or the Buyer of the
transactions contem-
35
plated hereby and thereby will (a) conflict with or result in any breach of any
provision of the certificate of incorporation or by-laws of the Parent or the
Buyer; (b) require on the part of the Parent or the Buyer any material filing
with, or the obtaining of any material permit, license, action, waiver,
authorization, consent, filing, registration or approval of, any governmental or
regulatory authority; (c) result in a material breach of, or constitute a
material default under, or violate or conflict with or give rise to any material
right of amendment, termination, cancellation or acceleration, or to a loss of
any benefit to which the Parent or the Buyer is entitled, under any of the
terms, conditions or provisions of any note, mortgage, other evidence of
indebtedness, guarantee, license, agreement, lease or other contract, instrument
or obligation to which the Parent or the Buyer is a party or by which the Parent
or the Buyer or any of the assets of the Parent or the Buyer may be bound or (d)
violate or conflict with any order, injunction, decree, statute, rule or
regulation applicable to the Parent or the Buyer, excluding from the foregoing
clauses (b), (c) and (d) such requirements, defaults, rights or violations which
(X) become applicable as a result of any acts or omissions by, or any facts
specifically relating to, the Seller, or (Y) would not have a material adverse
effect on the ability of the Parent or the Buyer to consummate the transactions
contemplated hereby.
Section 3 LITIGATION. There is no claim, action or proceeding pending
or, to the knowledge of the Parent or the Buyer, threatened against either of
the Parent or the Buyer which challenges the validity of this Agreement or the
Related Agreements, or the resolution of which would have an adverse effect on
the ability of the Parent or of the Buyer to consummate the transactions
contemplated hereby and thereby, by or before any court, governmental or
regulatory authority.
36
Section 4 CERTAIN FEES. Neither the Parent nor the Buyer has
employed any financial advisor or finder or incurred any liability for any
financial advisory or finders' fees in connection with this Agreement or the
Related Agreements or the transactions contemplated hereby and thereby.
ARTICLE IV
COVENANTS
Section 1 CONDUCT OF THE BUSINESS; CAPITAL EXPENDITURES. The Seller
agrees that, during the period from the date of this Agreement to the Closing,
it shall operate the Business in the ordinary course consistent with past
practice and will use its best efforts consistent with past practice to keep its
business and properties substantially intact, including its present operations,
physical facilities, working conditions and business relationships. Without
limiting the generality of the foregoing, the Seller shall not take any action
of the type contemplated by Section 2.7 of this Agreement.
Section 2 ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) Between the date of this Agreement and the Closing, the
Seller shall during normal business hours and upon reasonable notice (i) give to
the Parent and the Buyer and their respective authorized representatives access
to all books and records, offices and other facilities and properties of the
Business and the Seller relating to the Business or the Assets; (ii) permit the
Parent and the Buyer to make such inspections thereof as the Parent and the
Buyer may reasonably request; (iii) cause the officers of the Seller to furnish
each of the Parent and the Buyer with such financial and operating data and
other information with respect to the
37
business and properties of the Business as the Parent and the Buyer may from
time to time request; and (iv) otherwise provide the Parent and the Buyer and
their respective representatives full and complete access to the books and
records, employees and properties of the Seller relating to the Business or the
Assets so as to provide the Buyer and the Parent with the ability to prepare for
the integration of the Business with the Parent's business following the
Closing. Following the Closing Date, the Seller shall, during normal business
hours and upon reasonable notice, give to the Parent and the Buyer and their
authorized representatives access to the books and records listed on Section
1.3(a)(xi) of the Disclosure Schedule and not previously delivered to Buyer to
the extent reasonably requested.
(b) Subject to the provisions of the following sentence, all
confidential information concerning the Business furnished or provided by the
Seller, to either of the Parent or the Buyer or their respective representatives
(whether furnished before or after the date of this Agreement) shall be kept
confidential by the Seller, and, until the Closing, by the Buyer or the Parent.
The Seller agrees to provide such financial and other information as the Buyer
or the Parent may reasonably request with respect to the Seller or the Business
in connection with, among other things, capital market transactions, any
disclosure obligations of the Buyer or the Parent or their Affiliates under
federal securities and other applicable law and such other matters as the Buyer
may reasonably request, and that such financial and other information may be
disclosed by the Buyer, the Parent and their Affiliates to the extent reasonably
appropriate including in connection with capital market transactions, filings
required pursuant to federal securities and other applicable law and such other
matters as the Buyer may reasonably request.
38
(c) The Seller agrees to keep proprietary information regarding
the Business, the Assets, the Buyer and the Parent confidential and following
the Closing will keep proprietary information regarding the Business, the
Assets, the Buyer and the Parent confidential and agrees that it will only use
such information in connection with the transactions contemplated by this
Agreement and not disclose any of such information, except to the extent
disclosure is required by law, regulation or judicial order by any governmental
authority.
(d) The Seller agrees that so long as any books and records
relating to the Business remain in existence and available and have not
otherwise been delivered to the Buyer, the Buyer and the Parent shall have the
right to inspect and to make copies of the same at any time during normal
business hours for any proper purpose, and that, to the extent any such books
and records have not otherwise been delivered to the Buyer, the Seller will not
destroy or dispose of any books or records relating to the Business existing as
of the Closing Date without first offering to provide such books or records to
the Buyer. The Buyer and the Parent shall, during normal business hours and
upon reasonable notice, give the Seller and its authorized representatives
reasonable access to the Books and Records pertaining to matters occurring prior
to the Closing Date, and for a period of seven years will not destroy or dispose
of such Books and Records without first offering to provide the same to Seller.
(e) The Seller shall deliver or make available to the Buyer any
documents which the Buyer shall request in order that the Buyer may obtain title
insurance on surveys for each of the Real Properties.
39
Section 3 REGULATORY COMPLIANCE.
(a) Immediately following the date hereof, the parties hereto
shall make all necessary filings, including, without limitation, those required
under the HSR Act, in connection with the New Jersey Permit applicable United
States or foreign antitrust laws and applicable state laws, in order to
facilitate prompt consummation of the transactions contemplated hereby and by
the Related Agreements. In addition, each of the Seller and the Buyer will use
its reasonable best efforts (including, without limitation, payment of any
required fees), and will cooperate fully with the other to (i) comply as
promptly as practicable with all governmental requirements applicable to the
transactions contemplated by this Agreement and the Related Agreements and (ii)
obtain promptly all approvals, permits, orders or other consents of any
applicable governmental authorities necessary for the consummation of the
transactions contemplated by this Agreement and the Related Agreements. Each of
the parties hereto will furnish to the other party such necessary information
and reasonable assistance as such other party may reasonably request in
connection with the foregoing. All fees and expenses payable in connection with
the HSR filing, New Jersey Permit and the transfer of the Permits shall be paid
by the Buyer.
(b) The Seller and the Buyer will coordinate and cooperate fully
with the other in exchanging such information and providing such assistance as
the other may reasonably request in connection with the foregoing and in seeking
early termination of any applicable waiting periods under the HSR Act or in
connection with other regulatory approvals and consents. The Seller and the
Buyer agree to respond promptly to and comply fully with any request for
additional information or documents under the HSR Act. The Seller and the Buyer
will each provide the other party with copies of all correspondence, filings or
communications (or memoranda
40
setting forth the substance thereof) between the Seller or the Buyer or any of
their representatives, on the one hand, and any governmental agency or authority
or members of their respective staffs, on the other hand, with respect to this
Agreement and the transactions contemplated hereby.
Section 4 CONSENTS; ASSIGNMENTS. The Seller and the Buyer will use
their respective reasonable best efforts to obtain any consent, approval or
amendment required to novate and/or assign all agreements, leases, licenses and
other rights of any nature whatsoever relating to the Assets; PROVIDED, HOWEVER,
THAT, except for filing and other administrative charges, the Buyer shall not be
obligated to pay any consideration therefor to the third party from whom such
consents, approvals and amendments are requested. In the event and to the
extent that the Buyer and the Seller are unable to obtain any such required
consent, approval or amendment, or if any attempted assignment would be
ineffective or would adversely affect the rights of the Seller with respect to
any Asset so that the Buyer would not in fact receive all the rights with
respect to such Asset, the Seller and the Buyer will cooperate (to the extent
permitted by law or the terms of any applicable agreement) in a mutually
agreeable arrangement under which the Buyer would, to the extent possible,
obtain the benefits and assume the obligations with respect to such Asset, in
accordance with this Agreement, including sub-contracting, sub-licensing, or
sub-leasing to the Buyer, or under which the Seller would enforce for the
benefit of the Buyer, with the Buyer assuming the Seller's obligations, any and
all rights of the Seller against a third party thereto. The Seller shall,
without further consideration therefor, pay and remit to the Buyer promptly all
monies, rights and other considerations received in respect of the Buyer's
performance of such obligations and the Buyer shall remit to the Seller (or pay
directly) all amounts due under such contracts to such third parties. If and
when any
41
such consent shall be obtained or such agreement, lease, license or other right
shall otherwise become assignable or able to be novated, the Seller shall
promptly assign and novate all its rights and obligations thereunder to the
Buyer without payment of further consideration and the Buyer shall, without the
payment of any further consideration therefor, assume such rights and
obligations and the Seller shall be relieved of any and all liability hereunder.
Section 5 REASONABLE BEST EFFORTS. Upon the terms and subject to the
conditions herein provided, each of the parties hereto agrees to use its
reasonable best efforts to take or cause to be taken all action, to do or cause
to be done, and to assist and cooperate with the other party hereto in doing,
all things necessary, proper or advisable under applicable laws and regulations,
to consummate and make effective, in the most expeditious manner practicable,
the transactions contemplated by this Agreement and the Related Agreements.
Section 6 NON-COMPETITION.
(a) The Seller agrees that for a period of five full years from
the Closing Date, neither it nor any of its officers or Affiliates (other than
CIBC and CVF), nor Xxxxx X. XxXxxxxx or any member of his immediate family or
any of his or their Affiliates (other than CIBC or CVF) shall, without the prior
written consent of the Parent: (i) engage, either directly or indirectly, as a
principal or for its own account or solely or jointly with others, or as
shareholders, members, partners or the like (other than through the ownership of
not more than 5% of the outstanding voting securities of any publicly-traded
entity), in any business that competes with the Business as it exists on the
Closing Date in any of those counties listed in Section 9 of the Disclosure
Schedule where the Business is conducted on the Closing Date; or (ii)
affirmatively solicit, other than through a
42
general solicitation, the employment of any employee of the Business as of the
Closing Date. XxXxxxxx may, with the prior consent of Parent, be employed by,
consult with or provide services to any entity, that is a competitor of the
Business, with respect to any business conducted in any territory other than the
counties listed on Section 9 of the Disclosure Schedule; PROVIDED, that such
consent shall be given by Parent if reasonable provisions can be made to prevent
the disclosure of Confidential Information (as defined in the Consulting
Agreement) and to otherwise protect the Business and the Assets.
(b) If any provisions contained in this Section 4.6 shall for
any reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Section 4.6, but this Section 4.6 shall be construed as if such invalid,
illegal or unenforceable provisions had never been contained herein. It is the
intention of the parties that if any of the restrictions or covenants contained
herein is held to cover a geographic area or to be for a length of time which is
not permitted by applicable law, or in any way construed to be too broad or to
any extent invalid, such provision shall not be construed to be null, void and
of no effect, but to the extent such provision would be valid or enforceable
under applicable law, a court of competent jurisdiction shall construe and
interpret or reform this Section 4.6 to provide for a covenant having the
maximum enforceable geographic area, time period and other provisions (not
greater than those contained herein) as shall be valid and enforceable under
such applicable law. The Seller acknowledges that the Buyer would be
irreparably harmed by any breach of this Section 4.6 and that there would be no
adequate remedy at law or in damages to compensate the Buyer for any such
breach. The Seller agrees that the Buyer shall be entitled to injunctive relief
requiring specific performance by the Seller of
43
this Section 4.6, and the Seller consents to the entry of an order thereof.
Section 7 PRESS RELEASES. Prior to Closing, neither the Seller nor
the Buyer shall make any press release or public announcement in connection with
the transactions contemplated hereby without the prior written consent of the
other or, if required by law, without prior consultation with the other,
PROVIDED, THAT, the Buyer and the Parent may disclose such information to
analysts and other market professionals, in any capital market transaction and
as otherwise provided in Section 4.2(b) hereof.
Section 8 EMPLOYEES. Buyer shall inform the Seller in writing at
least five days prior to the Closing of which employees of the Seller the Buyer
intends to offer employment (the "Retained Employees"). As of the Closing, (a)
Seller shall terminate the employment of all Retained Employees and shall
terminate all consulting and employment agreements and pay out any severance
benefits and (b) the Buyer shall offer employment, effective the day after the
Closing Date, to the Retained Employees. The Buyer will not adopt or assume, at
and as of the Closing, any of the Plans maintained nor any trust, insurance
contract, annuity contract, or other funding arrangement established with
respect thereto. The Buyer will not ensure that the Plans treat employment with
the Business prior to the Closing Date the same as employment with the Buyer for
purposes of eligibility, vesting, and benefit accrual.
Section 9 ENVIRONMENTAL STUDIES; TITLE. The Seller shall allow the
Buyer (and any Person designated by the Buyer) access to the Real Properties to
the extent necessary to conduct Phase I, Phase II and any other environmental
studies and surveys and title reports, as the Buyer may request ("Environmental
Studies").
44
Section 10 SUPPLEMENTAL DISCLOSURE. The Seller will promptly inform
the Buyer in writing of any fact or circumstance known to the Seller that would
constitute a breach of any representations or warranties contained in Article II
or would cause any of the conditions to either party's obligations to consummate
the transactions contemplated under this Agreement not to be fulfilled.
Section 11 NO SOLICITATION OF TRANSACTIONS. The Seller shall not,
and shall cause each of its Partners and their respective officers, employees,
advisors, representatives, agents or Affiliates not to, directly or indirectly,
encourage, engage in, solicit or initiate any discussions or negotiations with,
or provide any information to, or negotiate or enter into any agreement or
agreement in principle with, any other person, entity or group, with respect to
a sale of the Business, assets or partnership interests in connection therewith
or any similar transaction. The Seller shall, and shall cause its Partners and
their respective officers, employees, advisors, representatives, agents and
Affiliates to, notify the Buyer of any action taken by any person in connection
with the foregoing sentence and shall provide the Buyer with any information,
written or oral, obtained by such party in connection therewith.
Section 12 LIABILITIES, OBLIGATIONS AND DEBTS OF THE SELLER. The
Seller agrees to pay all liabilities, obligations and debts of the Seller (other
than the Assumed Liabilities) as they become due.
Section 13 OBLIGATIONS OF THE BUYER. The Parent and the Buyer shall
be jointly and severally responsible to perform all of the Buyer's obligations,
covenants and agreements under this Agreement, other than with respect to the
Assumed Liabilities and the Undertaking which will be the sole responsibility of
the Buyer.
45
Section LETTER OF CREDIT. The Buyer and the Parent will use their
reasonable best efforts to have the letter of credit issued in connection with
the existing sign at the New Jersey side entrance of the Lincoln Tunnel released
at the Closing Date.
ARTICLE V
CERTAIN TAX MATTERS
Section 5.1 TAX CERTIFICATES. On or before Closing, the Seller shall
provide the Buyer with copies of the certificates (and similar Tax documentation
or correspondence) from the appropriate Tax Authorities set forth on Section 5.1
of the Disclosure Schedule (or any similar certificates or documentation the
Buyer reasonably requests at least ten days prior to the Closing) stating that
no Taxes of the kind for which the Buyer could have liability to withhold or pay
Taxes with respect to the transfer of the Assets are due to any state or other
Tax Authority; PROVIDED, HOWEVER, THAT, any failure to provide such certificates
to the Buyer which is not the fault of the Seller or any of its Partners shall
not relieve the Buyer of its obligations to enter into and complete the Closing.
If the Seller fails to provide such certificates, the Buyer shall withhold such
amount as necessary from the Purchase Price based upon the Buyer's reasonable
estimate of the amount of such potential liability, or as determined by the
appropriate Tax Authority, to cover such Taxes until such time as certificates
are provided.
Section 5.2 ALLOCATION OF CONSIDERATION. No later than 15 days after
the date hereof, the Seller shall make available to the Buyer, or provide the
Buyer with access to, all information necessary to the preparation of Section
5.2 of the Buyer Disclosure Schedule described hereafter. In accordance with
and subject to
46
the provisions of Section 1.9 hereof, the Buyer and the Seller shall cooperate
in good faith in the preparation of Section 5.2 of the Buyer Disclosure Schedule
which shall allocate the Consideration (which will constitute an amount paid to
acquire the Assets for federal, state or local income tax purposes) among the
assets and to the non-compete provisions provided for in Section 4.6 hereof in
accordance with the fair market value of such assets and provisions.
Notwithstanding the foregoing, $50,000 (or such higher amount reasonably
determined by the Seller) of the Consideration shall be allocated to the non-
compete provisions provided for in Section 4.6 hereof. No later than four
months following the Closing Date, the Buyer shall deliver Schedule 5.2 to the
Seller. The Buyer and the Seller shall each report the transactions
contemplated under this Agreement for all federal, state and local income tax
and all other purposes (including, without limitation, for purposes of Section
1060 of the Code) as set forth on Schedule 5.2. The Buyer and the Seller shall
each use their best efforts to cause the Partners of the Seller to timely file a
Form 8594 (and any similar forms required under state or local Tax law) in
accordance with the requirements of Section 1060 of the Code (or state or local
Tax law, as the case may be) and this Section 5.2. An agreement on or before
the Closing Date as to an allocation of the Consideration shall not be a
condition to the Buyer's or the Seller's respective obligations to close
hereunder.
Section 5.3 SELLER'S RESPONSIBILITY. The Seller shall be responsible
for all sales, use, transfer, transfer gains, recording, ad valorem, stamp, and
any similar Tax, fee or duty arising out of and in connection with or
attributable to the transactions effected pursuant to this Agreement.
47
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF THE PARTIES
Section 1 CONDITIONS TO EACH PARTY'S OBLIGATION. The respective
obligations of each party to consummate the transactions contemplated herein is
subject to the satisfaction at or prior to the Closing of the following
conditions:
(a) Any waiting periods applicable to the transactions
contemplated by this Agreement under applicable United States and foreign
antitrust or trade regulation laws and regulations, including, without
limitation, under the HSR Act, shall have expired or been terminated and all
governmental authorizations or approvals required in connection with the
transactions contemplated by this Agreement shall have been obtained or given.
(b) No statute, rule or regulation shall have been enacted,
entered, promulgated or enforced by any court or governmental authority and
there shall not be in effect any judgement, order, injunction or decree of any
court of competent jurisdiction which prohibits or restricts the consummation of
the transactions contemplated hereby.
(c) No proceeding by any Person which is reasonably likely to
have any of the effects contemplated in clause (b) of this Section 6.1 shall be
pending.
(d) Xxxxx X. XxXxxxxx shall have caused Slate Belt Development
to convey to the Buyer and Buyer shall have purchased on the Closing Date the
two parcels of real property (the "Slate Belt Properties") set forth in item 1
on Section 2.21 of the Disclosure Schedule by limited warranty deeds (or the
statutory equivalent thereof with covenants against grantor's acts only), in
48
recordable form, for aggregate consideration of $100,000; it being understood
that the consummation of such transfer shall be subject to satisfactory
environmental studies in the judgement of the Buyer.
Section 2 CONDITIONS TO OBLIGATIONS OF THE SELLER. The obligations
of the Seller to consummate the transactions contemplated herein are further
subject to the satisfaction (or waiver) at or prior to the Closing of the
following conditions:
(a) The representations and warranties of the Parent and the
Buyer contained in Article III of this Agreement shall be true and correct in
all respects at the date hereof and as of the Closing Date, as if made at and as
of such time, except for representations and warranties which are as of a
specific date which shall be true and correct in all respects as of such date.
(b) Each of the Parent and the Buyer shall have performed in all
material respects its respective obligations under this Agreement required to be
performed by it at or prior to the Closing pursuant to the terms hereof; and the
Seller shall have received a certificate from the Parent and the Buyer signed by
an authorized officer of each of the Parent and the Buyer to the effect of this
paragraph and of paragraph (a) of this Section 6.2.
(c) The parties shall have executed an agreement in respect of
the acquisition of the lease with the Township of Weehawkin, New Jersey for 2
(two) Displays located in the immediate vicinity of the Lincoln Tunnel.
49
Section 3 CONDITIONS TO OBLIGATIONS OF THE PARENT AND THE BUYER. The
obligations of the Parent and the Buyer to consummate the transactions
contemplated hereby are further subject to the satisfaction (or waiver) at or
prior to the Closing of the following conditions:
(a) The representations and warranties of the Seller contained
in this Agreement shall be true and correct in all respects at the date hereof
and as of the Closing Date, as if made at and as of such time, except for
representations and warranties which are as of a specific date which shall be
true and correct in all respects as of such date and except for such
inaccuracies in such representations and warranties and failures of such
representations and warranties to be true and correct in all respects which
would not in the aggregate have a material adverse effect on the business,
assets, results of operations, prospects or condition (financial or otherwise)
of the Business taken as a whole (a "Material Adverse Effect"). For purposes of
this Section 6.3(a), (i) an adverse change (including any regulation of content
of advertising) will not be deemed to be a Material Adverse Effect unless it
relates to the loss of or impairs the current use of either (A) 3% or more of
the number of signs, (B) signs generating 3% or more of the revenues of the
Business during 1995 or the nine months ended September 30, 1996, or (C) 3% or
more of the revenues of the Business during 1995 or the nine months ended
September 30, 1996, and (ii) regulations limiting the content of advertising
shall not be deemed to constitute a Material Adverse Effect to the extent they
directly restrict or prohibit the advertising of tobacco products or alcoholic
beverages.
(b) The Seller shall have performed in all material respects
each of its obligations under this Agreement required to be performed by it at
or prior to the Closing pursuant to the terms hereof; and the Buyer
50
shall have received a certificate from the Seller signed by Xxxxx X. XxXxxxxx,
president of the General Partner of the Seller to the effect of this paragraph
and of paragraph (a) of this Section 6.3.
(c) The Environmental Studies are satisfactory to the Buyer and
the Parent; PROVIDED, HOWEVER, that in the event the Environmental Studies are
not satisfactory to the Buyer and the Parent, the Seller may elect to exclude
any property which is the subject of any environmental liabilities or any
potential liabilities identified to Seller as unsatisfactory to the Buyer and
the Parent from the Assets to be conveyed hereunder and such action by Seller
shall constitute the satisfaction of this condition to Closing.
(d) The Seller shall have provided evidence satisfactory to the
Buyer that any Liens, other than Permitted Liens, on the Assets, including
without limitation any Liens on the Assets in connection with the CIBC Credit
Agreement, shall have been released as of the time of the Closing.
ARTICLE VII
TERMINATION; AMENDMENT; WAIVER
Section 1 TERMINATION. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned:
(a) at any time, by mutual written consent of the parties
hereto;
(b) by either the Buyer or the Seller, if the Closing shall not
have occurred prior to January 31, 1997; or
51
(c) by either the Buyer or the Seller if consummation of the
transactions contemplated hereby would violate any nonappealable final order,
decree or judgment of any court or governmental body having competent
jurisdiction;
PROVIDED, THAT, no party may terminate this Agreement pursuant to clauses (b) or
(c) above, if such party is, at the time of any such attempted termination, in
breach of any term hereof.
Section 2 PROCEDURE AND EFFECT OF TERMINATION. In the event of the
termination of this Agreement and the abandonment of the transactions
contemplated hereby pursuant to Section 7.1 hereof, written notice thereof shall
forthwith be given by the party so terminating to the other party and this
Agreement shall terminate and the transactions contemplated hereby shall be
abandoned, without further action. If this Agreement is terminated pursuant to
Section 7.1 hereof, (i) the Deposit and interest earned thereon shall be
distributed in accordance with the provisions of Section 1.2 hereof, and (ii)
there shall be no liability or obligation hereunder on the part of the Seller,
the Buyer or the Parent or any of their respective directors, officers,
employees, Affiliates, controlling persons, agents or representatives, unless
the Seller, the Buyer or Parent, as the case may be, has (x) willfully failed to
have performed its obligations hereunder or (y) knowingly made a
misrepresentation of any matter set forth herein.
Section 3 AMENDMENT, MODIFICATION AND WAIVER. This Agreement may be
amended, modified or supplemented at any time only by written agreement of the
Seller and the Buyer. Any failure of the Seller on the one hand, or the Buyer
or the Parent, on the other hand, to comply with any term or provision of this
Agreement may be waived, with respect to the Buyer or the Parent, by the Seller
and, with respect to the Seller, by the Buyer, by
52
an instrument in writing signed by or on behalf of the appropriate party, but
such waiver or failure to insist upon strict compliance with such term or
provision shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure to comply.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
Section 1 SURVIVAL. The parties hereto agree that (i) the covenants
and agreements contained in this Agreement and the representations and
warranties contained in Sections 2.2 and 2.8 (b) shall survive without
limitation, (ii) the representations and warranties contained in Sections 2.17,
2.18, 2.19, 2.20 and 2.21 shall survive until 90 days after the expiration of
all applicable statutes of limitation with respect to the subject matter
thereof, PROVIDED, HOWEVER, THAT, in the event that CIBC, CVF and Xxxxx X.
XxXxxxxx each provide to the Buyer on the Closing Date an executed waiver in the
form attached hereto as Exhibit D, then the representations and warranties
contained in Section 2.21 shall survive until the first anniversary following
the Closing Date, and (iii) the representations and warranties contained in
Article II (other than Sections 2.2, 2.8(b), 2.17, 2.18, 2.19, 2.20 and, except
as provided in clause (ii) hereof, Section 2.21) shall survive until the first
anniversary following the Closing Date.
Section 2 SELLER'S AGREEMENT TO INDEMNIFY.
(a) Subject to the terms and conditions set forth herein, from
and after the Closing, the Seller shall indemnify and hold harmless the Parent,
the Buyer and the Indemnitees from and against all Damages.
53
(b) The Seller's obligation to indemnify the Indemnitees for
Damages pursuant to Section 8.2(a) hereof is subject to the following
limitations: (i) no indemnification shall be made by the Seller for Damages
arising solely from clause (i) of the definition of Damages set forth in Article
IX hereof unless the aggregate amount of such Damages exceeds $400,000 and then
to the full extent of all such Damages in excess of $400,000; and (ii) in no
event shall the Seller's obligation to indemnify the Indemnitees exceed the
Purchase Price.
Section 3 NOTICE AND OPPORTUNITY TO DEFEND. If an event occurs that
entitles an Indemnitee, or that an Indemnitee believes entitles it, to
indemnification pursuant to this Article VIII, the Indemnitee shall promptly
notify the Seller. If the claim for indemnification arises out of a claim by a
third party, such notice shall occur within 15 days of the Indemnitee's receipt
of written notice of such claim; PROVIDED, HOWEVER, THAT, the failure to so
notify the Seller shall not relieve the Seller of its obligations hereunder,
except to the extent that the Seller is actually prejudiced by such failure.
The Seller shall have the right to undertake, conduct and control the defense
thereof by so notifying the Indemnitee in writing, provided that the Seller (i)
states that the settlement or defense of the claim will be conducted at all
times in good faith and in a reasonable manner (and so conducts it), (ii)
acknowledges in writing the obligation to indemnify the Indemnitee in accordance
with the terms contained in this Agreement, and (iii) promptly reimburses the
Indemnitee for all out-of-pocket expenses incurred as a result of the assumption
by the Seller of control of such settlement or defense. If the Seller provides
written notice to the Indemnitee that it elects to defend such claim, the Seller
shall be obligated to defend such claim, at its own expense and by counsel
chosen by it and reasonably satisfactory to the Indemnitee. In the event the
Seller
54
elects to provide the defense of such claim pursuant to this Section 8.3, the
Indemnitee shall cooperate fully with the Seller and its counsel in the defense
of such claim and shall be entitled to full access to information with respect
thereto and to participate in the defense thereof at its own cost and expense.
Any compromise, settlement or offer of settlement of such claim by the Seller
shall require the prior written consent of the Indemnitee, which consent shall
not be unreasonably withheld and unless such consent is obtained, the Seller
shall continue the defense of such claim; PROVIDED, HOWEVER, THAT, if the
Indemnitee refuses its consent to a bona fide offer of settlement that the
Seller wishes to accept and that involves no payment by the Indemnitee not paid
by the Seller and further involves no limitation on the future conduct of the
Business as presently conducted, the Seller may reassign the defense of such
claim to the Indemnitee, who may then continue to pursue the defense of such
matter, free of any participation by the Seller at the sole cost and expense of
the Indemnitee. In such event, the obligation of the Seller with respect
thereto shall not exceed the amount of the offer of settlement that the
Indemnitee refused to accept plus the costs and expenses of the Indemnitee prior
to the date the Seller notified the Indemnitee of the offer of settlement. If
the Seller does not elect to defend any such claim, it shall nevertheless have
the right of full access to information with respect thereto and to participate
in such defense at its sole cost and expense and shall remain liable for any
indemnification obligations pursuant to this Agreement.
ARTICLE IX
55
DEFINITIONS
For the purposes of this Agreement, the following terms shall have the
following respective meanings:
"Accruals" shall have the meaning set forth in Section 1.8 hereof.
"AR Schedule" shall have the meaning set forth in Section 1.9 hereof.
"Advertising Contracts" shall have the meaning set forth in Section
1.3(a)(iv) hereof.
"Affiliate" shall have the meaning set forth in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended.
"Affiliate Transactions" shall have the meaning set forth in Section
2.21 hereof.
"Agreement" means this agreement, dated as of December 10, 1996,
together with any amendments thereto, by and among the Seller, the Parent and
the Buyer.
"AR Amount" shall have the meaning set forth in Section 1.9 hereof.
"AR Closing Payment" shall have the meaning set forth in Section 1.4
hereof.
"AR Collections" shall have the meaning set forth in Section 1.9
hereof.
"AR Schedule" shall have the meaning set forth in Section 1.9 hereof.
56
"Assets" means all of the properties, contracts and other assets (of
every kind, nature, character and description, whether real, personal or mixed,
whether tangible or intangible, whether accrued, contingent or otherwise and
wherever situated), goodwill and business as a going concern of the Business,
all as of the Closing Date, other than the Excluded Assets.
"Assumed Liabilities" means (a) all obligations of the Seller pursuant
to any Lease, Permit, Advertising Contract, Customer Deposit or title documents
to Owned Real Property, (b) liability for Accruals of the Seller as set forth in
the Proration Schedule, (c) the two (2) Notes and Mortgages, each dated April
22, 1994, between MOA and Xxxxx Xxxxx in the original principal amounts of
$48,000 and $12,000, respectively, (d) the Union Contract and (e) all other
liabilities and obligations of the Seller set forth in the Disclosure Schedule
under an express statement to the effect that the definition of Assumed
Liabilities will include the liabilities and obligations so disclosed, other
than excluded liabilities as set forth below, to be assumed by the Buyer
pursuant to this Agreement, as provided in the Undertaking. It is understood
and agreed by the parties hereto that the Assumed Liabilities shall not include
any other liabilities of the Seller or of the Business, whether known or
unknown, disclosed or undisclosed, matured or unmatured, accrued, absolute,
contingent or otherwise, including without limitation, (a) any liability of the
Seller with respect to Taxes, (including, without limitation, with respect to
amounts not deductible under the Plans pursuant to Section 280G of the Code),
but except to the extent included in the Final Proration Schedule, (b) any
liability of the Seller for any Taxes arising in connection with the
consummation of the transactions contemplated hereby (including any Taxes
arising in connection with the Seller's transfer of Assets), (c) any liability
of the Seller for the unpaid Taxes of any Person other than the Seller under any
provision of Tax law or by
57
contract or otherwise, (d) any obligation of the Seller to indemnify any Person
by reason of the fact that such Person was a director, officer, employee,
shareholder or agent of the Seller or was serving at the request of the Seller
as a partner, trustee, director, officer, employee, shareholder or agent of
another entity (whether such indemnification is for judgments, damages,
penalties, fines, costs, amounts paid in settlement, losses, expenses, or
otherwise and whether such indemnification is pursuant to any statute, charter
document, bylaw, agreement, or otherwise), (e) any liability of the Seller for
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby, (f) any obligation of the Seller under this
Agreement, (g) any liability attributable to or incurred in connection with the
Plans for the benefit of any current or former employee of the Seller, (h) any
liability for severance pay, unemployment compensation or other similar payment
or right due or owing to or which as a result of the transactions contemplated
hereby, will become due or owing, to any officer, director or employee of the
Seller, (i) any obligations and liabilities relating to Excluded Assets, (j) any
obligations or liabilities relating to the Seller's "Pocono" or "Northeast PA"
Division or the sale thereof, (k) any other liability or obligation arising on
or before the Closing Date which is not expressly disclosed in the Disclosure
Schedule hereto as set forth in the first sentence of this paragraph or (l) any
other liability or obligation which is identified as excluded or not to be
assumed under an express statement to the effect that such will be excluded or
will not be assumed.
"Balance Sheet" shall have the meaning set forth in Section 2.5
hereof.
"Xxxx of Sale" means the duly executed xxxx of sale, substantially in
the form attached hereto as Exhibit A, which the Seller will deliver to the
Buyer effect-
58
ing the sale, assignment, transfer and delivery of the Assets.
"Books and Records" shall have the meaning set forth in Section
1.3(a)(xi) hereof.
"Business" means the business of owning and operating an outdoor
advertising business as presently conducted by the Seller in the counties listed
in Section 9 of the Disclosure Schedule including, without limitation, any and
all assets owned by the Seller and used in connection therewith, but which in no
event includes the business conducted through Seller's "Pocono" or "Northeast
PA" Division or the assets used in connection therewith.
"Buyer" shall have the meaning set forth in the introduction hereto.
"Buyer Disclosure Schedule" means the disclosure schedule document
being delivered to the Seller by the Buyer in connection herewith.
"Cash Purchase Price" shall have the meaning set forth in Section 1.4
hereof.
"CIBC" shall mean Canadian Imperial Bank of Commerce, New York Agency.
"CIBC Credit Agreement" shall mean the Credit Agreement, dated as of
December 29, 1995 among the Seller, CIBC and the lenders thereunder.
"Closing" shall have the meaning set forth in Section 1.5 hereof.
"Closing Date" shall have the meaning set forth in Section 1.5 hereof.
59
"Closing Payment" shall have the meaning set forth in Section 1.4
hereof.
"Code" means the Internal Revenue Code of 1986, as amended (or any
successor law thereto).
"Consideration" means the sum of the Purchase Price and any
liabilities or indebtedness of the Seller or the Partners of the Seller, that
are assumed by the Buyer in connection with this Agreement.
"Consulting Agreement" means the duly executed consulting agreement,
substantially in the form attached hereto as Exhibit E.
"Controlled Affiliate" means any corporation, partnership, entity or
other person that directly, or indirectly through one or more intermediaries, is
or has been controlled by the Seller or under common control with the person
specified and the Seller.
"CVF" shall have the meaning set forth in Section 2.20 hereof.
"Damages" means all liability, demands, claims, actions or causes of
actions, assessments, losses, damages, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses including those incurred in
the investigation or defense thereof or in the enforcement of rights hereunder)
asserted against or incurred by any Indemnitee as a result of or arising out of
(i) a breach of any representation or warranty contained in Article II of this
Agreement as of the applicable date provided for therein, (ii) the breach of any
covenant or agreement of the Seller contained herein, (iii) except as otherwise
expressly provided herein, any liabilities and obligations not to be assumed by
the Buyer as provided in the Undertaking, (iv) violations of or noncompliance
with the "bulk sales", "bulk transfer"
60
or similar laws of any state, (v) any liability arising out of or in connection
with the process undergone by the Seller and its financial advisors in
connection with any attempts to sell the Business or any interests therein, (vi)
liabilities arising or related to events occurring on or prior to the Closing
Date from or related to the pension plan listed on Section 2.17(c) of the
Disclosure Schedule, and (vii) the failure to perform any covenant or agreement
of the Seller.
"Deeds" means limited warranty deeds (or the statutory equivalent
thereof with covenants against grantor's acts only), in recordable form, with
respect to the Owned Real Property.
"Deposit" shall have the meaning set forth in Section 1.1 hereof.
"Disclosure Schedule" means the disclosure schedule document being
delivered to the Buyer by the Seller in connection herewith.
"Displays" shall have the meaning set forth in Section 1.3(a)(i)
hereof.
"Environmental Laws" means any and all applicable federal, state,
local and foreign statutes, laws, judicial decisions, regulations, ordinances,
rules, judgments, judicial orders, decrees, codes, injunctions, permits, consent
decrees, consent orders and governmental restrictions, now in effect, relating
to human health, the environment or to emissions, discharges or releases of
pollutants, contaminants, Hazardous Sub-
61
stances or wastes into the environment, including without limitation ambient
air, surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Hazardous Substances or
wastes or the clean-up or other remediation thereof.
"Environmental Notices" shall have the meaning set forth in Section
2.19(a) hereof.
"Environmental Permits" means all permits licenses, authorizations,
certificates and approvals of governmental authorities relating to or required
by Environmental Laws and necessary or proper for the Business as currently
conducted.
"Environmental Studies" shall have the meaning set forth in Section
4.9 hereof.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" shall mean any trade or business which together with
the Seller would be deemed a "single employer" within the meaning of section
4001 of ERISA.
"Estimated AR Schedule" shall have the meaning set forth in Section
1.9 hereof.
"Excluded Assets" means those assets, enumerated in Section 1.3(c),
which are expressly excluded from the Assets to be sold, conveyed, assigned, and
transferred to the Buyer and from the assets owned by the Seller.
"Final AR Collections" shall have the meaning set forth in Section 1.9
hereof.
"Final AR Schedule" shall have the meaning set forth in Section 1.9
hereof.
62
"Final Proration Schedule" shall have the meaning set forth in Section
1.8 hereof.
"Financial Statements" shall have the meaning set forth in Section 2.5
hereof.
"Formation Date" shall have the meaning set forth in Section 2.3
hereof.
"GAAP" means U.S. generally accepted accounting principles.
"General Partner" shall mean MOA.
"Hazardous Substances" means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives, by-products
and other hydrocarbons, or any substance having any constituent elements
displaying any of the foregoing characteristics, including, without limitation,
any substance regulated under Environmental Laws.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Improvements" shall have the meaning set forth in Section 2.8(c)
hereof.
"Indemnitees" means the Parent, the Buyer and their respective
directors, officers, employees, Affiliates, controlling persons, agents and
representatives and their successors and assigns.
Initial Term" shall have the meaning set forth in Section 1.10 hereof.
"Insurance Policies" shall have the meaning set forth in Section 2.16
hereof.
63
"Intangible Property" shall have the meaning set forth in Section
1.3(a)(x).
"Lease Assignments" means all appropriate documents for the assignment
(in form suitable for filing, registration or recording, if the applicable
agreement would permit such assignment to be filed, registered or recorded) of
rights in the Leases.
"Leases" means all leases or subleases of real property and all Sign
Location Leases under which the Seller is a lessee or lessor.
"Licensed Marks" shall have the meaning set forth in Section 1.10
hereof.
"Liens" means all mortgages, pledges, security interests, liens,
charges, options, easements, rights-of-way or other encumbrances of any nature
whatsoever, excluding licenses or rights to third parties.
"Material Adverse Effect" shall have the meaning set forth in Section
6.3 hereof.
"Material Agreements" shall have the meaning set forth in Section 2.15
hereof.
"MOA" shall have the meaning set forth in Section 2.3 hereof.
"New Jersey Permit" means the permit required to be obtained by Buyer
in accordance with the laws of the State of New Jersey in order to conduct the
business of outdoor advertising in the State of New Jersey.
"Other Instruments" means such other duly executed, good and
sufficient instruments of conveyance, transfer and assignment as the parties
shall deem neces-
64
sary to convey to the Buyer all of the Seller's rights, title and interests in
and to the appropriate Assets.
"Owned Real Property" shall have the meaning set forth in Section
1.3(a)(ii) hereof.
"Parent" shall have the meaning set forth in the introduction hereto.
"Partner" shall mean a general or limited partner of the Seller.
"Partnership Agreement" shall have the meaning set forth in Section
2.1 hereof.
"Permits" shall have the meaning set forth in Section 1.3(a)(v)
hereof.
"Permitted Liens" means (i) mechanics', carriers', workers',
repairers', materialmens', warehousemens' and other similar Liens arising or
incurred in the ordinary course of business which are Liens for work in progress
which are not past due or otherwise reflected on the Balance Sheet and (ii)
recorded easements, covenants and other restrictions which do not materially
impair the current use, occupancy, value, or the marketability of title; (iii)
liens for current real or personal property taxes not yet due and payable which
are accounted for in the Proration Schedule; and (iv) liens disclosed in writing
to Buyer which secure Assumed Liabilities.
"Person" means and includes an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a government
or any department or agency thereof.
"Plans" shall have the meaning set forth in Section 2.17(a) hereof.
65
"Pocono" shall have the meaning set forth in Section 2.5 hereof.
"Pocono Sale" shall mean the sale by Seller of the business of its
"Pocono" or "Northeast PA" Division to Xxxxx Outdoor Advertising on November 7,
1996.
"Predecessors" shall have the meaning set forth in Section 2.5 hereof.
"Prepaid Expenses" shall have the meaning set forth in Section 1.8
hereof.
"Proration Schedule" shall have the meaning set forth in Section 1.8
hereof.
"Purchase" shall have the meaning set forth in Section 2.3 hereof.
"Purchase Agreement" shall have the meaning set forth in Section 2.3
hereof.
"Purchase Price" shall have the meaning set forth in Section 1.4
hereof.
"Real Property" means the Owned Real Property, the Slate Belt
Properties and all real property leased pursuant to a Lease and all buildings,
structures and improvements located thereon, fixtures contained thereon and
appurtenances thereto and easements and other rights relating thereto.
"Related Agreements" means those other agreements and instruments
required to be executed pursuant to this Agreement.
"Retained Employees" shall have the meaning set forth in Section 4.8
hereof.
66
"Seller" shall have the meaning set forth in the introduction hereto.
"Sign Location Lease" shall mean any lease, license or other agreement
between the Seller and any person pursuant to which the Seller has obtained the
right to erect, place and maintain outdoor advertising sign structures on any
ground space, roof or wall space or upon any other improvement to real estate.
"Slate Belt Properties" shall have the meaning set forth in Section
6.1(d).
"Tax Authority" includes the Internal Revenue Service and any state,
local, foreign or other governmental authority responsible for the
administration of any Taxes.
"Tax Return" means any declaration, estimate, return, report,
information statement, schedule or other document (including any related or
supporting information) with respect to Taxes that is required to be filed with
any Tax Authority.
"Taxes" shall include all federal, provincial, territorial, state,
municipal, local, domestic, foreign or other taxes, imposts, rates, levies,
assessments and other charges including, without limitation, ad valorem,
capital, capital stock, customs duties, disability, documentary stamp,
employment, estimated, excise, fees, franchise, gains, goods and services, gross
income, gross receipts, import duties, income, intangible, inventory, license,
mortgage recording, net income, occupation, payroll, personal property,
production, profits, property, real property, recording, rent, sales, severance,
sewer, social security, stamp, transfer, transfer gains, unemployment, use,
value added, water, windfall profits, and withholding, together with any
interest, additions, fines or penalties with respect thereto or in respect of
any
67
failure to comply with any requirement regarding Tax Returns and any interest in
respect of such additions, fines or penalties and shall include any transferee
liability in respect of any and all of the above.
"Treasury Regulation" means any regulation promulgated under the Code.
"Undertaking" means the duly executed undertaking, substantially in
the form attached hereto as Exhibit B, whereby the Buyer will assume and agree
to pay and discharge the Assumed Liabilities.
"Union Contract" shall mean the Collective Bargaining Agreement dated
April 1, 1995 between Seller and Sign-Pictorial & Display Union Local 230 of the
International Brotherhood of Painters and Allied Trade AFL-CIO.
"WARN Act" shall have the meaning set forth in Section 2.22 hereof.
ARTICLE X
MISCELLANEOUS
Section 1 FURTHER ASSURANCES. From time to time after the Closing
Date, at the request of either party hereto and at the expense of such party,
the parties hereto shall execute and deliver to such requesting party such
documents and take such other action as such requesting party may reasonably
request in order to consummate more effectively the transactions contemplated
hereby.
Section 2 NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in
68
writing and may be given by any of the following methods: (a) personal
delivery; (b) facsimile transmission; (c) registered or certified mail, postage
prepaid, return receipt requested; or (d) overnight delivery service. Notices
shall be sent to the appropriate party at its address or facsimile number given
below (or at such other address or facsimile number for such party as shall be
specified by notice given hereunder):
If to the Parent or the Buyer, to:
Universal Outdoor, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx
Telecopy: (000) 000-0000
and
Xxxxx & Company
000 Xxxx Xxxxxx
00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
with a copy to:
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Telecopy: (000) 000-0000
and
69
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
If to the Seller, to:
Xxxxxxx Outdoor Advertising
Acquisition Co., L.P.
000 X Xxxxx Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. XxXxxxxx
Telecopy: 000-000-0000
with a copy to:
Powell, Goldstein, Xxxxxx & Xxxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telecopy: 000-000-0000
All such notices, requests, demands, waivers and communications shall be deemed
received upon (i) actual receipt thereof by the addressee, (ii) actual delivery
thereof to the appropriate address, or (iii) in the case of a facsimile
transmission, upon transmission thereof by the sender and issuance by the
transmitting machine of a confirmation slip that the number of pages
constituting the notice have been transmitted without error. In the case of
notices sent by facsimile transmission, the sender shall contemporaneously mail
a copy of the notice to the addressee at the address provided for above.
However, such mailing shall in no way alter the time at which the facsimile
notice is deemed received.
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Section 3 SEVERABILITY. Should any provision of this Agreement for
any reason be declared invalid or unenforceable, such decision shall not affect
the validity or enforceability of any of the other provisions of this Agreement,
which remaining provisions shall remain in full force and effect and the
application of such invalid or unenforceable provision to persons or
circumstances other than those as to which it is held invalid or unenforceable
shall be valid and enforced to the fullest extent permitted by law.
Section 4 BINDING EFFECT; ASSIGNMENT. This Agreement and all of the
provisions hereof shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned, directly or indirectly, including, without limitation, by operation
of law, by any party hereto without the prior written consent of the other
parties hereto; PROVIDED, HOWEVER, THAT, the Buyer may transfer or assign, in
whole or from time to time in part, to Xxxxxx X. Xxxxx, Xxxxx & Company or one
or more of any of their Affiliates, the right to purchase all or a portion of
the Assets but no such transfer or assignment shall relieve the Buyer of its
obligations hereunder.
Section 5 NO THIRD PARTY BENEFICIARIES. This Agreement is solely for
the benefit of the Seller and its successors and permitted assigns, with respect
to the obligations of the Parent and the Buyer under this Agreement, and for the
benefit of the Parent and the Buyer, and their respective successors and
permitted assigns, with respect to the obligations of the Seller, under this
Agreement, and this Agreement shall not be deemed to confer upon or give to any
other third party any remedy, claim, liability, reimbursement, cause of action
or other right.
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Section 6 INTERPRETATION. The article and section headings contained
in this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 7 JURISDICTION AND CONSENT TO SERVICE. In accordance with
Section 5.1401 of the General Obligations Law of the State of New York, and
without limiting the jurisdiction or venue of any other court, the Seller, the
Parent and the Buyer (a) agree that any suit, action or proceeding arising out
of or relating to this Agreement will be brought solely in the state or federal
courts of New York; (b) consent to the exclusive jurisdiction of each such court
in any suit, action or proceeding relating to or arising out of this Agreement;
(c) waive any objection which it may have to the laying of venue in any such
suit, action or proceeding in any such court, and (d) agree that service of any
court paper may be made in any manner as may be provided under applicable laws
or court rules governing service of process in such court.
Section 8 ENTIRE AGREEMENT. Except for this Agreement, the
Disclosure Schedule, the Buyer Disclosure Schedule and the Exhibits and other
documents referred to herein or delivered pursuant hereto which form a part
hereof constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all other prior agreements and
understandings, both written and oral, between the parties or any of them with
respect to the subject matter hereof.
Section 9 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York (regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof) as to all matters, including
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but not limited to matters of validity, construction, effect, performance and
remedies.
Section 10 SPECIFIC PERFORMANCE. The parties acknowledge and agree
that any breach of the terms of this Agreement would give rise to irreparable
harm for which money damages would not be an adequate remedy and accordingly the
parties agree that, in addition to any other remedies, each shall be entitled to
enforce the terms of this Agreement by a decree of specific performance without
the necessity of proving the inadequacy of money damages as a remedy.
Section 11 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
Section 12 EXPENSES. Except as otherwise provided herein, all costs
and expenses incurred in connection with this Agreement shall be paid by the
party incurring such cost or expense; PROVIDED, HOWEVER, that each party hereto
shall be entitled to reasonable costs and expenses, including attorneys fees,
incurred in enforcing its rights hereunder in the event of a breach by the other
party hereto.
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized Partner of the Seller, the Parent and the Buyer
as of the date first above written.
XXXXXXX OUTDOOR ADVERTISING
ACQUISITION CO., L.P.
By: XXXXXXX OUTDOOR ADVERTISING
ACQUISITION CO., INC.
its general partner
By: /s/ Xxxxx X. XxXxxxxx
----------------------------
Name: Xxxxx X. XxXxxxxx
Title: President
XXXXXXX ACQUISITION CORPORATION
By: /s/ Xxxx X. Xxxxx
----------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
UNIVERSAL OUTDOOR, INC.
By: /s/ Xxxxx X. Xxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
