PURCHASE AGREEMENT
AMONG
XXXXX OUTDOOR ADVERTISING LIMITED PARTNERSHIP
AND
XXXXX X. XXXXXXXX
AND
XXXXXXX OUTDOOR ADVERTISING ACQUISITION CO., L.P.
October 25, 1996
TABLE OF CONTENTS
SECTION HEADINGS PAGE
1. Definitions...................................................... 1
2. Purchase and Sale of Company Shares.............................. 5
(a) Basic Transaction........................................ 5
(b) Purchase Price........................................... 6
(c) The Closing.............................................. 6
(d) Deliveries at the Closing................................ 6
(f) Certain Consents......................................... 7
3. Representations and Warranties Concerning the Transaction........ 7
(a) Representations and Warranties of the Sellers............ 7
(b) Representations and Warranties of the Buyer.............. 8
4. Representations and Warranties Concerning the Pocono Business.... 9
(a) Organization, Qualification, and Corporate Power......... 9
(b) Capitalization........................................... 9
(c) Noncontravention......................................... 9
(d) Brokers' Fees............................................ 10
(e) Title to Tangible Assets................................. 10
(f) Financial Statements..................................... 10
(g) Events Subsequent to Most Recent Fiscal Month End........ 10
(h) Legal Compliance......................................... 11
(i) Tax Matters.............................................. 11
(j) Real Property............................................ 11
(k) Intellectual Property.................................... 12
(l) Contracts................................................ 12
(m) Advertising Structures................................... 13
(n) Advertising Contracts.................................... 13
(o) Permits.................................................. 13
(p) Site Leases.............................................. 13
(q) Powers of Attorney....................................... 13
(r) Litigation............................................... 14
(s) Employee Benefits........................................ 14
(t) Certain Business Relationships with the Company.......... 14
(u) Environmental Matter..................................... 15
(v) Insurance................................................ 15
(w) Completeness of Assets................................... 15
5. Pre-Closing Covenants............................................ 16
(a) General.................................................. 16
(b) Notices and Consents..................................... 16
(c) Operation of Business; Reorganization.................... 16
(d) Full Access.............................................. 16
(e) Notice of Developments................................... 16
(f) Disclosure Schedule and Annex I.......................... 17
(g) Hired Employees.......................................... 17
6. Further Assurances............................................... 17
7. Conditions to Obligation to Close................................ 17
(a) Conditions to Obligation of the Buyer.................... 17
(b) Conditions to Obligation of the Sellers.................. 18
8. Remedies for Breaches of This Agreement.......................... 19
(a) Survival of Representations and Warranties............... 19
(b) Indemnification Provisions for Benefit of the Buyer...... 19
(c) Indemnification Provisions for Benefit of the Sellers.... 20
(d) Matters Involving Third Parties.......................... 20
(e) Determination of Adverse Consequences.................... 21
(f) ......................................................... 21
9. Termination...................................................... 21
(a) Termination of Agreement................................. 21
(b) Effect of Termination.................................... 22
10. Miscellaneous................................................... 22
(a) Nature of Certain Obligations............................ 22
(b) Press Releases and Public Announcements.................. 22
(c) 401(k) Plan Transfer of Assets........................... 22
(d) No Third Party Beneficiaries............................. 22
(e) Entire Agreement......................................... 23
(f) Succession and Assignment................................ 23
(g) Counterparts............................................. 23
(h) Headings................................................. 23
(i) Notices.................................................. 23
(j) Governing Law............................................ 24
(k) Amendments and Waivers................................... 24
(l) Severability............................................. 24
(m) Expenses................................................. 24
(n) Construction............................................. 24
(o) Incorporation of Exhibits, Annexes, and Schedules........ 25
(p) Enforcement.............................................. 25
ii
PURCHASE AGREEMENT
This Purchase Agreement (the "Agreement") entered into as of October 25,
1996, by and among Xxxxx Outdoor Advertising Limited Partnership, a Minnesota
limited partnership (the "Buyer"), Xxxxx X. XxXxxxxx ("XxXxxxxx") and Xxxxxxx
Outdoor Advertising Acquisition Co., L.P., a Delaware limited partnership
("Xxxxxxx") (XxXxxxxx and Xxxxxxx are referred to herein collectively, as
"Sellers.") (The Buyer, XxXxxxxx and Xxxxxxx are referred to collectively herein
as the "Parties.")
W I T N E S S E T H
WHEREAS, Xxxxxxx owns and operates an outdoor advertising business,
including billboards and posters, in and around the Pocono region (the "Pocono
Business") through its Northeast Pennsylvania (Pocono) Division ("Division");
WHEREAS, in 1995 Xxxxxxx acquired the Pocono Business from PA Outdoor,
Inc., a Pennsylvania corporation (the "Company") in consideration of certain
limited partnership interests in Xxxxxxx;
WHEREAS, Xxxxxxx and the Company intend to reorganize through a redemption
of the Company's Xxxxxxx limited partnership interests in exchange for
substantially all of the assets of the Division other than the Xxxxxxx Pocono
Assets (as defined herein) (the "Reorganization");
WHEREAS, XxXxxxxx owns all of the outstanding capital stock of the Company;
WHEREAS, Buyer desires to acquire the Pocono Business by acquiring all of
the outstanding capital stock of the Company and the Pocono Xxxxxxx Assets from
XxXxxxxx and Xxxxxxx, respectively;
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
1. Definitions.
"Accredited Investor" has the meaning set forth in Regulation D promulgated
under the Securities Act.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable
amounts paid in settlement, liabilities, obligations, taxes, liens, losses,
expenses, and fees, including court costs and reasonable attorneys' fees and
expenses.
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"Advertising Contract" has the meaning set forth in (S)4(n) below.
"Affiliate" means, when used with reference to a specified Person, any
other Person that directly, or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with the specified
Person. For purposes of this definition of Affiliate, "control" means the
possession, directly or indirectly, of the power to direct or to cause the
direction of management and policies of the Person in question, whether through
the ownership of voting securities or by contract or otherwise.
"Affiliated Group" means any affiliated group within the meaning of Code
(S)1504.
"Asset Purchase Price" has the meaning set forth in (S)2(b) below.
"Assumed Liabilities" means (i) the liabilities of Xxxxxxx to the extent
reflected on the schedule of Working Capital at Closing, and (ii) the
liabilities and obligations of Xxxxxxx arising after the Closing pursuant to
those (A) Advertising Contracts, Site Leases, purchase money financing and other
written contracts and commitments included within the Xxxxxxx Pocono Assets and
listed on Exhibit C, and (B) the employment agreements listed on (S)4(l) of the
Disclosure Schedule between Xxxxxxx and those Employees of the Division who are
Hired Employees.
"Xxxx of Sale" means that Xxxx of Sale, Assignment and Assumption Agreement
in the form attached hereto as Exhibit A.
"Billboard" has the meaning set forth in (S)4(m) below.
"Billboard Leases" means those leases under which Xxxxxxx is the lessee for
those Billboards listed in (S)4(m) which are identified as Xxxxxxx Sub-Leased
Structures.
"Business Assets" means, collectively, the Xxxxxxx Pocono Assets and all
the assets of the Company.
"Buyer" has the meaning set forth in the preface above.
"CIBC" means the Canadian Imperial Bank of Commerce.
"Closing" has the meaning set forth in (S)2(e) below.
"Closing Date" has the meaning set forth in (S)2(c) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning set forth in the preface above.
"Company Shares" means the 306 shares of the Class A Voting Common Stock,
no par value $.01 per share, being all of the Company's issued and outstanding
stock.
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"Confidential Information" means any information concerning the businesses
and affairs of the Company that is not already generally available to the
public.
"Current Assets" means net accounts receivable (after allowance for bad
debts) and, to the extent that the Buyer receives the benefit thereof, prepaid
leases and prepaid other expenses.
"Current Liabilities" means all liabilities or obligations relating to the
Pocono Business that would be required under GAAP to be reflected as a liability
on a balance sheet dated as of the date of determination of Current Liabilities.
"CVF Fee" means the broker fee of Campell Xxxxxxxxxxx Xxxxxx, L.P. in the
amount of $185,000 with respect to the transactions contemplated under this
Agreement.
"Disclosure Schedule" has the meaning set forth in (S)4 below.
"Employee Benefit Plan" means any (a) nonqualified deferred compensation or
retirement plan or arrangement which is an Employee Pension Benefit Plan, (b)
qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan), or (d) Employee Welfare Benefit Plan or material fringe
benefit plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA (S)3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA (S)3(1).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Excluded Assets" means those assets of the Division specifically set forth
on Exhibit B hereto which will not be acquired by Buyer pursuant to this
Agreement.
"Financial Statements" has the meaning set forth in (S)4(f) below.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"Hired Employees" has the meaning set forth in (S)5(g).
"Income Tax" means any federal, state, local, or foreign income tax,
including any interest, penalty, or addition thereto, whether disputed or not.
"Income Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Income Taxes, including
any schedule or attachment thereto.
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"Indemnified Party" has the meaning set forth in (S)8(d) below.
"Indemnifying Party" has the meaning set forth in (S)8(d) below.
"Knowledge" means actual knowledge without independent investigation.
"XxXxxxxx" has the meaning set forth in the preface above.
"Xxxxxxx" has the meaning set forth in the preface above.
"Xxxxxxx Pocono Assets" means the assets used in the operation of the
Pocono Business that are not otherwise owned by the Company or Excluded Assets,
including the assets specifically set forth on Exhibit C hereto and including
$250,000 of Working Capital as of the Closing Date.
"Most Recent Financial Statements" has the meaning set forth in (S)4(f)
below.
"Most Recent Fiscal Month End" has the meaning set forth in (S)4(f) below.
"Multiemployer Plan" has the meaning set forth in ERISA (S)3(37).
"NonCompetition Agreement" means a NonCompetition Agreement between Buyer
and Xxxxxxx in the form of Exhibit D hereto.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Party" has the meaning set forth in the preface above.
"Permit" has the meaning set forth in (S)4(o) below.
"Permitted Liens" means (a) liens for Property Taxes not yet due and
payable, and (b) purchase money liens and liens securing rental payments under
capital lease arrangements listed on Exhibit C.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"Pocono Business" has the meaning set forth in the Preface above.
"Property Tax" means any property, ad valorem, franchise, net worth,
capital stock or similar type tax.
"Purchase Price" has the meaning set forth in (S)2(b) below.
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"Reorganization" has the meaning set forth in the preface above.
"Reportable Event" has the meaning set forth in ERISA (S)4043.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance, charge,
or other security interest or options or rights of any third parties with
respect thereto.
"Sellers" has the meaning set forth in the preface above.
"Site Lease" has the meaning set forth in (S)4(p) below.
"Sublease" means a Sublease from Xxxxxxx to Buyer with respect to the
Division's headquarters office space in Bangor, Pennsylvania for a mutually
agreeable period at a monthly rental equal to the rental paid by Xxxxxxx for
such space.
"Stock Purchase Price" has the meaning set forth in (S)2(b) below.
"Subsidiary" means any corporation with respect to which a specified Person
(or a Subsidiary thereof) owns a majority of the common stock or has the power
to vote or direct the voting of sufficient securities to elect a majority of the
directors.
"Third Party Claim" has the meaning set forth in (S)8(d) below.
"Working Capital" means, as of a given date, the excess of Current Assets
over Current Liabilities of the Division.
2. Purchase and Sale of Company Shares and Pocono Assets.
(a) Basic Transaction.
(i) At the Closing, on and subject to the terms and conditions of this
Agreement, (x) the Buyer agrees to purchase from XxXxxxxx, and XxXxxxxx
agrees to sell to the Buyer, all of the Company Shares free and clear of
any Security Interest for the Stock Purchase Price, (y) the Buyer agrees to
purchase from Xxxxxxx, and Xxxxxxx agrees to sell to the Buyer, all of the
Xxxxxxx Pocono Assets free and clear of any Security Interest other than
Permitted Liens for the Asset Purchase Price; and (z) Xxxxxxx agrees to
enter into the NonCompetition Agreement.
(ii) At the Closing, Xxxxxxx will deliver to the Buyer a Schedule of
the Working Capital of the Division as of Closing, which schedule will be
prepared in a manner consistent with the preparation of the Most Recent
Financial Statements and shall reflect Current Assets of the Division and
Current Liabilities of the Division of the same kind and nature reflected
in the Most Recent Financial Statements;
5
provided, however, that the Schedule shall reflect accrued salaries only
for Hired Employees. Buyer shall review the schedule delivered by Xxxxxxx,
and Xxxxxxx and the Buyer agree to resolve at Closing any objections raised
by the Buyer with respect thereto so that the schedule referred to herein
is mutually acceptable to Xxxxxxx and the Buyer. All of the Current Assets
and the Current Liabilities to the extent reflected on such Schedule shall
be Xxxxxxx Pocono Assets and Assumed Liabilities, respectively; provided,
however, that to the extent that Working Capital as shown on such Schedule
is less than $250,000, Xxxxxxx shall retain and agree to pay and perform
and there shall be excluded from Assumed Liabilities certain identified
Current Liabilities acceptable to the Sellers and the Buyer representing an
amount of Current Liabilities which would be necessary to result in
increasing Working Capital to approximately, but not less than, $250,000;
and provided further, that to the extent that Working Capital as shown on
such Schedule exceeds $250,000, Xxxxxxx shall retain and there shall be
excluded from the Xxxxxxx Pocono Assets certain identified accounts
receivable acceptable to the Sellers and the Buyer representing an amount
of accounts receivable from the Current Assets which would be necessary to
result in decreasing Working Capital to approximately, but not less than,
$250,000.
(b) Purchase Price. At the Closing, the Buyer agrees to pay Eight Million
Two Hundred Fifteen Thousand Dollars ($8,215,000) (the "Purchase Price") by wire
transfer in immediately available funds, of which One Million Four Hundred Fifty
Thousand Dollars ($1,450,000) ("Asset Purchase Price") shall be delivered to
Xxxxxxx for the Xxxxxxx Pocono Assets and the balance ("Stock Purchase Price")
shall be delivered to XxXxxxxx for the Company Shares. As additional
consideration for the Xxxxxxx Pocono Assets the Buyer shall assume the Assumed
Liabilities. In addition Buyer agrees to pay Xxxxxxx $100,000, by wire transfer
in immediately available funds, as consideration for the NonCompetition
Agreement. Upon the execution of this Agreement, the Buyer shall pay a $100,000
deposit to the Sellers which, upon the Closing, shall be credited to the Stock
Purchase Price and the Asset Purchase Price pro rata based on the ratio each
bears to the total Purchase Price. The $100,000 deposit shall be non-refundable
unless the Buyer terminates this Agreement in accordance with (S)9(a)(iii)
hereof, in which case the deposit shall be returned to the Buyer in addition to
any other remedy to which the Buyer may be entitled hereunder.
(c) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Powell, Goldstein,
Xxxxxx & Xxxxxx in Atlanta, Georgia, commencing at 9:00 a.m. local time on
October 31, 1996 or such other date as the Buyer and the Sellers may mutually
determine (the "Closing Date").
(d) Deliveries at the Closing. At the Closing, (i) the Sellers will deliver
to the Buyer the various certificates, instruments, and documents referred to in
(S)7(a) below, (ii) the Buyer will deliver to the Sellers the various
certificates, instruments, and documents referred to in (S)7(b) below, (iii)
XxXxxxxx will deliver to the Buyer stock certificates representing all of the
Company Shares, endorsed in blank or accompanied by duly executed assignment
documents, (iv) Xxxxxxx and the Buyer will each execute and deliver a
counterpart of the Xxxx of Sale with respect to the Xxxxxxx Pocono Assets and
the Assumed Liabilities, and (v) the Buyer will deliver to each of the Sellers
the consideration specified in (S)2(b) above and to
6
Campell Xxxxxxxxxxx Xxxxxx, L.P. the CVF Fee, by wire transfer inimmediately
available funds.
(f) Certain Consents. The Disclosure Schedule identifies each agreement,
contract, permit or similar asset to be assigned to the Company in the
Reorganization or to the Buyer as a Xxxxxxx Pocono Asset pursuant to this
Agreement which may not be assigned hereunder without the consent of another
person or written notice being given to another person. Delivery of the consents
listed on Exhibit E (being consents necessary to the assignment of any Site
Leases that individually account for more than 1% of the Pocono Business'
revenues but excluding any requirement which consists solely of prior written
notice of transfer) by Xxxxxxx to the Buyer is a condition to the obligation of
the Buyer to consummate the transactions contemplated hereunder. With respect to
any consent not obtained at or prior to Closing, Buyer may waive such condition
and, with respect to the agreement, contract, permit or similar asset for which
consent has not been contained, this Agreement shall not constitute an agreement
to assign the same if an attempted or actual assignment would constitute a
breach thereof or be unlawful, and Xxxxxxx and the Buyer, to the maximum extent
permitted by law and any terms of or limitations relating to such asset, shall
use their reasonable best efforts to obtain for Buyer the benefits thereunder,
and shall cooperate to the maximum extent permitted by law and any terms of or
limitations relating to such asset, in any reasonable arrangement designed to
provide such benefits to the Buyer, including any sublease or subcontract or
similar arrangement, and if the Buyer has obtained such benefits, the Buyer
shall discharge Matthew's obligations thereunder arising from and after the
Closing Date, except for those obligations arising because of Matthew's breach.
3. Representations and Warranties Concerning the Transaction.
(a) Representations and Warranties of the Sellers. Each of the Sellers,
severally and not jointly, represents and warrants to the Buyer that the
statements contained in this (S)3(a) are correct and complete as of the date of
this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this (S)3(a)) with respect to himself or itself,
except as set forth in Annex I to be delivered by Xxxxxxx to Buyer as provided
in (S)5(f) hereof.
(i) Organization of Certain Sellers. Xxxxxxx is a partnership, duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation and duly authorized to conduct business
and is in good standing under the laws of each jurisdiction where such
qualification is required, except where the lack of such qualification
would not have a material adverse effect on the financial condition of
Xxxxxxx taken as a whole.
(ii) Authorization of Transaction. The Seller has full power and
authority to execute and deliver this Agreement and to perform his or its
obligations hereunder. This Agreement constitutes the valid and legally
binding obligation of the Seller, enforceable in accordance with its terms
and conditions. The Seller need not give
7
any notice to, make any filing with, or obtain any authorization, consent,
or approval of any government or governmental agency in order to consummate
the transactions contemplated by this Agreement.
(iii) Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated
hereby, will (A) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which the Seller is
subject or, with respect to Xxxxxxx, any provision of its partnership
agreement, or (B) except as set forth in (S)3(a)(iii) of Annex I, conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel any agreement, contract, lease, license, instrument, or
other arrangement to which the Seller is a party or by which he or it is
bound or to which any of his or its assets is subject.
(iv) Brokers' Fees. Except for fees owed to Campell Xxxxxxxxxxx
Xxxxxx, L.P., the Seller has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
(v) Title to Company Shares. Except for a pledge of the Company
Shares to CIBC, XxXxxxxx has good title to the Company Shares, free and
clear of all Security Interests.
(b) Representations and Warranties of the Buyer. The Buyer represents and
warrants to the Sellers that the statements contained in this (S)3(b) are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this (S)3(b)),
except as set forth in Annex II attached hereto.
(i) Organization of the Buyer. The Buyer is a partnership duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation. The Buyer is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction where
such qualification is required, except where the lack of such qualification
would not have a material adverse effect on the financial condition of the
Buyer taken as a whole.
(ii) Authorization of Transaction. The Buyer has full power and
authority to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement constitutes the valid and legally
binding obligation of the Buyer, enforceable in accordance with its terms
and conditions. The Buyer need not give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any government
or governmental agency in order to consummate the transactions contemplated
by this Agreement.
8
(iii) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby,
will (A) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Buyer is subject or
any provision of its charter or bylaws or (B) conflict with, result in a
breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Buyer is a party or by which
it is bound or to which any of its assets is subject.
(iv) Brokers' Fees. The Buyer has no liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which any Seller could
become liable or obligated.
(v) Investment. The Buyer is an Accredited Investor acquiring the
Company Shares for investment purposes only and not with a view to or for
sale in connection with any distribution thereof within the meaning of the
Securities Act.
4. Representations and Warranties Concerning the Pocono Business. Xxxxxxx
represents and warrants to the Buyer that the statements contained in this (S)4
are correct and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
(S)4), except as set forth in the disclosure schedule to be delivered by Xxxxxxx
to the Buyer as provided in (S)5(f) hereof, as the same may be amended as
provided herein (the "Disclosure Schedule"). The parties acknowledge that Annex
I and the Disclosure Schedule shall not be attached upon execution hereof, but
that, upon delivery of Annex I and the Disclosure Schedule in accordance with
(S)5(f), each shall be attached and incorporated herein by reference.
(a) Organization, Qualification, and Corporate Power. The Company is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Pennsylvania. The Company is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction where such
qualification is required, except where the lack of such qualification would not
have a material adverse effect on the financial condition of the Company taken
as a whole. The Company has full corporate power and authority to carry on the
Pocono Business and to own and use the properties used in the Division.
(b) Capitalization. The Company has authorized capital stock consisting
of: 2,500 shares of Class A Voting Common Stock, no par value, of which 306
shares are issued and outstanding; and 2,500 shares of Class B Common Voting
Stock, no par value, of which no shares are issued and outstanding. All of the
issued and outstanding Company Shares have been duly authorized, are validly
issued, fully paid, and nonassessable, and are held of record by XxXxxxxx.
There are no outstanding or authorized options, warrants, purchase rights,
9
subscription rights, conversion rights, exchange rights, or other contracts or
commitments that could require the Company to issue, sell, or otherwise cause to
become outstanding any of its capital stock. There are no outstanding or
authorized stock appreciation, phantom stock, profit participation, or similar
rights with respect to the Company.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Company is subject or any provision
of the charter or bylaws of the Company or (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel any notice under
any agreement, contract, lease, license, instrument, or other arrangement to
which the Company is a party or by which it is bound or to which any of its
assets is subject (or result in the imposition of any Security Interest upon any
of its assets), except as set forth in (S) 4(c) of the Disclosure Schedule. The
Company is not required to give any notice to, make any filing with, or obtain
any authorization, consent, or approval of any government or governmental agency
in order for the Parties to consummate the transactions contemplated by this
Agreement, except where the failure to give notice, to file, or to obtain any
authorization, consent, or approval would not have a material adverse effect on
the financial condition of the Company together with the Xxxxxxx Pocono Assets
taken as a whole or on the ability of the Parties to consummate the transactions
contemplated by this Agreement.
(d) Brokers' Fees. The Company has no liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
(e) Title to Tangible Assets. Xxxxxxx has as of the date hereof good and
valid title, or, with respect to the Site Leases and any other leases included
in the Xxxxxxx Pocono Assets, a valid lessee's interest to the Xxxxxxx Pocono
Assets. Xxxxxxx will have as of the Closing Date good and valid title, or, with
respect to the Site Leases and any other leases included in the Xxxxxxx Pocono
Assets, a valid lessee's interest to the Xxxxxxx Pocono Assets. The Company
will have at Closing good and valid title, or, with respect to the Site Leases
or any other lease in the assets of the Company, a valid lessee's interest to
the assets used in the operation of the Division, other than the Xxxxxxx Pocono
Assets and the Excluded Assets.
(f) Financial Statements. Attached hereto as (S)4(f) of the Disclosure
Schedule are the following financial statements (collectively, the "Financial
Statements"): (i) unaudited statements of operating income as of and for the
fiscal years ended December 31, 1995 and December 31, 1994 for the Company; and
(ii) pro forma balance sheets of the Company (after giving effect to the
Reorganization) and statements of operating income (the "Most Recent Financial
Statements") as of and for the nine months ended September 30, 1996 for the
Pocono Business (the "Most Recent Fiscal Month End"). The Financial Statements
have been prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered thereby and present fairly the financial
condition of the Pocono Business as
10
of such dates and the results of operations of the Pocono Business for such
periods; provided, however, that the Most Recent Financial Statements have been
prepared after giving effect to the Reorganization and are subject to normal
year-end adjustments and that all the Financial Statements lack footnotes and
other presentation items required under GAAP; and provided, further, that the
Financial Statements have been prepared without any allocation of corporate
overhead. The term "corporate overhead," as used in this Agreement, does not
include any Division level operating expenses.
(g) Events Subsequent to Most Recent Fiscal Month End. Since the Most
Recent Fiscal Month End, there has not been any material adverse change in the
financial condition of the Division or the Company and the Xxxxxxx Pocono Assets
taken as a whole.
(h) Legal Compliance. Each of the Company and Xxxxxxx has complied in all
material respects with all applicable laws (including rules, regulations, codes,
plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder)
of federal, state, local, and foreign governments (and all agencies thereof).
(i) Tax Matters.
(i) Each of the Company and Xxxxxxx has filed all Income Tax Returns
that it was required to file, and has paid all Income Taxes shown thereon
as owing.
(ii) No Income Tax Returns with respect to the Company or Xxxxxxx for
taxable periods ended on or after December 31, 1992 have been audited, and
no Income Tax Returns of the Company or Xxxxxxx are currently the subject
of audit. The Sellers have delivered to the Buyer correct and complete
copies of all Income Tax Returns filed by the Company for periods after
December 31, 1992.
(iii) The Company and Xxxxxxx have not waived any statute of
limitations in respect of Income Taxes or agreed to any extension of time
with respect to an Income Tax assessment or deficiency.
(iv) The Company is not a party to any Income Tax allocation or
sharing agreement.
(v) The Company has not been a member of an Affiliated Group filing a
consolidated federal Income Tax Return.
(vi) On the Closing Date, none of the Buyer, the Company or the
Business Assets shall be liable or responsible for any tax arising or
relating to any period prior to the Closing Date, except to the extent
included in Current Liabilities. In determining whether a tax (other than
a Property Tax) relates to a period prior to or after the Closing Date, the
Company shall be treated as if its books had been closed on the Closing
Date and the liability for such tax shall be allocated between the
respective periods (i.e., before and after the Closing Date), based upon
the actual events occurring during those periods. In the case of a
Property Tax relating to those
11
periods, the liability for such tax shall be allocated between the two
periods (i.e., before and after the Closing Date) as if such tax accrued
ratably over the period covering such tax, regardless of the actual lien
date for payment of the tax.
(j) Real Property.
(i) Neither Xxxxxxx nor the Company owns any real property as of the
date hereof used in the operation of the Division, except for the perpetual
easements listed in Section 4(j)(i) of the Disclosure Schedule. With
respect to each such easement, the Company has, and at the Closing, Xxxxxxx
or the Company will have, good and marketable title to the perpetual
easement, free and clear of any Security Interest, covenant or other
restriction, except for taxes or installments of special assessments not
yet delinquent, recorded covenants and other restrictions, and utility
easements, building restrictions, zoning restrictions, and other
restrictions which do not impair the current use of the easement.
(ii) Section 4(j)(ii) of the Disclosure Schedule lists all real
property leased or subleased to Xxxxxxx or the Company (other than real
property subject to Site Leases) that is used in the operation of the
Division. The Sellers have delivered to the Buyer correct and complete
copies of the leases and subleases listed in (S)4(j)(ii) of the Disclosure
Schedule (as amended to date). Each lease and sublease listed in
(S)4(j)(ii) of the Disclosure Schedule is in full force and effect, and
there exists no fact which, with the passage of time or the giving of
notice, would constitute a default by Xxxxxxx or the Company or, to
Sellers' knowledge, any other party thereto, under any such lease or
entitle any other party to terminate or amend such lease. Neither Xxxxxxx
nor the Company has received any written notice that any other party to any
such lease intends to cancel or terminate any such lease.
(iii) The real property easements listed in Section 4(j)(i) of the
Disclosure Schedule, the leases listed on Section 4(j)(ii) of the
Disclosure Schedule and the Site Leases constitute all real estate or
interests in real estate (excluding Billboards) necessary to operate the
Pocono Business. Except as set forth in Schedule 4(j)(iii), there is no
pending or, to Sellers' knowledge, threatened condemnation or similar
proceeding that would adversely affect or impair the rights of the Company
or Xxxxxxx with respect to such real property or such leases or would
adversely affect or impair the operation of the Pocono Business thereon.
(k) Intellectual Property. Section 4(k) of the Disclosure Schedule
identifies all of Matthew's trade names, trademarks and patents used in the
operation of the Division and any registrations thereof which have been issued
to Xxxxxxx, identifies any pending patent application or application for
trademark registration to Xxxxxxx, and identifies any material license or
agreement which Xxxxxxx holds from or has granted to any third party with
respect to any of its intellectual property used in connection with the
operation of the Division (excluding in all events any "shrink-wrap" software
license and any list of names of advertisers, lessors or other similar lists).
Other than the name "Pocono Outdoor
12
Advertising" or as indicated on (S)4(k) of the Disclosure Schedule, all such
trade names, trademarks, patents or other intellectual property are Excluded
Assets.
(l) Contracts. Section 4(l) of the Disclosure Schedule lists all written
agreements (other than Advertising Contracts or Site Leases) to which Xxxxxxx
is, or the Company will be at Closing, a party, the performance of which will
involve consideration paid by or to the Company in excess of $5,000 per annum
and that relate to the operation of the Division. The Sellers have delivered to
the Buyer a correct and complete copy of each contract or other agreement listed
in (S)4(l) of the Disclosure Schedule (as amended to date).
(m) Advertising Structures. Section 4(m) of the Disclosure Schedule lists
all outdoor advertising structures used in the operation of the Division (the
"Billboards"). Each of the Billboards is (i) in condition to accept faces; and
(ii) in good condition and repair. Xxxxxxx has obtained all material Permits
necessary for the installation, maintenance and operation of the Billboards. The
Sellers shall have delivered to the Buyer a correct and complete copy of each
Billboard Lease prior to Closing. Each of the Billboard Leases is in full force
and effect and, to Seller's knowledge, there exists no fact which, with the
passage of time or the giving of notice, would constitute a material default by
Xxxxxxx or any other party thereto under any such Billboard Lease.
(n) Advertising Contracts. Section 4(n) of the Disclosure Schedule (as
amended to date) lists all written contracts to which Xxxxxxx is a party or to
which the Company will be a party at Closing relating to the display of outdoor
advertising (the "Advertising Contracts"). The Advertising Contracts all are in
full force and effect, and, to Sellers' knowledge, there exists no fact which,
with the passage of time or the giving of notice, would constitute a material
default by Xxxxxxx or the Company under any of the Advertising Contracts or
entitle any other party to terminate or amend any of such agreements. Neither
Xxxxxxx nor the Company has received any written notice that any other party to
any of the material Advertising Contracts intends to cancel or terminate any
such contract.
(o) Permits. Section 4(o) of the Disclosure Schedule lists all governmental
permits, certificates, registrations, licenses and authorizations to erect and
maintain advertising structures and to occupy advertising sites relating to the
Division to which Xxxxxxx has any right, title or interest (the "Permits"). The
Permits constitute all material governmental permits, certificates,
registrations, licenses and authorizations necessary to operate the Pocono
Business. To the extent Xxxxxxx transfers Billboards to the Company in the
Reorganization, Xxxxxxx will also transfer all of its rights in the Permits
related to such Billboards to the Company in the Reorganization and such
transfer will not adversely affect or impair the Permits. Xxxxxxx is, and at the
Closing the Company and Xxxxxxx will be, in material compliance with the terms
of the Permits. The Sellers are not aware of any fact or event which constitutes
a violation of any Permit and the Sellers have not received any written notice
that any agency or authority issuing any Permit intends to cancel, terminate,
modify, amend or impose any conditions with respect to any Permit.
(p) Site Leases. Section 4(p) of the Disclosure Schedule lists all written
agreements, leases and licenses (other than Permits) held by Xxxxxxx or the
Company for the use of real
13
estate on which the Billboards are or may be located (the "Site Leases"). Each
Site Lease listed in (S)4(p) of the Disclosure Schedule is in full force and
effect, except as listed in (S) 4(p) of the Disclosure Schedule, and, to
Sellers' knowledge, there exists no fact which, with the passage of time or the
giving of notice, would constitute a material default by Xxxxxxx or the Company
or any other party thereto, under any such Site Lease. Neither Xxxxxxx nor the
Company has received any written notice that any other party to any of the Site
Leases intends to cancel or terminate such Site Lease.
(q) Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of the Company.
(r) Litigation. Section 4(r) of the Disclosure Schedule sets forth each
instance in which the Company or Xxxxxxx (with respect to the Pocono Business)
(i) is subject to any outstanding injunction, judgment, order, decree, ruling,
or charge or (ii) is a party to any action, suit, proceeding, hearing, or
investigation of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction.
(s) Employee Benefits.
(i) The Company does not maintain any Employee Benefit Plans or have
any employees. Section 4(s) of the Disclosure Schedule lists each Employee
Benefit Plan that Xxxxxxx maintains or to which Xxxxxxx contributes. None
of the Company, the Buyer or the Business Assets shall be liable for,
charged with or obligated with respect to any such Employee Benefit Plan or
any other obligation of Xxxxxxx to its employees, except for accrued
salaries to the extent reflected on the schedule of Working Capital at
Closing and those employment agreements included within the Assumed
Liabilities.
(A) Each such Employee Benefit Plan (and each related trust,
insurance contract, or fund) complies in form and in operation in all
material respects with the applicable requirements of ERISA and the
Code.
(B) The 401(k) Plan maintained by the Company or Xxxxxxx is the
subject of a favorable determination letter from the Internal Revenue
Service to the effect that in form it meets the requirements of Code
(S)401(a).
(C) The Sellers have delivered to the Buyer correct and complete
copies of the plan documents and summary plan descriptions, the most
recent determination letter received from the Internal Revenue
Service, the most recent Form 5500 Annual Report, and all related
trust agreements, insurance contracts, and other funding agreements
which implement each such Employee Benefit Plan.
(ii) With respect to each Employee Benefit Plan that the Company
maintains or ever has maintained or to which it contributes, ever has
contributed, or ever has been required to contribute:
14
(A) Section 4(s) of the Disclosure Schedule identifies any
Multiemployer Plan or Employee Benefit Plan that was or has been
subject to Title IV of ERISA.
(B) No action, suit, proceeding, hearing, or investigation with
respect to the administration or the investment of the assets of any
such Employee Benefit Plan (other than routine claims for benefits) is
pending.
(t) Certain Business Relationships with the Company. Except as set forth
in (S)4(t) of the Disclosure Schedule, none of the Sellers and their Affiliates
has been involved in any material business arrangement or relationship with the
Company or with Xxxxxxx with respect to the operation of the Division within the
past twelve months and none of the Sellers or their Affiliates owns any asset
(other than the Xxxxxxx Pocono Assets which will be transferred to Buyer at
Closing), tangible or intangible, which is used in the operation of the
Division. Except as set forth in (S)4(t) of the Disclosure Schedule, (i) there
are no commitments to, and no income reflected in the Financial Statements or
the Most Recent Financial Statements has been derived from, any Affiliate of a
Seller or any division of Xxxxxxx other than the Division, and (ii) following
the Closing, neither the Company nor the Buyer shall have any obligation of any
kind or description to any such Affiliate or any such division of Xxxxxxx.
Except for items of corporate overhead, (x) no material expense relating to the
operation of the Pocono Business has been borne by an Affiliate of any Seller or
by a division of Xxxxxxx other than the Division, and (y) all material expenses
relating to the operation of the Pocono Business have been reflected in the
Financial Statements and the Most Recent Statements. The Sellers do not have
any reasonable basis to believe that the Business will lose any employees
(except for those who will not be Hired Employees as contemplated herein),
agent, advertiser or any other advantageous arrangement as a result of the
consummation of the transactions contemplated hereby.
(u) Environmental Matters.
(i) There have been no claims, litigation, administrative proceedings,
actual or, to Sellers' Knowledge, threatened, or judgments or orders,
against or applicable to the Company or the Division relating to any
hazardous substances or hazardous wastes with respect to any real property
used in the Division, including the property under Site Leases.
(ii) To Sellers' knowledge, there have been no hazardous substances or
hazardous wastes, as defined by the Resource Conservation and Recovery Act
(42 U.S.C. Subsection 6901, et seq.) and the Comprehensive Environmental
Responsibility Compensation and Liability Act (42 U.S.C. Subsection 9601,
et seq,), stored, handled, or disposed of on such real property by Xxxxxxx
or the Company in material violation of applicable environmental laws.
(v) Insurance. With respect to the Division, Xxxxxxx maintains adequate
insurance protection against all liabilities, claims, and risks against which it
is customary in the industry to insure.
15
(w) Completeness of Assets. The Business Assets and the Excluded Assets
constitute all assets used in the operation of the Pocono Business. At Closing,
the rights and properties of the Company together with the Xxxxxxx Pocono Assets
and the Excluded Assets will include all the rights and property necessary to
the operation of the Division in the manner it is presently conducted.
(x) Accounts Receivable. The accounts receivable of the Pocono Business
reflected in the Financial Statements and the Most Recent Financial Statements
are accounts which were generated in the ordinary course of operation of the
Pocono Business by the Company or by Xxxxxxx with genuine expectation by the
Company and Xxxxxxx of collection thereof.
(y) Liabilities. The Company has no liabilities, and, on the Closing Date,
the Company will have no liabilities of a kind customarily accrued, reserved
against or disclosed in a corporate balance sheet prepared in accordance with
GAAP, other than liabilities included in the calculation of Working Capital.
5. Pre-Closing Covenants. The Parties agree as follows with respect to the
period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties will use his or its reasonable best
efforts to take all action and to do all things necessary, proper, or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions set
forth in (S)7 below).
(b) Notices and Consents. Each of the Parties will (and the Sellers will
cause the Company to) give any notices to, make any filings with, and use its
reasonable best efforts to obtain any authorizations, consents, and approvals of
governments and governmental agencies or third parties necessary to consummate
the transactions contemplated herein.
(c) Operation of Business; Reorganization. Xxxxxxx will not cause or permit
the Division, and XxXxxxxx will not cause or permit the Company, to engage in
any practice, take any action, or enter into any transaction outside the
Ordinary Course of Business, except for the consummation of the Reorganization.
Xxxxxxx will, and XxXxxxxx will cause the Company to, consummate the
Reorganization at or prior to Closing such that the representations and
warranties set forth in (S)4 as to the Company after giving effect to the
Reorganization shall be true and correct in all material respects.
(d) Full Access. The Sellers will permit representatives of the Buyer to
have access in a manner so as not to interfere with the normal business
operations of the Division at all reasonable times to all premises, properties,
personnel, books, records (including tax records), contracts, and documents of
or pertaining to the Division or the Company. The Buyer will treat and hold as
such any Confidential Information it receives from any of the Sellers and the
Company in the course of the reviews contemplated by this (S)5(d), will not use
any of the Confidential Information except in connection with this Agreement,
and, if this Agreement is terminated for any reason whatsoever, will return to
the Sellers and the
16
Company all tangible embodiments (and all copies) of the Confidential
Information which are in its possession.
(e) Notice of Developments.
(i) Xxxxxxx shall notify the Buyer of any development causing a breach
of any of the representations and warranties in (S)4 above. Unless the
Buyer terminates this Agreement pursuant to (S)9(a)(iii) below by reason of
the development and exercises that right in accordance with (S)9(a)(iii)
below, the written notice pursuant to this (S)5(e)(i) will be deemed to
have amended the Disclosure Schedule, to have qualified the representations
and warranties contained in (S)4 above, and to have cured any
misrepresentation or breach of warranty that otherwise might have existed
hereunder by reason of the development.
(ii) Each Party will give prompt written notice to the others of any
material adverse development causing a breach of any of his or its own
representations and warranties in (S)3 above. No disclosure by any Party
pursuant to this (S)5(e)(ii), however, shall be deemed to amend or
supplement Annex I, Annex II, or the Disclosure Schedule or to prevent or
cure any misrepresentation or breach of warranty.
(f) Disclosure Schedule and Annex I. Xxxxxxx shall prepare and deliver to
Buyer a complete and up-to-date Disclosure Schedule and the Sellers shall
prepare and deliver to Buyer an up-to-date Annex I within five (5) days after
the execution of this Agreement for attachment and incorporation by reference to
this Agreement.
(g) Hired Employees. Buyer shall inform Xxxxxxx in writing at least five
business (5) days prior to the Closing Date of those employees of the Division
to whom Buyer will offer employment ("Hired Employees").
6. Further Assurances. In case at any time after the Closing any further
action is necessary to carry out the purposes of this Agreement, each of the
Parties will take such further action (including the execution and delivery of
such further instruments and documents) as any other Party reasonably may
request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under (S)8 below).
7. Conditions to Obligation to Close.
(a) Conditions to Obligation of the Buyer. The obligation of the Buyer to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in (S)3(a) and (S)4
above shall be true and correct in all material respects at and as of the
Closing Date;
17
(ii) the Sellers shall have performed and complied with all of their
covenants hereunder in all material respects through the Closing;
(iii) there shall not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the
transactions contemplated by this Agreement;
(iv) Xxxxxxx shall have delivered to the Buyer a certificate to the
effect that each of the conditions specified above in (S)7(a)(i)-(iii) is
satisfied in all respects;
(v) CIBC shall have consented to the transactions set forth herein and
released its security interest in the Company Shares and the Xxxxxxx Pocono
Assets;
(vi) the Buyer shall have received written confirmation from CIBC that
CIBC has received the amount of the Stock Purchase Price and deposited a
portion thereof into a CIBC account to secure XxXxxxxx'x obligation to pay
taxes with respect to the sale of the Company Shares and applied the
balance to the payment of Matthew's obligations to CIBC;
(vii) Xxxxxxx shall have entered into and delivered the NonCompetition
Agreement and the Sublease;
(viii) Xxxxxxx shall have delivered the Xxxx of Sale and any other
documents necessary to evidence the transfer of the Xxxxxxx Pocono Assets;
(ix) the Buyer shall have received from counsel to the Sellers an
opinion addressed to the Buyer in form and substance reasonably
satisfactory to counsel to Buyer, dated as of the Closing Date; and
(x) all actions to be taken by the Sellers in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form
and substance to the Buyer.
The Buyer may waive any condition specified in this (S)7(a) at or prior to the
Closing.
(b) Conditions to Obligation of the Sellers. The obligation of the Sellers
to consummate the transactions to be performed by them in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in (S)3(b) above
shall be true and correct in all material respects at and as of the Closing
Date;
(ii) the Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
18
(iii) there shall not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the
transactions contemplated by this Agreement;
(iv) the Buyer shall have delivered to the Sellers a certificate to
the effect that each of the conditions specified above in (S)7(b)(i)-(iii)
is satisfied in all respects;
(v) CIBC shall have consented to the transactions set forth herein and
released its security interest in the Company Shares and the Xxxxxxx Pocono
Assets;
(vi) Buyer shall have delivered the Xxxx of Sale and any other
documents necessary to evidence the assumption of the Assumed Liabilities;
(vii) the Sellers shall have received from counsel to the Buyer an
opinion addressed to the Sellers, and dated as of the Closing Date in form
and substance reasonably satisfactory to counsel to Sellers; and
(viii) all actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form
and substance to the Sellers.
The Sellers may waive any condition specified in this (S)7(b) at or prior to the
Closing.
8. Remedies for Breaches of This Agreement.
(a) Survival of Representations and Warranties. All of the representations
and warranties of Xxxxxxx contained in (S)4 above shall survive the Closing
hereunder (unless the Buyer knew or had reason to know of any misrepresentation
or breach of warranty at the time of Closing other than knowledge of the Buyer
obtained from the notice from Xxxxxxx given pursuant to (S)5(e)(i) above) and
continue in full force and effect for the following periods thereafter:
(i) With respect to claims arising from a breach of the
representations and warranties of Xxxxxxx contained in (S)(S)4(e), 4(i),
4(s), 4(u) and claims for fraud, such claims shall survive the Closing,
subject only to any applicable statute of limitations; and
(ii) With respect to claims arising from any other representation and
warranty of Xxxxxxx contained in (S)4 above, such claims shall survive the
Closing for a period of one (1) year thereafter.
All of the representations and warranties of the Parties contained in (S)3 above
shall survive the Closing (unless the damaged Party knew or had reason to know
of any misrepresentation or breach of warranty at the time of Closing other than
knowledge of the Buyer obtained from the notice from Xxxxxxx given pursuant to
(S)5(e)(i) above) and continue in full force
19
and effect for a period of five years thereafter (subject to any applicable
statutes of limitations, except with respect to claims arising from a breach of
the representations and warranties of the Sellers contained in (S)3(a)(v), or
claims against any Party for fraud, which claims shall survive the Closing
subject only to any applicable statute of limitations).
(b) Indemnification Provisions for Benefit of the Buyer.
(i) In the event any of the Sellers breaches any of their
representations, warranties, and covenants contained herein (other than the
covenants in (S)2(a) above and the representations and warranties in
(S)3(a) above), and, if there is an applicable survival period pursuant to
(S)8(a) above, provided that the Buyer makes a written claim for
indemnification against Xxxxxxx pursuant to (S)10(h) below within such
survival period, then Xxxxxxx agrees to indemnify the Buyer from and
against any Adverse Consequences the Buyer shall suffer through and after
the date of the claim for indemnification resulting from the breach;
provided, however, that Xxxxxxx shall not have any obligation to indemnify
the Buyer from and against any Adverse Consequences caused by the breach of
any representation or warranty of Xxxxxxx contained in (S)4 above (A) until
the Buyer has suffered Adverse Consequences by reason of all such breaches
in excess of a $50,000 aggregate deductible (after which point Xxxxxxx will
be obligated only to indemnify the Buyer from and against further Adverse
Consequences) or thereafter (B) to the extent the Adverse Consequences the
Buyer has suffered by reason of all such breaches exceeds an aggregate
ceiling equal to the Purchase Price (after which point Xxxxxxx will have no
obligation to indemnify the Buyer from and against further Adverse
Consequences).
(ii) In the event any of the Sellers breaches any of his or its
respective covenants in (S)2(a) above or any of his or its respective
representations and warranties in (S)3(a) above, and, if there is an
applicable survival period pursuant to (S)8(a) above, provided that the
Buyer makes a written claim for indemnification against the Seller pursuant
to (S)10(h) below within such survival period, then such Seller agrees to
indemnify the Buyer from and against the entirety of any Adverse
Consequences the Buyer shall suffer through and after the date of the claim
for indemnification resulting from the breach. The obligation of Sellers
pursuant to this (S)8(b)(ii) are several and not joint.
(c) Indemnification Provisions for Benefit of the Sellers. In the event
the Buyer breaches any of its representations, warranties, and covenants
contained herein, and, if there is an applicable survival period pursuant to
(S)8(a) above, provided that any of the Sellers makes a written claim for
indemnification against the Buyer pursuant to (S)10(h) below within such
survival period, then the Buyer agrees to indemnify each of the Sellers from and
against the entirety of any Adverse Consequences the Seller shall suffer through
and after the date of the claim for indemnification resulting from the breach.
20
(d) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the "Indemnified
Party") with respect to any matter (a "Third Party Claim") which may give
rise to a claim for indemnification against any other Party (the
"Indemnifying Party") under this (S)8, then the Indemnified Party shall
promptly (and in any event within ten business days after receiving notice
of the Third Party Claim) notify each Indemnifying Party thereof in
writing.
(ii) Any Indemnifying Party will have the right to assume and
thereafter conduct the defense of the Third Party Claim with counsel of his
or its choice reasonably satisfactory to the Indemnified Party; provided,
however, that the Indemnifying Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnified Party (not to be
withheld unreasonably) unless the judgment or proposed settlement involves
only the payment of money damages and does not impose an injunction or
other equitable relief upon the Indemnified Party.
(iii) Unless and until an Indemnifying Party assumes the defense of
the Third Party Claim as provided in (S)8(d)(ii) above, however, the
Indemnified Party may defend against the Third Party Claim in any manner he
or it reasonably may deem appropriate.
(iv) In no event will the Indemnified Party consent to the entry of
any judgment or enter into any settlement with respect to the Third Party
Claim without the prior written consent of each of the Indemnifying Parties
(not to be withheld unreasonably).
(e) Determination of Adverse Consequences. The Parties shall make
appropriate adjustments for tax benefits and insurance coverage in determining
Adverse Consequences for purposes of this (S)8.
(f) Exclusive Remedy. Except for the termination provisions in (S)9 below,
the indemnification provisions in this (S)8 are the exclusive remedy of the
Parties for any breach of a representation, warranty, or covenant contained
herein.
9. Termination.
(a) Termination of Agreement. Certain of the Parties may terminate this
Agreement as provided below:
(i) the Buyer and the Sellers may terminate this Agreement by mutual
written consent at any time prior to the Closing;
21
(ii) the Buyer may terminate this Agreement by giving written notice
to the Sellers at any time prior to the Closing if the Disclosure Schedule
or Annex I delivered pursuant to (S)5(f) discloses information about the
Company, the Xxxxxxx Pocono Assets or the Pocono Business not acceptable to
the Buyer (but not constituting a breach of Sellers' representations and
warranties made herein), as determined in the Buyer's sole discretion, or
if the Buyer's investigation of the Company, the Xxxxxxx Pocono Assets or
the Pocono Business otherwise reveals information about the Company, the
Xxxxxxx Pocono Assets or the Pocono Business which makes it inadvisable in
the Buyer's sole judgment to consummate the transactions contemplated
herein.
(iii) the Buyer may terminate this Agreement by giving written notice
to the Sellers at any time prior to the Closing (A) in the event any of the
Sellers has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, the Buyer has notified
the Sellers of the breach, and the breach has continued without cure for a
period of ten (10) business days after the notice of breach or has not been
cured prior to the Closing Date, (B) in the event that the Disclosure
Schedule or Annex I delivered pursuant to (S)5(f) discloses information
about the Company, the Xxxxxxx Pocono Assets or the Pocono Business which
is inconsistent in any material respect with the information regarding the
same provided by Sellers to Buyer prior to the date hereof, or (C) if the
Closing shall not have occurred on or before November 18, 1996, by reason
of the failure of any condition precedent under (S)7(a) hereof (unless the
failure results primarily from the Buyer itself breaching any
representation, warranty, or covenant contained in this Agreement); and
(iv) the Sellers may terminate this Agreement by giving written notice
to the Buyer at any time prior to the Closing (A) in the event the Buyer
has breached any material representation, warranty, or covenant contained
in this Agreement in any material respect, any of the Sellers has notified
the Buyer of the breach, and the breach has continued without cure for a
period of ten (10) business days after the notice of breach or has not been
cured prior to the Closing Date, or (B) if the Closing shall not have
occurred on or before November 18, 1996, by reason of the failure of any
condition precedent under (S)7(b) hereof (unless the failure results
primarily from any of the Sellers themselves breaching any representation,
warranty, or covenant contained in this Agreement).
(b) Effect of Termination. If any Party terminates this Agreement pursuant
to (S)9(a) above, all rights and obligations of the Parties hereunder shall
terminate without any liability of any Party to any other Party (except for any
liability of any Party then in breach); provided, however, that the
confidentiality provisions contained in (S)5(d) above shall survive termination,
and provided, further, that the Buyer shall be entitled to a refund of the
$100,000 deposit from Sellers only in the event of a termination by Buyer based
on (S)9(a)(iii) above.
10. Miscellaneous.
22
(a) Nature of Certain Obligations.
(i) The covenants of each of the Sellers in (S)2(a) above concerning
the sale of the Company Shares or the Xxxxxxx Pocono Assets to the Buyer
and the representations and warranties of each of the Sellers in (S)3(a)
above concerning the transaction are several obligations. The particular
Seller making the representation, warranty, or covenant will be solely
responsible to the extent provided in (S)8 above for any Adverse
Consequences the Buyer may suffer as a result of any breach thereof.
(ii) The remainder of the representations, warranties, and covenants
of the Sellers in this Agreement shall be the sole responsibility of
Xxxxxxx and Buyer shall have no recourse to XxXxxxxx therefore. Xxxxxxx
will be responsible to the extent provided in (S)8 above for any Adverse
Consequences the Buyer may suffer as a result of any breach thereof.
(b) Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing without the prior written approval of the
Buyer and the Sellers; provided, however, that any Party may make any public
disclosure it believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly-traded securities (in which
case the disclosing Party will use its reasonable best efforts to advise the
other Parties prior to making the disclosure).
(c) 401(k) Plan Transfer of Assets. None of the Buyer, the Company or
the Pocono Business shall have any liability for or obligation with respect to
the 401(k) Plan administered by Xxxxxxx xxxxx to the Closing, and Xxxxxxx shall
administer any such 401(k) Plan in accordance with the terms thereof and in
accordance with applicable law.
(d) No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(e) Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements, or representations by or among the Parties,
written or oral, to the extent they have related in any way to the subject
matter hereof.
(f) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of his
or its rights, interests, or obligations hereunder without the prior written
approval of the Buyer and the Sellers; provided, however, that the Buyer may
assign all of its rights, interests and obligations hereunder to one of its
Subsidiaries; provided, further, that in such event the Buyer shall not be
relieved of any of its obligations hereunder.
23
(g) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(h) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(i) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing and shall be deemed duly given (i)
on the date on which the same was delivered in person or by courier, including,
but not limited to, overnight express mail couriers, provided that a receipt is
obtained for a courier delivery; or (ii) two (2) business days after the same
was sent by registered or certified mail, return receipt requested, postage
prepaid, and addressed to the intended recipient as set forth below:
If to the Sellers: Xxxxx X. XxXxxxxx
00 Xxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
Xxxxxxx Outdoor Advertising Co., L.P.
000X Xxxxx Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxx 00000
With a copy to: Powell, Goldstein, Xxxxxx & Xxxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
If to the Buyer: Xxxxx Outdoor Advertising Limited Partnership
0000 Xxxx Xxxxx Xxxxx Xxxx
Xxxxx 000, Xxxxx Wing
Xxxxxxx, Xxxxxxx 00000
Attn: Mr. Xxxxx Xxxxxxx
With a copy to: Xxxxxx, Xxxxxxxx & Xxxxxx P.A.
5500 Norwest Center
00 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxxxx X. York, Esq.
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is received by the intended recipient. Any Party may change the
24
address to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Parties notice in the manner
herein set forth.
(j) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Pennsylvania without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Pennsylvania or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Pennsylvania.
(k) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Sellers. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(l) Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(m) Expenses. Each of the Buyer, Sellers and the Company will bear its or
his own costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby;
provided, however, that Buyer shall pay the CVF Fee at Closing on behalf of
Sellers.
(n) Construction. The Parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
(o) Incorporation of Exhibits, Annexes, and Schedules. The Exhibits,
Annexes, and Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
(p) Enforcement. Each of the Parties submits to personal jurisdiction in
the State of Pennsylvania for the enforcement of this Agreement.
Notwithstanding the foregoing, nothing contained in this Agreement shall prevent
a party from bringing any action against another party within any other state or
country. Initiating such proceeding or taking such action in any jurisdiction
shall not constitute a waiver of the submission made by a party to personal
jurisdiction within the State of Pennsylvania.
25
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
BUYER:
XXXXX OUTDOOR ADVERTISING
LIMITED PARTNERSHIP
By Its Managing General Partner,
Xxxxx Outdoor Advertising, Inc.
/s/ Xxx Xxxxxx
By:______________________________________
Xxx Xxxxxx
Name:____________________________________
Vice President
Title:___________________________________
Xxx Xxxxxx
Vice President
SELLERS:
/s/ Xxxxx X. XxXxxxxx
_________________________________________
Xxxxx X. XxXxxxxx
XXXXXXX OUTDOOR ADVERTISING
ACQUISITION CO., L.P.
By its General Partner,
Xxxxxxx Outdoor Advertising
Acquisition Co., Inc.
/s/ Xxxxx X. XxXxxxxx
_________________________________________
Xxxxx X. XxXxxxxx, President
