ASSET PURCHASE AGREEMENT
THIS AGREEMENT, made and entered into this 12th day of September, 1996,
by and among MOUNTAIN MEDIA, INC., A Pennsylvania corporation doing business
as Iowa Outdoor Displays ("IOD") and XXXXXX X. XXXXXXX, ("Xxxxxxx") (IOD and
Xxxxxxx are collectively referred to as "Seller") and UNIVERSAL OUTDOOR, INC.
an Illinois corporation, ("Buyer").
W I T N E S S E T H :
In consideration of the respective representations, warranties and
covenants contained in this Agreement and other good and valuable
consideration, the sufficiency and receipt of which is hereby acknowledged,
Buyer and Seller agree as follows:
1. Transfer of Assets.
1.1. Buyer agrees that at the Closing it shall acquire all of the
business and assets of Seller, whether disclosed or undisclosed,
wherever located, which are used in the outdoor advertising
business in the market described in Exhibit 1.1, ("Market"),
including, but not limited to, those assets listed on Exhibits or
Schedules attached to this Agreement ("Assets"), and Seller agrees
to transfer, assign, convey and deliver to Buyer all of the Assets,
in exchange solely for the consideration specified under the
provisions of Section 1.4 herein ("Purchase Price"), plus the
assumption of certain obligations of Seller as specified.
1.2 The consideration payable by Buyer, as specified in
Section 1.1, includes any applicable sales taxes or other taxes
imposed upon the transfer of the Assets to Buyer.
1.3 The Assets shall include, but shall not be limited to, the
following, all of which are located in the Market:
1.3.1 All interest in and to real property as described
on Exhibit 1.3.1 including all leasehold interests of
Seller in and to real property, and all easements and
licenses, including prepaid ground rents.
1.3.2 All sign structures, whether owned or leased, and
any fixtures and leasehold
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interests in sign structures, and all lights, electrical
hook ups, catwalks and other appurtenant equipment in the
Market which are described in Exhibit 1.3.2.
1.3.3 All rights and entitlement of Seller in and to
advertising contracts which are listed in Exhibit 1.3.3.
1.3.4 All other contract rights and entitlements related to
the business of Seller, whether oral or written in excess
of $5,000, including those set forth in 1.3.4.
1.3.5 All rights and obligations of Seller in and to sign
constructions. All such rights and a list of any
contractors are listed in Exhibit 1.3.5. For purposes of
this subsection "sign constructions" shall mean any
locations as to which Seller has a perfected or partial
right or expectancy to construct signs.
1.3.6 All governmental permits, licenses, approvals or
authorizations necessary for Seller to conduct its outdoor
business within the Market. Seller shall cooperate with
Buyer in the assignment and transfer to Buyer of all such
governmental permits, licenses, approvals or authorizations,
including state and local sign permits. All such sign
permits and all other material permits, licenses,
approvals or authorizations are listed in Exhibit 1.3.1
and 1.3.6.
1.3.7 All other assets and property of Seller used in the
Market in Seller's outdoor advertising business, such as
motor vehicles, office equipment and machinery, sign
panels, lighting fixtures, furniture, inventories of raw
materials, supplies, customer lists, business records, and
work in progress. A list of all other material assets is
set out in Exhibit 1.3.7.
1.3.8 All deposits from customers held by Seller arising
from transactions in the Market. A list of all deposits
from customers is set forth in Exhibit 1.3.8.
1.3.9 All telephone numbers and listings used by Seller in
the Market. Seller will not change said telephone numbers.
A list of all
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telephone numbers and listings is attached as Exhibit 1.3.9.
1.3.10 [Intentionally Deleted]
1.3.11 Data regarding lessors, advertisers and other business
data in machine-readable form.
1.3.12 All accounts receivables and prepaid expenses of IOD
attached as Exhibit 1.3.12.
1.4 Buyer shall pay to Seller a Purchase Price for the Assets of:
(a) One Million Seven Hundred Twenty-Five Thousand Dollars
($1,725,000) in cash or by wire transfer at Closing at Seller's
direction as shown on Exhibit 1.4(a) and (b) Seventy-Five Thousand
Dollars ($75,000) payable into escrow pursuant to the terms of the
Escrow Agreement attached Exhibit 1.4(b). The Purchase Price set
forth herein is subject to the following adjustments:
1.4.1 [Intentionally Deleted]
1.4.2 Minus the amounts which will credit Buyer for the
following:
1.4.2.1 $1000 for the Construction of one face on
Xxxxx 00, Xxxxxxxxxx.
1.4.2.2 Any advertising services delivered after
Closing for which Seller has already received
payment as reflected on Exhibit 1.3.8.
1.4.3 Other than as provided for in Section 1.4.2, all items
of income and expense listed below relating to the Assets
will be prorated as of the Closing Date, with Seller liable
to the extent such items relate to any time period up to and
including the Closing Date, and Buyer liable to the extent
such items relate to periods on or subsequent to the
Closing Date: (a) personal property, real estate,
occupancy and water taxes, if any, on or with respect to
the Assets: (b) rents, taxes and other items payable by
Seller under any contract to be assigned to or assumed by
Buyer: (c) the amount of sewer rents and charges for
water, telephone, electricity and other utilities and
fuel; and (d) [Intentionally Deleted] (e) all
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fuel; and (d) [Intentionally Deleted] (e) all items paid
or payable on or after the Closing Date under any of the
Assumed Obligations (as such term is defined in Section 4.1
herein) to the extent not specifically referenced in
clauses (a) - (d) above which are normally prorated in
connection with similar transactions;
The net aggregate amount of the prorations described
in (a) - (d) shall be added to or subtracted from the
base amount payable by Buyer to Seller on the Closing
Date. If current payments with respect to items to be
prorated pursuant to this Section 1.4.3 are not
ascertainable on or before the Closing Date, such payments
shall be prorated on the basis of the most recently
ascertainable xxxx therefor and shall be reprorated between
Seller and Buyer when the current bills with respect to
such items have been issued and a cash settlement shall
be made within thirty (30) days thereafter.
The prorated items known to the parties at Closing
are as listed on Exhibit 1.4.3.
1.5 The Purchase Price will be paid by Buyer plus or minus the
amount, if any, by which the Purchase Price is adjusted pursuant
to subsection 1.4 of this Agreement.
1.6 The parties hereto agree that the allocated Asset values
attached hereto, designated Exhibit 1.6, fairly and accurately
represent the respective values of the Asset categories of Seller
purchased by Buyer pursuant to the Asset Agreement.
1.7 At the Closing, Seller shall execute the Non-Competition,
Non-Solicitation and Non-Disclosure Agreement substantially in the
form set forth in Exhibit 1.7(a).
If Seller violates this Section 1.7 and the Non-Competition,
Non-Solicitation and Non-Disclosure Agreement referenced herein, and
Buyer obtains a final judgment or arbitration award or a settlement
is reached with Seller for damages as a result of this violation,
Buyer may offset the amount of this judgment, arbitration award or
settlement against any amounts owed by Buyer. "Final" shall mean
any judgment for which no appeal has been filed during the thirty
(30) days following the
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entry of the judgment order. Provided, however, Buyer's claim
shall not be limited to the amount of any offset available.
1.8 After the Closing, Buyer shall have the right to use the name
Iowa Outdoor Displays and all other trade names used by Seller
in the Market. Buyer shall also have the right for one year
from the Closing Date to endorse the name Iowa Outdoor Displays
to all checks which, pursuant to the terms of this Agreement,
are the property of Buyer.
2. Representations and Warranties of Seller. Seller represents and
warrants to Buyer as an inducement to Buyer to purchase the Assets
of Buyer pursuant to the terms of this Agreement as follows:
2.1 IOD is a Pennsylvania corporation, duly organized, validly
existing and in good standing under the laws of that state,
and has the corporate power to own its property and carry on
its business as now being conducted, and to execute and deliver
the Asset Purchase Agreement and any other agreements to be
entered into by Seller in connection with the Asset Purchase
Agreement.
2.2 Seller is properly qualified as a foreign corporation to do
business in the jurisdictions listed in the attachment hereto
designated as Exhibit 2.2. These are the only jurisdictions where
Seller is required to be qualified as a foreign corporation in order
to conduct business in the Market.
2.3 To the best of Seller's knowledge, except as set forth on
Exhibit 2.3, there are no violations of applicable laws or
regulations, including, but not limited to, zoning regulations and
building permits or other permits related to sign structures have
occurred that would have a material adverse effect on the future
operation of any Asset.
2.4 Attached as Exhibit 2.4 are unaudited balance sheets and
comparative operating statements of Seller's business in the Market
as of July 31, 1996 (the "Financial Statements"). These Financial
Statements are in accordance with the books and records of Seller
and fairly and accurately present its financial position as of that
date in accordance with generally accepted accounting principles.
2.5 Since the date of the Financial Statements, except as disclosed
in Exhibit 2.5 attached hereto, to the best of Seller's knowledge
there have been no material adverse
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changes in the general affairs, management or financial position or
financial condition of Seller with respect to the Market.
2.6 The Exhibits attached to this Agreement are correct in all
material respects including specifically the following:
2.6.1 The information about contracts attached as
Exhibit 1.3.3 and Exhibit 1.3.4 to this Agreement is
true and correct as of the date set forth in said Exhibit.
Except as set forth in Exhibit 2.6.1, said contracts (1) are
in full force and effect (2) have not been breached by Seller
or to the best of Seller's knowledge, any of the parties
thereto; and (3) all payments required under said contracts
have been made except those not yet due and payable provided
the current portion of which is included as a Current
Liabilities. Seller has no "percentage rental" leases.
2.6.2 All sign leases to which Seller is a Lessee are in full
force and effect.
2.6.3 [Intentionally Deleted]
2.6.4 Exhibit 2.6.4 lists agreements, whether oral or written
requiring payments or performance by IOD after Closing other
than Lease payments and the following agreements:
(a) Each material contract, agreement or commitment for
the sale or lease of Seller's Assets, products or services,
excluding advertising contracts and contracts to provide
advertising allowances or promotional services which are
listed in Exhibit 1.3.4.
(b) Each contract with any dealer, distributor, broker, agent
or sales representative.
(c) Employment contracts, including union contracts, executed
by any officer, director, employee or consultant of Seller.
2.7 There are no unfair labor practice charges pending, or to
the best of Seller's knowledge, threatened against Seller.
Seller has not engaged in any unfair labor practices, and there
is no strike, dispute, request for representation or work
stoppage pending or threatened against Seller by or with
respect to any such employees.
2.8 The execution, delivery and performance of this
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Agreement by Seller, including, without limitation, all
conveyances, transfers, assignments and deliveries
contemplated herein, have been duly and effectively
authorized and approved by IOD's board of directors and
shareholders and all other persons, businesses, banks and
governmental bodies or courts whose approval is required . This
Agreement and each and every instrument executed and delivered
hereunder by Seller shall constitute a valid and binding
obligation of Seller enforceable according to their terms.
2.9 The performance of this Agreement by Seller will not
conflict with or violate the provisions of any material
agreement or instrument binding upon Seller
2.10 Except as set forth in Exhibit 2.10, there is no suit,
action, arbitration or legal, administrative or other proceeding
or governmental investigation pending or, after due inquiry, to
the best of Seller's knowledge, threatened against or affecting
the business, Assets or financial conditions of Seller within the
Market which would have any material adverse effect on Seller's
performance of this Agreement and the transactions contemplated
herein. Seller is not in default with respect to any order, writ,
injunction or decree of any federal, state, local or foreign
court, department, agency or instrumentality.
2.11 Except as set forth on Exhibit 2.11, at Closing Seller will
convey good and merchantable title to all Assets and Seller's
title to all property included in the Assets required to be
disclosed in the Exhibits to this Agreement is not encumbered in
any manner other than for liens for taxes not yet due.
2.12 All Assets are useable in the ordinary course of business in
accordance with industry standards except those listed in
Exhibit 2.12. Seller has no knowledge of any defects in the
condition of any of the said Assets, ordinary wear and tear
excepted.
2.13 Seller represents and warrants to Buyer that as of the date
of this Agreement the following environmental representations
and warranties are true:
2.13.1 Seller has not caused or permitted its operations
on any real estate owned or leased by Seller to
generate, manufacture, refine, transport, treat,
store, handle, dispose, transfer, produce or process
hazardous substances or other dangerous or toxic
substances or solid wastes, except in
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caused or to the best of Seller's knowledge permitted
and has no knowledge of the release of any hazardous
substances that have gone onto or offsite of any real
estate owned or leased by Seller (other than the
disposal of paints, pastes and similar chemicals
through approved channels) and Seller has no knowledge
that any person or entity has in the past utilized any
real estate owned or leased by Seller in a manner
which has created any hazardous substance on or off
any real estate owned or leased by Seller. There are no
pending and, to the best of Seller's knowledge, no
threatened claims, suits, administrative proceedings,
or other actions by a Court or governmental entity
with regard to hazardous substances on any real estate
owned or leased by Seller except as set forth in
Exhibit 2.13.1.
2.13.2 Seller agrees to indemnify and hold
harmless Buyer, its successors, and assigns against and in
respect of any and all damages, claims, losses, liabilities and
expenses, including, without limitation, reasonable legal,
accounting, consulting, engineering and other expenses, which
may be imposed upon or incurred by Buyer, its successors or
assigns, or asserted against the Buyer, their successors or
assigns by any other party or parties (including, without
limitation, a governmental entity), arising out of or in
connection with any environmental condition, resulting from
activity of Seller prior to Closing. The indemnification
obligations of Seller in this Section 2.13.2 shall survive and
extend to the fifth anniversary of Closing subject to the limits
stated in Section 10.5.
2.14 As of the date of this Agreement, Seller knows of no
individual, partnership, corporation or other entity in the
Market who makes it a practice to destroy billboards as part of
a campaign or concerted effort to damage billboard companies.
2.15 Except current liabilities incurred or paid in the ordinary
course of business and obligations under contracts entered into
or performed in the ordinary course of business Seller has not
since the date of the Financial Statements attached as
Exhibit 2.4:
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2.15.1 incurred or become subject to any obligations or
liabilities (absolute or contingent) which have a material
adverse effect on the Assets;
2.15.2 mortgaged, pledged or subjected to any lien, charge or
encumbrance any of its assets covered by this Agreement
(other than liens for taxes not yet due);
2.15.3 entered into any transaction other than in the ordinary
course of business in any way affecting the Assets, except
for this Agreement and the transactions contemplated
hereunder;
2.15.4 increased, without the knowledge of Buyer, the general
rate of compensation payable to any of its employees or made
or accrued for any new employee benefit plans for employees.
A list of employees who work on a full time basis and all
compensation and bonus arrangements for these employees is
set forth in Exhibit 2.15.4;
2.15.5 made, accrued or become liable in any way for any bonus,
profit sharing, pension, incentive compensation or other
similar payments to any employee; or
2.15.6 suffered any other event or condition of any character
which has materially adversely affected Seller's business.
2.16 The accounts receivable of Seller reflected in the Financial
Statements attached hereto as Exhibit 2.4 and the accounts
receivable of Seller resulting from its business operations through
the Closing Date have been or, to the best of Seller's knowledge,
will be collected in the ordinary course of business, considering
the offset for the reserve for doubtful accounts on the same basis
as used by Seller in the past. Seller shall continue through the
Closing Date its normal and customary collection efforts with regard
to such accounts receivable and shall not make any operational
changes in anticipation of this transaction. Said accounts
receivable arose out of bona fide transactions in the ordinary
course of business and are not subject to any right of offset or
counterclaim except for any barter or lease trade out arrangements
disclosed in Section 2.21.
2.17 Except as set forth in Exhibit 2.17, Seller does not sponsor
or participate in any (i) life, health, accident
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or disability or any other "employee welfare benefit plan" as
defined in Section 3(1) of ERISA, or (ii) any "employee pension
benefit plan" as defined in Section 3(2) of ERISA. Exhibit 2.17 also
discloses the Seller's vacation, sick leave and holiday policies.
2.18 Pursuant to the terms of this Agreement, is delivering to
Buyer all Assets used in the Market by Seller to operate its
business except Seller's Automobile.
2.19 Seller has paid all federal and municipal taxes, including
real and personal property, sales and use taxes it is required to
pay.
2.20 Seller has not sublet any property except as disclosed in
Exhibit 2.20.
2.21 Seller has not engaged in any "bartering" or "lease trade
outs" of accounts receivable or advertising space except as set forth
in Exhibit 2.21.
2.22 The supplies owned by Seller being purchased by Buyer, which
are current assets, are useable by Buyer, both as to quality and
quantity, in the ordinary course of business in accordance with
industry standards.
2.23 [Intentionally Deleted]
2.24 [Intentionally Deleted]
2.25 Seller has all permits and licenses needed to operate the
Assets being purchased by Buyer and no one has challenged the
validity of those permits and licenses except as set forth in
Exhibit 2.25.
2.26 No Major Advertiser of Seller has advised Seller that it will
not renew or it is going to breach or terminate its advertising
contracts when it is assigned to Buyer. The term "Major Advertiser"
as used herein shall mean any advertiser whose annual payments are
Five Thousand Dollars ($5,000.00) in the aggregate or more. No group
of advertisers whose annual payments exceed Forty Thousand Dollars
($40,000) have advised Seller they will not renew or are going to
breach or terminate their advertising contracts when they are
assigned to Buyer.
2.27 Seller has not received notice of any tax audits against
Seller.
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2.28 Seller shall be responsible for providing any notice of
layoff or plant closing required in connection with the transaction
contemplated herein pursuant to the Federal Worker Adjustment and
Retraining Notification Act of 1988, any successor federal law, and
any applicable state or local plant closing notification statute,
and Seller shall bear any liability or obligation that may rise or
accrue as the result of improper or untimely notice or that may
arise from any person claiming wrongful termination or change of
employment as a result of any action or omissions of Seller with
respect to the transactions set forth in this Agreement.
2.29 All dues owed by Seller to any outdoor advertising
association have been paid.
2.30 There are no agreements or undertakings pursuant to which any
third party has or may have the right to acquire from Seller any of
the stock or (except in the ordinary course of business) Assets of
Seller.
2.31 To the best of Seller's knowledge, except as set forth on
Exhibit 2.31, after Closing Buyer will have the exclusive right to
use the Seller's name and all other trade names used by Seller in
the outdoor advertising business in the outdoor advertising market
area where Seller currently transacts business.
2.32 To the best of Seller's knowledge, in the five years prior to
Closing, no employee of Seller, lessor, business invitee, or other
person has suffered personal injury or property damage as a result
of any action involving the business or Assets of Seller within the
Market such that a claim has been or may be raised against Seller
directly or indirectly or under the xxxxxxx'x compensation laws of
any state except as set forth in Exhibit 2.32.
2.33 Seller shall have delivered to Buyer under this Agreement
sign structures containing, in the aggregate, at least 155
advertising faces.
2.34 Except as disclosed on Exhibit 2.34, following Closing,
neither Seller nor any affiliates, officers, directors or
shareholders of IOD nor any person related to or affiliated with
Xxxxxxx will have any direct, indirect or beneficial ownership of
any real or personal property which is in any way involved with or
related to the operation of the Assets and property of Seller used
in the Market in Seller's outdoor advertising business being
purchased by Buyer.
3. Representatives and Warranties of Buyer. Buyer represents and
warrants to Seller as follows:
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3.1 Buyer has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of
Illinois, with full power and authority to own its properties and
carry on its business as now being conducted and to execute and
deliver this Asset Purchase Agreement and any other Agreements to be
entered into by Buyer in connection with this Asset Purchase
Agreement.
3.2 The performance of this Agreement by Buyer will not conflict
with or violate the provisions of any material agreement or
instrument binding upon Buyer; and the execution, delivery and
performance of this Agreement shall have been duly and effectively
authorized by Buyer prior to Closing. This Agreement and each and
every instrument executed and delivered by Buyer shall constitute a
valid and binding obligation of Buyer.
3.3 There is no suit, action, arbitration or legal,
administrative or other proceeding or governmental investigation
pending or, to the best of Buyer's knowledge, threatened against or
affecting the business, assets or financial conditions of Buyer
which would have any material adverse effect on Buyer's performance
of this Agreement and the transactions contemplated. Buyer is not in
default with respect to any order, writ, injunction or decree of any
federal, state, local or foreign court, department, agency or
instrumentality.
3.4 Buyer shall use its best efforts to perform and fulfill all
conditions and obligations on its part to be performed and fulfilled
under this Agreement, to the end that the transactions contemplated
by this Agreement shall be fully carried out.
4. Assumptions of Obligations.
4.1 Buyer does not assume any obligations or liabilities of
Seller of any kind or nature, except as to those post-closing
matters specified below.
4.1.1 Post-closing liabilities under leases affecting the
Assets or within the Market; and which have not been paid,
performed or discharged by Seller.
4.1.2 Post-closing obligations to deliver advertising services
pursuant to advertising contracts purchased pursuant to this
Agreement in the Market.
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4.2 Anything to the contrary notwithstanding, it is expressly
understood that Buyer shall not assume any of the following
obligations or liabilities of Seller:
4.2.1 Any city, state or federal tax liabilities for any
kind of tax for any period prior to and including the
Closing Date. Real and personal property taxes shall be
prorated as of the Closing Date, based upon bills
received, when received.
4.2.2 Any income tax liability arising from the sale of
Assets to Buyer or conveyance of Assets to Buyer or any
liquidation and dissolution of Seller.
4.2.3 Any obligation, commitment or liability of or claim
against Seller which constitutes or arises from a breach
by Seller of any representation, warranty or covenant.
4.2.4 Any obligation, commitment or liability of or claim
against Seller which may arise from Seller's operation of
the Assets prior to the Closing Date.
4.2.5 Any obligation, commitment or liability of or claim
against Seller which may arise from the rendering of
professional, legal, accounting, appraisal, engineering
or other similar services to Seller in connection with
the transactions.
4.2.6 Any liability of Seller under profit-sharing or
similar employee benefit plans or any other employee
benefit collective bargaining agreement, employment
agreement or salary or bonus arrangement.
4.3 Seller herewith agrees that it shall pay promptly when due,
or contest, any and all liabilities of Seller arising in the Market
not assumed by Buyer at Closing or discharged by Seller prior to
Closing, if Seller's failure to pay would have a material adverse
effect on Buyer, provided that Seller may contest the assertion of
any such liability to the extent reasonably prudent and Buyer shall
cooperate fully in any such contest. If Seller elects to contest
any such liability and fails to succeed in such contest after any
appeals, then Seller shall promptly pay such liability. Seller shall
give Buyer written notice before Seller begins contesting any such
liability unless Seller does not have adequate time,
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in which event, Seller shall give Buyer said written notice within
five (5) business days after Seller begins contesting any such
liability.
In the event that Seller is contesting any liability not assumed
by Buyer under the terms of the Asset Agreement, Seller shall make it
clear to the third party that Seller and not Buyer is the entity
disputing the matter.
4.4 Installments of special assessments levied against real estate
included in the Assets shall be the obligation of Seller if due on or
before the Closing Date and the obligation of Buyer if due after the
Closing Date.
4.5 Prior to the Closing and for six months thereafter, Seller shall
cooperate with Buyer to obtain all consents, approvals, and
certificates and licenses and permits, and other documents required
or appropriate in connection with the performance by it of this
Agreement and the consummation of the transactions contemplated
hereby or otherwise required in order to prevent the breach of any
representation and warranty set forth herein; provided, however,
that no contact will be made by the Seller with any third party to
obtain any Consent except in accordance with arrangements
previously agreed to by Buyer.
4.6 Excluding workmen's compensation, Seller shall be responsible
for all claims associated with health, illness or injury insofar as
they relate to events or conditions existing on or before the Closing
Date and relating to employees or their dependents (or others) to
the extent that event or condition has been reported on or before
the Closing Date to Seller or to a medical professional or as to
which medical treatment has been obtained on or before the Closing
Date; provided, however, that Buyer's health plans will (to the
extent they would cover medical expenses for a condition arising
after the Closing Date) cover medical expenses for continuing
employees incurred after the Closing Date to the extent said
medical expenses result from a medical condition existing on or
before the Closing Date that have not been so reported or the subject
of such treatment.
Seller shall be responsible for all workmen's compensation
claims associated with health, illness or injury insofar as they
relate to events occurring on or before the Closing Date.
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4.7 Seller shall offer continuation coverage under its applicable
group health plans to all employees of Seller and their covered
dependents who incur a "qualifying event" (within the meaning of
section 4980(B) of the Code and section 603 of ERISA) as a result
of or in connection with the transactions contemplated by this
Agreement. Such coverage shall comply with the continuation coverage
requirements (including any applicable notice provisions) of
section 4980(B) of the Code and Part 6 of Title I of ERISA and any
applicable state law continuation coverage requirements.
5. Conduct of Business Pending Closing. Seller represents,
warrants and agrees that from the date of this Agreement until the
Closing as to the Markets and Assets:
5.1 The business of Seller will be conducted in the usual
and ordinary course, the character of the business will not
change, no different business will be undertaken within the
Market, and Seller will, in accordance with its past practices,
preserve for Buyer the relationship with suppliers, customers
and others having business relations with Seller, including
those employees of Seller which Buyer intends to hire after
Closing.
5.2 Except in the ordinary course of business, Seller will not
enter into any contract, agreement, commitment or understanding
with respect to employing any agents, wholesalers, dealers,
brokers or consultants in the development and sale of their
services which requires an expenditure of more than $5,000
without the prior written authorization of Buyer.
5.3 As to the Market or Assets in the Market, Seller will not:
(i) mortgage, pledge or subject to any lien, charge or
encumbrance any of its Assets in the Market;
(ii) sell or transfer any of its Assets in the Market, except
in the ordinary course of business, or any permits, licenses,
approvals, or authorization or except in the ordinary course
of business, cancel any debts or claims;
(iii) knowingly enter into any transaction outside the
ordinary course of business.
(iv) make, accrue or become liable in any way for any bonus
(other than those which Seller shall pay in full), profit-
sharing, pension, incentive compensation or other similar
payments to any employee in the Market
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inconsistent with prior practices or other than as shown on a
Schedule or Exhibit to this Agreement;
(v) make or permit any amendment or early termination of
any contract, except in the ordinary course of business;
(vi) through negotiations or otherwise, make any commitment
affecting the Market or incur any liability affecting the Market
to labor organizations without the prior written approval of
Buyer;
(vii) make any material alteration to the normal and customary
pricing in the Market or terms and conditions of sale extended
to Seller's customers; or
(viii) discharge or satisfy any lien or encumbrance affecting
the Market or pay any obligation or liability affecting the
Market (absolute or contingent), except as required or allowed
hereunder.
5.4 Seller shall maintain books of account consistent with past
accounting practices as described in Section 2.4. Seller will not
materially alter its current insurance coverage without the prior
written consent of Buyer.
5.5 Prior to this Agreement, Seller has made available to Buyer and
its representatives certain information and records relating to the
business and affairs of Seller as requested by Buyer. During the
normal business hours throughout the period from this date to the
Closing Date, Seller will give to Buyer and its accountants, counsel,
appraisers and other representatives full access to all properties,
contracts, commitments, books and records or Seller pertaining to
the Market. Buyer will keep such information confidential and not
disclose or use such information except for purposes of this
Agreement until Closing.
5.6 Prior to the Closing, Buyer shall not have the risk of loss with
respect to the Assets to be conveyed pursuant to this Agreement. In
the event, between the date of this Agreement and the Closing Date,
any parcel of improved real property or personal property being
purchased, or leased as a part of this transaction, including but
not limited to, the office furniture and equipment, fixtures,
leasehold improvements, equipment, vehicles or other personal
property is materially damaged or destroyed by fire or other casualty
or in the event that the sign structures to be purchased are
materially damaged or destroyed by fire or other casualty, and if as
16
a result the Assets are materially diminished in value, Buyer may
elect to terminate this Agreement, and all obligations of the parties
shall cease and neither party shall have any further rights against the
other. Seller shall have the right within thirty (30) days to remedy or
repair such damage or destruction and (subject to the terms and
conditions of this Agreement) thereupon require Buyer to close. Seller
shall immediately notify the Buyer in writing of the occurrence of any
fire or other casualty. Buyer shall notify Seller in writing within two
days of Buyer's receipt of Seller's notice whether Buyer elects to
consummate this transaction.
6. Conditions to Obligations of Buyer to Consummate the Transaction. The
obligations of Buyer to be performed at the Closing shall be subject to the
satisfaction or the waiver in writing by Buyer on or prior to the Closing
Date of the following conditions:
6.1 Buyer shall have received an opinion from counsel for Seller in
the form attached as Exhibit 6.1 which shall be reasonably satisfactory
to Buyer, dated the Closing Date, to the effect that;
6.1.1 IOD is a corporation duly organized, existing and in good
standing under the laws of the State of Pennsylvania and has the
corporate power to carry on its business as now being conducted in
the Market, and is not required to qualify to do business in any
state where the nature of its business or assets require
qualification.
6.1.2 Such counsel does not know of any pending or threatened
lawsuits against Seller other than those described in Exhibit 2.10
or elsewhere in this Agreement.
6.1.3 The execution, delivery and performance of this Agreement by
Seller has been duly authorized and approved by its Board of
Directors and this Agreement and each instrument executed and
delivered herewith by Seller has been duly executed by and
constitute valid and binding obligations of Seller on the Closing
Date enforceable according to their terms except to the extent
enforceability is limited by applicable bankruptcy and insolvency
laws and by general principles of equity. Counsel may take exception
to the enforceability of the noncompetition and nonsolicitation
provisions of the instruments and other generally accepted
exceptions.
17
6.1.4 This Agreement and each instrument have been duly executed
and delivered by Seller.
6.1.5 [Intentionally Deleted]
6.1.6 [Intentionally Deleted]
6.1.7 When the Xxxx of Sale or other conveyance instruments shall
have been delivered to Buyer by Seller, such delivery will transfer
to Buyer good title to the Assets, and the Assets to the best of
counsel's knowledge will be free and clear of all liens,
encumbrances, claims, charges and assessments whatsoever, other than
any incurred by Buyer.
6.2 Buyer shall not have discovered and given notice to Seller prior
to closing of any material error, misstatement or omission in the
representations and warranties made by Seller which alone or in the
aggregate are materially adverse to Seller or to Buyer if the
transaction is completed, unless Seller has covered the same to Buyer's
reasonable satisfaction. The representations and warranties and
Exhibits or Schedules of Seller contained in this Agreement shall be
true on and as of the Closing Date with the same effect as though such
representations and warranties have been made on and as of such date,
except for any variations resulting from actions contemplated or
permitted by this Agreement, which variations shall not be materially
adverse, and each and all of the covenants to be performed by Seller on
or before the Closing Date pursuant to the terms shall have been duly
performed in all material respects. Seller shall deliver to Buyer a
certiifcate to that effect, dated the Closing Date, certifying to all
the foregoing, and executed by an authorized officer of Seller.
6.3 All contracts, leases and options, permits and rights employed by
Seller in the conduct of its business in the Market, to the extent
assignable by Seller, shall be assigned to Buyer at Closing, and Seller
will use reasonable business efforts to obtain and provide to Buyer at
Closing any third parties' consents required for such assignments.
6.4 If required by law, Seller shall have
18
complied with all requirements imposed by such agencies of the
U.S. Government as may be necessary for the valid and legal
consummation of the transactions contemplated by this Agreement.
6.5 No court or governmental agency shall have issued an order,
binding on Buyer, enjoining the closing of the transactions
contemplated herein, and no proceeding shall be pending or threatened
that could result in such order.
6.6 [Intentionally Deleted]
6.7 Seller shall have delivered a certificate that there has been no
material adverse change in the exhibits prepared for this Agreement
between the date of the exhibit and the Closing Date.
6.8 There shall be no existing or threatened suit, action,
arbitration or legal, administrative or other proceeding or
governmental investigation pending or, after due inquiry, to the best
of Seller's knowledge, threatened against or affecting the business,
assets or financial conditions of Seller within the Market which would
have any material adverse effect on Seller's performance of this
Agreement and the transactions contemplated, including that listed in
Exhibit 2.10 or elsewhere in this Agreement.
6.9 Seller shall deliver a certified copy of the Board of Directors
resolution approving this transaction and the execution of this
Agreement.
6.10 Seller shall deliver an Incumbency Certificate to Buyer as to
Seller.
6.11 Seller shall deliver to Buyer copies of all books, records and
documents relating to the Assets at the Closing. Seller shall retain
its minute books and Corporate records.
6.12 Seller shall have terminated or reassigned all of Seller's
employees in the Market.
7. Conditions to Obligations of Seller to Consummate the Transaction. The
obligations of Seller to be performed at the Closing shall be subject to
the satisfaction or the waiver in writing by Seller on or prior to the
Closing Date of the following conditions:
7.1 Seller shall have received an opinion of Buyer's counsel in the
form attached as Exhibit 7.1 and which shall be reasonably satisfactory
to Seller, dated the
19
Closing Date, to the effect that:
7.1.1 Buyer is a corporation duly organized, existing and in good
standing under the laws of the State of Illinois and has the
corporate power to carry on its business as now being conducted.
7.1.2 The execution, delivery and performance of this Agreement by
Buyer has been duly authorized and approved; and this Agreement and
each instrument executed and delivered by Buyer have been duly
executed by and constitute valid and binding obligations of Buyer
enforceable according to their terms subject, however, to any state
or federal laws for debtor relief or general principles of equitable
relief.
7.2 Seller shall not have discovered any material error, misstatement
or omission in the representations and warranties made by Buyer which
alone or in the aggregate to Buyer or Seller if this transaction is
completed unless Buyer has covered the same to Seller's reasonable
satisfaction. The representations and warranties of Buyer contained in
this Agreement shall be true on and as of the Closing Date with the
same effect as though such representations and warranties had been
made on and as of such date, except for any variations therein
resulting from actions permitted by this Agreement, which variations
shall not be materially adverse to Buyer and each and all the
covenants to be performed by Buyer on or before the Closing Date shall
have been duly performed in all material respects. Buyer shall
deliver to Seller a certificate to that effect, dated the Closing
Date, and executed by an authorized officer of Buyer.
7.3 If required by law, Buyer shall have complied with all
requirements imposed by such agencies of the U.S. Government as may be
necessary for the valid and legal consummation of the transactions
contemplated hereby.
7.4 No court of competent jurisdiction or governmental agency shall
have issued an order, binding on Seller, enjoining the closing of the
transactions contemplated herein, and no proceeding shall be pending or
threatened
20
that could result in such order.
7.5 There shall be no existing or threatened suit, action,
arbitration or legal, administrative or other proceeding or
governmental investigation pending or, after due inquiry, to the
best of Buyer's knowledge, threatened against or affecting the
business, assets or financial conditions of Buyer within the Market
which would have any material adverse effect on Buyer's performance
of this Agreement and the transactions contemplated, including that
listed in Exhibit 2.10 or elsewhere in this Agreement.
7.6 Buyer shall deliver an Incumbency Certificate to Seller as to
Buyer.
8. Closing.
8.1 The transactions required under this Agreement to be
consummated at the Closing shall take place at such date ("Closing
Date"), and time as Seller and Buyer may agree, as close as possible
to the execution of this agreement, but in no event later than
September 30, 1996.
8.2 In addition to, and without limiting any other provision of
this Agreement, Seller agrees to do, perform and deliver at the date
of Closing the following:
8.2.1 The opinion of counsel of Seller as specified in
Section 6.1;
8.2.2 Execution by Seller of the requisite instruments of
conveyance, including, but not limited to, a Xxxx of Sale
and assignments;
8.2.3 Appropriate instruments of transfer to Buyer all
parcels of real estate or leaseholds covered by this
Agreement.
8.2.4 Evidence satisfactory to Buyer showing compliance
with provisions of any applicable requirement of the U.S.
Government or any state or local government.
8.2.5 Such other instruments as counsel for Buyer may
reasonably request.
8.2.6 A certificate that there has been no material adverse
change in the Exhibits prepared for this Agreement,
between the date of the Exhibit and the Closing Date.
21
8.3 In addition to, and without limiting any other provisions of
this Agreement, Buyer agrees to do, perform and deliver at the Closing
the following:
8.3.1 The opinion of Buyer's counsel as specified in
Section 7.01;
8.3.2 The amount specified in Section 1.4 in the form of an
interbank transfer of immediately available funds;
8.3.3 Deposit of the amount specified in Section 1.4 in
escrow pursuant to the Escrow Agreement.
8.3.4 Evidence satisfactory to Seller showing compliance
with provisions of any applicable requirement of the U.S.
Government or any state or local government.
8.3.5 Such other instruments as counsel for Seller may
reasonably request.
9. Post-Closing Covenants.
9.1 Buyer and Seller agree to retain and permit each other access
to relevant pre-closing accounting records and corporate books of
Seller regarding the Assets for a period of six (6) years following
the Closing Date for any proper purpose. "Proper purpose" means the
preparation and review of any federal, state or local tax filing or
governmental report, filing, or application and defending or
enforcing rights against third parties or defending or enforcing
rights under this Agreement.
9.2 Seller and Buyer agree to cooperate in the preparation of any
governmental reports and to furnish reasonably requested information
needed for the preparation of governmental reports.
9.3 Consents. To the extent that the assignment of any contract,
license, lease or other agreement to be assigned to Buyer herein
shall require the consent of any person other than Seller, this
Agreement shall not constitute an agreement to assign the same if an
attempted assignment would constitute a breach thereof. Of any such
consent is not obtained before the Closing Date, Seller agrees to
cooperate with Buyer thereafter in any reasonable arrangement (such
as subcontracting, sublicensing or subleasing) designed to provide
for Buyer
22
the benefits under the applicable contract, license, lease or other
agreement, as the case may be including without limitation,
enforcement, at the cost to and for the benefit of Buyer, of any all
rights of Seller against the other parties thereto arising out of
the breach or cancellation thereof by such other parties or
otherwise.
9.4 Waiver of Bulk Transfer Laws. The Buyer and Seller each hereby
agrees to waive compliance by the other with the provisions of the
bulk transfer law of any jurisdiction.
10. Indemnity.
10.1 Seller agrees to indemnify Buyer against all claims, losses,
expenses, obligations, damages and liabilities (including, without
limitation, costs and expenses of litigation and reasonable
attorneys' fees) occurring or arising from the following: (1) any
breach of any representation or warranty or failure to do and
perform any covenant or agreement of Seller contained in this
Agreement; (2) any obligation, debt or liability of Seller of any
claim based upon any other occurrence arising from the operation of
the Assets anywhere, or from the operation of Seller's entire
business anywhere, prior to the Closing, the obligation for which is
not expressly assumed or agreed to be assumed by Buyer; or (3) any
claim of any finder or broker engaged by Seller or owed compensation
by Seller as a result of the transactions contemplated in this
Agreement.
10.2 Buyer hereby agrees to indemnify Seller against all claims,
losses, expenses, obligations, damages and liabilities (including,
without limitation, costs and expenses of litigation and reasonable
attorneys' fees) occurring or arising from the following: (1) any
breach of any representation or warranty or failure to do and
perform any covenant or agreement of Buyer contained in this
Agreement: (2) any obligation, debt or liability of Seller or any
claim based upon any other occurrence arising from the operation of
the Assets anywhere, or from the operation of Buyer's entire
business anywhere after the Closing, the obligation for which is not
expressly assumed or agreed to be assumed by Seller: or (3) any
claim of any finder or broker engaged by Buyer or owed compensation
by Buyer as a result of this transaction.
10.3 Within a reasonable time after receipt of notification of a
claim, the indemnified party shall notify the indemnifying party of
any claim or demand which the indemnified party has determined has
given rise
23
to a right of indemnification. Such notice shall specify the
agreement, representation or warranty with respect to which the
claim is made, the facts giving rise to the claim, the alleged basis
for the claim, and the amount (to the extent then determinable) of
liability for which indemnity is asserted. Failure to give the
foregoing notice shall not be deemed a waiver of any claim or a bar
to the assertion of such claim unless and to the extent an
indemnifying party is able to establish damage or prejudice arising
from the delay, in which case such failure shall be a waiver and bar
only to the extent of such damage or prejudice. In the event any
action, suit or proceeding is brought against the indemnified party
with respect to which it may make a claim for indemnification, the
indemnifying party shall assume the defense of such action, suit or
proceeding and shall hire attorneys and other professionals
reasonably acceptable to the indemnified party. The defense shall
include all settlement negotiations and arbitration, trial, appeal
or other proceedings which indemnifying party's counsel shall deem
appropriate, all of which shall be at the discretion of and
conducted by the indemnifying party. The indemnified party shall
have the right to be represented by advisory counsel and
accountants, at its expense, and shall be kept informed of such
action, suit or proceeding at reasonable times at all stages thereof,
whether or not so represented. The parties agree to make available
to each other, their counsel and accountants all information and
documents reasonably available to them which relate to such
proceedings or litigation, and the parties further agree to render
to each other such assistance as they may reasonably require of each
other in order to ensure the proper and adequate defense of any such
action, suit or proceeding. Each party shall promptly notify the
other party of any audit or examination of its books and records
undertaken by federal or state tax authorities and the results of
any such audit or examination, if such audit or examination is
reasonably expected to impact the other party.
10.4 In the event that any party does not provide indemnification as
required by the terms of this Article 10, and an indemnified party
shall pay or suffer a loss due to an indemnified liability, the
party or parties failing to provide indemnification shall pay all
expenses suffered by the indemnified party including reasonable
legal expenses of compelling the indemnifying party or parties to
provide indemnification to so provide.
If any party brings a legal action to compel an indemnification
and loses, the losing party or parties shall pay all reasonable
costs of litigation and the
24
legal expenses of the defendant in that action.
10.5 Limits on Indemnification. No claim for indemnification or damages
shall be made by Buyer hereunder unless the aggregate cumulative
amount of claims of Buyer (or any person or entity claiming through
Buyer) exceeds $7.500 and then only to the extent such claims exceeds
such amount. Notwithstanding anything in this Agreement to the
contrary, Seller shall not be liable to Buyer or any person claiming
through Buyer for an aggregate cumulative amount in excess of $250,000.
10.6 Arbitration. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof shall be settled by final and
binding arbitration in accordance with the then prevailing rules of
the American Arbitration Association, and judgment upon the award
rendered may be entered in any court having jurisdiction thereof. The
arbitration proceedings shall be held in Des Moines, Iowa, before a
single arbitrator.
11. Finders. Except with respect to Xxxxxxx, Xxxxxx & Co., which shall be
paid solely by Seller, Seller and Buyer each represent and warrant to the
other that they have not dealt with any finder or broker, they have not had
communications with any individual acting in such capacity with regard to
these transactions, and they are not in any way obligated to compensate any
such person.
12. Miscellaneous.
12.1 This Agreement may be amended or modified by, and only
by, a written document executed by all of the parties.
12.2 The titles of the sections of this Agreement are for
convenience of reference only and are not to be considered in
construing this Agreement.
12.3 This Agreement and any documents specifically referred to
constitute the entire understanding between the parties with respect
to the subject matter, superseding all negotiations, prior discussions
and preliminary agreements. This Agreement may be executed in any
number of counterparts.
12.4 The representations and warranties by the parties shall
survive the Closing for a period of two (2) years, all covenants and
agreements shall also survive the
25
Closing for a period of two (2) years unless they expire by
their terms on or before Closing. Except as set forth in Section 2.13,
no claim for indemnification shall be allowed after such two year
period.
12.5 It is expressly understood and agreed that Buyer and
Seller or their respective officers or agents have not made any
warranty or agreement, express or implied, except as are
expressly provided, as to the tax consequences of this
transaction or the tax consequences of any transaction pursuant
to or arising out of this Agreement.
12.6 Other than to a subsidiary or affiliate of Buyer, this
Agreement may not be assigned without the prior written consent of the
other party. This Agreement will be binding upon and inure to the
benefit of the parties, their successors or permitted assigns, and the
parties agree for themselves, their successors or permitted assigns,
to execute any instrument and to perform any acts which may be
necessary or proper to carry out the purposes of this Agreement.
12.7 The Exhibits to this agreement shall be as of the date of
this Agreement unless otherwise stated, but Seller shall provide Buyer
with the certification provided for in Section 6.7.
12.8 All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly
given if delivered in person or by electronic facsimile with receipt
acknowledged and copies sent by mail as provided below to the
respective persons named below or if mailed by Express, certified or
registered mail, postage prepaid, return receipt requested:
If to Seller:
Xxxxxx X. Xxxxxxx
Iowa Outdoor Displays, Inc.
X.X. Xxx 00
000 X. Xxxxxxxxxx
Xxxxxxx, XX 00000
(Phone: 000-000-0000)
(Fax: 000-000-0000)
26
With a copy to:
Xxxxx X. Xxxxxxxxx, Esq.
Day, Xxxxx & Xxxxxx
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
(Phone: 000-000-0000)
(Fax: 000-000-0000)
If to Buyer:
Xxxxx X. Xxxxxxx
Xxxx X. Xxxxx
Universal Outdoor, Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
12.9 After the execution of this Agreement, Buyer may issue
such press releases and prepare and file documents containing such
information regarding this Agreement and the transactions contemplated
as Buyer deems appropriate.
12.10 This Agreement may be executed in one or more
counterparts, each of which need not contain the signatures of all
parties, and all of such counterparts taken together shall constitute
one Agreement. Signatures on facsimile copies of this
Agreement are acceptable.
IN WITNESS WHEREOF, all of the parties hereto have
executed and delivered this Agreement as of the day and year first
above written.
BUYER:
UNIVERSAL OUTDOOR, INC
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Its: Vice President
---------------------------------
SELLER:
MOUNTAIN MEDIA INC., d/b/a
IOWA OUTDOOR DISPLAYS
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Its President
---------------------------------
/s/ X.X. Xxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxx
27
