Exhibit 2.6
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OPTION AND ASSET PURCHASE AGREEMENT
BY AND AMONG
▇▇▇▇▇▇.▇▇▇▇ LLC
TOA ENTERPRISES, L.P.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
WBT OUTDOOR, INC.
THE ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ TRUST
▇▇▇▇▇▇ ACQUISITION CORPORATION
AND
UNIVERSAL OUTDOOR, INC.
DATED AS OF SEPTEMBER 12, 1996
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TABLE OF CONTENTS
Page
ARTICLE I
PURCHASE AND SALE OF ASSETS
AND ASSUMPTION OF LIABILITIES. . . . . . . . . . . 1
Section 1.1 BUYER OPTION . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 PURCHASE AND SALE. . . . . . . . . . . . . . . . . . . . . 2
Section 1.3 CONSIDERATION. . . . . . . . . . . . . . . . . . . . . . . 6
Section 1.4 CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.5 DELIVERIES BY THE SELLERS. . . . . . . . . . . . . . . . . 8
Section 1.6 DELIVERIES BY THE BUYER. . . . . . . . . . . . . . . . . . 8
Section 1.7 PRORATION PAYMENT. . . . . . . . . . . . . . . . . . . . . 9
Section 1.8 ACCOUNTS RECEIVABLES . . . . . . . . . . . . . . . . . . . 10
Section 1.9 LEASES . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND ▇▇▇▇▇▇ . . . . 11
Section 2.1 ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.2 AUTHORIZATION. . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.3 INTERESTS IN OTHER ENTITIES. . . . . . . . . . . . . . . . 12
Section 2.4 CONSENTS AND APPROVALS; NO VIOLATIONS. . . . . . . . . . . 13
Section 2.5 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . 13
Section 2.6 ABSENCE OF UNDISCLOSED LIABILITIES . . . . . . . . . . . . 14
Section 2.7 ABSENCE OF ADVERSE AND OTHER CHANGES . . . . . . . . . . . 14
Section 2.8 TITLE, OWNERSHIP AND RELATED MATTERS . . . . . . . . . . . 16
Section 2.9 PROPERTIES AND ASSETS NECESSARY FOR CONDUCT
OF BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2.10 LEASES. . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2.11 DISPLAYS. . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2.12 INTANGIBLE PROPERTY . . . . . . . . . . . . . . . . . . . 18
Section 2.13 LITIGATION. . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2.14 COMPLIANCE WITH APPLICABLE LAW; PERMITS . . . . . . . . . 19
Section 2.15 CERTAIN CONTRACTS AND ARRANGEMENTS. . . . . . . . . . . . 19
Section 2.16 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.17 EMPLOYEE BENEFIT PLANS. . . . . . . . . . . . . . . . . . 21
Section 2.18 TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.19 ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . 24
Section 2.20 CERTAIN FEES. . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.21 AFFILIATE TRANSACTIONS. . . . . . . . . . . . . . . . . . 25
Section 2.22 LABOR AGREEMENTS. . . . . . . . . . . . . . . . . . . . . 26
Section 2.23 DISCLOSURE. . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.24 ACQUISITION FOR INVESTMENT. . . . . . . . . . . . . . . . 27
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE
CONSENTING PARTIES. . . . . . . . . . . . . . 28
Section 3.1 ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . 28
Section 3.2 AUTHORIZATION; CONSENT . . . . . . . . . . . . . . . . . . 28
Section 3.3 INTERESTS IN THE ASSETS. . . . . . . . . . . . . . . . . . 28
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE
PARENT AND THE BUYER . . . . . . . . . . . . . 29
Section 4.1 ORGANIZATION AND AUTHORITY OF THE PARENT AND
THE BUYER. . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 4.2 CONSENTS AND APPROVALS; NO VIOLATIONS. . . . . . . . . . . 29
Section 4.3 LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 4.4 CERTAIN FEES . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE V
COVENANTS. . . . . . . . . . . . . . . . 31
Section 5.1 CONDUCT OF THE BUSINESS. . . . . . . . . . . . . . . . . . 31
Section 5.2 ACCESS TO INFORMATION; CONFIDENTIALITY . . . . . . . . . . 31
Section 5.3 REGULATORY COMPLIANCE. . . . . . . . . . . . . . . . . . . 32
Section 5.4 CONSENTS; ASSIGNMENTS. . . . . . . . . . . . . . . . . . . 33
Section 5.5 REASONABLE BEST EFFORTS. . . . . . . . . . . . . . . . . . 34
Section 5.6 NON-COMPETITION. . . . . . . . . . . . . . . . . . . . . . 34
Section 5.7 PRESS RELEASES . . . . . . . . . . . . . . . . . . . . . . 35
Section 5.8 EMPLOYEES. . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 5.9 ENVIRONMENTAL STUDIES; TITLE . . . . . . . . . . . . . . . 36
Section 5.10 SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 5.11 SUPPLEMENTAL DISCLOSURE . . . . . . . . . . . . . . . . . 38
Section 5.12 NO SOLICITATION OF TRANSACTIONS . . . . . . . . . . . . . 38
ARTICLE VI
CERTAIN TAX MATTERS . . . . . . . . . . . . . 38
Section 6.1 NO WITHHOLDING . . . . . . . . . . . . . . . . . . . . . . 38
Section 6.2 ALLOCATION OF CONSIDERATION. . . . . . . . . . . . . . . . 39
Section 6.3 SELLERS RESPONSIBILITY . . . . . . . . . . . . . . . . . . 39
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ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE PARTIES . . . . . . . . 39
Section 7.1 CONDITIONS TO EACH PARTY'S OBLIGATION. . . . . . . . . . . 39
Section 7.2 CONDITIONS TO OBLIGATIONS OF THE SELLERS . . . . . . . . . 40
Section 7.3 CONDITIONS TO OBLIGATIONS OF THE PARENT AND
THE BUYER. . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER. . . . . . . . . . . 42
Section 8.1 TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . 42
Section 8.2 PROCEDURE AND EFFECT OF TERMINATION. . . . . . . . . . . . 42
Section 8.3 AMENDMENT, MODIFICATION AND WAIVER . . . . . . . . . . . . 43
ARTICLE IX
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION . . . . . . . 43
Section 9.1 SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 9.2 SELLERS' AGREEMENT TO INDEMNIFY. . . . . . . . . . . . . . 43
Section 9.3 NOTICE AND OPPORTUNITY TO DEFEND . . . . . . . . . . . . . 44
Section 9.4 OPTION PAYMENT . . . . . . . . . . . . . . . . . . . . . . 45
Section 9.5 RIGHT OF SET-OFF . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE X
DEFINITIONS . . . . . . . . . . . . . . . 46
ARTICLE XI
MISCELLANEOUS. . . . . . . . . . . . . . . 56
Section 11.1 FURTHER ASSURANCES. . . . . . . . . . . . . . . . . . . . 56
Section 11.2 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 11.3 SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . 58
Section 11.4 BINDING EFFECT; ASSIGNMENT. . . . . . . . . . . . . . . . 58
Section 11.5 NO THIRD PARTY BENEFICIARIES. . . . . . . . . . . . . . . 58
Section 11.6 INTERPRETATION. . . . . . . . . . . . . . . . . . . . . . 58
Section 11.7 ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . .59
Section 11.8 JURISDICTION AND CONSENT TO SERVICE . . . . . . . . . . . 60
Section 11.9 ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . .60
Section 11.10 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 61
Section 11.11 SPECIFIC PERFORMANCE . . . . . . . . . . . . . . . . . . 61
Section 11.12 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . 61
Section 11.13 BULK SALES LAWS. . . . . . . . . . . . . . . . . . . . . 62
Section 11.14 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . 62
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EXHIBITS
EXHIBIT A - Form of ▇▇▇▇ of Sale
EXHIBIT B - Form of Undertaking
EXHIBIT C - Form of Real Property Lease Assignments
EXHIBIT D - Form of TP LLC Excluded Properties Lease
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DISCLOSURE SCHEDULE
SECTION
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Section 1.2 - Certain Assets of the Sellers
Section 2.3 - Interests in Other Entities
Section 2.4 - Exception to Consents and Approvals;
No Violations Provision
Section 2.5 - Financial Statements
Section 2.6 - Undisclosed Liabilities
Section 2.7 - Exception to Absence of Adverse and
Other Changes Provision
Section 2.8 - Title; Ownership and Related Matters
Section 2.10 - Leases
Section 2.12 - Intangible Property
Section 2.13 - Litigation
Section 2.14 - Compliance with Applicable Law
Section 2.15 - Certain Contracts and Arrangements
Section 2.16 - Insurance
Section 2.17 - Employee Benefit Plans
Section 2.18 - Taxes
Section 2.19 - Environmental Matters
Section 2.21 - Affiliate Transactions
Section 2.22 - Labor Agreements
Section 5.6 - Non-Competition
Section 7.3 - Consents and Renewals
BUYER DISCLOSURE SCHEDULE
SECTION
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Section 4.2 - Exception to Consents and Approvals; No Violations Provision
Section 6.2 - Allocation of Consideration
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OPTION AND ASSET PURCHASE AGREEMENT
OPTION AND ASSET PURCHASE AGREEMENT, dated as of September 12, 1996,
by and among ▇▇▇▇▇▇.▇▇▇▇ LLC ("TP LLC"), a Tennessee limited liability company,
TOA Enterprises, L.P. ("TOA," and together with TP LLC, the "Sellers"), a
Tennessee limited partnership, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), WBT Outdoor, Inc.
("WBT"), a Tennessee corporation, The ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust (the "Trust," and
together with ▇▇▇▇▇▇ and WBT, the "Consenting Parties"), ▇▇▇▇▇▇ Acquisition
Corporation (the "Buyer"), a Delaware corporation, and Universal Outdoor, Inc.
(the "Parent"), an Illinois corporation.
WHEREAS, pursuant to the terms and conditions of this Agreement, the
Sellers desire to grant to the Buyer the option to buy, and the Buyer desires,
at its sole discretion, upon exercise of such option to cause the Sellers to
sell to the Buyer, the Assets of the Sellers.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
AND ASSUMPTION OF LIABILITIES
Section 1.1 BUYER OPTION. Subject to the terms and conditions of
this Agreement, the Buyer shall have the right, at its sole discretion, during
the period from December 1, 1996 to December 31, 1996 (the "Option Exercise
Period") to purchase from each of the Sellers the Assets pursuant to Section 1.2
hereof and to consummate the other transactions contemplated hereby to occur at
the Closing (the "Option") for the consideration set forth in Section 1.3
hereof. In the event that the Buyer wishes to exercise the Option, the Buyer
shall deliver to TP LLC written notice (an "Advance Notice") at least ten and no
more than forty five days prior to the Buyer's intended date of exercise of the
Option. The Advance Notice shall state that the Buyer intends to exercise
such Option and shall specify the date on which the Buyer intends to exercise
the Option (the "Option Exercise Date"). Notwithstanding the foregoing, the
Advance Notice shall be revocable by the Buyer, in its sole discretion, at
any time prior to the Option Exercise Date by delivery to TP LLC of a written
notice of such revocation. After any such revocation of the Advance Notice,
the Buyer may subsequently re-deliver an Advance Notice so long as such
subsequent Advance Notice is delivered to TP LLC prior to December 31, 1996.
In the event that the Buyer has not revoked the Advance Notice, or if so, in
the event the Buyer has re-delivered an Advance Notice, in either case, the
Buyer shall be deemed to have exercised the Option on the Option Exercise
Date. As soon thereafter as practicable and subject to satisfaction or
waiver of the conditions set forth in Article VII, each of the Sellers shall
convey, transfer, sell and assign and the Buyer shall purchase and acquire
the Assets on the terms and conditions set forth herein. Notwithstanding the
foregoing, if this Agreement is terminated pursuant to Section 8.1, the Buyer
shall cease to have the right to exercise the Option, and any Advance Notice
which shall have been delivered pursuant to this Section 1.1 shall be void
and of no effect.
Section 1.2 PURCHASE AND SALE.
(a) Subject to the terms and conditions of this Agreement, in
the event that the Option is exercised by the Buyer, at the Closing, each of the
Sellers will sell, convey, assign, transfer and deliver or cause to be sold,
conveyed, assigned, transferred and delivered to the Buyer, and the Buyer will
purchase, acquire and accept from each of the Sellers, all of such Sellers'
respective rights, title and interests in and to the Assets as set forth in
Section 1.2 of the Disclosure Schedule, free and clear of all Liens, other than
Permitted Liens, including, without limitation, the following:
(i) all personal property owned and used in the
operation of the existing bulletin, junior poster, eight-sheet painted
walls or any other outdoor advertising displays (the "Displays") as
are more fully described by location in Section 1.2(a)(i) of the
Disclosure Schedule, including all sign struc-
2
tures and any fixtures and leasehold interests in sign structures, and all
lights, electrical hook ups, catwalks and other appurtenant equipment
related thereto;
(ii) all of the real property owned in fee (the "Owned
Real Property") and any rights in and to all facilities, easements,
rights-of-way, licenses, permits and other appurtenances thereunto
belonging and all buildings, facilities, structures, fixtures,
leasehold and other improvements located thereon;
(iii) all of the rights and incidents of ownership in
and to all leases, including Sign Location Leases for the locations
listed on Section 1.2(a)(iii) of the Disclosure Schedule and all
leases and subleases for real property and any rights in and to all
easements, rights-of-way, licenses, permits and other appurtenances
thereon belonging and all buildings, facilities, structures, fixtures
and leasehold improvements located thereon and any prepaid ground
rents thereunder;
(iv) all rights and entitlement in and to the
advertising contracts (the "Advertising Contracts") related to the
Business;
(v) all necessary and requisite consents, permits,
licenses, franchises, approvals or authorizations (including any
vegetation removal permits) of any governmental or regulatory agency
or authority, including in respect of the ▇▇▇▇▇▇ Owned Properties
(collectively, the "Permits");
(vi) any complete or partially complete Displays and
any Sign Location Leases, Advertising Contracts or Permits, as well as
any perfected or partial right, title, interest, or expectancy in any
location where either of the Sellers has planned, contemplated or
worked upon the possibility of outdoor advertising at any time prior
to the date of this Agreement but which have not yet been con-
3
structed (as more fully described in Section 1.2(a)(v) of the Disclosure
Schedule);
(vii) all accounts and other receivables and prepaid
expenses arising after the Closing;
(viii) all raw materials, work-in process, finished
goods, supplies and other inventories and fixtures and the leasehold
improvements, plant and equipment located on any of the Real
Properties;
(ix) all rights in, to and under all other contracts,
licenses, leases, commitments, purchase orders, entitlement and other
agreements, whether oral or written;
(x) all rights under any non-compete agreements,
including those set forth in Section 1.2(a)(x) of the Disclosure
Schedule;
(xi) all customer lists of whatever nature;
(xii) all trademarks, trade names, service marks,
service names, logos, assumed names, copyrights, patents,
registrations and applications for the foregoing, trade secrets and
confidential business information (including ideas, research and
development, know-how, technical data, designs, drawings and
specifications) and all licenses thereof, and all other intellectual
property rights and other proprietary rights (together, the
"Intangible Property");
(xiii) all of the books and records of (A) the Sellers
and (B) ▇▇▇▇▇▇ in so far as such books and records relate to the
Business, in each case including, but not limited to, all files,
computer generated or stored data, advertising and customer
information, correspondence, memoranda, telephone numbers and
listings, personnel and payroll records and the like and all books and
records in connection with or to any extent relating to
4
Taxes (including without limitation accounting and tax records and
information pertaining to events occurring prior to or after the
Closing Date) (collectively, the "Books and Records"); PROVIDED,
HOWEVER, that the Buyer will keep the Books and Records available for
use and copying by the Sellers for a period of 3 years after the
Closing;
(xiv) all other files, indices, market research studies,
surveys, reports, analyses and similar information;
(xv) all other assets and property, including sign
panels, computer hardware and software, machinery, equipment,
furniture, office equipment, communications equipment, vehicles,
storage tanks, spare and replacement parts, fuel and other tangible
property, to the extent used in the Business;
(xvi) all deposits from customers held;
(xvii) all cash after the Closing;
(xviii) all rights, claims, credits, causes of action,
condemnation proceedings or rights of set-off against third parties;
(xix) the goodwill in or arising from the Assets or the
Business; and
(xx) all other assets reflected on the Balance Sheet or
acquired after June 30, 1996 which would be reflected on a balance
sheet prepared in accordance with GAAP.
(b) Such sale, assignment, transfer and delivery of the Assets
will be effected by delivery by the Sellers to the Buyer of (i) the Bills of
Sale (each Seller shall deliver a ▇▇▇▇ of Sale to transfer that portion of the
Assets owned by each such Seller), (ii) the Lease Assignments, (iii) the Deeds,
and (iv) the Other Instruments.
5
(c) Notwithstanding anything to the contrary contained in
paragraphs (a) or (b) of this Section 1.2, the following assets shall be
considered Excluded Assets: (i) the consideration delivered by the Buyer
pursuant to this Agreement; (ii) all tax refunds (including any interest
thereon) and all tax credits and deductions for the period prior to and
including the date hereof; (iii) the ownership interest, whether in fee simple,
perpetual easement or the like, in the real property owned by TP LLC set forth
in Section 1.2(c)(iii) of the Disclosure Schedule (the "TP LLC Excluded
Properties"); (iv) ▇▇▇▇▇▇'▇ ownership interest in the forty-five properties
owned by ▇▇▇▇▇▇ (the "▇▇▇▇▇▇ Owned Properties") set forth in Section 1.2(c)(iv)
of the Disclosure Schedule; (v) the computers, facsimile machines, seven
cellular phones, and the like owned by WBT Media but located on the Real
Property (as more fully described in Section 1.2(c)(v) of the Disclosure
Schedule); (vi) the three motor vehicles set forth in Section 1.2(c)(vi) of the
Disclosure Schedule; (vii) the accounts receivables and the cash of the Business
as of the Closing; (viii) the structure related to the ▇▇▇▇▇▇▇/▇▇▇▇▇▇ Lease
(board number 218 on Section 1.2(a)(i) of the Disclosure Schedule); and (ix) the
structure related to the ▇▇▇▇▇▇▇▇/▇▇▇▇▇▇ Lease (board number 137 on Section
1.2(a)(i) of the Disclosure Schedule).
(d) Anything contained in this Agreement to the contrary
notwithstanding, this Agreement shall not, unless and until, and to the extent
the Buyer notifies the Sellers otherwise, constitute an agreement to assign any
right, title or interest in, to or under any contract, license, lease,
commitment, sales order, purchase order or other agreement or any claim or right
to any benefit arising thereunder or resulting therefrom if an attempted
assignment thereof, without the consent of a third party thereto, would
constitute a breach thereof, or in any way adversely affect the rights of the
Buyer or the respective Seller thereunder, and such consent is not obtained.
Section 1.3 CONSIDERATION.
(a) Subject to the terms and conditions of this Agreement, in
consideration of granting the Option, the Buyer will deliver or cause to be
delivered to TP LLC on the date hereof $5,000,000 in cash by wire
6
transfer of immediately available funds to such bank account as shall be
specified by TP LLC prior to the date hereof (the "Option Payment"), which
amount, subject to the provisions of Article IX hereof, shall be
non-refundable irrespective of whether the Buyer shall exercise the Option.
(b) Subject to the terms and conditions of this Agreement, the
consideration for the Assets to be acquired shall be (i) $65,880,000 in the
event that the Closing occurs on or prior to December 31, 1996 and $65,885,000
in the event that the Closing occurs on or after January 1, 1997, in each case,
in cash, plus or minus the Proration Payment as calculated pursuant to Section
1.7 hereof (the "Cash Purchase Price"); (ii) the Option Payment; (iii) 100,000
duly authorized and issued shares of common stock, par value $.01 per share, of
the Parent (the "Shares", and collectively with the Cash Purchase Price, the
"Purchase Price"); and (iv) assumption of liabilities consummated pursuant to
the Undertaking.
(c) The Purchase Price and the Option Payment will be delivered
to TP LLC for its account and for the account of TOA, PROVIDED however that such
portion of the Purchase Price and the Option Payment shall be deemed received by
TP LLC on its own behalf and on behalf of TOA allocated $3,720,000 to TOA for
all of its Assets (representing $60,000 per face of TOA located on each TOA Sign
Location Lease and Display) and the balance to TP LLC. The Sellers shall
indemnify and hold harmless the Parent, the Buyer and the Indemnitees from and
against any and all liabilities arising from or in connection with such
allocation.
Section 1.4 CLOSING. The Closing shall take place as promptly as
practicable, and in any event not later than the tenth business day following
the receipt of clearance under the HSR Act and the satisfaction or waiver of all
of the conditions to Closing set forth in Article VII hereof, at 9:00 a.m.,
local time, on the Closing Date, at the offices of Baker, Donelson, Bearman &
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, or at such other place and
time as the parties may agree; PROVIDED, HOWEVER, that the Buyer and the Sellers
shall immediately following receipt of the Advance Notice proceed to complete
all items necessary to proceed to
7
Closing, including, but not limited to, filing under the HSR Act as contemplated
by Section 5.3 hereof.
Section 1.5 DELIVERIES BY THE SELLERS. At the Closing, the Sellers
will deliver or cause to be delivered to the Buyer the following:
(a) the Deeds;
(b) the Lease Assignments;
(c) the duly executed Bills of Sale;
(d) a duly executed Undertaking;
(e) the Other Instruments, if any;
(f) the Books and Records;
(g) the certificates of the Sellers signed by the Chief Manager
of TP LLC and the general partner of TOA, respectively, referred to in Section
7.3 hereof;
(h) appropriate authorizations for each Seller for the
transactions contemplated hereby consisting of (i) with respect to TP LLC, a
consent of the Members and a certificate of the Chief Manager and (ii) with
respect to TOA, a certificate of the General Partner and a consent of the
necessary Partners;
(i) an opinion of counsel to the Sellers, dated as of the
Closing Date, in form and substance reasonably satisfactory to the Buyer; and
(j) all other documents, instruments and writings required to be
delivered by the Sellers at or prior to the Closing pursuant to this Agreement
or otherwise required in connection herewith. All such documents, instruments
and writings to be delivered by the Sellers at the Closing shall be in form and
substance reasonably satisfactory to the Buyer.
Section 1.6 DELIVERIES BY THE BUYER.
At the Closing, the Buyer will deliver or cause to be delivered
to the Sellers the following:
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(a) the Cash Purchase Price, delivered by wire transfer of
immediately available funds to such bank account as shall be specified by TP LLC
prior to the Closing;
(b) stock certificates representing the Shares;
(c) a duly executed Undertaking assuming the Assumed Liabilities
and holding harmless the Sellers from such Assumed Liabilities;
(d) the Other Instruments, if any;
(e) the certificate of the Buyer signed by an officer of the
Buyer referred to in Section 7.2 hereof;
(f) all other documents, instruments and writings required to be
delivered by the Parent or the Buyer at or prior to the Closing pursuant to this
Agreement or otherwise required in connection herewith; and
(g) an opinion of counsel to the Buyer dated as of the Closing
Date, in form and substance reasonably satisfactory to TP LLC.
Section 1.7 PRORATION PAYMENT.
(a) Within 15 days after the Closing, the Buyer shall prepare
and deliver to the Sellers a statement (the "Statement") setting forth the
prepaid leases and prepaid expenses (together, the "Prorated Assets"), the
accounts payable, accrued liabilities and other current liabilities (together,
the "Prorated Liabilities") of the Business as of the Closing and the capital
expenditures made from the date hereof to the date of the Closing (and approved
pursuant to the Joint Management Agreement) (the "Capital Expenditures"). The
preparation of the Statement shall be, in all material respects, in accordance
with GAAP. Following the date of the Closing, each of the Buyer and the Sellers
shall give the other party and any independent auditors of such other party
access at all reasonable times to the properties, books, records and personnel
of the Business for purposes of preparing and reviewing the Statement. The
Sellers shall have 15 days following delivery to the
9
Sellers of the Statement during which to notify the Buyer of any dispute of
any item contained in the Statement, which notice shall set forth in
reasonable detail the basis for such dispute. If the Sellers fail to notify
the Buyer of any such dispute within such 15-day period, the Statement shall
be deemed to be the final Statement (the "Final Statement"). In the event
that the Sellers shall so notify the Buyer of any dispute, the Buyer and the
Sellers shall cooperate in good faith to resolve such dispute as promptly as
possible.
(b) If the Buyer and the Sellers are unable to resolve any such
dispute within 15 days of the Sellers' delivery of notice of a dispute, such
dispute shall be resolved by an independent accounting firm (the "Accounting
Firm") reasonably acceptable to the Buyer and TP LLC (on behalf of the Sellers),
and such determination shall be final and binding on the parties. If the Buyer
and TP LLC cannot mutually agree on the identity of the Accounting Firm, the
Buyer and TP LLC shall each submit to the other party's independent auditor the
name of a big six accounting firm which does not at the time and has not in the
prior two years provided services to any of the Sellers or the Buyer or the
Parent or any of their respective affiliates, and the Accounting Firm shall be
selected by lot from these two firms by the independent auditors of the two
parties. Any expenses relating to the engagement of the Accounting Firm shall
be shared equally by the Buyer and the Parent, on the one hand, and the Sellers,
on the other. The Accounting Firm shall be instructed to use every reasonable
effort to perform its services within 15 days of submission of the Statement to
it and, in any case, as promptly as practicable after such submission. The
Statement, as modified by resolution of any disputes by the Buyer and the
Sellers or by the Accounting Firm, shall be the Final Statement.
(c) To the extent that the sum of the Prorated Assets existing
as of the Closing Date and the Capital Expenditures exceeds the Prorated
Liabilities of the Business as of the Closing Date, Buyer shall pay the
difference to TP LLC for the account of the Sellers, and to the extent that the
Prorated Liabilities of the Business which arose on or prior to the Closing Date
exceed the sum of the Prorated Assets existing as of the Closing Date and the
Capital Expenditures, the Sellers shall pay the difference to the Buyer (such
payment being referred
10
to herein as the "Proration Payment"). The Proration Payment shall be made as
soon as practicable following the determination of the Final Statement, shall be
paid by wire transfer of immediately available funds to an account designated by
the payee at least two business days prior to the payment, and shall be an
adjustment to the Purchase Price.
(d) The Parent's and the Buyer's rights to indemnification
pursuant to Article IX hereof shall not be deemed to limit, supersede or
otherwise affect the Buyer's or the Sellers' rights to a Proration Payment
pursuant to this Section 1.7.
Section 1.8 ACCOUNTS RECEIVABLES. Within 15 days after the Closing,
the Buyer shall prepare and deliver to TP LLC a statement setting forth all
accounts receivables of the Business existing on the Closing Date
("Receivables"). Notwithstanding anything to the contrary in this Agreement,
the parties acknowledge and agree that the Receivables shall remain the property
of TP LLC, but shall be collected by the Buyer. Any proceeds collected, from
the original account customer/contracting party or its assignee, without further
discounting excluding finance charges, on account of the Receivables, shall
remain the property of TP LLC. If the Buyer receives payment of any of the
Receivables following the date of the Closing, the Buyer shall within thirty
days of receipt notify TP LLC of its receipt of these funds and pay over such
funds to TP LLC. If following Closing Date either TP LLC or the Buyer receives
commingled funds which include payments for both TP LLC and the Buyer, then the
party who received the funds shall tender to the other party such other party's
portion of the received commingled funds within thirty days of its receipt of
such funds.
Section 1.9 LEASES.
(a) Simultaneously with the Closing, ▇▇▇▇▇▇ and the Buyer shall
enter into leases with respect to each of the ▇▇▇▇▇▇ Owned Properties (the
"▇▇▇▇▇▇ Owned Property Leases") which shall provide for, among other things, a
term of 40 years renewable at the option of either party (or its successor or
assign) and shall provide for rent abatements equal in the aggregate to $250,000
per year for the first two years. The ▇▇▇▇▇▇
11
Owned Property Leases shall supersede any existing leases in respect of ▇▇▇▇▇▇
Owned Properties and any such pre-existing leases shall terminate following the
Closing.
(b) Simultaneously with the Closing, TP LLC and the Buyer shall
enter into leases in respect of each of the TP LLC Excluded Properties (the "TP
LLC Excluded Properties Leases"), substantially in the form attached hereto as
Exhibit D, which shall provide for, among other things, a term of 40 years
renewable at the option of either party with rent to be paid at the rate of $0
in each month of the first three years and $11,425 per month thereafter.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND ▇▇▇▇▇▇
Each of the Sellers and ▇▇▇▇▇▇ jointly and severally represent and
warrant to the Buyer and the Parent on the date hereof and on the Closing Date:
Section 2.1 ORGANIZATION. TP LLC is a limited liability company and
TOA is a limited partnership, both of which are duly organized, validly existing
and in good standing under the laws of the State of Tennessee and have all
requisite power and authority to own, lease and operate the properties owned,
leased and operated by them and to carry on the operations of the Business as
now being conducted by them. Each of the Sellers is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification necessary. TP LLC and TOA have previously made
available to the Buyer complete and correct copies of their certificate of
formation and operating agreement (the "LLC Agreement") or partnership agreement
(the "TOA Agreement").
Section 2.2 AUTHORIZATION. Each of the Sellers has full power and
authority to execute and deliver this Agreement and the Related Agreements and
to consummate the transactions contemplated hereby and thereby. The execution
and delivery of this Agreement and the Related Agreements and the consummation
of the transactions contemplated hereby and thereby have been duly and
12
validly authorized by all necessary action on the part of each of the
Sellers, and no other proceedings on the part of either Seller is necessary
to authorize the execution, delivery and performance of this Agreement and
the Related Agreements or the consummation of the transactions contemplated
hereby and thereby. This Agreement has been duly executed and delivered by
each Seller and constitutes, and when executed and delivered, each of the
Related Agreements to be executed and delivered by either Seller pursuant
hereto will constitute, a valid and binding obligation of such Seller,
enforceable against such Seller in accordance with its terms.
Section 2.3 INTERESTS IN OTHER ENTITIES. Except as set forth in
Section 2.3 of the Disclosure Schedule, each of the Sellers, directly or
indirectly, (i) has no interest in the outstanding stock of any corporation or
in any partnership, joint venture, limited liability company or other entity and
(ii) is not party to nor is it bound by any agreement, understanding, contract
or commitment relating to an interest in any such entity or the Sellers'
investment therein or which would require such Seller to make any investment
therein. Neither of the Sellers holds any assets other than Assets used in
connection with the Business to be conveyed to the Buyer pursuant to this
Agreement. Neither of the Sellers has or has had a Controlled Affiliate.
Section 2.4 CONSENTS AND APPROVALS; NO VIOLATIONS. Except for
applicable requirements of the HSR Act, and as set forth in Section 2.4 of the
Disclosure Schedule, neither the execution and delivery of this Agreement or the
Related Agreements nor the consummation by the Sellers of the transactions
contemplated hereby and thereby will (a) conflict with or result in any breach
of any provision of the LLC Agreement or the TOA Agreement or any other
organizational document of either Seller; (b) require any filing with, or the
obtaining of any permit, license, action waiver, authorization, consent, filing,
registration or approval of, any governmental or regulatory authority, PROVIDED,
HOWEVER, that no representation in this clause (b) is made by reason of facts
pertaining specifically to the Parent or the Buyer or by reason of the
Financing; (c) result in a breach of, or constitute a default (whether by notice
or lapse of time or by both) under, or violate or conflict with or give rise to
any right of amendment, termination, can-
13
cellation or acceleration, or to a loss of any benefit to which either Seller is
entitled, or require any consent to assign, under any of the terms, conditions
or provisions of, any note, mortgage, other evidence of indebtedness, guarantee,
license, agreement, lease or other contract, instrument or obligation to which
either Seller is party or to which either Seller or any of the Assets are bound
(or result in the imposition of any Lien upon any of the Assets); or (d) violate
or conflict with any order, injunction, decree, statute, rule or regulation
applicable to either Seller or to the Assets.
Section 2.5 FINANCIAL STATEMENTS. Section 2.5 of the Disclosure
Schedule contains true and accurate copies (collectively, the "Financial
Statements") of (i) audited consolidated balance sheets (including notes
thereto) for the years ended December 31, 1995, and December 31, 1994 and
related statements of earnings for the periods then ended for the Sellers, and
(ii) an unaudited consolidated balance sheet and statement of earnings as of
June 30, 1996 of the Sellers (the "Balance Sheet"), except that lease expenses
are understated by $127,500. The Financial Statements have been prepared in
accordance with GAAP, consistently applied (other than for statements of cash
flows and footnotes otherwise required by GAAP) and have been prepared on a
basis consistent with the financial and other books and records of the Business.
The Financial Statements fairly present the financial position and the results
of operations of the Sellers as of the respective dates and periods thereof,
subject in the case of interim financial statements to normal year-end
adjustments.
Section 2.6 ABSENCE OF UNDISCLOSED LIABILITIES. Except for
liabilities and obligations (a) incurred since June 30, 1996 in the ordinary
course of business and consistent with past practice, (b) disclosed in Section
2.6 of the Disclosure Schedule, and (c) provided for in the Balance Sheet (in
relation to the Business) and the Sellers have no material liabilities or
obligations of any kind whatsoever (whether direct, indirect, accrued or
contingent) and there is no existing condition or situation which could
reasonably be expected to result in any such liabilities or obligations.
Section 2.7 ABSENCE OF ADVERSE AND OTHER CHANGES. Except as set
forth in Section 2.7 of the
14
Disclosure Schedule or as otherwise contemplated by this Agreement, since June
30, 1996, (a) there has not been any event or occurrence which has resulted in
or could reasonably be expected to result in, a material adverse change in the
Business or in the business, assets, results of operations, prospects or
condition (financial or otherwise) of either Seller, (b) the Business has been
conducted in the ordinary course consistent with past practices, and (c) there
has not been (i) any increase in the compensation of or other benefits payable
to any of the officers or employees of the Business, except such increases as
are granted in the ordinary course of business in accordance with its customary
practices (which shall include normal periodic
performance reviews and related compensation and benefit increases), (ii) any
incurrence, assumption or guarantee by either Seller in connection with the
Business of any indebtedness for borrowed money; (iii) any creation or other
incurrence of any Lien (other than a Permitted Lien) on any Asset; (iv) any
transaction or commitment made, or any contract or agreement entered into, by
either Seller in connection with the Business (including with respect to the
acquisition or disposition of any assets) or any relinquishment by either Seller
in connection with the Business of any contract or other right, in either case,
other than in the ordinary course of TP LLC's business and for fair
consideration; (v) any change in any method of accounting or accounting practice
by either Seller; (vi) any (A) employment, deferred compensation, severance,
retirement or other similar agreement entered into with any employee of the
Business (or any amendment to any such existing agreement), (B) grant of any
severance or termination pay to any such employee or (C) any loan or advance to
any employee of the Business, to the extent outstanding on the date hereof;
(vii) any material change in the methods of operation of the Business; (viii)
any loss or damage to the properties of the Business or the Assets in excess of
$10,000; (ix) any capital expenditures (or series of related capital
expenditures) in excess of $200,000 in the period from July 1, 1996 through the
date hereof by either Seller in connection with the Business; (x) any
acceleration, termination, modification, or cancellation of any contract,
agreement, lease, license or understanding by either Seller in connection with
the Business, outside of the ordinary course of TP LLC's business consistent
with past practice; (xi) any capital investment in, or any loan to, any other
Person by either
15
Seller in connection with the Business; (xii) any delay or postponement of the
payment of any accounts payable or other liabilities or obligations by either
Seller in connection with the Business, except in the ordinary course of
business consistent with past practice; (xiii) any cancellation, waiver or
release of any right or claim by either Seller in connection with the Business,
except in the ordinary course of business consistent with past practice; (xiv)
any grant or any license or sublicense of any rights under or with respect to
any Intangible Property; (xv) any transaction with, payment to or repurchase of
any interest in (or any amounts in respect of interests in), any Member or
Partner or affiliate of either of the Sellers; (xvi) any settlement or payment
of any amount to any other Person with respect to any liability or obligation,
outside the ordinary course of TP LLC's business; (xvii) any non-cash dividend,
distribution or allocation to any Member or Partner in respect of such Member's
or Partner's interest in either Seller; or (xviii) any agreement or any
commitment to take any of the actions described in this Section 2.7.
Section 2.8 TITLE, OWNERSHIP AND RELATED MATTERS.
(a) Section 2.8(a) of the Disclosure Schedule sets forth a list
and briefly describes (and specifies the owner of) all Real Property owned (and
any options to purchase) by each Seller in connection with the Business, and any
title insurance policies and surveys with respect thereto, and any Liens
thereon.
(b) As of the Closing, the Sellers will have, and will deliver
to the Buyer, good and marketable title to, or in the case of any leased Real
Property, has, and will deliver a valid fee simple or leasehold interest in, all
of the Assets, in each case free and clear of all Liens, except for Permitted
Liens.
(c) There are no material defects in the physical condition of
buildings, structures, and other improvements included within the Real Property
(the "Improvements") that would interfere with the use or occupancy of the
Improvements in the ordinary conduct of the Business. The Improvements have
access to all utility services that are necessary for and currently used in the
conduct of the Business. Neither of the Sellers has re-
16
ceived notice, nor has knowledge of, any pending, threatened or contemplated
condemnation proceeding, or of any sale or other disposition in lieu of
condemnation, affecting the Real Property. There are no leases, subleases,
licenses, concessions or other agreements, written or oral, granting to any
party or parties the right of use of occupancy of any portion of any Real
Property and there are no outstanding options or rights of first refusal to
purchase any Real Property or interest therein owned by the Sellers. No
condemnation or eminent domain proceeding against any of the Real Properties
is pending or threatened or any other matter affecting adversely the current
use, occupancy or value thereof. Neither of the Sellers has received any
written notice of any violation of any law, regulation or ordinance relating
to (i) the physical condition of the Improvements or (ii) the current use of
the Real Property. Each parcel of Real Property abuts on or has direct
vehicular access to a public road.
Section 2.9 PROPERTIES AND ASSETS NECESSARY FOR CONDUCT OF BUSINESS.
The Assets to be transferred to the Buyer pursuant to this Agreement are the
properties and assets (i) owned by each of the Sellers, (ii) used in connection
with the Business, and (iii) necessary to permit the Business to be conducted as
currently conducted or as contemplated to be conducted by the Sellers or which
has been used in the conduct of the Business. Section 1.2 of the Disclosure
Schedule sets forth all assets owned by the Sellers described in the preceding
sentence, all of which shall be conveyed to the Buyer pursuant hereto.
Section 2.10 LEASES. Section 2.10 of the Disclosure Schedule sets
forth a true, complete and correct list, as of the date hereof, of all Leases
(including Sign Location Leases), the name of the lessor or sublessor, the
primary lease term and any title insurance policies and the commitments and
surveys with respect thereto and any Liens thereon and a brief description
thereof. True and complete copies of the Leases and all written riders,
addenda, amendments and any other agreements and all title policies to the
commitments and surveys in either Seller's possession relating thereto have
been made available to the Buyer. Except as set forth in Section 2.10 of the
Disclosure Schedule, each Seller party to a Lease has a valid leasehold
interest in
17
such Lease free and clear of all Liens, other than Permitted Liens. No
consent is required (or the requirement for the same has been waived in
writing prior to the date hereof by the Buyer) of any landlord or other third
party to any Lease to consummate the transactions contemplated hereby and
upon consummation of the transactions contemplated hereby, each Lease will
continue to entitle the respective Seller to the use and possession of the
real property specified in such Leases and for the purposes for which such
real property is now being used by the Sellers. Neither of the Sellers is in
default beyond any applicable notice or grace period and has not received
written notice of default still outstanding on the date hereof under any such
Lease, and to the best of each of the Sellers' knowledge, there exists no
uncured default thereunder by any third party. With respect to any Leases
whereon there exists a Display, unless otherwise set forth in Section 2.10 of
the Disclosure Schedule, said Display is owned by the Seller indicated in
Section 2.10 of the Disclosure Schedule and is conveyed in accordance with
this Agreement. Upon request from the Buyer, each Seller shall use its best
efforts to obtain an estoppel certificate from the lessor or sublessor under
any Lease for which the Buyer requests such Seller to obtain such estoppel
certificate. Neither of the Sellers is aware of any circumstances involving
a dispute, oral modification, misunderstanding, forebearance program or
intention to terminate the relationship thereunder (either at present or in
the future) regarding or in relation to any Lease. Each Lease has been
entered into on terms substantially consistent with industry standards and
practices with respect to the subject matters thereof.
Section 2.11 DISPLAYS. The Displays and all related equipment are in
good working order and repair, and comply with all applicable building codes,
zoning or other promulgations of entities having jurisdiction over the
construction and maintenance of the Displays and are fit for intended purpose in
accordance with industry standards. There are at least 2012 Displays faces
being purchased by the Buyer.
Section 2.12 INTANGIBLE PROPERTY. Section 2.12 of the Disclosure
Schedule hereto contains a complete and correct list of the Intangible Property
used by either Seller in connection with the Business, and each
18
license or other agreement relating thereto. Each of the Intangible
Properties is owned by the Seller indicated in Section 2.12 of the Disclosure
Schedule and is owned free and clear of all Liens. There has been no claim
asserted in writing, which is still pending, or otherwise threatened, that
any of the foregoing is invalid or conflicts with the asserted rights of
others, or otherwise challenging such Seller's ownership or use thereof. The
Sellers possess all Intangible Property necessary for the conduct of the
Business as currently conducted. The use by the Sellers of such rights does
not violate the rights of any third party.
Section 2.13 LITIGATION. Except as set forth in Section 2.13 of the
Disclosure Schedule, there is no claim, action or proceeding pending or
threatened against either Seller or any of their respective operations by or
before any court, governmental or regulatory authority.
Section 2.14 COMPLIANCE WITH APPLICABLE LAW; PERMITS.
(a) Neither of the Sellers is in violation of, nor has been
threatened to be charged with or given notice of any violation of, or to the
best of such Seller's knowledge, is under investigation with respect to, any
applicable laws, ordinances, rules and regulations of any federal, state, local
or foreign governmental authority, except as set forth in Section 2.14 of the
Disclosure Schedule.
(b) To the best of the Sellers' knowledge, the Sellers have
obtained all necessary Permits (including, without limitation, vegetation
removal permits) and other federal, state and local authorizations necessary to
allow the continued presence of the Displays where located; all applicable fees
for such Permits have been paid; all such Permits are valid and in effect and
are fully transferable; and neither the execution nor the consummation of this
Agreement and the transactions contemplated hereby will terminate any Permit.
Section 2.15 CERTAIN CONTRACTS AND ARRANGEMENTS. Section 2.15 of the
Disclosure Schedule sets forth the following agreements to which either Seller
is a party in connection with the Business, (i) any agreements relating to
indebtedness for borrowed money (wheth-
19
er incurred, assumed, guaranteed or secured by any asset), (ii) all
Advertising Contracts, (iii) any agreement (or group of related agreements)
for the lease of personal property to or from any Person providing for lease
payments in excess of $10,000 per annum, (iv) any agreement (or group of
related agreements) for the purchase or sale of raw materials, commodities,
supplies, products, or other personal property, or for the furnishing or
receipt of services, the performance of which will extend over a period of
more than one year, result in a material loss to either Seller, or involve
consideration in excess of $25,000, (v) any agreement concerning a
partnership or joint venture, (vi) any agreement concerning confidentiality
or non-competition, (vii) any profit sharing, stock option, stock purchase,
stock appreciation, deferred compensation, severance, or other material plan
or arrangement for the benefit of the current or former employees of the
Business, (viii) any collective bargaining agreement, (ix) any agreement for
the employment of any individual on a full-time, part-time, consulting, or
other basis providing annual compensation in excess of $1,000 or providing
severance benefits, (x) any agreement under which it has advanced or loaned
any amount to any of the employees or affiliates of either Seller, (xi) any
agreement providing for indemnification of or by either Seller, (xii) any
non-compete agreement applicable to either Seller, (xiii) any agreement by
either Seller providing products or services to any Person for consideration
other than cash or receiving consideration from any Person in products or
services in lieu of cash, and (xiv) any other agreement (or group of related
agreements) the performance of which involves consideration in excess of
$10,000 (such contracts and agreements, together with the Leases, the Sign
Location Lease and the Insurance Policies, the "Material Agreements"). TP
LLC has delivered to the Buyer a correct and complete copy of each written
Material Agreement and a written summary setting forth the terms and
conditions of each oral Material Agreement. Except as set forth in Section
2.15 of the Disclosure Schedule, all Material Agreements are valid, binding
and enforceable in accordance with their terms and will continue to be so on
identical terms immediately following the consummation of the transactions
contemplated by this Agreement and the Related Agreements, and neither the
Sellers nor, to the best knowledge of each Seller, any other party thereto,
is in default under any of such agreements, nor, to the best knowledge of
each Seller,
20
has any event or circumstance occurred that, with notice or lapse of time or
both, would constitute any event of default by either Seller or any other
party thereto.
Section 2.16 INSURANCE. Section 2.16 of the Disclosure Schedule sets
forth a complete and accurate list of all policies and fidelity bonds (including
their respective expiration dates) of fire, liability, product liability,
worker's compensation, and other forms of insurance presently in effect with
respect to the Business and its operations (the "Insurance Policies"). There is
no claim pending under any of such policies or bonds as to which coverage has
been questioned, denied or disputed by the underwriters of such policies or
bonds or in respect of which such underwriters have reserved their rights. All
premiums payable under all such policies and bonds have been timely paid and
each Seller has otherwise complied fully with the terms and conditions of all
such policies and bonds, as applicable. Such policies of insurance and bonds
(or other policies and bonds providing substantially similar insurance coverage)
have been in effect since January 1, 1995 and remain in full force and effect.
Such policies and bonds are of the type and in amounts customarily carried by
Persons conducting businesses similar to the Business.
Section 2.17 EMPLOYEE BENEFIT PLANS.
(a) Section 2.17(a) of the Disclosure Schedule contains a true
and complete list of each bonus, deferred compensation, incentive compensation,
stock purchase, stock option, severance or termination pay, hospitalization or
other medical, life or other insurance, supplemental unemployment benefits,
profit-sharing, pension, or retirement plan, program, agreement or arrangement,
and each other employee benefit plan, program, agreement or arrangement,
sponsored, maintained or contributed to or required to be contributed to by
either Seller or any ERISA Affiliate for the benefit of any employee or
terminated employee of either Seller or any ERISA Affiliate, whether formal or
informal and whether legally binding or not (the "Plans"). Neither any Seller
nor any ERISA Affiliate has any formal plan or commitment, whether legally
binding or not, to create any additional Plan or modify or change any existing
Plan that would affect any employee or terminated employee of either Seller or
any ERISA Affiliate.
21
(b) With respect to each Plan, TP LLC has heretofore delivered
to the Buyer true and complete copies of each of the following documents: (i) a
copy thereof (including all amendments thereto); (ii) a copy of the most recent
annual report, if required under ERISA; (iii) a copy of the most recent
actuarial report, if required under ERISA; (iv) a copy of the most recent report
prepared with respect thereto in accordance with Statement of Financial
Accounting Standards No. 87, Employer's Accounting for Pensions; (v) a copy of
the most recent Summary Plan Description; (vi) if the Plan is funded through a
trust or any third party funding vehicle, a copy of the trust or other funding
agreement (including all amendments thereto); and (vii) the most recent
determination letter received from the Internal Revenue Service with respect to
each Plan that is intended to be qualified under section 401 of the Code.
(c) To the best knowledge of each Seller, there has been no
termination or partial termination, withdrawal or partial withdrawal with
respect to any of the Plans that either Seller maintains or contributes to or
has maintained or contributed to. Neither any Seller nor any ERISA Affiliate
has incurred any material liability under Title IV of ERISA with respect to any
of the Plans, other than liability for premiums due the Pension Benefit Guaranty
Corporation, which payments have been made or will be made when due. Neither
any Seller nor any ERISA Affiliate contributes to or is required to contribute
to a "multiemployer plan," as such term is defined in ERISA Section 3(37). Each
of the Plans has been operated and administered in all material respects in
accordance with applicable laws, including but not limited to ERISA and the
Code.
(d) No amounts payable under the Plans will fail to be
deductible for federal income tax purposes by virtue of section 280G of the
Code. The consummation of the transactions contemplated by this Agreement will
not (i) entitle any current or former employee or officer of the Business to
severance pay, unemployment compensation or any other payment or (ii) accelerate
the time of payment or vesting, or increase the amount of compensation due any
such employee or officer. There are no pending, threatened or anticipated
claims by or on behalf of any Plan, by any employee or beneficiary cov-
22
ered under any such Plan, or otherwise involving any such Plan (other than
routine claims for benefits).
Section 2.18 TAXES. (a) Each Seller (i) has timely filed or will
timely file all Tax Returns required to be filed by each such Seller on or prior
to the Closing Date (including extensions of time to file), and all such Tax
Returns are true, correct and complete, (ii) has timely paid (or adequately
provided for on the Balance Sheet) all Taxes that are due or claimed to be due
from such person by any Tax Authority with respect to periods (or any portion
thereof) ending on or before the Closing Date, and (iii) is not required to file
any state Tax Returns other than as set forth in Section 2.18 of the Disclosure
Schedule.
(b) No Tax is required to be withheld by the Buyer from the
Purchase Price or the Option Payment as a result of the transfers contemplated
by this Agreement or the Related Agreements. The Buyer will not be liable for
any Tax of any of the Sellers, Members or any Partner as a result of the
transactions contemplated hereby.
(c) No deficiency for any Taxes has been proposed, asserted or
assessed against either of the Sellers which has not been resolved and paid in
full; none of the Sellers has received any notice of deficiency or assessment
from any Tax Authority with respect to liability for Taxes of a Member relating
to income of TP LLC, or a Partner relating to the liability of TOA which has not
been resolved and paid in full; no member, partner, officer, director, or
employee responsible for Tax matters of TP LLC or TOA expects any Tax Authority
to propose, assert, or assess any additional Taxes for any period for which Tax
Returns have been filed; neither the Sellers, any Partner, nor any Member has
signed or filed any written requests, agreements, consents or waivers to extend
any statutory period of limitations with respect to Taxes of either of the
Sellers.
(d) No audit or other proceeding by any Tax Authority is
presently pending with respect to any Taxes or Tax Return of the Sellers. There
are no liens, security interests or other encumbrances for Taxes upon any of the
assets of either of the Sellers other than liens, security interests or other
encumbrances for Taxes
22
not yet due or payable. From the date of their formation, TP LLC and TOA have
at all times each been classified as a partnership for all Tax purposes; TP LLC,
TOA and each Member and Partner have filed all forms and taken all actions
necessary to maintain such status (and to so qualify and maintain such status in
Tennessee and any other state where such qualification is necessary). Neither
TP LLC, TOA nor any Member or Partner has taken or will have taken or permitted
any action, or omitted to take any action, which action or omission could result
in the loss of TP LLC's or TOA's classification as a partnership for any period
on or before the Closing Date.
Each of the Sellers has complied (and until the Closing will comply) in all
material respects with all applicable laws, rules and regulations relating to
the payment and withholding of Taxes (including, without limitation, withholding
of Taxes pursuant to Sections 1441 and 1442 of the Code or similar provisions
under any foreign laws) and has, within the time and in the manner prescribed by
law, withheld from employee wages and paid over to the proper governmental
authorities all amounts required to be so withheld and paid over under all
applicable law.
(e) Neither of the Sellers is a party to, is bound by, nor has
any obligation under any Tax sharing, indemnity, or similar contract or
arrangement, or is liable for the Taxes of any other person. No power of
attorney has been granted by the Sellers with respect to any matter relating to
Taxes which is currently in force. No assumed liability or indebtedness of TP
LLC or TOA is an obligation to make a payment that would not be deductible under
Section 280G of the Code.
Section 2.19 ENVIRONMENTAL MATTERS. Except as set forth in Section
2.19 of the Disclosure Schedule: (a) (i) each of the Sellers is in substantial
compliance with all Environmental Permits, and with all applicable Environmental
Laws and no notice, notification, demand, request for information, citation,
summons, complaint or order has been issued, no complaint has been filed, no
penalty has been assessed and no investigation or review (collectively,
"Environmental Notices") is pending, or to the best of either Sellers'
knowledge, threatened by any governmental entity or other Person with respect to
any (A) alleged violation by either Seller of any Environmental Law or liability
thereunder or (B) alleged failure by either Seller to have any Environmental
Permit; (ii) nei-
24
ther of the Sellers has received any written request for information, or has
been notified that it is a potentially responsible party, under the federal
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, or any similar state law with respect to any on-site or off-site
location; and (iii) there have been no discharges, emissions or releases of
Hazardous Substances which are or were reportable under Environmental Laws by
either Seller and neither of the Sellers has liability (and has not handled or
disposed of any substance, arranged for the disposal of any substance, exposed
any employee or other individual to any substance or condition, or owned or
operated any property in any matter that could form the
basis for any present or future action, suit, proceeding, investigation, charge,
complaint, claim or demand against either Seller, which could reasonably be
expected to result in any liability) for any damage to any site, location, or
body of water, for any illness or personal injury to any employee or other
individual, or for any reason under any Environmental Law.
(b) There has been no environmental investigation, study, audit,
test, review or other analysis (including all Phase I environmental assessments)
conducted of which either Seller has knowledge in relation to any Real Property
which has not been delivered to the Buyer prior to the date hereof. Except as
set forth in Section 2.19 of the Disclosure Schedule, neither of the Sellers is
subject to any judgment, decree or order relating to compliance with, or the
cleanup of regulated substances under, any applicable Environmental Law.
Section 2.20 CERTAIN FEES. Neither of the Sellers has (i) employed
any financial advisor or finder, or (ii) incurred any liability for any
financial advisory or finders' fees, in each case in connection with this
Agreement or the Related Agreements or the transactions contemplated hereby or
thereby.
Section 2.21 AFFILIATE TRANSACTIONS. Section 2.21 of the Disclosure
Schedule sets forth all contracts, agreements and arrangements in effect on or
after January 1, 1996 between any Seller (including any Members, Partners,
affiliates or associates of any Seller), on the one hand, and any other Seller
(including any Members, Partners, affiliates or associates of any Seller)
("Affiliate
25
Transactions"). All such contracts, agreements and arrangements have been
entered into on an arms-length basis and are commercially reasonable. Except as
set forth in Section 2.21 of the Disclosure Schedule, no Member, Partner,
affiliates or associates of any Seller has any direct, indirect or beneficial
ownership of any real or personal property which is in any way involved with or
related to the operation of the Displays or any other Real Property to be
conveyed pursuant to the terms of this Agreement. Since June 30, 1996, no
payment, compensation, loan, advance or distribution has been made to either
Seller (including any Members, Partners, affiliates or associates of any Seller)
by any other Seller (including any Members, Partners, affiliates or associates
of any Seller) on account of or in connection with the Business except for
compensation paid to employees of the Business in the ordinary course of
business consistent with past practices.
Section 2.22 LABOR AGREEMENTS. Neither of the Sellers is a party to
any labor or collective bargaining agreement and there are no labor or
collective bargaining agreements which pertain to employees of the Business.
There are no pending or, to either Sellers' knowledge, threatened strikes, work
stoppages, slowdowns, lockouts, grievances, arbitrations or other labor disputes
against the Business. There are no pending or, to either Sellers' knowledge,
threatened complaints, charges or claims against either Seller with any public
or governmental authority, arbitrator or court based upon the employment or
termination of employment by either Seller of any individual. Each Seller (i)
is in compliance with all laws, regulations and orders relating to the
employment of labor, including all such laws, regulations and orders relating to
wages, hours, collective bargaining, discrimination, civil rights, safety and
health, workers' compensation and the collection and payment of withholding
and/or social security taxes and any similar tax and (ii) is not and has not
been for the past two (2) years engaged in any unfair labor practice. Neither
of the Sellers has a written personnel policy applicable to employees, except as
set forth in Section 2.22 of the Disclosure Schedule. No union organization
campaign is presently in progress or has occurred in the past three (3) years
and no representation question exists with respect to the employees of the
Business.
26
Section 2.23 DISCLOSURE. No representation or warranty made by
either Seller in this Agreement nor any statement or certificate already
furnished or to be furnished by either Seller in connection with the
transactions contemplated hereby, contain any known untrue statement of or fails
to state a material fact necessary in order to make the statements not
misleading.
Section 2.24 ACQUISITION FOR INVESTMENT. Each Seller who will
receive Shares as consideration hereunder represents that (i) it is acquiring
the Shares for its own account, for investment purposes only and not with a view
to the resale or distribution thereof or with any present intention of
distributing or selling any of the Shares; (ii) it has authority to make the
representations contained in this Article II; (iii) it has sufficient knowledge
and experience in financial and business matters so as to be capable of
evaluating the merits and risks of its investment in the Shares and is capable
of bearing the economic risk of such investment, including a complete loss of
the investment in the Shares; (iv) it is an "accredited investor" within the
meaning of Rule 501 of Regulation D of the Securities Act or is a savings and
loan association or a similar institutional investor; (v) it is acquiring all
the Shares to be acquired by it hereunder with no view or intention to offer for
sale any of the Shares in a manner which would violate federal or state
securities laws; subject, however, to any requirement of law that the
disposition of its property shall at all times be and remain within its control;
(vi) that it is aware that the Shares have not been registered under the
Securities Act and may not be offered or sold within the United States to, or
for the account or benefit of, United States Persons, except as provided below;
and (viii) it has received all information it has requested in connection with
its execution of this Agreement and its purchase of the Shares, and has been
given the opportunity and right to meet, and to ask questions and receive
answers from, the representatives of the Parent and to investigate and inquire
into all aspects of the Parent and the terms and conditions of the purchase of
the Shares.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE
27
CONSENTING PARTIES
Each of the Consenting Parties jointly and severally represent and
warrant to the Buyer and the Parent on the date hereof and on the Closing Date
as follows:
Section 3.1 ORGANIZATION. ▇▇▇▇▇▇, WBT and the Trust are individuals,
corporations or trusts, as the case may be, duly formed, validly existing and in
good standing under the laws of their respective states of incorporation or
formation, as the case may be, and have full power (corporate, trust or
otherwise) and authority to own, lease and operate the properties owned, leased
and operated by them and to carry on their businesses as presently conducted and
are duly qualified to do business and are in good standing in each jurisdiction
in which the property owned, leased or operated by them or the nature of the
business conducted by them makes such qualification necessary.
Section 3.2 AUTHORIZATION; CONSENT. Each of the Consenting Parties
has full power and authority to execute and deliver this Agreement and the
Related Agreements and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the Related
Agreements and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized and consented to by all necessary
action on the part of each of the Consenting Parties, and no other proceedings
on the part of any such Consenting Party are necessary to authorize the
execution, delivery and performance of this Agreement and the Related Agreements
or the consummation of the transactions contemplated hereby and thereby.
Section 3.3 INTERESTS IN THE ASSETS. Except as otherwise
specifically provided for in this Agreement, none of the Consenting Parties (i)
has any right, title or interest whatsoever in or to any of the Assets or (ii)
operates, conducts or has any interest, directly or indirectly, in a business
which provides outdoor advertising services or in any manner competes with the
Business; PROVIDED, THAT, the WBT Media business shall be deemed not to be in
competition with the Business; it being understood that ▇▇▇▇▇▇, WBT Media, Buyer
and Parent will work together to avoid any potential conflicts or
28
overlaps in respect of clients and shall use their best efforts to maintain the
client relationships of the Business.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE
PARENT AND THE BUYER
The Parent and the Buyer jointly and severally represent and warrant
to each of the Sellers on the date hereof and as of the Closing Date as follows:
Section 4.1 ORGANIZATION AND AUTHORITY OF THE PARENT AND THE BUYER.
(a) Each of the Parent and the Buyer is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each of the Parent and the Buyer has heretofore
delivered to TP LLC complete and correct copies of its respective certificate of
incorporation and by-laws as currently in effect.
(b) Each of the Parent and the Buyer has the corporate and other
power and authority to execute and deliver this Agreement and the Related
Agreements and consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Related Agreements and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by the Board of Directors of each of the Parent and the
Buyer and no other corporate or other proceedings on the part of either of the
Parent or the Buyer are necessary to authorize the execution, delivery and
performance of this Agreement and the Related Agreements or the consummation of
the transactions contemplated hereby or thereby. This Agreement has been duly
executed and delivered by each of the Parent and the Buyer and constitutes, and
when executed and delivered each of the Related Agreements to be executed and
delivered by each of the Parent and the Buyer pursuant hereto will constitute, a
valid and binding obligation of each of the Parent and the Buyer, enforceable
against each of the Parent and the Buyer in accordance with its terms.
29
Section 4.2 CONSENTS AND APPROVALS; NO VIOLATIONS. Except for
applicable requirements of the HSR Act and as set forth in Section 4.2 of the
Buyer's Disclosure Schedule, neither the execution and delivery of this
Agreement or the Related Agreements nor the consummation by the Parent or the
Buyer of the transactions contemplated hereby and thereby will (a) conflict with
or result in any breach of any provision of the certificate of incorporation or
by-laws of the Parent or the Buyer; (b) require on the part of the Parent or the
Buyer any material filing with, or the obtaining of any material permit,
license, action, waiver, authorization, consent, filing, registration or
approval of, any governmental or regulatory authority; (c) result in a material
breach of, or constitute a material default under, or violate or conflict with
or give rise to any material right of amendment, termination, cancellation or
acceleration, or to a loss of any benefit to which the Parent or the Buyer is
entitled, under any of the terms, conditions or provisions of any note,
mortgage, other evidence of indebtedness, guarantee, license, agreement, lease
or other contract, instrument or obligation to which the Parent or the Buyer is
a party or by which the Parent or the Buyer or any of the assets of the Parent
or the Buyer may be bound or (d) violate or conflict with any order, injunction,
decree, statute, rule or regulation applicable to the Parent or the Buyer,
excluding from the foregoing clauses (b), (c) and (d) such requirements,
defaults, rights or violations which (X) become applicable as a result of any
acts or omissions by, or any facts specifically relating to, either of the
Sellers, (Y) would not have a material adverse effect on the ability of the
Parent or the Buyer to consummate the transactions contemplated hereby, or (Z)
are or become necessary in connection with the financing to be obtained by the
Parent and the Buyer in connection with the transactions contemplated hereby,
including without limitation, to pay transaction fees and expenses associated
therewith and to provide working capital on a going forward basis (the
"Financing").
Section 4.3 LITIGATION. There is no claim, action or proceeding
pending or, to the best knowledge of the Parent or the Buyer, threatened against
either of the Parent or the Buyer which challenges the validity of this
Agreement or the Related Agreements, or the ability of the Parent or of the
Buyer to consummate the transactions
30
contemplated hereby and thereby, by or before any court, governmental or
regulatory authority.
Section 4.4 CERTAIN FEES. Neither the Parent nor the Buyer has
employed any financial advisor or finder or incurred any liability for any
financial advisory or finders' fees in connection with this Agreement or the
Related Agreements or the transactions contemplated hereby and thereby.
ARTICLE V
COVENANTS
Section 5.1 CONDUCT OF THE BUSINESS. Each of the Sellers agrees
that, during the period from the date of this Agreement to the Closing, it shall
operate the Business in the ordinary course consistent with past practice and
will use its best efforts to keep its business and properties substantially
intact, including its present operations, physical facilities, working
conditions and business relationships. Without limiting the generality of the
foregoing, neither of the Sellers nor the Consenting Parties (with respect to
the Business) shall take any action of the type contemplated by Section 2.7 of
this Agreement or; PROVIDED, HOWEVER, that the Sellers may enter into and
perform their obligations under the Joint Management Agreement (the "Joint
Management Agreement") between the Sellers and Universal Outdoor Management
Company, Inc., dated the date hereof.
Section 5.2 ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) Between the date of this Agreement and the Closing, each of
the Sellers shall (i) give to the Parent and the Buyer and their respective
authorized representatives access to all books, records, offices and other
facilities and properties of the Business; (ii) permit the Parent and the Buyer
to make such inspections thereof as the Parent and the Buyer may reasonably
request; and (iii) cause the officers of each of the Sellers to furnish each of
the Parent and the Buyer with such financial and operating data and other
information with respect to the business and properties of the Business as the
Parent and the Buyer may from time to time request.
31
(b) All information concerning either Seller or the Business
furnished or provided by the Sellers, to either of the Parent or the Buyer or
their respective representatives (whether furnished before or after the date of
this Agreement) shall be kept confidential by the Seller, and until the Closing,
by the Buyer or the Parent; PROVIDED, THAT the Parent and its affiliates may
disclose any information to the extent such disclosure is required in connection
with any capital market transaction, any filings required pursuant to applicable
law or required by federal or state securities laws.
(c) Each of the Sellers agrees to keep proprietary information
regarding the Sellers, the Buyer and the Parent confidential and following the
Closing will keep proprietary information regarding the Sellers, the Buyer and
the Parent confidential and agree that they will only use such information in
connection with the transactions contemplated by this Agreement and not disclose
any of such information, except to the extent disclosure is required in
connection with the financing or required by law, regulation or judicial order
by any governmental authority.
(d) Each of the Sellers agrees that so long as any books and
records relating to the Business remain in existence and available and have not
otherwise been delivered to the Buyer, the Buyer and the Parent shall have the
right to inspect and to make copies of the same at any time during normal
business hours for any proper purpose, and that, to the extent any such books
and records have not otherwise been delivered to the Buyer, any such Seller will
not destroy or dispose of any books or records relating to the Business existing
as of the Closing Date without first offering to provide such books or records
to the Buyer.
(e) Each of the Sellers shall deliver or make available to the
Buyer any documents which the Buyer shall request in order that the Buyer may
obtain title insurance on surveys for each of the Real Properties.
Section 5.3 REGULATORY COMPLIANCE.
(a) Immediately following the delivery of Advance Notice to TP
LLC as contemplated by Section 1.1
32
hereof, the parties hereto shall make all necessary filings, including,
without limitation, those required under the HSR Act, applicable United
States or foreign antitrust laws and applicable state laws, in order to
facilitate prompt consummation of the transactions contemplated hereby and by
the Related Agreements. In addition, each of the Sellers and the Buyer will
use its reasonable best efforts (including, without limitation, payment of
any required fees), and will cooperate fully with the other to (i) comply as
promptly as practicable with all governmental requirements applicable to the
transactions contemplated by this Agreement and the Related Agreements and
(ii) obtain promptly all approvals, permits, orders or other consents of any
applicable governmental authorities necessary for the consummation of the
transactions contemplated by this Agreement and the Related Agreements. Each
of the parties hereto will furnish to the other party such necessary
information and reasonable assistance as such other party may reasonably
request in connection with the foregoing.
(b) Each of the Sellers and the Buyer will coordinate and
cooperate fully with the other in exchanging such information and providing such
assistance as the other may reasonably request in connection with the foregoing
and in seeking early termination of any applicable waiting periods under the HSR
Act or in connection with other regulatory approvals and consents. Each of the
Sellers and the Buyer agrees to respond promptly to and comply fully with any
request for additional information or documents under the HSR Act. Each of the
Sellers will provide the Buyer with copies of all correspondence, filings or
communications (or memoranda setting forth the substance thereof) between such
Seller or any of its representatives, on the one hand, and any governmental
agency or authority or members of their respective staffs, on the other hand,
with respect to this Agreement and the transactions contemplated hereby.
Section 5.4 CONSENTS; ASSIGNMENTS. Each of the Sellers and the Buyer
will use their respective best efforts to obtain any consent, approval or
amendment required to novate and/or assign all agreements, leases, licenses and
other rights of any nature whatsoever relating to the Assets; PROVIDED, HOWEVER,
that except for filing and other administrative charges, the Buyer shall not be
obligated to pay any consideration therefor to the
33
third party from whom such consents, approvals and amendments are requested.
In the event and to the extent that the Buyer and the Sellers are unable to
obtain any such required consent, approval or amendment, or if any attempted
assignment would be ineffective or would adversely affect the rights of any
Seller with respect to any Asset so that the Buyer would not in fact receive
all the rights with respect to such Asset, the Sellers and the Buyer will
cooperate (to the extent permitted by law or the terms of any applicable
agreement) in a mutually agreeable arrangement under which the Buyer would,
to the extent possible, obtain the benefits and assume the obligations with
respect to such Asset, in accordance with this Agreement, including
sub-contracting, sub-licensing, or sub-leasing to the Buyer, or under which
such Seller would enforce for the benefit of the Buyer, with the Buyer
assuming such Seller's obligations, any and all rights of such Seller against
a third party thereto. Such Seller shall, without further consideration
therefor, pay and remit to the Buyer promptly all monies, rights and other
considerations received in respect of the Buyer's performance of such
obligations. If and when any such consent shall be obtained or such
agreement, lease, license or other right shall otherwise become assignable or
able to be novated, such Seller shall promptly assign and novate all its
rights and obligations thereunder to the Buyer without payment of further
consideration and the Buyer shall, without the payment of any further
consideration therefor, assume such rights and obligations and such Seller
shall be relieved of any and all liability hereunder.
Section 5.5 REASONABLE BEST EFFORTS. Upon the terms and subject to
the conditions herein provided, each of the parties hereto agrees to use its
reasonable best efforts to take or cause to be taken all action, to do or cause
to be done, and to assist and cooperate with the other party hereto in doing,
all things necessary, proper or advisable under applicable laws and regulations,
to consummate and make effective, in the most expeditious manner practicable,
the transactions contemplated by this Agreement and the Related Agreements.
Section 5.6 NON-COMPETITION.
(a) Each of the Sellers and ▇▇▇▇▇▇ agree that from the date
hereof through the Closing Date (ex-
34
cept with respect to the Business) and for a period of five full years from the
Closing Date, neither they nor any of their respective members, partners (except
for ▇▇▇▇▇ ▇▇▇▇) or affiliates shall: (i) engage, either directly or indirectly,
as a principal or for its own account or solely or jointly with others, or as
stockholders, members, partners or the like (other than through the ownership of
not more than 5% of the outstanding voting securities of any publicly-traded
entity), in any business that competes with the Business or the business of the
Buyer as it exists on the Closing Date in any jurisdiction where the Business is
conducted or advertised on the Closing Date or within a 250 mile square radius
thereof; or (ii) affirmatively solicit, other than through a general
solicitation, the employment of any employee of the Business as of the Closing
Date, except that TP LLC shall have the right to solicit the employment of those
employees listed in Section 5.6 of the
Disclosure Schedule.
(b) If any provisions contained in this Section 5.6 shall for
any reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Section 5.6, but this Section 5.6 shall be construed as if such invalid,
illegal or unenforceable provisions had never been contained herein. It is the
intention of the parties that if any of the restrictions or covenants contained
herein is held to cover a geographic area or to be for a length of time which is
not permitted by applicable law, or in any way construed to be too broad or to
any extent invalid, such provision shall not be construed to be null, void and
of no effect, but to the extent such provision would be valid or enforceable
under applicable law, a court of competent jurisdiction shall construe and
interpret or reform this Section 5.6 to provide for a covenant having the
maximum enforceable geographic area, time period and other provisions (not
greater than those contained herein) as shall be valid and enforceable under
such applicable law. Each of the Sellers acknowledges that the Buyer would be
irreparably harmed by any breach of this Section 5.6 and that there would be no
adequate remedy at law or in damages to compensate the Buyer for any such
breach. Each of the Sellers agrees that the Buyer shall be entitled to
injunctive relief requiring specific performance
35
by such Seller of this Section 5.6, and each of the Sellers consents to the
entry of an order thereof.
Section 5.7 PRESS RELEASES. Prior to Closing, none of the Sellers
nor the Buyer shall make any press release or public announcement in connection
with the transactions contemplated hereby without the prior written consent of
the other or, if required by law, without prior consultation with the other.
Section 5.8 EMPLOYEES. As of the Closing, the Buyer shall offer to
continue the employment, effective the day after the Closing Date, of such
persons who are active employees of the Business on the Closing Date, as it
shall elect in its sole discretion. The Buyer will not adopt or assume, at and
as of the Closing, any of the Plans maintained nor any trust, insurance
contract, annuity contract, or other funding arrangement established with
respect thereto. The Buyer will not ensure that the Plans treat employment with
the Business prior to the Closing Date the same as employment from and after the
Closing Date for purposes of eligibility, vesting, and benefit accrual.
Furthermore, in order to preserve the Assets and the relationships of the
Business with employees and clients, the Buyer agrees, for a period of five full
years from the Closing Date, not to directly or indirectly (other than as agent
or representative of any third party) employ ▇▇▇▇▇ ▇▇▇▇▇ in connection with the
Business and in the event that Buyer breaches this provision, Buyer shall pay
$1,000,000 to the Sellers as liquidated damages.
Section 5.9 ENVIRONMENTAL STUDIES; TITLE. Each of the Sellers shall
allow the Buyer (and any Person designated by the Buyer) access to the Real
Properties to the extent necessary to conduct Phase I, Phase II and any other
environmental studies and surveys and title reports, as the Buyer may request
(the "Environmental Studies"). In the event that such Environmental Studies
determine that a potential liability in excess of $500,000 exists or may exist
on any of the properties, the Buyer may, at its sole option, either (i)
terminate this Agreement and receive a full refund of the Option Payment or (ii)
remove such property from the Assets to be acquired and make a corresponding
reduction to the Purchase Price; PROVIDED, HOWEVER, THAT, the Sellers may elect
to cure any such environmental liabilities or
36
otherwise satisfy any potential liabilities, in each case, in a manner
reasonably acceptable to the Parent and the Buyer.
Section 5.10 SHARES.
(a) Each Seller who will receive Shares as consideration
hereunder agrees that the following restrictive legends will be placed on
certificates representing any or all of the Shares and that transfer of any or
all of the Shares may be refused by the Parent's transfer agent unless the
Shares for which transfer is sought are registered under the Securities Act and
all other applicable federal securities or blue sky laws or unless such Seller
provides information satisfactory to the Buyer that such registration is not
required:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON TRANSFER AND CERTAIN OTHER CONDITIONS.
NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT (A)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933 AND THE RULES AND REGULATIONS IN EFFECT THEREUNDER AND ALL APPLICABLE
STATE SECURITIES OR "BLUE SKY" LAWS (SUCH FEDERAL AND STATE LAWS, THE
"SECURITIES LAWS") OR (B) IF THE BUYER HAS BEEN FURNISHED WITH AN OPINION
OF COUNSEL FOR THE HOLDER, WHICH OPINION AND COUNSEL SHALL BE REASONABLY
SATISFACTORY TO THE BUYER, TO THE EFFECT THAT SUCH TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE
PROVISIONS OF THE SECURITIES LAWS."
The Shares being delivered pursuant to this Agreement shall not be transferable
by either Seller except (A) (i) pursuant to an effective registration statement
under the Securities Act, (ii) pursuant to Rule 144, or any successor rule,
under the Securities Act or (iii) upon receipt by the Parent of a written
opinion of counsel reasonably satisfactory to the Parent that is knowledgeable
in securities laws matters, to the effect that the proposed transfer is exempt
from the registration requirements of the Securities Act and relevant state
securities laws and
37
(B) following notice to the transferee of any restrictions on the transfer of
such Shares.
(b) No later than May 31, 1997, Parent shall prepare and file
with the Securities and Exchange Commission a registration statement in regard
to the Shares. Parent shall use its best efforts to have the registration
statement declared effective under the Securities Act as promptly as practicable
after such filing. Parent shall also take any action reasonably required to be
taken under any applicable state securities laws in connection with the
registration and qualification of the Shares.
(c) In consideration of the Parent registering the Shares
pursuant to paragraph (b) of this Section 5.10, the Sellers agree not to offer,
sell, sell short or otherwise dispose of the Shares or other capital stock of
the Parent, or any securities convertible, exchangeable or exercisable for
common stock of the Parent for a period of 180 days following the date of any
registration of shares of Common Stock of the Parent. Sellers shall cause any
party to whom they transfer the Shares to agree to the foregoing in writing as a
condition to such transfer.
Section 5.11 SUPPLEMENTAL DISCLOSURE. Each of the Sellers will
promptly inform the Buyer in writing of any fact or circumstance known to such
Seller that would constitute a breach of any representations or warranties
contained in Article II or would cause any of the conditions to either party's
obligations to consummate the transactions contemplated under this Agreement not
to be fulfilled.
Section 5.12 NO SOLICITATION OF TRANSACTIONS. Each of the Sellers
shall not, and shall cause each of their Members, Partners, officers, employees,
advisors, representatives, agents or affiliates not to, directly or indirectly,
encourage, engage in, solicit or initiate any discussions or negotiations with,
or provide any information to, or negotiate or enter into any agreement or
agreement in principle with, any other person, entity or group, with respect to
a sale of the Business, assets or membership interests in connection therewith
or any similar transaction. Each of the Sellers shall, and shall
38
cause their Members, Partners, officers, employees, advisors,
representatives, agents or affiliates to, notify the Buyer of any action
taken by any person in connection with the foregoing sentence and shall
provide the Buyer with any information, written or oral, obtained by such
party in connection therewith.
ARTICLE VI
CERTAIN TAX MATTERS
Section 6.1 NO WITHHOLDING. The Buyer agrees to pay the Seller the
Purchase Price without reduction for any amounts in respect of any potential
withholding or other Taxes and the Sellers agree to indemnify and hold harmless
the Buyer and the Parent from any liability which may be asserted or arise from
the determination of any Taxing Authority that any amounts were required to be
withheld from the Purchase Price.
Section 6.2 ALLOCATION OF CONSIDERATION. No later than 15 days after
the Closing Date, the Sellers shall make available to the Buyer, or provide the
Buyer with access to, all information necessary to the Buyer's preparation of
Section 6.2 of the Buyer Disclosure Schedule described hereafter. The Buyer
shall prepare Section 6.2 of the Buyer Disclosure Schedule which shall allocate
the Consideration (which in Buyer's sole discretion constitutes an amount paid
to acquire the Assets for federal, state or local income tax purposes) among the
assets and to the non-compete provisions provided for in Section 5.6 hereof in
accordance with the fair market value of such assets and provisions. No later
than 90 days after the Closing Date, the Buyer shall deliver Schedule 6.2 of the
Buyer Disclosure Schedule to Sellers. The Buyer and the Sellers shall each
report the transactions contemplated under this Agreement for all federal, state
and local income tax and all other purposes (including, without limitation, for
purposes of Section 1060 of the Code) as set forth on Section 6.2 of the Buyer
Disclosure Schedule. The Buyer and the Sellers shall each, and TP LLC and TOA
shall use their best efforts to cause the Members and Partners to, timely file a
Form 8594 (and any similar forms required under state or local Tax law) in
accordance with the requirements of Section 1060 of the Code (or state or local
Tax law, as the case may be) and
39
this Section 6.2. Notwithstanding anything contained herein to the contrary,
no more than $300,000 of the consideration shall be allocated to the
non-compete agreement contemplated by Section 5.6 hereof.
Section 6.3 SELLERS RESPONSIBILITY. Sellers shall be jointly and
severally responsible for all sales, use, transfer, transfer gains, recording,
ad valorem, stamp, and any similar Tax, fee or duty arising out of and in
connection with or attributable to the transactions effected pursuant to this
Agreement.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE PARTIES
Section 7.1 CONDITIONS TO EACH PARTY'S OBLIGATION. The respective
obligations of each party to consummate the transactions contemplated herein is
subject to the satisfaction at or prior to the Closing of the following
conditions:
(a) The Buyer shall have exercised the Option in accordance with
the provisions of Section 1.1 hereof and any Advance Notice delivered pursuant
thereto shall not have been revoked unless a subsequent Advance Notice shall
have been delivered.
(b) Any waiting periods applicable to the transactions
contemplated by this Agreement under applicable United States and foreign
antitrust or trade regulation laws and regulations, including, without
limitation, under the HSR Act, shall have expired or been terminated and all
governmental authorizations or approvals required in connection with the
transactions contemplated by this Agreement shall have been obtained or given.
(c) No statute, rule or regulation shall have been enacted,
entered, promulgated or enforced by any court or governmental authority and
there shall not be in effect any judgement, order, injunction or decree of any
court of competent jurisdiction which prohibits or restricts the consummation of
the transactions contemplated hereby.
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(d) No proceeding by any Person which is reasonably likely to
have any of the effects contemplated in clause (c) of this Section 7.1 shall be
pending.
Section 7.2 CONDITIONS TO OBLIGATIONS OF THE SELLERS. The
obligations of the Sellers to consummate the transactions contemplated herein
are further subject to the satisfaction (or waiver) at or prior to the Closing
of the following conditions:
(a) The representations and warranties of the Parent and the
Buyer contained in Article IV of this Agreement shall be true and correct in all
respects at the date hereof and as of the Closing Date, as if made at and as of
the date hereof.
(b) Each of the Parent and the Buyer shall have performed in all
material respects its respective obligations under this Agreement required to be
performed by it at or prior to the Closing pursuant to the terms hereof; and TP
LLC shall have received a certificate from the Parent and the Buyer signed by an
authorized officer of each of the Parent and the Buyer to the effect of this
paragraph and of paragraph (a) of this Section 7.2.
Section 7.3 CONDITIONS TO OBLIGATIONS OF THE PARENT AND THE BUYER.
The obligations of the Parent and the Buyer to consummate the transactions
contemplated hereby are further subject to the satisfaction (or waiver) at or
prior to the Closing of the following conditions:
(a) The representations and warranties of the Sellers and the
Consenting Parties contained in this Agreement shall be true and correct in all
material respects at the date hereof and as of the Closing Date.
(b) Each of the Sellers shall have performed in all material
respects each of its obligations under this Agreement required to be performed
by it at or prior to the Closing pursuant to the terms hereof; and the Buyer
shall have received a certificate from TP LLC, signed by the Chief Manager of TP
LLC, and from TOA, signed by the general partner of TOA, to the effect of this
paragraph and of paragraph (a) of this Section 7.3.
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(c) All consents or renewals listed on Section 7.3 of the
Disclosure Schedule and marked with an asterisk shall have been obtained on
terms and conditions satisfactory to the Buyer.
(d) No statute, rule or regulation shall have been enacted,
entered, promulgated or enforced by any court or governmental authority and
there shall not be in effect any judgement, order, injunction or decree of any
court of competent jurisdiction, which would restrain, prohibit or otherwise
interfere with the effective operation or enjoyment by the Buyer of all or any
substantial portion of the Assets, and no proceeding by any Person which is
reasonably likely to have any of the foregoing effects shall be pending.
(e) The Sellers shall have provided evidence satisfactory to the
Buyer that any Liens on the Assets have been released as of the time of Closing.
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
Section 8.1 TERMINATION. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned:
(a) by the Buyer, upon notice to TP LLC of its intention not to
exercise the Option;
(b) at any time, by mutual written consent of the parties
hereto;
(c) by either the Buyer or TP LLC, if, an Advance Notice shall
not have been delivered prior to December 31, 1996; or
(d) by either the Buyer or TP LLC, if, consummation of the
transactions contemplated hereby would violate any nonappealable final order,
decree or judgment of any court or governmental body having competent
jurisdiction;
PROVIDED, THAT, no party may terminate this Agreement pursuant to clauses (c) or
(d) above, if such party is,
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at the time of any such attempted termination, in breach of any term hereof.
Section 8.2 PROCEDURE AND EFFECT OF TERMINATION. In the event of the
termination of this Agreement and the abandonment of the transactions
contemplated hereby pursuant to Section 8.1 hereof, written notice thereof shall
forthwith be given by the party so terminating to the other party and this
Agreement shall terminate and the transactions contemplated hereby shall be
abandoned, without further action. If this Agreement is terminated pursuant to
Section 8.1 hereof, there shall be no liability or obligation hereunder on the
part of either of the Sellers or the Buyer or any of their respective directors,
officers, employees, affiliates, controlling persons, agents or representatives,
unless such Seller or the Buyer, as the case may be, has (i) willfully failed to
have performed its obligations hereunder or (ii) knowingly made a
misrepresentation of any matter set forth herein.
Section 8.3 AMENDMENT, MODIFICATION AND WAIVER. This Agreement may
be amended, modified or supplemented at any time only by written agreement of TP
LLC and the Buyer. Any failure of either of the Sellers on the one hand, or the
Buyer or the Parent, on the other hand, to comply with any term or provision of
this Agreement may be waived, with respect to the Buyer or the Parent, by TP LLC
and, with respect to the Sellers, by the Buyer, by an instrument in writing
signed by or on behalf of the appropriate party, but such waiver or failure to
insist upon strict compliance with such term or provision shall not operate as a
waiver of, or estoppel with respect to, any subsequent or other failure to
comply.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
Section 9.1 SURVIVAL. The parties hereto agree that (i) the
covenants and agreements contained in this Agreement and the representations and
warranties contained in Sections 2.2, 2.9, 2.20, 2.21 2.24, 3.1, 3.2 and 3.3
shall survive without limitation, (ii) the representations and warranties
contained in Sections
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2.14, 2.17, 2.18 and 2.19 shall survive until 90 days after the expiration of
the applicable statute of limitations with respect to the subject matter
thereof, and (iii) the representations and warranties contained in Article II
(other than Sections 2.2, 2.9, 2.14, 2.17, 2.18, 2.19, 2.20, 2.21 and 2.24)
shall survive until eighteen months following the Closing Date.
Section 9.2 SELLERS' AGREEMENT TO INDEMNIFY.
(a) Subject to the terms and conditions set forth herein, from
and after the Closing, the Sellers and ▇▇▇▇▇▇ shall jointly and severally
indemnify and hold harmless the Parent, the Buyer and the Indemnitees from and
against all Damages. The Sellers' and ▇▇▇▇▇▇'▇ obligation to indemnify the
Indemnitees for Damages pursuant to this Section 9.2(a) is subject to the
following limitations: (i) no indemnification shall be made by the Sellers or
▇▇▇▇▇▇ for Damages arising solely from clause (i) of the definition of Damages
set forth in Article X hereof unless the aggregate amount of such Damages
exceeds $500,000 and then to the full extent of all such Damages; and (ii) in no
event shall the Sellers' or Tanners' aggregate obligation to indemnify the
Indemnitees exceed the Purchase Price.
(b) Subject to the terms and conditions set forth herein, from
and after the Closing, the Consenting Parties shall jointly and severally
indemnify and hold harmless the Parent, the Buyer and the Indemnitees from and
against all Consenting Party Damages. The Consenting Parties obligation to
indemnify the Indemnitees for Consenting Party Damages pursuant to this Section
9.2(b) is subject to the following limitations: (i) no indemnification shall be
made by the Consenting Parties for Consenting Party Damages arising solely from
clause (i) of the definition of Consenting Party Damages set forth in Article X
hereof unless the aggregate amount of such Consenting Party Damages exceeds
$100,000 and then to the full extent of all such Consenting Party Damages; and
(ii) in no event shall the Consenting Parties' aggregate obligation to indemnify
the Indemnitees exceed the Purchase Price.
Section 9.3 NOTICE AND OPPORTUNITY TO DEFEND. If an event occurs
that entitles an Indemnitee, or that an Indemnitee believes entitles it, to
indemnification
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pursuant to this Article IX, the Indemnitee shall promptly notify TP LLC. If
the claim for indemnification arises out of a claim by a third party, such
notice shall occur within 15 days of the Indemnitee's receipt of written notice
of such claim; PROVIDED, HOWEVER, that the failure to so notify TP LLC shall not
relieve either of the Sellers or the Consenting Parties, as the case may be, of
their obligations hereunder, except to the extent that the Sellers or the
Consenting Parties, as the case may be, are actually prejudiced by such failure.
TP LLC shall have the right to undertake, conduct and control the defense
thereof by so notifying the Indemnitee in writing, provided that TP LLC (i)
states that the settlement or defense of the claim will be conducted at all
times in good faith and in a reasonable manner (and so conducts it), (ii)
acknowledges in writing the obligation to indemnify the Indemnitee in accordance
with the terms contained in this Agreement, and (iii) promptly reimburses the
Indemnitee for all out-of-pocket expenses incurred as a result of the assumption
by TP LLC of control of such settlement or defense. If TP LLC provides written
notice to the Indemnitee that it elects to defend such claim, TP LLC shall be
obligated to defend such claim, at its own expense and by counsel chosen by it
and reasonably satisfactory to the Indemnitee. In the event TP LLC elects to
provide the defense of such claim pursuant to this Section 9.3, the Indemnitee
shall cooperate fully with TP LLC and its counsel in the defense of such claim
and shall be entitled to full access to information with respect thereto and to
participate in the defense thereof at its own cost and expense. Any compromise,
settlement or offer of settlement of such claim by TP LLC shall require the
prior written consent of the Indemnitee, which consent shall not be unreasonably
withheld and unless such consent is obtained, TP LLC shall continue the defense
of such claim; PROVIDED, HOWEVER, that if the Indemnitee refuses its consent to
a bona fide offer of settlement that TP LLC wishes to accept and that involves
no payment by the Indemnitee not paid by the Sellers or the Consenting Parties,
as the case may be, and further involves no limitation on the future conduct of
the Business as presently conducted, TP LLC may reassign the defense of such
claim to the Indemnitee, who may then continue to pursue the defense of such
matter, free of any participation by TP LLC, at the sole cost and expense of the
Indemnitee. In such event, the obligation of the Sellers and the Consenting
Parties, as the case
45
may be, with respect thereto shall not exceed the amount of the offer of
settlement that the Indemnitee refused to accept plus the costs and expenses of
the Indemnitee prior to the date TP LLC notified the Indemnitee of the offer of
settlement. If TP LLC does not elect to defend any such claim, it shall
nevertheless have the right of full access to information with respect thereto
and to participate in such defense at its sole cost and expense and shall remain
liable for any indemnification obligations pursuant to this Agreement.
Section 9.4 OPTION PAYMENT. In addition to any other rights pursuant
to applicable law, at any time prior to the Closing Date, the Buyer shall be
entitled to the immediate return of the Option Payment in the event (i) any
representation or warranty contained in Article II, Section 3.1 or Section 3.2
hereof shall be untrue as of the date such representation or warranty was made
and shall in the reasonable judgement of the Buyer be reasonably likely to
result in Damages which in the aggregate exceed $1,000,000; PROVIDED, HOWEVER,
THAT, the Sellers may elect to cure any such breach of a representation or
warranty contained in Article II hereof or otherwise satisfy any liabilities
related thereto, in each case, in a manner reasonably acceptable to the Parent
and the Buyer, (ii) any representation or warranty contained in Section 3.3
hereof shall be untrue in any respect or (iii) as contemplated by Section 5.9
hereof. Any dispute in connection with the foregoing shall be resolved in
accordance with the dispute provisions set forth in Section 11.7 hereof.
Section 9.5 RIGHT OF SET-OFF.
(a) Notwithstanding any other provision of this Agreement or any
other agreement, instrument, or undertaking, it is understood and agreed that
Buyer shall have the right to set off the amount of any Damages or Consenting
Party Damages, as the case may be, against any sums of money (including the
lease payments under the ▇▇▇▇▇▇ Owned Property Leases and the TP LLC Excluded
Property Leases) at any time or from time to time payable or deliverable to the
Sellers or ▇▇▇▇▇▇, as the case may be, or their respective heirs, beneficiaries,
personal and legal representatives or assigns pursuant to this Agreement, by the
Buyer or the Parent (or their respective successor or assign), based upon the
Buyer's or the
46
Parent's reasonable estimate of the amount of such Damages or Consenting Party
Damages.
(b) For all federal income tax purposes, any payment made
pursuant to this Section 9.5 shall be treated as if Buyer made the payment in
respect of the lease (or otherwise) and that the Sellers or ▇▇▇▇▇▇, as the case
may be, made a deemed payment to the Buyer in respect of the Damages which is
treated as an adjustment to the Purchase Price.
ARTICLE X
DEFINITIONS
For the purposes of this Agreement, the following terms shall have the
following respective meanings:
"Accounting Firm" shall have the meaning set forth in Section 1.7 (b)
hereof.
"Advance Notice" shall have the meaning set forth in Section 1.1
hereof.
"Advertising Contracts" shall have the meaning set forth in Section
1.2(a)(iv) hereof.
"Affiliate" shall have the meaning set forth in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended.
"Affiliate Transactions" shall have the meaning set forth in Section
2.21 hereof.
"Agreement" means this agreement, dated as of September 12, 1996,
together with any amendments thereto, by and among the Sellers, the Parent and
the Buyer.
"Assets" means all of the properties, contracts and other assets (of
every kind, nature, character and description, whether real, personal or mixed,
whether tangible or intangible, whether accrued, contingent or otherwise and
wherever situated), goodwill and business as a going concern of the Business,
all as of the Closing Date, other than the Excluded Assets.
47
"Assumed Liabilities" means (a) all obligations of either Seller under
any Lease, Permit, Advertising Contract or title documents to Owned Real
Property which is specifically identified in this Agreement as being transferred
to the Buyer, (b) the $1,100,000 ▇▇▇▇/▇▇▇▇▇▇ Outdoor Advertising Company 8%
promissory note; (c) the $75,000 Perim Corporation 8% promissory note, and (d)
any other liabilities and obligations of either Seller set forth in the
Disclosure Schedule under an express statement to the effect that the definition
of Assumed Liabilities will include the liabilities and obligations so disclosed
and that the Buyer shall assume such liability or obligation. Notwithstanding
the foregoing, it is understood and agreed by the parties hereto that the
Assumed Liabilities shall not include any other liabilities or obligations of
the Sellers or of the Business not specifically identified in clauses (a)
through (d) of this definition. Without limiting the generality of the
foregoing, the Assumed Liabilities shall specifically exclude, among other
things, (a) any liability of either Seller with respect to Taxes, (b) any
liability of either Seller for any Taxes arising in connection with the
consummation of the transactions contemplated hereby (including any Taxes
arising in connection with the Sellers' transfer of Assets), (c) any liability
of either Seller for the unpaid Taxes of any Person other than such Seller under
any provision of Tax law or by contract or otherwise, (d) any obligation of
either Seller to indemnify any Person by reason of the fact that such Person was
a director, officer, employee, or agent of such Seller or was serving at the
request of such Seller as a partner, trustee, director, officer, employee, or
agent of another entity (whether such indemnification is for judgments, damages,
penalties, fines, costs, amounts paid in settlement, losses, expenses, or
otherwise and whether such indemnification is pursuant to any statute, charter
document, bylaw, agreement, or otherwise), (e) any liability of either Seller
for costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby, (f) any obligation of either Seller under this
Agreement, (g) any liability attributable to or incurred in connection with the
Plans for the benefit of any current or former employee of the Business, (h) any
obligations and liabilities relating to Excluded Assets, except for the on-going
obligation of the Buyer to comply with the provisions in the ▇▇▇▇▇▇ Owned
Property Leases and the TP LLC Excluded Properties Leases or
48
(i) any liabilities with respect to any litigation arising before, or related to
events occurring prior to, the Closing.
"Balance Sheet" shall have the meaning set forth in Section 2.5
hereof.
"Bills of Sale" means the duly executed bills of sale, substantially
in the form attached hereto as Exhibit A, which each Seller will deliver to the
Buyer effecting the sale, assignment, transfer and delivery of that portion of
the Assets, owned by each such Seller.
"Books and Records" shall have the meaning set forth in Section
1.2(a)(xiii) hereof.
"Business" means the business of owning and operating an outdoor
advertising business as presently conducted by TP LLC and TOA in Memphis,
Tennessee, and the surrounding area including, but not limited to, Shelby
County, Fayette County, ▇▇▇▇▇▇ County and ▇▇▇▇▇▇ County, Tennessee, and Desoto
County, Tunica County and Acorn County, Mississippi, and ▇▇▇▇▇▇▇▇▇▇ County and
▇▇▇▇▇▇ County, Arkansas, including, without limitation, any and all assets owned
by either of the Sellers and used in connection therewith.
"Buyer" shall have the meaning set forth in the introduction hereto.
"Buyer Disclosure Schedule" means the disclosure schedule document
being delivered to the Sellers by the Buyer in connection herewith.
"Capital Expenditures" shall have the meaning set forth in Section
1.7(a) hereof.
"Cash Purchase Price" shall have the meaning set forth in Section
1.3(b) hereof.
"Closing" means the closing of the transactions contemplated by this
Agreement.
"Closing Date" means the date of the Closing.
"Code" means the Internal Revenue Code of 1986, as amended (or any
successor law thereto).
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"Consenting Parties" shall have the meaning set forth in the
introduction hereto.
"Consenting Party Damages" means all liability, demands, claims,
actions or causes of actions, assessments, losses, damages, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses)
asserted against or incurred by any Indemnitee as a result of or arising out of
(i) a breach of any representation or warranty contained in Article III of this
Agreement as of the applicable date provided for therein and (ii) the breach of
any covenant or agreement of any of the Consenting Parties contained herein.
"Consideration" shall have the meaning set forth in Section 1.3(b).
"Controlled Affiliate" means any corporation, partnership, entity or
other person that directly, or indirectly through one or more intermediaries, is
or has been controlled by either of the Sellers or under common control with the
person specified and any of the Sellers.
"Damages" means all liability, demands, claims, actions or causes of
actions, assessments, losses, damages, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) asserted against or
incurred by any Indemnitee as a result of or arising out of (i) a breach of any
representation or warranty contained in Article II of this Agreement as of the
applicable date provided for therein, (ii) the breach of any covenant or
agreement of either of the Sellers contained herein, (iii) except as otherwise
expressly provided herein, any liabilities and obligations not to be assumed by
the Buyer as provided in the Undertaking, (iv) any liability arising out of or
in connection with the process undergone by the Sellers and their financial
advisors in connection with any attempts to sell the Business or any interests
therein, and (v) the failure to perform any covenant or agreement of either of
the Sellers.
"Deeds" means limited warranty deeds (or the statutory equivalent
thereof with covenants against grantor's acts only), in recordable form, with
respect to the Owned Real Property.
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"Disclosure Schedule" means the disclosure schedule document being
delivered to the Buyer by the Sellers in connection herewith.
"Displays" shall have the meaning set forth in Section 1.2(a)(i)
hereof.
"Environmental Laws" means any and all applicable federal, state, local
and foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, judicial orders, decrees, codes, injunctions, permits, consent
decrees, consent orders and governmental restrictions, now in effect, relating
to human health, the environment or to emissions, discharges or releases of
pollutants, contaminants, Hazardous Substances or wastes into the environment,
including without limitation ambient air, surface water, ground water or land,
or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants, contaminants,
Hazardous Substances or wastes or the clean-up or other remediation thereof.
"Environmental Notices" shall have the meaning set forth in Section
2.19(a) hereof.
"Environmental Permits" means all permits licenses, authorizations,
certificates and approvals of governmental authorities relating to or required
by Environmental Laws and necessary or proper for the Business as currently
conducted.
"Environmental Studies" shall have the meaning set forth in Section
5.9 hereof.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" shall mean any trade or business which together with
any Seller would be deemed a "single employer" within the meaning of section
4001 of ERISA.
"Excluded Assets" means those assets, enumerated in Section 1.2(c),
which are expressly excluded from the Assets to be sold, conveyed, assigned, and
trans-
51
ferred to the Buyer and from the assets owned by either of the Sellers.
"Final Statement" shall have the meaning set forth in Section 1.7(a)
hereof.
"Financial Statements" shall have the meaning set forth in Section 2.5
hereof.
"Financing" shall have the meaning set forth in Section 4.2 hereof.
"GAAP" means U.S. generally accepted accounting principles.
"Hazardous Substances" means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives, by-products
and other hydrocarbons, or any substance having any constituent elements
displaying any of the foregoing characteristics, including, without limitation,
any substance regulated under Environmental Laws.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
"Improvements" shall have the meaning set forth in Section 2.8(c)
hereof.
"Indemnitees" means the Parent, the Buyer and their respective
directors, officers, employees, affiliates, controlling persons, agents and
representatives and their successors and assigns.
"Insurance Policies" shall have the meaning set forth in Section 2.16
hereof.
"Intangible Property" shall have the meaning set forth in Section
1.2(a)(xii).
"Joint Management Agreement" shall mean the Joint Management
Agreement, dated as of the date hereof, between the Sellers and Universal
Outdoor Management Company.
"LLC Agreement" shall have the meaning set forth in Section 2.1
hereof.
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"Lease Assignments" means all appropriate documents for the assignment
(in form suitable for filing, registration or recording, if the applicable
agreement would permit such assignment to be filed, registered or recorded) of
rights in the Leases.
"Leases" means the TP LLC Leases and the TOA Leases.
"Liens" means all mortgages, pledges, security interests, liens,
charges, options, easements, rights-of-way or other encumbrances of any nature
whatsoever, excluding licenses or rights to third parties.
"Material Agreements" shall have the meaning set forth in Section 2.15
hereof.
"Member" shall mean any Person holding a membership interest in TP
LLC.
"Option" shall have the meaning set forth in Section 1.1 hereof.
"Option Exercise Date" shall have the meaning set forth in Section 1.1
hereof.
"Option Exercise Period" shall have the meaning set forth in Section
1.1 hereof.
"Option Payment" shall have the meaning set forth in Section 1.3(a)
hereof.
"Other Instruments" means such other duly executed, good and
sufficient instruments of conveyance, transfer and assignment as the parties
shall deem necessary to convey to the Buyer all of each of the Sellers' rights,
title and interests in and to the appropriate Assets.
"Owned Real Property" shall have the meaning set forth in Section
1.2(a)(ii) hereof.
"Parent" shall have the meaning set forth in the introduction hereto.
"Partner" shall mean a general or limited partner of TOA.
53
"Permits" shall have the meaning set forth in Section 1.2(a)(v)
hereof.
"Permitted Liens" means (i) mechanics', carriers', workers',
repairers', materialmens', warehousemens' and other similar Liens arising or
incurred in the ordinary course of business which are Liens for work in progress
which are not past due or otherwise reflected on the Balance Sheet and (ii)
recorded easements, covenants and other restrictions which do not impair the
current use, occupancy, value, or the marketability of title.
"Person" means and includes an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a government
or any department or agency thereof.
"Plans" shall have the meaning set forth in Section 2.17(a) hereof.
"Prorated Assets" shall have the meaning set forth in Section 1.7(a)
hereof.
"Prorated Liabilities" shall have the meaning set forth in Section
1.7(a) hereof.
"Proration Payment" shall have the meaning set forth in Section 1.7(c)
hereof.
"Purchase Price" shall have the meaning set forth in Section 1.3(b)
hereof.
"Real Property" means the Owned Real Property and all real property
leased pursuant to a Lease and all buildings, structures and improvements
located thereon, fixtures contained thereon and appurtenances thereto and
easements and other rights relating thereto.
"Receivables" shall have the meaning set forth in Section 1.8 hereof.
"Related Agreements" means those other agreements and instruments
required to be executed pursuant to this Agreement.
54
"Securities Act" means the Securities Act of 1933, as amended.
"Sellers" shall have the meaning set forth in the introduction hereto.
"Shares" shall have the meaning set forth in Section 1.3(b) hereof.
"Sign Location Leases" means the TP LLC Sign Location Leases and the
TOA Sign Location Leases.
"Statement" shall have the meaning set forth in Section 1.7(a) hereof.
"▇▇▇▇▇▇" shall have the meaning set forth in the introduction hereto.
"▇▇▇▇▇▇ Owned Properties" shall have the meaning set forth in Section
1.2(c) hereof.
"▇▇▇▇▇▇ Owned Property Leases" shall have the meaning set forth in
Section 1.9(a) hereof.
"Tax Authority" includes the Internal Revenue Service and any state,
local, foreign or other governmental authority responsible for the
administration of any Taxes.
"Tax Return" means any declaration, estimate, return, report,
information statement, schedule or other document (including any related or
supporting information) with respect to Taxes that is required to be filed with
any Tax Authority.
"Taxes" mean all federal, provincial, territorial, state, municipal,
local, domestic, foreign or other taxes, imposts, rates, levies, assessments and
other charges including, without limitation, ad valorem, capital, capital stock,
customs duties, disability, documentary stamp, employment, estimated, excise,
fees, franchise, gains, goods and services, gross income, gross receipts, import
duties, income, intangible, inventory, license, mortgage recording, net income,
occupation, payroll, personal property, production, profits, property, real
property, recording, rent, sales, severance, sewer, social security, stamp,
transfer, transfer gains, unem-
55
ployment, use, value added, water, windfall profits, and withholding, together
with any interest, additions, fines or penalties with respect thereto or in
respect of any failure to comply with any requirement regarding Tax Returns and
any interest in respect of such additions, fines or penalties and shall include
any transferee liability in respect of any and all of the above.
"TOA" shall have the meaning set forth in the introduction hereto.
"TOA Agreement" shall have the meaning set forth in Section 2.1
hereof.
"TOA Leases" means all leases or subleases of real property under
which TOA is a lessee or lessor and the TOA Sign Location Leases.
"TOA Sign Location Leases" shall mean any lease, license or other
agreement between TOA and any Person pursuant to which TOA has obtained the
right to erect, place and maintain outdoor advertising sign structures on any
ground space, roof or wall space or upon any other improvement to real estate.
"TP LLC" shall have the meaning set forth in the introduction hereto.
"TP LLC Excluded Properties" shall have the meaning set forth in
Section 1.2(c) hereof.
"TP LLC Excluded Properties Leases" shall have the meaning set forth
in Section 1.9(b) hereof.
"TP LLC Leases" means all leases or subleases of real property under
which TP LLC is a lessee or lessor and the TP LLC Sign Location Leases.
"TP LLC Sign Location Leases" shall mean any lease, license or other
agreement between TP LLC and any person pursuant to which TP LLC has obtained
the right to erect, place and maintain outdoor advertising sign structures on
any ground space, roof or wall space or upon any other improvement to real
estate.
"Treasury Regulation" means any regulation promulgated under the Code.
56
"Trust" shall have the meaning set forth in the introduction hereto.
"Undertaking" means the duly executed undertaking, substantially in
the form attached hereto as Exhibit B, whereby the Buyer will assume and agree
to pay and discharge the Assumed Liabilities.
"WBT" shall have the meaning set forth in the introduction hereto.
ARTICLE XI
MISCELLANEOUS
Section 11.1 FURTHER ASSURANCES. From time to time after the Closing
Date, at the request of either party hereto and at the expense of such party,
the parties hereto shall execute and deliver to such requesting party such
documents and take such other action as such requesting party may reasonably
request in order to consummate more effectively the transactions contemplated
hereby.
Section 11.2 NOTICES. All notices, requests, demands, waivers and
other communications required or permitted to be given under this Agreement
shall be in writing and may be given by any of the following methods: (a)
personal delivery; (b) facsimile transmission; (c) registered or certified mail,
postage prepaid, return receipt requested; or (d) overnight delivery service.
Notices shall be sent to the appropriate party at its address or facsimile
number given below (or at such other address or facsimile number for such party
as shall be specified by notice given hereunder):
If to the Parent or the Buyer, to:
Universal Outdoor, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
57
and
▇▇▇▇▇ & Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Winston & ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to either of the Sellers, to:
▇▇▇▇▇▇.▇▇▇▇, L.L.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Chief Manager
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Johnson, Grusin, Kee & Surprise, P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
All such notices, requests, demands, waivers and communications shall be deemed
received upon (i) actual receipt thereof by the addressee, (ii) actual delivery
58
thereof to the appropriate address, or (iii) in the case of a facsimile
transmission, upon transmission thereof by the sender and issuance by the
transmitting machine of a confirmation slip that the number of pages
constituting the notice have been transmitted without error. In the case of
notices sent by facsimile transmission, the sender shall contemporaneously mail
a copy of the notice to the addressee at the address provided for above.
However, such mailing shall in no way alter the time at which the facsimile
notice is deemed received.
Section 11.3 SEVERABILITY. Should any provision of this Agreement
for any reason be declared invalid or unenforceable, such decision shall not
affect the validity or enforceability of any of the other provisions of this
Agreement, which remaining provisions shall remain in full force and effect and
the application of such invalid or unenforceable provision to persons or
circumstances other than those as to which it is held invalid or unenforceable
shall be valid and enforced to the fullest extent permitted by law.
Section 11.4 BINDING EFFECT; ASSIGNMENT. This Agreement and all of
the provisions hereof shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned, directly or indirectly, including, without limitation, by
operation of law, by any party hereto without the prior written consent of the
other parties hereto; PROVIDED, HOWEVER, that the Buyer may transfer or assign,
in whole or from time to time in part, to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ & Company or
one or more of any of their affiliates, the right to purchase all or a portion
of the Assets but no such transfer or assignment shall relieve the Buyer of its
obligations hereunder.
Section 11.5 NO THIRD PARTY BENEFICIARIES. This Agreement is solely
for the benefit of the Sellers and their successors and permitted assigns, with
respect to the obligations of the Parent and the Buyer under this Agreement, and
for the benefit of the Parent and the Buyer, and their respective successors and
permitted assigns, with respect to the obligations of the Sellers, under this
Agreement, and this Agreement shall not be deemed to confer upon or give to any
other third party
59
any remedy, claim, liability, reimbursement, cause of action or other right.
Section 11.6 INTERPRETATION. The article and section headings
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the parties and shall not in any way affect the meaning
or interpretation of this Agreement.
Section 11.7 ARBITRATION. Each of the parties hereto agrees to
submit to binding arbitration any and all differences and disputes which may
arise between them, their heirs, successors, assigns, employees, officers,
directors, affiliates, subsidiaries, or shareholders which are related to this
Agreement. Prior to initiating arbitration, the parties shall first meet face-
to-face to effect a resolution of the differences. Any differences which the
parties are unable to resolve in said face-to-face meeting shall be heard and
finally settled at a mutually agreed upon location by the parties, by binding
arbitration in accordance with the Commercial Rules of the American Arbitration
Association. If the parties do not agree upon a location, the arbitration
proceeding shall be conducted in St. Louis, Missouri. Any award entered in any
such arbitration shall be final, binding, and may be entered and enforced in any
court of competent jurisdiction. The arbitrator shall make such orders, conduct
and schedule all proceedings in connection with the arbitration so that final
arbitration commences no less than thirty (30) days and concludes no later than
seventy-five (75) days after a party files the initial notice of arbitration,
and so that the final arbitration award is made and delivered to the parties
within ninety (90) days after the filing of the initial notice of arbitration.
The cost of such arbitration shall be apportioned as determined by the
arbitrator, in any manner determined by him/her based upon the fault or lack
thereof by the respective parties. If the cost of such arbitration is not
apportioned by the arbitrator, then the cost shall be borne equally between the
Buyer and the Sellers. Nothing herein contained shall be construed as
preventing any party from instituting legal or equitable action in any
jurisdiction against any of the other parties for temporary or similar
provisional relief to the full extent permitted under the laws applicable to
this Agreement, or any such other written agreement between the parties or the
performance hereof or thereof
60
or otherwise pending final settlement of any dispute, difference or question by
arbitration. Any such provisional relieve may be modified or amended in any way
by the arbitrator at any time after his appointment.
Section 11.8 JURISDICTION AND CONSENT TO SERVICE. The Sellers, the
Parent and the Buyer (a) agree that any suit, action or proceeding arising out
of or relating to this Agreement will be brought solely in the federal courts of
the State of Missouri, sitting in the City of St. Louis, Missouri; (b) consent
to the exclusive jurisdiction of each such court in any suit, action or
proceeding relating to or arising out of this Agreement; (c) waive any objection
which it may have to the laying of venue in any such suit, action or proceeding
in any such court, and (d) agree that service of any court paper may be made in
any manner as may be provided under applicable laws or court rules governing
service of process in such court.
Section 11.9 ENTIRE AGREEMENT. Except for this Agreement, the
Disclosure Schedule, the Buyer Disclosure Schedule and the Exhibits and other
documents referred to herein or delivered pursuant hereto which form a part
hereof constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all other prior agreements and
understandings, both written and oral, between the parties or any of them with
respect to the subject matter hereof.
Section 11.10 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware (regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof) as to all matters, including but not limited to matters of
validity, construction, effect, performance and remedies.
Section 11.11 SPECIFIC PERFORMANCE. The parties acknowledge and
agree that any breach of the terms of this Agreement would give rise to
irreparable harm for which money damages would not be an adequate remedy and
accordingly the parties agree that, in addition to any other remedies, each
shall be entitled to enforce the
61
terms of this Agreement by a decree of specific performance without the
necessity of proving the inadequacy of money damages as a remedy.
Section COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
Section 11.13 BULK SALES LAWS. The Buyer and each of the Sellers
each hereby waive compliance by each such Seller with the provisions of the
"bulk sales", "bulk transfer" or similar laws of any state.
Section 11.14 EXPENSES. Except as otherwise provided herein, all
costs and expenses incurred in connection with this Agreement shall be paid by
the party incurring such cost or expense except that the Buyer, on the one hand,
and the Sellers, on the other, shall share equally the costs of the applicable
filing fee in connection with the HSR Act filings referred to in Section 5.3
hereof.
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the Sellers, the Consenting
Parties, the Parent and the Buyer as of the date first above written.
▇▇▇▇▇▇ ▇▇▇▇ L.L.C.
By:
----------------------------
Name:
Title:
TOA ENTERPRISES, L.P.
By:
----------------------------
Name:
Title:
-------------------------------
▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇
WBT OUTDOOR, INC.
By:
----------------------------
Name:
Title:
THE ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ TRUST
By:
----------------------------
Name:
Title:
63
▇▇▇▇▇▇ ACQUISITION CORPORATION
By:
----------------------------
Name:
Title:
UNIVERSAL OUTDOOR, INC.
By:
----------------------------
Name:
Title:
64
