Exhibit 2(vi)
ASSET PURCHASE AGREEMENT
between
MidSouth Sign Company, Inc.
Seller
and
National Services Associates, Inc.
Buyer
DATED August 1, 2002
INDEX TO EXHIBITS
Section and Exhibit Description
-------------------------------------------
4.3(b) Xxxx of Sale
4.4(c) Assumption Agreement
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INDEX TO SCHEDULES
Section and Schedule Description
-----------------------------------------
1.1(e) Leases, Orders
3.2 Allocation
5.4 Financial Statements
5.5 Absence of Undisclosed Liabilities
5.6 Absence of Changes
5.7 Title to Assets
5.9 Real Property - Leased
5.10 Personal Property - Owned
5.11 Personal Property - Leased
5.12 Agreements
5.13 Litigation
5.15 Employees
5.18 Customers & Suppliers
5.22 Accounts Receivable
5.24 Tax Matters
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This ASSET PURCHASE AGREEMENT is entered into as of August 1, 2002,
between National Services Associates, Inc., a Tennessee corporation ("Buyer"),
and MidSouth Sign Company, Inc., a Tennessee Corporation ("Seller").
W I T N E S S E T H:
WHEREAS, Seller is engaged in the business of providing electric sign
products and also operates a sign survey and project management division doing
business as National Survey Associates ("NSA"), (the NSA division being called
the "Purchased Business"); and
WHEREAS, the parties desire that Seller transfer, convey and assign to
Buyer certain of the assets, properties and rights of the Purchased Business as
a going concern; and that Buyer purchase and acquire the same, subject to the
assumption by Buyer of certain liabilities and obligations of Seller, upon the
terms set forth below;
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements set forth below, the
parties agree as follows:
ARTICLE I TRANSFER OF PURCHASED ASSETS AND RELATED MATTERS
1.1 Purchased Assets. On the terms and subject to the conditions of
this Agreement, at the Closing (as defined in Article IV hereof), Seller shall
transfer, convey and assign to Buyer, and Buyer shall purchase and acquire from
Seller, all of the assets, properties and rights of Seller, wherever located,
real, personal and mixed, tangible and intangible, as the same shall exist
immediately prior to the Closing (except for those assets set forth in Section
1.2 hereof), including, but not limited to, the following items as they relate
to the operations of NSA:
(a) all furniture, fixtures, office equipment and supplies and
other items of tangible personal property and all warranties relating
thereto;
(b) all real property and interests therein, including land,
buildings, structures and improvements located thereon, fixtures
contained therein, appurtenances attached thereto, and leasehold
improvements;
(c) all supplies, packaging and shipping containers and
materials;
(d) all prepaid expenses, advances, escrows and deposits of
Seller the benefit of which will accrue to Buyer, except for those that
specifically relate to Excluded Assets (as defined in Section 1.2) or
Excluded Obligations (as defined in Section 2.2);
(e) all rights of Seller under all contracts, licenses, leases,
permits, commitments, purchase orders, sales orders and other
agreements which are described on Schedule 1.1(e) attached hereto;
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(f) all accounts and notes receivable;
(g) all rights of Seller in and to insurance and indemnity claims
relating to the Purchased Business, the Purchased Assets (as defined in
Section 1.1) or the Assumed Obligations (as defined in Section 2.1);
(h) all patents, patent applications, trade names, fictitious or
assumed names, service marks, service xxxx applications, trademarks,
trademark applications, copyrights, copyright applications, patterns,
inventions, trade secrets, logos, slogans, proprietary processes and
formulae, license agreements, research and development projects and
reports, market reports, product or customer surveys, and all other
proprietary, technical and other information and intellectual property
rights, whether patentable or unpatentable (collectively, the
"Intellectual Property"), and the goodwill associated therewith;
(i) all records and files, including, but not limited to,
property records, production records, engineering records, purchasing
and sales records, correspondence with suppliers and customers (both
actual and prospective), personnel and payroll records, accounting
records, plant records, mailing lists, customer and vendor lists and
records, sales aids, and computer programs, records, files and related
software;
(j) all stationery, purchase orders, forms, invoices, labels,
shipping material, catalogs, brochures, art work, photographs,
advertising materials, merchandising and display materials; and
(k) to the extent transferable, all governmental licenses,
permits, authorizations and approvals.
For convenience of reference, the assets, properties and rights to be
transferred, conveyed and assigned to Buyer hereunder, exclusive of the Excluded
Assets, are herein collectively called "Purchased Assets."
1.2 Excluded Assets. Anything contained in Section 1.1 hereof to the
contrary notwithstanding, there are expressly excluded from the assets,
properties and rights to be transferred, conveyed and assigned to Buyer
hereunder the following:
(a) the consideration delivered by Buyer to Seller pursuant to
this Agreement; and
(b) all assets and other items of the Seller not related to the
NSA division; and
(c) Seller's minute books and other records having exclusively to
do with the organization of Seller.
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For convenience of reference, the assets, properties and rights which are not to
be transferred, conveyed and assigned to Buyer hereunder are herein collectively
called "Excluded Assets."
1.3 Assignment of Contracts. Anything in this Agreement to the contrary
notwithstanding, this Agreement shall not constitute an agreement or attempted
agreement to transfer, sublease or assign any contract, license, lease, sales
order, purchase order, commitment or other agreement or any claim or right or
any benefit arising thereunder or resulting therefrom or any permit or operating
authority if an attempted transfer, sublease or assignment thereof, without the
consent of any other party thereto, would constitute a breach thereof or in any
way adversely affect the rights of Buyer or Seller thereunder. At the request of
Buyer, Seller will use its best efforts to obtain the consent of such other
party to the assignment or transfer thereof to Buyer in all cases in which such
consent is required for assignment or transfer. If such consent is not obtained,
Seller will cooperate with Buyer in any arrangements necessary or desirable to
provide for Buyer the benefits thereunder, including, without limitation,
enforcement for the benefit of Buyer of any and all rights of Seller against the
other party thereto arising out of the cancellation by such other party or
otherwise. Nothing contained in this Section 1.3 will affect the liability, if
any, of Seller pursuant to this Agreement for failing to disclose the need for
such consent or approval or any termination rights of Buyer hereunder if consent
is not obtained.
1.4 Passage of Title and Risk of Loss. Legal and equitable title and
risk of loss with respect to the Purchased Assets will not pass to Buyer until
such assets are transferred at the Closing.
ARTICLE II ASSUMPTION OF CERTAIN LIABILITIES
2.1 Assumed Obligations. At the closing, Buyer will assume the
following liabilities and obligations, and only the following liabilities and
obligations, of Seller:
(a) Obligations listed on Schedule 2.1 (a)
(b) As it relates to the Purchased Business, any claims, demands,
liabilities or obligations of any nature whatsoever which
arose or were incurred at or before the Closing, or which are
based on events occurring or conditions existing at or before
the Closing, or which are based on services performed by
Seller at or before the Closing, or which relate to goods or
products of Seller shipped or delivered at or before the
Closing or goods or products of Seller in transit prior to or
at the Closing and delivered after the Closing, (1)
notwithstanding that the claim, demand, liability or
obligation arises or becomes manifest after the Closing and
(2) regardless of whether or not set forth or otherwise
disclosed on any Schedule attached hereto (whether or not
required to be so set forth or disclosed);
(c) those liabilities and obligations arising after the Closing
under those cotracts, licenses, leases, permits, commitments, purchase
orders, sales orders and other agreements set forth on Schedule 1.1(e),
effectively assigned and transferred to Buyer
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pursuant to Section 1.1(e) hereof, to the extent such do not constitute
any misrepresentation or breach of warranty by Seller.
For convenience of reference, the liabilities and obligations being assumed by
Buyer as stated above are herein collectively called the "Assumed Obligations."
2.2 Excluded Obligations. Except as specifically detailed in section
2.1, Buyer will not assume any liability or obligation of Seller or the
Purchased Business not included in the Assumed Obligations, including, but not
limited to, the following:
(a) any liabilities and obligations of Seller for Federal,
state, territorial, local and foreign taxes, including, without
limitation, franchise, income, personal, real property, sales, use,
unemployment, gross receipts, excise, payroll, withholding or other
taxes;
(b) Other than as it relates to the Purchased Business, any
claims, demands, liabilities or obligations of any nature whatsoever
which arose or were incurred at or before the Closing, or which are
based on events occurring or conditions existing at or before the
Closing, or which are based on services performed by Seller at or
before the Closing, or which relate to goods or products of Seller
shipped or delivered at or before the Closing or goods or products of
Seller in transit prior to or at the Closing and delivered after the
Closing, (1) notwithstanding that the claim, demand, liability or
obligation arises or becomes manifest after the Closing and (2)
regardless of whether or not set forth or otherwise disclosed on any
Schedule attached hereto (whether or not required to be so set forth or
disclosed);
(c) any actions, suits, claims, investigations or legal,
administrative or arbitration proceedings pending or threatened against
Seller or the Purchased Business;
(d) any liabilities and obligations of Seller for amounts owed
to any owner of Seller or any person affiliated therewith, in such
person's capacity as an owner or creditor of Seller;
(e) any liabilities or obligations for payments due or required
to be made under any pension, retirement, savings or other compensation
plan maintained by Seller or any other entity;
(f) any liabilities and obligations of Seller under this
Agreement or with respect to or arising out of the transactions
contemplated hereby;
(h) any liabilities and obligations relating to the Excluded
Assets; and
(i) any other liabilities and obligations of Seller not being
specifically assumed by Buyer pursuant to Section 2.1 above.
For convenience of reference, the liabilities and obligations of Seller not
being assumed by Buyer as aforesaid are collectively called the "Excluded
Obligations." Seller shall take any and
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all actions that may be necessary to prevent any person, firm or governmental
authority from having recourse against the Purchased Business, any of the
Purchased Assets or against Buyer with respect to any Excluded Obligations and
shall discharge all Excluded Obligations when they become due and payable.
ARTICLE III PURCHASE PRICE
3.1 Purchase Price. The aggregate consideration to be paid to Seller for
the Purchased Assets shall be the assumption of the Assumed Obligations.
3.2 Allocation. The total purchase price (the amount of the Assumed
Obligations) will be allocated as set forth on Schedule 3.2. The parties will
use such allocation in reporting the transaction for Federal and state tax
purposes.
ARTICLE IV CLOSING
4.1 Closing Date. The closing for the consummation of the transactions
contemplated by this Agreement (the "Closing") will take place at the offices at
00000 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxx 00000 on August 1, 2002. ("Closing
Date.")
4.2 Simultaneous Actions. All actions to be taken and all documents to be
executed and delivered by the parties at the Closing will be deemed to have been
taken and executed simultaneously and no actions will be deemed taken nor any
documents executed or delivered until all have been taken, executed and
delivered.
4.3 Deliveries by Seller. On or before the Closing Date, Seller will
deliver to Buyer the following:
(a) Closing Certificate. An accurate certificate, dated the Closing
Date, of Seller, satisfactory in form and substance to Buyer, certifying
that:
(1) the representations and warranties of Seller contained in this
Agreement are true and accurate on and as of the Closing Date
with the same force and effect as if made on the Closing Date;
(2) Seller has performed and complied with all covenants, obligations
and agreements to be performed or complied with by it on or
before the Closing Date pursuant to this Agreement;
(3) attached thereto are true and complete copies of resolutions
adopted by Seller's board of governors and members approving this
Agreement and the transactions contemplated hereby;
(4) the incumbency and specimen signature of the Director of Seller
executing this Agreement and any other document to be executed by
Seller are as set forth in such certificate; and
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(5) Seller is not a foreign person within the meaning of Section 1445
of the Internal Revenue Code.
(b) Instruments of Transfer. A duly executed xxxx of sale and general
instrument of assignment in substantially the form of Exhibit 4.3(b)
attached hereto and such other duly executed general warranty deeds,
endorsements, assignments and instruments of transfer, conveyance and
assignment in form and substance reasonably satisfactory to Buyer, as are
necessary or desirable to effect the transfers, conveyances and assignments
to Buyer referred to in Article I hereof.
(c) Consents. Duly executed consents, authorizations, orders or
approvals of any third party (including, without limitation, any
governmental body, lender, lessor, licensor, supplier, customer or other
party to any agreement listed on Schedule 5.12 which are required for the
consummation of the transactions contemplated by this Agreement, each of
which shall be in full force and effect on the Closing Date, or a statement
saying that no consent, requested by Buyer, was acquired.
4.4 Deliveries by Buyer. On or before the Closing Date, Buyer will have
delivered to Seller the following:
(a) Closing Certificate. An accurate certificate, dated the Closing
Date, of a duly authorized officer of Buyer, satisfactory in form and
substance to Seller, certifying that:
(1) the representations and warranties of Buyer contained in this
Agreement are true and accurate on and as of the Closing Date
with the same force and effect as if made on the Closing Date;
(2) Buyer has performed and complied with all covenants, obligations
and agreements to be performed or complied with by it on or
before the Closing Date pursuant to this Agreement;
(3) attached thereto are true and complete copies of resolutions
adopted by Buyer's board of directors approving this Agreement
and the transactions contemplated hereby; and
(4) the incumbency and specimen signature of each officer of Buyer
executing this Agreement and any other document to be executed by
Buyer are as set forth in such certificate.
(b) Assumption Agreement. A duly executed instrument of assumption
whereby Buyer shall assume the Assumed Obligations as provided herein,
which instrument of assumption shall be in substantially the form of
Exhibit 4.4(b) attached hereto.
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
5.1 Organizational Matters. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Tennessee.
Seller is duly qualified and in good standing to do business in every
jurisdiction in which such qualification is necessary because of the nature of
the property owned, leased or operated by it in connection with the Purchased
Business or the nature of the business conducted by the Purchased Business.
5.2 Authority. Seller has all requisite power and authority to: own, lease
and operate its properties; carry on the Purchased Business as now being
conducted; enter into this Agreement; perform its obligations hereunder; and
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement by Seller, and the consummation of the
transactions contemplated hereby, have been duly and validly authorized by all
necessary action on the part of Seller. This Agreement has been duly and validly
executed by Seller, and is a valid and binding obligation of Seller, enforceable
in accordance with its terms.
5.3 Noncontravention. Neither the execution, delivery and performance of
this Agreement by Seller, nor the consummation by Seller of the transactions
contemplated hereby nor compliance by Seller with any of the provisions hereof
will:
(a) conflict with or result in a breach of any provision of the
Articles of Organization.
(b) cause a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms of any note, bond,
lease, mortgage, indenture, license, warranty or other instrument or
agreement to which Seller is a party, or by which Seller or any of its
assets is or may be bound or benefited, or
(c) violate any law, statute, rule or regulation or order, writ,
judgment, injunction or decree applicable to Seller or any of its
respective assets.
No consent or approval by, or any notification of or filing with, any public
body or authority is required in connection with the execution, delivery and
performance by Seller of this Agreement, or the consummation by Seller of the
transactions contemplated hereby.
5.4 Financial Statements. Schedule 5.4 attached hereto contains internally
generated copies of the following (collectively, the "Financial Statements"):
(a) the statement of income for the fiscal years ended March 31,
2002; and
(b) the statement of income for the quarter ended June 30, 2002.
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All allocations of corporate expenses, interest and other charges reflected in
the Financial Statements have been made on a consistent basis from period to
period.
5.5 Absence of Undisclosed Liabilities. Except as set forth on Schedule
5.5 attached hereto, at the Closing Date:
(a) the Purchased Business had no liabilities or obligations of any
nature (matured or unmatured, fixed or contingent) which were not provided
for or disclosed onSchedule 2.1(a),
(b) all reserves established by Seller and set forth on the Schedule
2.1 (a) or Schedule 5.22 were adequate for the purposes indicated therein,
and
(c) there were no loss contingencies (as such term is used in
Statement of Financial Accounting Standards No. 5 issued by the Financial
Accounting Standards Board) which were not adequately provided for in the
Balance Sheet.
5.6 Absence of Changes. Since theMarch 31, 2002, except as set forth on
Schedule 5.6 attached hereto, Seller has operated the Purchased Business in the
ordinary course and there has not been, as it relates to the Purchased Business:
(a) any adverse change in the condition (financial or otherwise),
assets, liabilities, earnings or business of Seller other than operating
losses which have increased the difference between accounts receivable and
accounts payable;
(b) any damage, destruction or loss (whether or not covered by
insurance) adversely affecting any of the Purchased Assets;
(c) any increase in the compensation or benefits of any officer,
director, employee, consultant or agent (including, without limitation, any
increase pursuant to any bonus, pension, profit-sharing or other plan or
commitment), or the entering into of any contract with any officer,
director or employee, or the making of any loan to, or engagement in any
transaction with, any officers or directors of Seller;
(d) any capital expenditure or commitment therefore by Seller in
excess of $1,000 in the aggregate for additions to property, plant or
equipment;
(e) any forward purchase commitments in excess of the requirements
for normal operating inventories or at prices higher than market prices
prevailing at the time the commitment was entered into;
(f) any forward sales commitments other than in the ordinary course
of business consistent with past practices;
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(g) any change in the manner in which inventory of the Purchased
Business is marketed or any increase in inventory levels in excess of
levels reasonably required for the fulfillment of existing orders in
accordance with the terms thereof, or any change in the manner in which the
Purchased Business extends discounts or credit to, or accepts returns of
merchandise from, customers or otherwise deals with its customers;
(h) any write-down or write-up of the value of any inventory of the
Purchased Business or any write-off as uncollectible of any accounts or
notes receivable of the Purchased Business or any portion thereof;
(i) any obligation or liability (whether absolute, accrued,
contingent or otherwise and whether due or to become due) incurred, or any
transaction, contract or commitment entered into, by Seller, other than
items incurred or entered into (as the case may be) in the ordinary course
of business and consistent with the past practice of Seller, each of which
has been properly recorded in Seller's financial records;
(j) any payment, discharge or satisfaction of any claim, encumbrance
or liability by Seller other than in the ordinary course of business
(whether absolute, accrued, contingent or otherwise and whether due or to
become due);
(k) any amendment or termination of any contract, license, lease,
commitment or other agreement to which Seller is a party, except in the
ordinary course of business and consistent with the past practice of
Seller;
(l) any actual or threatened labor trouble, problem or grievance
adversely affecting the Purchased Business or the Purchased Assets;
(m) any license, sale, transfer, pledge, mortgage or other
disposition of any tangible or intangible asset or Intellectual Property of
the Purchased Business except sales of inventory in the ordinary course of
business and consistent with the past practice of Seller;
(n) any cancellation of any debts or claims or any amendment,
termination or waiver of any rights of Seller relating to the Purchased
Assets or the Purchased Business;
(o) any change in the accounting methods or practices followed by
Seller or any change in depreciation or amortization policies or rates
theretofore adopted;
(p) any change in the suppliers, customers or the personnel of Seller
other than such routine changes which occur in the ordinary course of
business and which are consistent with the past practices of Seller, which
changes have not been, individually or in the aggregate, adverse to the
Purchased Business;
(q) any material change in the prices charged or to be charged by
Seller to its customers or by any supplier to Seller;
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(r) any decrease in the level of maintenance of tangible Purchased
Assets from that level generally in effect prior to the Balance Sheet Date;
(s) any failure to operate the Purchased Business in the ordinary
course of business consistent with past practice, including, but not
limited to, any failure by Seller to make capital expenditures or
investments in the Purchased Business or any failure to pay trade accounts
payable when due; or
(t) any agreement or understanding, whether in writing or otherwise,
for Seller to take any of the actions specified above in items (a) through
(s) above.
5.7 Title to Assets. (a) Seller has good and marketable title to all of
the Purchased Assets, free and clear of all mortgages, liens, pledges, charges,
security interests, rights of way, options, rights of first refusal, conditions,
restrictions or encumbrances of any kind or character, whether or not relating
to the extension of credit or the borrowing of money (collectively,
"Encumbrances"), except for the Encumbrances set forth on Schedule 5.7, and
liens for taxes and governmental charges not yet due and payable. The lien on
assets of Seller in the favor of Branch Banking and Trust will be satisfied by
Seller prior to December 31, 2002, or if such action does not occur, it is
dependent on the guarantors of such obligation to Branch Bank and Trust to
satisfy such lien without recourse or further obligation to Buyer.
(b) The Purchased Assets include all assets and properties and all
rights necessary or desirable to permit Buyer to carry on the Purchased Business
as presently conducted by Seller. Seller has complete and unrestricted power and
the unqualified right to sell, convey, assign, transfer and deliver the
Purchased Assets (subject to obtaining any consents or waivers of third parties
disclosed on Schedule 5.12 and required in connection with such sale,
conveyance, assignment, transfer and delivery of the Purchased Assets or any
part thereof). The instruments of transfer, conveyance and assignment executed
and delivered by Seller to Buyer at the Closing will be valid and binding
obligations of Seller, enforceable in accordance with their respective terms,
sufficient for purposes of recordation and filing where permitted by law,
sufficient to transfer, convey and assign to Buyer all of Seller's interest in
and to the Purchased Assets, the foregoing to constitute good and marketable
title thereto, free and clear of all Encumbrances, and sufficient to vest in
Buyer the full right, power and authority to conduct the Purchased Business as
presently conducted.
5.8 Real Property - Owned. None.
5.9 Real Property - Leased. Schedule 5.9 attached hereto contains a list
and brief description (including with respect to each lease (i) a statement as
to whether there is any requirement of consent of the lessor to the assignment
and (ii) a statement as to whether the lessee has or has not agreed to
subordinate the leasehold estate to any liens encumbering the property) of the
terms of all real estate leases to which Seller is a party (as lessee or
lessor). True, complete and correct copies (or, in the case of oral leases,
descriptions) of each lease have been furnished to Buyer. Each such lease is in
full force and effect and constitutes a legal, valid and binding obligation of
the respective parties thereto. All rents and additional amounts due to date on
each such lease have been paid. In each case, the lessee is in peaceable
possession under such
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lease, has a valid leasehold interest therein and is not in default thereunder
and no waiver, indulgence or postponement of the lessee's obligations thereunder
has been granted by the lessor, nor does there exist any event, condition or
occurrence which, with the giving of notice or the lapse of time, or both, would
constitute such a default under any such lease. Seller has not violated any of
the terms or conditions under any such lease in any respect which violation
would give rise to the right of the other party thereto to terminate such lease
or xxx for damages thereunder. All buildings, structures, appurtenances or real
property leased by Seller (a) are in good operating condition and repair, (b)
are in such condition as to permit surrender by Seller to the lessors on the
date hereof without any cost or expense to Seller for repair or restoration if
such leases were terminated on the date hereof, (c) are adequate and suitable
for the uses for which intended by Seller, and (d) afford adequate rights of
ingress and egress for operation of its business in the ordinary course. None of
such buildings, structures and appurtenances, any equipment therein nor the use,
operation or maintenance thereof, violates any restrictive covenant or
encroaches on any property owned by others. No condemnation proceeding is
pending or, to the best of Seller's knowledge, threatened which would preclude
or impair the use of any such property by Seller for the uses for which intended
by it. All of the foregoing conform to applicable Federal, state, territorial,
local and foreign laws and regulations (including applicable environmental and
occupational safety and health laws and regulations and zoning and building
ordinances).
5.10 Personal Property - Owned. Schedules 5.10 and 5.11 attached
hereto contain a summary and brief description of all tangible personal
properties and assets owned by Seller. All such personal property is in good
operating condition and repair, is adequate and suitable for the uses for which
intended by Seller in the ordinary course of the Purchased Business, and there
does not exist any condition which interferes in any material way with the use
or economic value thereof.
5.11 Personal Property - Leased. Schedules 5.10 and 5.11 attached
hereto contain a list of all leases or other material agreements under which
Seller is lessee of or holds or operates any items of machinery, equipment,
motor vehicles, office furniture, computer software, fixtures or other tangible
personal property owned by any third party. True, complete and correct copies
(or, in the case of oral leases or agreements, descriptions) of such leases and
agreements have been furnished to Buyer. Seller is the owner and holder of all
of the leasehold estates purported to be granted by such leases or agreements
and all other leases or agreements under which it is lessee of or holds or
operates any such items owned by a third party. Each of such leases and
agreements is in full force and effect and constitutes a legal, valid and
binding obligation of the respective parties thereto. There is not under any of
such leases any existing default or event, condition or occurrence which, with
the giving of notice or lapse of time, or both, would constitute a default
thereunder. Each of the items of personal property covered by leases or
agreements of Seller is in good operating condition and repair, is in such
condition as to permit surrender thereof by Seller to the lessors on the date
hereof without any cost or expense for repair or restoration if such leases were
terminated on the date hereof, is suitable for the uses for which intended by
Seller in the ordinary course of the Purchased Business and there does not exist
any condition which interferes in any material way with the use or economic
value thereof.
5.12 Agreements. As it relates to the Purchased Business, Schedule
5.12 attached hereto sets forth a true, complete and correct list and brief
description (including a statement as
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to whether there is any requirement of consent of any party other than Seller to
assignment) of all written or oral contracts, agreements and other instruments
not made in the ordinary course of business to which Seller is a party, or made
in the ordinary course of business and referred to in clauses (a) through (m) of
the next sentence of this Section 5.12. As it relates to the Purchased Business
and except as set forth on said Schedule 5.12, Seller is not a party to any
written or oral, formal or informal,
(a) distributor, dealer, sales, advertising, agency,
manufacturer's representative, franchise or similar contract or any
other contract relating to the distribution of its products or to the
payment of any fees or commissions;
(b) collective bargaining agreement or contract with or
commitment to any labor union;
(c) continuing contract for the future purchase of finished
goods, material, supplies, equipment or services;
(d) contract for the future sale of products;
(e) contract or commitment for the employment of any officer,
manager, employee or consultant, management contract or any other type
of contract or understanding with any officer, manager, employee or
consultant;
(f) profit-sharing, bonus, stock option, stock purchase,
savings and investment, pension, retirement, deferred compensation,
severance or termination pay, disability, hospitalization, insurance or
similar plan or agreement, formal or informal, providing benefits to
any current or former manager, officer, employee or consultant;
(g) indenture, mortgage, promissory note, loan agreement,
guaranty or other agreement or commitment for the borrowing of money,
for a line of credit or for a leasing transaction of a type required to
be capitalized in accordance with FASB Statement of Financial
Accounting Standards No. 13 or any tax benefit transfer lease;
(h) contract or commitment for charitable contributions;
(i) contract or commitment for capital expenditures in excess
of $2,500 in the aggregate;
(j) contract or commitment for the sale of any assets,
properties or rights other than inventory in the ordinary course of
business;
(k) lease or other agreement pursuant to which it is a lessee
of or holds or operates any real property, machinery, equipment, motor
vehicles, office furniture, computer software, fixtures or similar
personal property owned by any third party;
15
(l) any contract or agreement having a value of or otherwise
involving at least $5,000 (including, without limitation, purchase
orders and sales orders), whether or not in the ordinary course of
business; or
(m) agreement which restricts Seller from engaging in any
aspect of the Purchased Business anywhere in the world.
Each such agreement, lease, contract, commitment, instrument and obligation is
in full force and effect and constitutes a legal, valid and binding obligation
of Seller and of each other party thereto and is enforceable in accordance with
its terms. Seller has performed all the obligations required to be performed by
it to date and is not in default or alleged to be in default in any respect
under any agreement, lease, contract, commitment, instrument or obligation.
There exists no event, condition or occurrence which, after notice or lapse of
time, or both, would constitute a default by it of any of the foregoing. Seller
is not aware of any default by any other party to any such agreement, lease,
contract, commitment, instrument or obligation. Seller has furnished to Buyer
complete and correct copies of all documents set forth on said Schedule 5.12.
5.13 Litigation. Except as set forth on Schedule 5.13 attached
hereto, there are no (a) audits, inspections, actions, suits, claims,
investigations or legal or administrative or arbitration proceedings pending or
threatened against Seller, whether at law or in equity, whether civil or
criminal in nature or whether before or by any Federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, nor, to the best knowledge of Seller, does
any basis exist therefor or (b) judgments, decrees, injunctions or orders of any
court, governmental department, commission, agency, instrumentality or
arbitrator against Seller. Seller has made available to Buyer all documents and
correspondence relating to matters referred to in Schedule 5.13.
5.14 Compliance; Governmental Authorization.
(a) Seller has complied with all Federal, state, territorial, local
or foreign laws, ordinances, regulations or orders applicable to the Purchased
Business or the Purchased Assets, including, by way of description, and not
limitation, matters relating to the environment, anti-competitive practices,
discrimination, employment, health and safety, customs duties and requirements,
and foreign practices. Seller has all governmental licenses and permits
necessary in the conduct of the Purchased Business as presently conducted, which
licenses and permits are in full force and effect, and to Seller's knowledge, no
violations are outstanding or uncured with respect to any such licenses or
permits and no proceeding is pending or threatened to revoke or limit any of
them.
(b) There are no governmental licenses and permits, consents,
orders, decrees and other compliance agreements under which Seller is operating
or bound subsequent to the Closing date.
(c) Seller has furnished to Buyer copies of all reports of
inspections, if any, of the Purchased Business during the five years preceding
the date hereof under OSHA, U.S. EPA, and under all other applicable Federal,
state and local health and safety or environmental laws and regulations. The
deficiencies, if any, noted on such reports have been corrected.
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(d) As used in this Agreement, "Hazardous Substance" shall mean and
include all hazardous or toxic substances, wastes or materials, any pollutants
or contaminants (including, without limitation, all oil and petroleum of any
kind and in any form, asbestos and raw materials which include hazardous
constituents), or any other similar substances, or materials which are included
under or regulated by any local, state or Federal law, rule or regulation
pertaining to environmental regulation, contamination, clean-up or disclosure,
including, without limitation, the Clean Air Act, the Federal Water Pollution
Control Act, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Superfund Amendments and Reauthorization Act of 1986,
the Resource Conservation and Recovery Act of 1976, the Toxic Substances Control
Act, the Federal Insecticide, Fungicide and Rodenticide Act, the Occupational
Safety and Health Act, the Emergency Planning and Community Right-to-Know Act of
1986, and all comparable state or local laws, orders and regulations, as any of
the foregoing has heretofore been or is hereafter amended.
(e) Seller has no knowledge of the presence, storage, disposition,
generation, treatment, release or discharge of any Hazardous Substance on, under
or about the Purchased Assets or the land and buildings on and in which the
Purchased Business currently conducts its operations.
5.15 Labor Relations; Employees. Seller enjoys a satisfactory
employer-employee relationship with all of its employees, taken as a whole.
Seller is in compliance with all Federal, state, territorial, local and foreign
laws and regulations respecting labor, employment and employment practices,
terms and conditions of employment and wages and hours. There is no unfair labor
practice complaint against Seller pending before the National Labor Relations
Board or any state, local or foreign agency. Except as set forth on Schedule
5.15 hereto: there is no labor strike, dispute, slowdown, stoppage or
organizational effort actually pending or threatened involving the Purchased
Business; no representation question exists respecting the employees of the
Purchased Business; and no collective bargaining agreement presently covers any
employees of the Purchased Business, nor is any currently being negotiated by
Seller on behalf of the Purchased Business. Schedule 5.15 attached hereto lists
all employees of the Purchased Business, their current salary and benefits and
any increases in their compensation during the past twelve months.
5.16 Employee Benefit Plans - None
5.17 Related Party Transactions. Except for the item noted on
Schedule 5.17 and compensation to regular employees of Seller, no current or
former manager, officer, employee or owner or any immediate family member of any
such person (defined as a person's spouse, parents, children, siblings, mothers
and fathers-in-law, sons and daughters-in-law, and brothers and sisters-in-law)
is presently, or during the last three fiscal years has been:
(a) party to any transaction with Seller (including, but not
limited to, any contract, agreement or other arrangement providing for
the furnishing of services by, or rental of real or personal property
from, or otherwise requiring payments to, any such manager, officer,
employee, owner or immediate family member);
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(b) the direct or indirect owner of an interest in any
corporation, firm, association or business organization which is or was
a competitor, supplier or customer of Seller; or
(c) a recipient of income from any source other than Seller
which relates to the business of, or should properly accrue to, Seller.
5.18 Customers. Schedule 5.18 attached hereto contains a true and
complete list of the current customers in which the Buyer will remit a 5%
commission to Seller during the first twelve subsequent to the Closing, based on
actual receipts.
5.19 Market Information. All market reports, product surveys and
customer surveys, which have been conducted by or for the Company since January
1, 1997 have been delivered to Buyer.
5.20 Intellectual Property. Seller has provided Buyer a true and
complete description of:
(a) all Intellectual Property rights owned by Seller or used
in connection with the Purchased Business;
(b) all agreements by which Seller licenses any Intellectual
Property, whether as licensor or licensee;
(c) all claims, if any, pending or threatened to the effect
that (1) the present or past operations of Seller infringe or conflict
the alleged rights of others in any Intellectual Property; or (2) any
Intellectual property of the Seller is invalid or unenforceable; and
(d) any outstanding orders, decrees, judgments, stipulations,
claims or settlements relating to any Intellectual Property rights of
Seller.
Seller owns or possesses adequate licenses or other rights to use all
Intellectual Property necessary to conduct the Purchased Business as now
operated. Seller is not aware of any infringement, misappropriation or other
misuse being made by any other party of Seller's Intellectual Property. Subject
to Seller's obtaining the consents set forth on Schedule 5.12 hereof, no
contract, agreement or understanding between Seller and any party exists which
would impede or prevent assignment to Buyer of the right, title and interest of
Seller in and to the Intellectual Property.
5.21 Insurance. Buyer is responsible for all insurance from Date of
Closing and thereafter.
5.22 Accounts and Notes Receivable. Schedule 5.22 contains a true
aged list of unpaid accounts and notes receivable owing to Seller from third
parties as of the Closing related to the Purchased Business. All such unpaid
accounts and notes receivable owing to Seller from third parties at the date
hereof constitute, and at the Closing Date will constitute, valid and
enforceable claims arising in bona fide transactions in the ordinary course of
business. Except as
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set forth in said Schedule 5.22, there is (a) no account or note debtor who has
refused or threatened to refuse to pay its obligations or who has or threatened
to set-off such obligations for any reason, (b) no account or note debtor who is
to Seller's knowledge insolvent or bankrupt and (c) no account or note
receivable pledged to any third party. The reserves and allowances provided for
on the Balance Sheet have been established on the basis of historical experience
in accordance with generally accepted accounting principles consistently
applied.
5.23 Inventories. There are no inventories.
5.24 Tax Matters. For purposes of this Agreement, "Taxes" means all
taxes, charges, fees, levies or other assessments of whatever kind or nature,
including, without limitation, all net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license, withholding,
payroll, employment, excise, estimated, severance, stamp, occupancy or property
taxes, customs duties, fees, assessments or charges of any kind whatsoever
(together with any interest and any penalties, additions to tax or additional
amounts) imposed by any taxing authority (domestic or foreign) upon or payable
by Seller. For purposes of this Section 5.24, the term "Seller" shall include
each other corporation with which Seller files consolidated or combined income
tax returns or reports. Except as noted in Schedule 5.24:
(a) Seller has filed, within the time and in the manner
prescribed by law, all returns, declarations, reports, estimates,
information returns and statements (collectively, "Returns") required
to be filed under federal, state, local or any foreign laws by Seller,
and all such Returns are true and complete in all material respects.
(b) Seller, within the time and in the manner prescribed by
law, has paid (and until the Closing Date will pay) all Taxes that are
due and payable.
(c) Seller has established (and through the Closing Date will
establish) on its books and records reserves that are adequate for the
payment of all Taxes not yet due and payable.
(d) There are no liens for Taxes upon the assets of Seller
except liens for Taxes not yet due.
(e) No deficiency for any Taxes has been proposed, asserted
or assessed against Seller or any of its assets which has not been
resolved and paid in full. No audits or other administrative
proceedings or court proceedings are presently pending with regard to
any Taxes or Returns.
(f) There are no outstanding waivers or comparable consents
regarding the application of the statute of limitations with respect to
any Taxes or Returns that have been given by Seller.
(g) Seller is not a party to any tax-sharing or allocation
agreement, nor does Seller owe any amount under any tax-sharing or
allocation agreement.
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(h) Seller has complied (and will comply through the Closing
Date) in all respects with all applicable laws, rules and regulations
relating to the payment and withholding of Taxes and, within the time
and in the manner prescribed by law, has withheld and will withhold
from employee wages, and has paid and will pay over to the proper
governmental authorities all amounts required to be so withheld and
paid over under all applicable laws.
5.25 Shares. N/A
5.26 Brokers. Neither Seller, nor any of its officers, managers,
owners or employees, have employed any broker or finder in connection with the
transactions contemplated by this Agreement. Seller shall indemnify, defend and
hold Buyer harmless from any and all claims or losses relating to brokerage
fees, commissions or finder's fees owed or claimed to be owed to any broker or
finder engaged or claimed to be engaged by Seller.
5.27 Disclosure. Neither this Agreement (including the Schedules and
Exhibits attached hereto) nor any other document, certificate or statement
furnished to Buyer by or on behalf of Seller in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
and therein not misleading.
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
6.1 Organizational Matters. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Tennessee.
6.2 Authority. Buyer has all requisite corporate power and
authority to enter into this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby, have been duly and validly authorized by all necessary
corporate action on the part of Buyer. This Agreement has been duly and validly
executed and delivered by Buyer, and is a valid and binding obligation of Buyer,
enforceable in accordance with its terms.
6.3 Noncontravention. Neither the execution, delivery and
performance of this Agreement by Buyer, nor the consummation by Buyer of the
transactions contemplated hereby, nor compliance by Buyer with any of the
provisions hereof will:
(a) conflict with or result in a breach of any provision of
the Articles of Incorporation or Bylaws of Buyer,
(b) cause a default (or give rise to any right of
termination, cancellation or acceleration) under any of the terms of
any agreement, instrument or obligation to which Buyer is a party, or
by which any of its properties or assets may be bound, in each case
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excluding the Purchased Assets as to which no representation or
warranty is made by Buyer, or
(c) violate any statute, rule or regulation or judgment,
order, writ, injunction or decree of any court, administrative agency
or governmental body, in each case applicable to Buyer or any of its
assets.
No filing with, and no permit, authorization, consent or approval of, any public
body or authority is necessary for the consummation by Buyer of the transactions
contemplated by this Agreement.
6.4 Brokers. Neither Buyer nor any of its officers, directors or
employees have employed any broker or finder in connection with the transactions
contemplated by this Agreement. Buyer shall indemnify, defend and hold Seller
harmless from any and all claims or losses relating to brokerage fees,
commissions or finder's fees owed or claimed to be owed to any broker or finder
engaged or claimed to be engaged by Buyer.
ARTICLE VII COVENANTS OF SELLER
Seller hereby covenants and agrees with Buyer as follows:
7.1 Non-competition -. For a period of twenty four months subsequent to
Closing, Seller agrees to not compete with the Buyer in the area of national
signage surveys. Specifically, the customers listed in Schedule 5.18 will not be
solicited for purposes of survey work of any nature or type for a period of
twenty four months subsequent to Closing. In consideration of this
non-competition agreement, Buyer will pay Seller a fee of 5% of receipts from
the customers listed on Schedule 5.18 for a period of twelve months.
7.2 Non-Raid - Seller agrees to not employ or offer employment to any
current employee of the Purchased Business for a period of twelve months
subsequent ot the Closing date.
ARTICLE VIII COVENANTS OF BUYER
8.1 Confidentiality; Return of Documents. Unless and until the
transactions contemplated by this Agreement are consummated, Buyer will keep in
confidence all proprietary and financial information of Seller including
information concerning its customers, suppliers, business and know-how, and will
not, except to the extent required by law or to the extent any such information
is otherwise publicly available or received from a third party not affiliated
with Seller, without the prior written consent of Seller, reveal any such
financial or proprietary information to any third party other than affiliates or
representatives of Buyer and potential lenders and other providers of funds each
of whom shall agree to be bound by the same restrictions with respect to
confidentiality imposed on Buyer hereunder. If the transactions contemplated by
this Agreement are not consummated, Buyer will return to Seller, at Seller's
request, all documents supplied to Buyer by Seller pursuant to the provisions of
this Agreement.
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8.2 Access to Records. Following the Closing, Buyer will upon
request provide Seller, its accountants and attorneys reasonable access at times
to be designated by Buyer during normal working hours, to the books and records
of Seller which are to be transferred to Buyer pursuant to Section 1.1(i)
hereof.
8.3 Non-Raid - Buyer agrees to not employ or offer employment to
any current employee of the Seller for a period of twelve months subsequent to
the Closing date.
ARTICLE IX CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer under this Agreement are subject to the
satisfaction, on or before the Closing Date, of the following conditions, any of
which may be waived by Buyer. The waiver of any of the following conditions in
order to close the transaction will not constitute a waiver or forfeiture of
Buyer's right to indemnification for Seller's failure to fulfill such condition.
9.1 Authorization. All corporate action necessary to authorize the
execution, delivery and performance of this Agreement by Seller, and the
consummation of the transactions contemplated hereby will have been duly and
validly taken by Seller, and Seller will have full power and right to sell the
Purchased Assets as contemplated hereby.
9.2 Accuracy of Representations and Warranties. The representations
and warranties of Seller contained in this Agreement and in any schedule or
exhibit hereto shall be true and accurate on and as of the Closing Date, with
the same force and effect as if made on the Closing Date, except as affected by
transactions contemplated or permitted hereby.
9.3 Performance of Agreements. Seller shall have performed and
complied with all covenants, obligations and agreements to be performed or
complied with by it on or before the Closing Date pursuant to this Agreement or
any schedule or exhibit hereto, including, but not limited to, each of Seller's
obligations under Section 4.3 and the successful transfer or assignment of all
agreements to be transferred or assigned hereunder.
9.4 Legislation. No Federal, state, territorial, local or foreign
statute, rule or regulation shall have been enacted which prohibits, restricts,
delays or materially adversely affects the consummation of the transactions
contemplated by this Agreement or any of the conditions to the consummation of
such transactions. No temporary restraining order or injunction shall be in
effect restraining the consummation of the transactions contemplated hereby.
9.5 Financial Standards. The financial statements represent a true
and accurate reflection of the financial condition of the Purchased Business as
of the Closing date.
9.6 Due Diligence. Buyer shall have completed its due diligence
investigation and the results thereof shall be satisfactory to it in its sole
discretion.
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ARTICLE X CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement are subject to the
satisfaction, on or before the Closing Date, of the following conditions, any of
which may be waived by Seller. The waiver of any of the following conditions in
order to close the transaction will not constitute a waiver or forfeiture of
Seller's right to indemnification for Buyer's failure to fulfill such condition.
10.1 Authorization. All corporate action necessary to authorize the
execution, delivery and performance of this Agreement by Buyer and the
consummation of the transactions contemplated hereby will have been duly and
validly taken by Buyer.
10.2 Accuracy of Representations and Warranties. The representations
and warranties of Buyer contained in this Agreement or in any schedule or
exhibit hereto shall be true and accurate on and as of the Closing Date, with
the same force and effect as if made on the Closing Date, except as affected by
transactions contemplated or permitted hereby.
10.3 Performance of Agreements. Buyer shall have performed and
complied with all covenants, obligations and agreements to be performed or
complied with by it on or before the Closing Date pursuant to this Agreement or
any schedule or exhibit hereto, including, but not limited to, each of Buyer's
obligations under Section 4.4.
10.4 Legislation. No Federal, state, territorial, local or foreign
statute, rule or regulation shall have been enacted which prohibits, restricts,
delays or materially adversely affects the consummation of the transactions
contemplated by this Agreement or any of the conditions to the consummation of
such transactions. No temporary restraining order or injunction shall be in
effect restraining the consummation of the transactions contemplated hereby.
ARTICLE XI INDEMNIFICATION
11.1 Survival. All representations and warranties contained herein
shall survive the Closing.
11.2 Indemnification. (a) Seller will indemnify, defend and save
Buyer harmless from, against, for and in respect of the following:
(1) any and all liabilities and obligations of Seller or the
Purchased Business (whether absolute, accrued, contingent or otherwise
and whether a contractual, tax or any other type of liability,
obligation or claim) not specifically assumed by Buyer pursuant to this
Agreement and the Assumption Agreement, including the obligation to
Branch Banking and Trust owed by Seller;
(2) any damages, losses, obligations, liabilities, claims,
actions or causes of action sustained or suffered by Buyer and arising
from a breach of any representation or warranty of Seller contained in
or made pursuant to this Agreement (including the
23
Schedules and Exhibits attached hereto), or in any certificate,
instrument or agreement delivered by Seller pursuant hereto or in
connection with the transactions contemplated hereby;
(3) all fines and penalties and liabilities, including all
foreseeable and unforeseeable consequential damages and any other
damages, costs and losses, including reasonable attorneys' and
consultants' fees, directly or indirectly and in whole or in part
arising out of or attributable to:
(i) (A) Hazardous Substances released into or
existing on or prior to the Closing Date in the air, water or
beneath or on the surface of the Purchased Assets or the land
and buildings on and in which the Purchased Business currently
conducts its operations or (B) as to those Hazardous
Substances in (A) which migrated or migrate at anytime
(whether before or after the Closing Date) within or from the
Purchased Assets or the land and buildings on and in which the
Purchased Business currently conducts its operations; or
(ii) Hazardous Substances existing on or prior to the
Closing Date at or migrating from any other location for which
Seller is responsible and with respect to which any liability
is sought to be imposed upon Buyer, its employees, officers,
directors or their respective successors or assigns, as an
alleged successor to Seller or the Purchased Business;
including, without limitation, any natural resource damages and the
cost of any remedial, removal, response, abatement, clean-up,
investigative and monitoring costs and any other related costs and
expenses;
(4) all damages, losses, obligations, liabilities, claims,
actions or causes of action sustained or suffered by Buyer as a result
of the failure to obtain any consent or provide any benefit under any
contract, license, lease, sales order, purchase order or other
agreement, claim, right, permit or operating authority contemplated by
Section 1.3 hereof;
(5) any damages, losses, obligations, liabilities, claims,
actions or causes of action sustained or suffered by Buyer and arising
from a breach of any covenant or agreement of Seller contained in or
made pursuant to this Agreement; and
(6) all reasonable costs and expenses (including, without
limitation, reasonable attorneys', accountants' and other professional
fees and expenses) incurred by Buyer in connection with any action,
suit, proceeding, demand, investigation, assessment or judgment
incident to any of the matters indemnified against under this Section
12.2(a).
No claim, demand, suit or cause of action will be brought against Seller under
or pursuant to this Section 11.2(a) with respect to an alleged breach of any
representation or warranty unless Buyer gives Seller written notice, with
reasonable specificity, of the existence of any such claim, demand, suit or
cause of action under this Agreement. Upon the giving of such written notice as
24
aforesaid, Buyer will have the right, in addition to all other remedies
available to it, to commence legal proceedings for the enforcement of its rights
under this Agreement.
(b) Buyer will indemnify, defend and save Seller harmless
from, against, for and in respect of the following:
(1) any liabilities or obligations of Seller assumed by
Buyer pursuant to this Agreement and the Assumption Agreement;
(2) any damages, losses, obligations, liabilities,
claims, actions or causes of action sustained or suffered by Seller and
arising from a breach of any representation or warranty of Buyer
contained in or made pursuant to this Agreement or in any certificate,
instrument or agreement delivered by it pursuant hereto or in
connection with the transactions contemplated hereby; and
(3) any damages, losses, obligations, liabilities,
claims, actions or causes of action sustained or suffered by Seller and
arising from a breach of any covenant or agreement of Buyer contained
in or made pursuant to this Agreement; and
(4) all reasonable costs and expenses (including, without
limitation, reasonable attorneys', accountants' and other professional
fees and expenses) incurred by Seller in connection with any action,
suit, proceeding, demand, investigation assessment or judgment incident
to any of the matters indemnified against under this Section 11.2(b).
No claim, demand, suit or cause of action will be brought against Buyer under or
pursuant to this Section 11.2(b) with respect to an alleged breach of
representation or warranty unless Seller gives Buyer written notice, with
reasonable specificity, of the existence of any such claim, demand, suit or
cause of action under this Agreement. Upon the giving of such written notice as
aforesaid, Seller will have the right to commence legal proceedings for the
enforcement of any of its rights under this Agreement.
11.3 Third Party Claims. With respect to claims resulting from
assertion of liability by third parties, the obligations and liabilities of the
party responsible for indemnification (the "Indemnifying Party") hereunder with
respect to indemnification claims by the party entitled to indemnification (the
"Indemnified Party") will be subject to the following terms and conditions:
(a) The Indemnified Party will give prompt written notice to
the Indemnifying Party of any assertion of liability by a third party
which might give rise to a claim by the Indemnified Party against the
Indemnifying Party based on the indemnity agreements contained in
Section 11.2 hereof, stating the nature and basis of said assertion and
the amount thereof, to the extent known.
(b) If any action, suit or proceeding is brought against the
Indemnified Party, with respect to which the Indemnifying Party may
have liability under the indemnity agreement contained in Section 11.2
hereof, the action, suit or proceeding will, upon the written agreement
of the Indemnifying Party that it is obligated to indemnify under the
25
indemnity agreement contained in Section 11.2 hereof, be defended
(including all proceedings on appeal or for review which counsel for
the defendant shall deem appropriate) by the Indemnifying Party. The
Indemnified Party will have the right to employ its own counsel in any
such case, but the fees and expenses of such counsel will be at the
expense of such Indemnified Party unless (1) the employment of such
counsel is authorized by the Indemnifying Party in connection with the
defense of such action, suit or proceeding, (2) the Indemnifying Party
does not agree, promptly after the notice to it provided in subsection
(a) above, that it is obligated to indemnify under the indemnity
agreement contained in Section 11.2 hereof or (3) such Indemnified
Party reasonably concludes that such action, suit or proceeding
involves to a significant extent matters beyond the scope of the
indemnity agreement contained in Section 11.2 hereof, or that there may
be defenses available to it which are different from or additional to
those available to the Indemnifying Party, in any of which events the
Indemnifying Party will not have the right to direct the defense of
such action, suit or proceeding on behalf of the Indemnified Party and
that portion of such fees and expenses reasonably related to matters
covered by the indemnity agreement contained in Section 11.2 hereof
will be borne by the Indemnifying Party. The Indemnified Party will be
kept fully informed of such action, suit or proceeding at all stages
thereof whether or not it is so represented. The Indemnifying Party
will make available to the Indemnified Party and its attorneys and
accountants all books and records of the Indemnifying Party relating to
such proceedings or litigation and the parties hereto agree to render
to each other such assistance as they may reasonably require of each
other in order to ensure the proper and adequate defense of any such
action, suit or proceeding.
(c) The Indemnifying Party will not make any settlement of any
claims without the written consent of the Indemnified Party.
11.4 Remedies Cumulative. The remedies provided for in this Article
XII are cumulative and will not preclude assertion by the Indemnified Party of
any other rights or the seeking of any other remedies against the Indemnifying
Party.
11.5 Recoveries. In the event an Indemnified Party subsequently
receives payment (including, without limitation, proceeds of insurance and
payments on accounts receivable) with respect to a matter for which it has been
indemnified by the Indemnifying Party, the Indemnified Party will promptly pay
the amount of such payment up to the indemnification received, to the
Indemnifying Party.
ARTICLE XII MISCELLANEOUS
12.1 Expenses; Transfer Taxes. All fees, costs and expenses incurred
by Seller in connection with, relating to or arising out of the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, legal and
accounting fees and expenses, will be borne by Seller. All fees and expenses
incurred by Buyer in connection with this Agreement will be borne by Buyer. All
sales taxes and all registration, recording or transfer taxes which may be
payable in connection with the transactions contemplated by this Agreement will
be borne by Seller. All real and personal property taxes will be pro rated with
Seller responsible for taxes relating to the period up to and
26
including the Closing Date and Buyer responsible for taxes relating to the
period after the Closing Date.
12.2 Parties in Interest. This Agreement is not assignable by either
Buyer or Seller without the prior written consent of the other, except that
without relieving Buyer of any of its obligations under this Agreement, Buyer
may assign this Agreement to any affiliate of Buyer. Subject to the foregoing,
this Agreement will be binding upon, inure to the benefit of, and be enforceable
by, the respective successors, heirs, legal representatives and assigns of the
parties hereto. This Agreement constitutes an agreement among the parties hereto
and none of the agreements, covenants, representations or warranties contained
herein is for the benefit of any third party not a party to this Agreement.
12.3 Entire Agreement; Amendments. This Agreement (including the
Schedules and Exhibits attached hereto) contains the entire understanding of the
parties with respect to its subject matter. This Agreement supersedes all prior
agreements and understandings between the parties with respect to the subject
matter hereof. This Agreement may be amended only by a written instrument duly
executed by the parties, and any condition to a party's obligations hereunder
may only be waived in writing by such party.
12.4 Headings. The article and section headings contained in this
Agreement are for reference purposes only and will not affect in any way the
meaning or interpretation of this Agreement.
12.5 Notices. All notices, claims, certificates, requests, demands and
other communications hereunder will be in writing and shall be deemed given if
delivered personally, if mailed (by registered or certified mail, return receipt
requested and postage prepaid), if sent by reputable overnight courier service
for next business day delivery, or if sent by facsimile transmission, as
follows:
if to Seller:
President
MidSouth Sign Company, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
if to Buyer:
National Services Associates, Inc.
00000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
27
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. Any such
communication will be effective on the date of receipt (or, if received on a
non-business day, on the first business day after the date of receipt).
12.6 Publicity. The parties agree that, except as otherwise required
by law, the issuance of any reports, statements or releases pertaining to this
Agreement or the transactions contemplated hereby will require mutual consent.
12.7 Counterparts. This Agreement may be signed in any number of
counterparts and by different parties in separate counterparts, each of which
will be deemed an original instrument, but all of which together will constitute
one agreement. This Agreement will become effective when one or more
counterparts have been signed by Seller and Buyer, and delivered to Buyer and
Seller, respectively. Any party may deliver an executed copy of this Agreement
(and an executed copy of any documents contemplated by this Agreement) by
facsimile transmission to another party, and such delivery will have the same
force and effect as any other delivery of a manually signed copy of this
Agreement (or such other document).
12.8 Governing Law. This Agreement will be governed by and construed
in accordance with the laws of the State of Tennessee.
12.9 Waivers. Any provision of this Agreement may be waived only by a
written instrument executed by the party to be charged with such waiver. The
waiver by any party hereto of a breach of any provision of this Agreement will
not operate or be construed as a waiver of any subsequent breach.
12.10 Defined Terms. Throughout this Agreement various terms have been
defined by being enclosed in quotation marks, usually in parentheses, and used
with their initial letters capitalized. Unless the context otherwise requires,
such defined terms will have their designated meaning whenever used in this
Agreement or any attached schedules. Unless an express reference is made to a
different document, all references to a Section or Article shall be understood
to refer to the indicated Section or Article of this Agreement, and all
references to a Schedule or Exhibit shall be understood to refer to the
indicated Schedule or Exhibit attached to this Agreement.
12.11 Construction. This Agreement is the result of negotiations
between Seller and Buyer. No provision of this Agreement shall be construed
against a party because of such party's role as the drafter of the provision.
12.12 Attorneys Fees. If there is any litigation or arbitration
proceeding between the parties related to this Agreement or the transactions
contemplated by this Agreement, the prevailing party will be entitled to recover
all reasonable costs and expenses (including, without limitation, reasonable
attorneys', accountants' and other professional fees and expenses).
12.13 Arbitration. If the parties disagree as to any matter governed by
this Agreement or relating to the transactions contemplated by this Agreement,
the parties will promptly consult
28
with one another in an effort to resolve the disagreement. If such effort is
unsuccessful, any controversy or claim arising out of or relating to this
Agreement, or the breach of this Agreement, will be settled exclusively by
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (subject to the provisions stated below). Judgment upon
the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. The arbitrators will have the power to render equitable,
as well as other, awards and relief. The arbitrators will have the power to
award reasonable fees and expenses in accordance with Section 13.12 above.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered on the date first above written.
SELLER: MidSouth Sign Company, Inc.
------
By: /s/ Xxx Xxxxxx
--------------------------
Title: Director
BUYER: National Services Associates, Inc.
-----
By: /s/ Xxxxxxx X. Xxxx
--------------------------
Title: President
ACKNOWLEDGED: /s/ Xxxxx Xxxxxx
------------- -----------------------------
Xxxxx Xxxxxx
/s/ Xxxx Xxxxx
-----------------------------
Xxxx Xxxxx
/s/ Xxxxx Xxxxx
-----------------------------
Xxxxx Xxxxx
29
