Exhibit 2.8
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into this 11th day of September, 1996,
by and among SRM INVESTMENTS, INC., d/b/a The Chase Company, a Texas corporation
("Chase"), Xxxxx X. Xxxxx ("Xxxxx") and Xxxxxxx X. Xxxxxxxx ("Xxxxxxxx") (Xxxxx,
Xxxxx and Xxxxxxxx are collectively referred to as "Seller") and UNIVERSAL
OUTDOOR, INC., an Illinois corporation ("Buyer").
W I T N E S S E T H :
In consideration of the respective representations, warranties and
covenants contained in this Agreement and other good and valuable consideration,
the sufficiency and receipt of which is hereby acknowledged, Buyer and Seller
agree as follows:
1. TRANSFER OF ASSETS.
1.1 Buyer agrees that at the Closing it shall acquire the assets
of Seller described in Section 1.3 of this Agreement, including those
assets listed on Exhibits 1.3.1 through 1.3.11A attached to this
Agreement ("Assets"), all of which Assets are used in the outdoor
advertising business in the market described in Exhibit 1.1 ("xxx
Xxxxxx"). Seller agrees to transfer, assign, convey and deliver to
Buyer all of the Assets, in exchange solely for the consideration
specified under the provisions of Section 1.4 herein ("Purchase
Price"), the assumption of certain obligations of Seller as specified,
and the other undertakings of Buyer pursuant to this Agreement.
1.2 The consideration payable by Buyer, as specified in Section
1.4, includes any applicable sales taxes or other taxes imposed upon
the transfer of the Assets to Buyer.
1.3 The Assets shall consist of the following:
1.3.1 All interest in and to the real property described on
Exhibit 1.3.1, including all leasehold interests of Seller
as lessee in and to such real property, and all easements,
licenses, and prepaid ground rents associated with such real
property (collectively "Leases").
1.3.2 All sign structures, whether owned or leased, and
leasehold interests in sign structures, including all
fixtures, lights, electrical hook ups, catwalks and other
appurtenant equipment, which are described in Exhibit 1.3.2
(collectively "Signs").
1.3.3 All rights and entitlement of Seller in and to
advertising contracts which are listed in Exhibit 1.3.3.
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1.3.4 All other contract rights and entitlements related to
the Assets, whether oral or written, including those set
forth in Exhibit 1.3.4.
1.3.5 All rights and obligations of Seller in and to the
unbuilt sign locations listed in Exhibit 1.3.5. For
purposes of this subsection "unbuilt sign locations" shall
mean all leasehold or other property interests, all state or
local permits, and any other complete or partial right or
expectancy to construct a sign.
1.3.6 To the extent they are assignable, all governmental
permits, licenses, approvals or authorizations related to
the Assets ("Permits"). Seller shall cooperate with Buyer
in the assignment and transfer to Buyer of all such
governmental permits, licenses, approvals or authorizations,
including state and local sign permits. All such permits,
licenses, approvals or authorizations are listed in Exhibit
1.3.6. Buyer acknowledges that Seller's Texas Department of
Transportation sign operator's license is personal and non-
transferable and will not be assigned to Buyer pursuant to
this Agreement.
1.3.7 All deposits from customers held by Seller arising from
transactions relating to the Assets. There are no such
deposits known to Seller.
1.3.8 All telephone numbers and listings used by Seller in
the Market. Seller will not change said telephone numbers.
A list of all telephone numbers and listings is attached as
Exhibit 1.3.8.
1.3.9 All claims or rights to payment associated with or
arising with respect to any litigation as to which Seller is
a plaintiff or defendant (except for Seller's rights as to
collection judgments as set forth in Section 1.3.11), and/or
any condemnation proceedings relating to any Assets pending
as of the Closing Date. There are no such proceedings known
to Seller. Seller will cooperate with Buyer in providing
Buyer with information about said litigation.
1.3.10 All computerized or non-computerized artwork used with
respect to Seller's outdoor advertising business in the
Market.
1.3.11 All accounts receivable and prepaid expenses of Chase
at Closing, including but not limited to those listed on
Exhibit 1.3.11A, except for collection judgments and the
Heywood Company promissory note set forth on Exhibit
1.3.11B.
1.3.12 All rights of Seller as sublessee of Seller's sign shop
in Kennedale, Texas, all rights of Seller as lessee of the
leased shop equipment located therein, all of Seller's
right, title, and interest in the shop equipment, inventory,
supplies, and all other personal property located therein
which is owned by Seller, and (subject to Buyer's assumption
of the promissory notes described in
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Exhibit 4.1.4) all of Seller's right, title, and interest in
the Toyota T-100 truck, Ford Ranger truck, and trailer used
in Seller's shop operations.
1.3.13 All books, records, and documents relating to the
Assets, but excluding Seller's general accounting and tax
records and other documents not specifically relating to the
Assets.
1.4 Buyer shall pay to Chase a Purchase Price for the Assets
equal to the sum of the following:
(a) One Hundred Thousand Dollars ($100,000) as a non-
refundable xxxxxxx money deposit ("the Xxxxxxx Money"); and
(b) Five Million Six Hundred Fifty Thousand Dollars
($5,650,000) in cash or cash equivalent funds or by wire
transfer at closing pursuant to Chase's instructions shown
on Exhibit 1.4(b).
(c) Fifty Thousand Dollars ($50,000) payable into
escrow pursuant to the terms of the Escrow Agreement
attached as Exhibit 1.4(c).
1.4.1 The parties acknowledge that the anticipated payment
status of such periodic receipts and expenditures as sign
lease ground rents (including percentage rentals) and other
lease payments, advertising revenues, advertising
commissions, property taxes, utility charges, and paint
costs has been taken into account in determining the
Purchase Price, and that therefore there will be no
proration of said items or any other periodic receipts and
expenditures associated with the Assets.
1.5 The Purchase Price shall be payable as follows:
1.5.1 The Xxxxxxx Money will be paid by Buyer to Chase by
wire transfer upon execution of this Agreement. The Xxxxxxx
Money will be refundable to Buyer solely in the event that
the transactions contemplated by this Agreement fail to
close by reason of Seller's default.
1.5.2 The portion of the Purchase Price payable under Section
1.4(b) will be paid by Buyer to the order of Chase on the
Closing Date, without reduction or credit for the Xxxxxxx
Money.
1.5.3 The portion of the Purchase Price payable under Section
1.4(c) will be paid by Buyer to the escrow agent by wire
transfer at Closing.
1.6 The parties agree that the allocated Asset values attached
as Exhibit 1.6 fairly and accurately represent the respective values
of the Asset categories of Seller purchased
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by Buyer pursuant to this Agreement. Buyer and Seller shall timely
(and in no event later than three months after the Closing Date)
complete a Form 8594, Asset Acquisition Statement of Allocation,
consistent with the allocations set forth on Exhibit 1.6, and shall
file a copy of such form with their respective federal income tax
returns for the period which includes the Closing Date. Buyer and
Seller further agree not to take any position inconsistent with such
allocation for any tax purpose.
1.7 At the Closing, Seller shall execute the Non-Competition,
Non-Solicitation and Non-Disclosure Agreement substantially in the
form set forth in Exhibit 1.7.
If Seller violates this Section 1.7 and the Non-Competition,
Non-Solicitation and Non-Disclosure Agreement referenced herein, and
Buyer obtains a final judgment or arbitration award or a settlement is
reached with Seller for damages as a result of this violation, Buyer
may offset the amount of this judgment, arbitration award or
settlement against any amounts owed by Buyer to the party or parties
committing such violation. "Final" shall mean any judgment for which
no appeal has been filed despite the expiration of the time allowed
therefor under applicable law, or as to which all available appeals
have been exhausted. Provided, however, Buyer's claim shall not be
limited to the amount of any offset available.
1.8 Buyer has the non-exclusive right to use the name Chase and
all other trade names used by Seller in its outdoor advertising
business in the Market for one year from the Closing Date. Buyer
shall have the right for one year from the Closing Date to endorse the
name Chase or Chase Company to all checks, which pursuant to the terms
of this Agreement, are the property of Buyer.
2. REPRESENTATIONS AND WARRANTIES OF CHASE. Chase represents and warrants to
Buyer as an inducement to Buyer to purchase the Assets pursuant to the
terms of this Agreement as follows:
2.1 Chase is a Texas corporation, duly organized, validly
existing in good standing under the laws of that state, and has the
corporate power to own its property and carry on its business as now
being conducted, and to execute and deliver the Asset Purchase
Agreement and any other agreements to be entered into by Chase in
connection with the Asset Purchase Agreement.
2.2 To the best of Seller's knowledge, no violations of
applicable laws or regulations, including, but not limited to, zoning
regulations and building permits or other permits related to sign
structures have occurred that would have a material adverse effect on
the future operation of any Asset, except as disclosed in Exhibit 2.2.
Buyer and Seller acknowledge that some or all of the Signs constitute
legal nonconforming uses under the laws and ordinances of the
respective jurisdictions in which they are located.
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2.3 Attached as Exhibit 2.3 are unaudited balance sheets and
comparative operating statements of Seller's outdoor advertising
business in the Market as of June 30, 1996 (the "Financial
Statements"). These Financial Statements are in accordance with the
books and records of Seller and fairly and accurately present its
financial position with respect to its outdoor advertising business in
the Market as of that date.
2.4 Since the date of the Financial Statements, except as
disclosed in Exhibit 2.4, there have been no material adverse changes
in the general affairs, management or financial position or financial
condition of Seller with respect to the outdoor advertising business
in the Market.
2.5 The Exhibits attached to this Agreement are correct in all
respects including specifically the following;
2.5.1 The information about contracts attached as Exhibit
1.3.3 and Exhibit 1.3.4 to this Agreement is true and
correct as of the dates set forth and those contracts (1)
are, to the best of Seller's knowledge, enforceable
according to their terms; and (2) have not been breached by
Seller or, to the best of Seller's knowledge, any of the
other parties thereto except as disclosed in Exhibit 1.3.3.
2.5.2 To the best of Seller's knowledge, all sign leases
to which Seller is a Lessee of property on which one or more
Signs have been erected are enforceable according to their
terms.
2.5.3 Exhibit 2.5.3 lists the following agreements,
whether oral or written:
(a) Each contract, agreement or commitment for the
sale or lease of Assets, excluding advertising contracts listed in
Exhibit 1.3.3, contracts to provide advertising allowances or
promotional services which are listed in Exhibit 1.3.4, subleases
listed in Exhibit 2.17, and agreements listed in Exhibit 2.26.
(b) Each contract with any dealer, distributor,
broker, agent or sales representative related to the Assets.
(c) Employment contracts, including union contracts,
executed by any officer, director, employee or consultant of Seller in
connection with Seller's outdoor advertising business in the Market
(other than Skorburg and Xxxxx).
2.6 There are no unfair labor practice charges pending, or to
the best of Seller's knowledge, threatened against Seller in
connection with its outdoor advertising business in the Market.
Seller has not engaged in any unfair labor practices in connection
with its outdoor advertising business in the Market, and there is no
strike, dispute, request for representation or work stoppage pending
or threatened against Seller by or with respect to any employees of
Seller in its outdoor advertising business
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in the Market.
2.7 The execution, delivery and performance of this Agreement by
Seller, including, without limitation, all conveyances, transfers,
assignments and deliveries contemplated, have been duly and
effectively authorized and approved by Chase's board of directors and
shareholders and all other persons, businesses, banks and governmental
bodies or courts whose approval is required. This Agreement and each
and every instrument executed and delivered by Seller shall constitute
a valid and binding obligation of Seller enforceable against Seller
according to its terms.
2.8 The performance of this Agreement by Seller shall not
conflict with or violate the provisions of any agreement or instrument
binding upon Seller.
2.9 There is no suit, action, arbitration or legal,
administrative or other proceeding or governmental investigation
pending or, after due inquiry, to the best of Seller's knowledge,
threatened against or affecting the Assets or which would have any
adverse effect on Seller's performance of this Agreement and the
transactions contemplated. Seller is not in default with respect to
any order, writ, injunction or decree of any federal, state, local or
foreign court, department, agency or instrumentality.
2.10 Except as set forth on Exhibits 2.10, 2.17, and 2.26,
Seller's title to all property included in the Assets disclosed in the
Exhibits to this Agreement has not been encumbered by Seller in any
manner, except for encumbrances which will be extinguished at or
before Closing.
2.11 To the best of Seller's knowledge, all Assets are useable in
the ordinary course of business in accordance with industry standards.
Except as set forth in Exhibit 2.11, Seller has no knowledge of any
defects in the condition of any of the said Assets which would
materially impair Buyer's ability to use said Assets in the outdoor
advertising business in the Market. The provisions of this Section
are subject to the provisions of Section 4.5 regarding Consents.
2.12 Chase represents and warrants to Buyer that as of the date
of this Agreement the following environmental representations and
warranties are true to the best of Seller's knowledge:
2.12.1 Seller has not caused or permitted its operations on
any real estate owned or leased by Seller in connection with
the Assets to generate, manufacture, refine, transport,
treat, store, handle, dispose, transfer, produce or process
hazardous substances or other dangerous or toxic substances,
or solid wastes except in compliance with all applicable
federal, state and local laws or regulations, and has not
caused or permitted and has no knowledge of the release of
any hazardous substances that have gone onto or offsite of
any real estate owned or leased by Seller in connection with
the Assets, and Seller has
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no knowledge that any person or entity has in the past
utilized any real estate owned or leased by Seller in
connection with the Assets in a manner which has created any
hazardous substance on or off any real estate owned or
leased by Seller. There are no pending and no threatened
claim, suit, administrative proceeding, or other action by a
Court or governmental entity with regard to hazardous
substances on any real estate owned or leased by Seller in
connection with the Assets.
2.12.2 Chase agrees to indemnify and hold harmless Buyer, its
successors, and assigns against and in respect of any and
all damages, claims, losses, liabilities and expenses,
including, without limitation, reasonable legal, accounting,
consulting, engineering and other expenses, which may be
imposed upon or incurred by Buyer, its successors or
assigns, or asserted against the Buyer, their successors or
assigns by any other party or parties (including, without
limitation, a governmental entity), arising out of or in
connection with any environmental condition, resulting from
activity of Seller prior to Closing.
2.13 Except current liabilities incurred or paid in the ordinary
course of business and obligations under contracts entered into or
performed in the ordinary course of business so as to preserve and
expand their ongoing business or as otherwise incurred or performed in
the ordinary course of business, Seller has not since the date of the
Financial Statements attached as Exhibit 2.3;
2.13.1 incurred or become subject to any obligations or
liabilities (absolute or contingent) which have a material
adverse effect on the Assets;
2.13.2 mortgaged, pledged or subjected to any lien, charge or
encumbrance any of the Assets;
2.13.3 entered into any transaction other than in the ordinary
course of business in any way affecting the Assets, except
for this Agreement and the transactions contemplated
hereunder;
2.13.4 except as disclosed in Exhibit 2.13.4, increased,
without the knowledge of Buyer, the general rate of
compensation payable to any of its employees in Seller's
outdoor advertising business in the Market or made or
accrued for any new employee benefit plans for such
employees. A list of such employees (except Skorburg and
Xxxxx) who work on a full time basis and all compensation
and bonus arrangements for these employees is set forth in
Exhibit 2.13.4;
2.13.5 except as disclosed in Exhibit 2.13.4, made, accrued or
become liable in any way for any bonus, profit sharing,
pension, incentive compensation or other similar payments to
any employee in Seller's outdoor advertising business in the
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Market;
2.13.6 suffered any other event or condition of any character
which has materially adversely affected the Assets.
2.14 Seller shall continue through the Closing Date its normal
and customary collection efforts with regard to its accounts
receivable and shall not make any operational changes in anticipation
of this transaction. The accounts receivable reflected in the
Financial Statements attached as Exhibit 2.3 arose out of bona fide
transactions in the ordinary course of business and, to the best of
Seller's knowledge, are not subject to any right of offset or
counterclaim except for any barter or lease trade out arrangements
disclosed in Exhibit 2.18.
2.15 Except as set forth in Exhibit 2.15, Seller does not sponsor
or participate in any (i) life, health, accident or disability or any
other "employee welfare benefit plan" as defined in Section 3(1) of
ERISA, with respect to Seller's outdoor advertising business in the
Market, or (ii) any "employee pension benefit plan" as defined in
Section 3(2) of ERISA, with respect to Seller's outdoor advertising
business in the Market. Exhibit 2.15 also discloses the Seller's
vacation, sick leave and holiday policies with respect to its
employees engaged in outdoor advertising business in the Market.
2.16 Seller has paid or will pay all federal, state, and local
taxes, including real and personal property, sales and use and other
taxes it is required to pay with respect to its outdoor advertising
business in the Market, except for current year property taxes
proration of which is waived pursuant to Section 1.4.1.
2.17 Except as set forth in Exhibit 2.17, Seller has not sublet
any Assets.
2.18 Seller has not engaged in any "bartering" or "lease trade
outs" of accounts receivable or advertising space with respect to the
Assets except as described on Exhibit 2.18.
2.19 Seller does not know of any governmental investigation of
Seller, or Chase's shareholders, officers or directors, in connection
with Seller's outdoor advertising business in the Market.
2.20 The performance of this Agreement by Seller shall not
constitute a fraudulent conveyance under Federal or State law.
2.21 To the best of Seller's knowledge, Seller has all permits
and licenses needed to operate the Assets being purchased by Buyer
except as disclosed in Exhibit 2.2, and no one has challenged the
validity of those permits and licenses.
2.22 No Major Advertiser of Seller has advised Seller that it is
going to breach,
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terminate, or decline to renew its advertising contract by reason of
the assignment of such contract to Buyer. The term "Major Advertiser"
as used herein shall mean any advertiser whose annual payments are
Five Thousand Dollars ($5,000.00) in the aggregate or more. No group
of advertisers whose annual payments exceed Forty Thousand Dollars
($40,000) have advised Seller they are going to breach, terminate, or
decline to renew their advertising contracts by reason of the
assignment of such contracts to Buyer.
2.23 With respect to its outdoor advertising business in the
Market, Seller has filed all tax returns or other tax reports when
due. There are no tax audits threatened or pending against Seller
with respect to its outdoor advertising business in the Market.
2.24 Chase shall be responsible for providing any notice of
layoff or plant closing required in connection with the transaction
contemplated herein pursuant to the Federal Worker Adjustment and
Retraining Notification Act of 1988, any successor federal law, and
any applicable state or local plant closing notification statute, and
Chase shall bear any liability or obligation that may arise or accrue
as the result of improper or untimely notice or that may arise under
such laws from any person claiming wrongful termination or change of
employment as a result of the transaction set forth in this Agreement.
2.25 All dues owed by Seller to any outdoor advertising
association have been paid.
2.26 There are no agreements or undertakings pursuant to which
any third party has or may have the right to acquire from Seller any
Assets, except as described in Exhibit 2.26.
2.27 To the best of Seller's knowledge, in the five years prior
to Closing, no employee of Seller, lessor, business invitee, or other
person has suffered personal injury or property damage as a result of
any action involving the Assets such that a claim has been or may be
raised against Seller directly or indirectly or under the xxxxxxx'x
compensation laws of any state except as set forth in Exhibit 2.27.
2.28 Seller shall deliver to Buyer under this Agreement sign
structures containing, in the aggregate, at least 255 advertising
faces.
2.29 Following Closing, neither Seller nor any affiliates of
Seller will have any direct, indirect or beneficial ownership of any
of the Assets being purchased by Buyer.
3. Representations and Warranties of Buyer. Buyer represents and
warrants to Seller as follows:
3.1 Buyer has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of
Illinois, with full power and authority to
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own its properties and carry on its business as now being conducted,
and to execute and deliver this Agreement and any other agreements to
be entered into by Buyer in connection with this Agreement.
3.2 The performance of this Agreement by Buyer will not conflict
with or violate the provisions of any agreement or instrument binding
upon Buyer; and the execution, delivery and performance of this
Agreement shall have been duly and effectively authorized and approved
by Buyer and all other persons, businesses, banks, and governmental
bodies whose approval is required, prior to closing. This Agreement
and each and every instrument executed and delivered by Buyer shall
constitute a valid and binding obligation of Buyer enforceable
according to its terms.
3.3 There is no suit, action, arbitration or legal,
administrative or other proceeding or governmental investigation
pending or, after due inquiry, to the best of Buyer's knowledge,
threatened against or affecting the business, assets or financial
conditions of Buyer within the Market or which would have any material
adverse effect on Buyer's performance of this Agreement and the
transactions contemplated. Buyer is not in default with respect to
any order, writ, injunction or decree of any federal, state, local or
foreign court, department, agency or instrumentality.
3.4 Buyer shall use its reasonable business efforts to perform
and fulfill all conditions and obligations on its part to be performed
and fulfilled under this Agreement, to the end that the transactions
contemplated by this Agreement shall be fully carried out.
3.5 The performance of this Agreement by Buyer shall not
constitute a fraudulent conveyance under Federal or State law.
4. ASSUMPTION OF OBLIGATIONS.
4.1 Buyer does not assume any obligations or liabilities of
Seller of any kind or nature, except as to those matters specified
below.
4.1.1 Post-closing liabilities under leases affecting the
Assets, and which have not been paid, performed or
discharged by Seller.
4.1.2 Post-closing obligation to deliver advertising services
pursuant to advertising contracts purchased pursuant to this
Agreement.
4.1.3 Post-closing obligations to pay advertising commissions
with respect to advertising revenues received by Buyer after
the Closing Date. Such obligations are listed in Exhibits
2.5.3 and 4.1.3.
4.1.4 Post-closing obligations under the promissory notes
described in
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Exhibit 4.1.4.
4.1.5 Those trade accounts payable in the ordinary course of
business of Seller listed on Exhibit 4.1.5.
4.2 Anything to the contrary notwithstanding, it is expressly
understood that Buyer shall not assume any of the following
obligations or liabilities of Seller:
4.2.1 Any city, state or federal tax liabilities for any kind
of tax for any period prior to and including the Closing
Date, except current year property taxes proration of which
has been waived pursuant to Section 1.4.1.
4.2.2 Any income tax liability arising from the sale of
Assets to Buyer or conveyance of Assets to Buyer or any
liquidation and dissolution of Chase.
4.2.3 Any obligation, commitment or liability of or claim
against Seller which constitutes or arises from a breach by
Seller at or prior to the Closing of any representation,
warranty or covenant.
4.2.4 Any obligation, commitment or liability of or claim
against Seller which may arise from Seller's operation of
the Assets prior to the Closing Date, except for liabilities
assumed by Buyer pursuant to Sections 4.1.1 through 4.1.5.
4.2.5 Any obligation, commitment or liability of or claim
against Seller which may arise from the rendering of
professional, legal, accounting, appraisal, engineering or
other similar services to Seller in connection with this
Agreement or the transactions contemplated hereunder.
4.2.6 Any liability of Seller under profit-sharing or similar
employee benefit plans or any other employee benefit
collective bargaining agreement, employment agreement or
salary or bonus arrangement.
4.3 Chase, Skorburg, and Xxxxx hereby severally agree that they
shall pay promptly when due, or contest, any and all of their
liabilities arising with respect to Seller's outdoor advertising
business in the Market not assumed by Buyer at Closing or discharged
by Seller prior to Closing, provided that Chase, Skorburg, and Xxxxx
may contest the assertion of any such liability to the extent
reasonably prudent and Buyer shall cooperate fully in any such
contest. If Chase, Skorburg, or Xxxxx elects to contest any such
liability and fails to succeed in such contest, then the contesting
party shall promptly pay such liability. The contesting party shall
give Buyer written notice before the contesting party begins
contesting any such liability unless the contesting party does not
have adequate time, in which event, the contesting party shall give
Buyer said written notice within five (5) business days after the
contesting party begins contesting any such liability. If Chase,
Skorburg, or Xxxxx elects to contest or fails without contest
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to pay any such liability, it or he shall indemnify and hold Buyer
harmless from and against any costs of such contest or failure
(including all reasonable costs and attorneys' fees). If Chase,
Skorburg, or Xxxxx fails to succeed in such contest, then it or he
shall promptly pay such liability.
In the event that Chase, Skorburg, or Xxxxx is contesting
any liability arising from Seller's outdoor advertising business in
the Market and not assumed by Buyer under the terms of this Agreement,
Seller shall clearly state to the third party that Chase, Skorburg, or
Xxxxx and not Buyer is the entity disputing the matter, unless Buyer
is in actuality also disputing the matter.
4.4 Installments of special assessments levied against real
estate included in the Assets shall be the obligation of Chase if due
on or before the Closing Date and the obligation of Buyer if due after
the Closing Date.
4.5 The Seller shall cooperate with Buyer to the extent
reasonable to obtain all consents, approvals, and certificates and
licenses and permits, and other documents required or appropriate in
connection with the performance by it of this Agreement and the
consummation of the transactions contemplated or otherwise required in
order to prevent the breach of any representation and warranty set
forth ("Consents"); provided, however, that no contact will be made by
the Seller with any third party to obtain any Consent except in
accordance with arrangements previously agreed to by Buyer. The
provisions of this Section shall apply to consents of the respective
lessors of the leases described in Sections 1.3.1 and 1.3.12 and
Exhibit 1.3.1 to assignment of said leases to Buyer, but Seller does
not warrant that such consents can be obtained and the obtaining of
such consents is not a condition precedent to Closing.
4.6 Excluding workmen's compensation, Chase shall be responsible
for all claims associated with health, illness or injury insofar as
they relate to events or conditions existing on or before the Closing
Date and relating to employees or their dependents (or others) to the
extent that event or condition has been reported on or before the
Closing Date to Seller or to a medical professional or as to which
medical treatment has been obtained on or before the Closing Date;
provided, however, that Buyer's health plans will (to the extent they
would cover medical expenses for a condition arising after the Closing
Date) cover medical expenses for continuing employees incurred after
the Closing Date to the extent said medical expenses result from a
medical condition existing on or before the Closing Date that have not
been so reported or the subject of such treatment.
Chase, through its workers' compensation carrier, shall be
responsible for all workmen's compensation claims associated with
health, illness or injury insofar as they relate to events occurring
on or before the Closing Date.
5. CONDUCT OF BUSINESS PENDING CLOSING. Chase represents, warrants and
agrees that
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from the date of this Agreement until the Closing as to the Assets:
5.1 The outdoor advertising business of Seller with respect to
the Assets will be conducted in the usual and ordinary course, the
character of such business will not change in a materially adverse
manner, no different business will be undertaken with respect to the
Assets, and Seller will, in accordance with its past practices,
exercise reasonable efforts to preserve for Buyer the relationship
with suppliers, customers and others having business relations with
Seller with respect to the Assets, including employees of Seller
engaged in such business.
5.2 Except in the ordinary course of business, Seller will not,
in connection with the Assets, enter into any contract, agreement,
commitment or understanding with respect to employing any agents,
wholesalers, dealers, brokers or consultants in the development and
sale of their services which requires an expenditure of more than
$5,000 without the prior written authorization of Buyer.
5.3 As to the Assets, Seller will not:
(i) mortgage, pledge or subject to any lien, charge or
encumbrance any of the Assets;
(ii) sell or transfer any of the Assets, or any permits,
licenses, approvals, or authorizations with respect to the Assets or
cancel any debts or claims relating to Seller's outdoor advertising
business in the Market;
(iii) knowingly enter into any transaction affecting the Market
which would have an adverse effect on the Assets;
(iv) make, accrue or become liable in any way for any bonus
(other than those which Seller shall pay in full), profit-sharing,
pension, incentive compensation or other similar payments to any
employee in Seller's outdoor advertising business in the Market
inconsistent with prior practices or other than as shown on an Exhibit
to this Agreement;
(v) make or permit any amendment or termination of any contract
in connection with the Assets, except for termination of contracts by
parties other than Seller as authorized by the terms of such
contracts;
(vi) through negotiations or otherwise, make any commitment
affecting the Market to labor organizations or incur any liability
affecting the Market to labor organizations without the prior written
approval of Buyer;
(vii) make any material alteration to the normal and customary
pricing or terms and conditions of sale extended to Seller's customers
with respect to the Assets; or
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(vii) discharge or satisfy any lien or encumbrance affecting the
Assets or pay any obligation or liability affecting the Assets
(absolute or contingent), except in the ordinary course of business or
as required or allowed under this Agreement.
5.4 Seller shall maintain books of account with respect to the
Assets consistent with past accounting practices as described in
Section 2.3. Seller will not materially alter its current insurance
coverage with respect to the Assets without the prior written consent
of Buyer.
5.5 Prior to this Agreement, Seller has made available to Buyer
and its representatives certain information and records relating to
the business and affairs of Seller as requested by Buyer. During the
normal business hours throughout the purchase from this date to the
Closing Date, Seller will give to Buyer and its accountants, counsel,
appraisers and other representatives full access to all properties,
contracts, commitments, books and records or Seller pertaining to the
Assets. Prior to the Closing Date, and thereafter if the transactions
contemplated by this Agreement fail to close for any reason, Buyer
will maintain in confidence all information acquired through such
access regarding the outdoor advertising business of Seller in the
Market.
5.6 Prior to Closing, Buyer shall not have the risk of loss with
respect to the Assets to be conveyed pursuant to this Agreement. In
the event, between the date of this Agreement and the Closing Date,
any parcel of improved real property or personal property being
purchased as a part of this transaction, including but not limited to,
the furniture and equipment, fixtures, leasehold improvements,
equipment, vehicles or other personal property is materially damaged
or destroyed by fire or other casualty or in the event that the sign
structures to be purchased are materially damaged or destroyed by fire
or other casualty, Buyer may elect to terminate this Agreement, and
all obligations of the parties shall cease and neither party shall
have any further rights against the other. Chase shall immediately
notify the Buyer in writing of the occurrence of any fire or other
casualty. Buyer shall notify Chase in writing of Buyer's receipt of
Chase's notice, indicating whether Buyer elects to consummate this
transaction.
6. CONDITIONS TO OBLIGATIONS OF BUYER TO CONSUMMATE THE TRANSACTION. The
obligations of Buyer to be performed at the Closing shall be subject to the
satisfaction or the waiver in writing by Buyer on or prior to the Closing
Date of the following conditions:
6.1 Buyer and Buyer's lenders, if required, shall have received
an opinion from counsel for Chase in substantially the form attached
as Exhibit 6.1 which shall be reasonably satisfactory to Buyer, dated
the Closing Date, to the effect that:
6.1.1 Chase is a corporation duly organized, existing and in
good standing under the laws of the State of Texas and has
the corporate power to carry on
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its business as now being conducted in the Market, and is
not required to qualify to do business in any state other
than where qualified.
6.1.2 Such counsel does not know of any pending or threatened
lawsuits against Seller with respect to the Assets. Counsel
giving this opinion for Chase shall review their files in
such manner as they consider necessary before giving this
opinion.
6.1.3 The execution, delivery and performance of this
Agreement by Chase has been duly authorized and approved by
its Board of Directors.
6.1.4 This Agreement and each instrument executed and
delivered by Seller have been duly executed by and
constitute valid and binding obligations of Seller
enforceable against Seller according to their terms,
subject, however, to any state or federal laws for debtor
relief or general principles of equitable relief. No
opinion will be given regarding the enforceability of the
Non-Competition, Non-Solicitation and Non-Disclosure
Agreement (Exhibit 1.7).
6.1.5 All actions and proceedings required by law to be taken
by Seller at or prior to the closing in connection with this
Agreement and the transactions provided for have been duly
and validly taken, or waived by Buyer.
6.1.6 Except as disclosed in Exhibits 2.10, 2.17, and 2.26,
the Assets to the best of counsel's knowledge are free and
clear of all liens, encumbrances, claims, charges and
assessments incurred by Seller, other than any which will be
extinguished at or before Closing and any incurred by Buyer.
6.2 Buyer shall not have discovered and given notice to Seller
prior to Closing of any material error, misstatement or omission in
the representations and warranties made by Chase which alone or in the
aggregate are materially adverse to Seller or to Buyer if the
transaction is completed. The representations and warranties and
Exhibits contained in this Agreement shall be true on and as of the
Closing Date with the same effect as though such representations and
warranties have been made on and as of such date, except for any
variations resulting from actions contemplated or permitted by this
Agreement, which variations shall not be materially adverse, and each
and all of the covenants to be performed by Seller on or before the
Closing Date pursuant to the terms shall have been duly performed.
Chase shall deliver to Buyer a certificate to that effect, dated the
Closing Date, certifying to all the foregoing, and executed by an
authorized officer of Chase.
6.3 Subject to the provisions of Section 6.11, all contracts,
leases and options, permits and rights which constitute Assets, to the
extent assignable by Seller, shall be assigned to Buyer at Closing,
and Seller will use reasonable business efforts to obtain and provide
to Buyer at Closing any third parties' consents required for such
assignments in
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accordance with Section 4.5.
6.4 If required by law, Buyer and Seller shall have complied
with all requirements imposed by such agencies of the U.S. Government
as may be necessary for the valid and legal consummation of the
transactions contemplated by this Agreement.
6.5 No court or governmental agency shall have issued an order,
binding on Buyer, enjoining the closing of the transactions
contemplated herein.
6.6 There shall be no existing or threatened suit, action,
arbitration or legal, administrative or other proceeding or
governmental investigation pending or, after due inquiry, to the best
of Seller's or Buyer's knowledge, threatened against or affecting the
Assets or which would have any material adverse effect on Seller's
performance of this Agreement and the transactions contemplated.
6.7 Chase shall deliver a certified copy of the action of its
Board of Directors approving this transaction and the execution of
this Agreement.
6.8 Chase shall deliver an Incumbency Certificate to Buyer as to
Chase.
6.9 Seller shall deliver to Buyer all books, records and
documents relating to the Assets at the closing.
6.10 Chase shall have terminated from its employ all of Chase's
employees in its outdoor advertising business in the Market, except
Skorburg and Xxxxx.
6.11 Buyer shall have received and approved a Phase 1
environmental report for the real property described in Section
1.3.12. In the event that Buyer has not yet received this report as
of Closing, Buyer and Seller shall execute a sublease of said property
from Seller to Buyer, on substantially the same terms as Seller's
existing sublease for the property, to be effective from month to
month pending receipt of the report. Upon receipt thereafter of a
report satisfactory to Buyer, Buyer and Seller will execute
appropriate instruments to cancel the sublease and effect an
assignment to Buyer of Seller's existing sublease in accordance with
Section 1.3.12. Upon receipt of a report unsatisfactory to Buyer,
Buyer may elect to cancel the sublease granted pursuant to this
Section or to continue said sublease for the remainder of the term of
Seller's existing sublease, but in either event this Agreement will
remain in force and the validity of the other transactions
contemplated hereunder will not be affected.
7. CONDITIONS TO OBLIGATIONS OF SELLER TO CONSUMMATE THE TRANSACTION.
The obligations of Seller to be performed at the Closing shall be subject
to the satisfaction or the waiver in writing by Seller on or prior to the
Closing Date of the following conditions:
7.1 Seller shall have received an opinion of Buyer's counsel in
substantially the
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form attached as Exhibit 7.1 and which shall be reasonably
satisfactory to Seller, dated the Closing Date, to the effect that;
7.1.1 Buyer is a corporation duly organized, existing and in
good standing under the laws of the State of Illinois and
has the corporate power to carry on its business as now
being conducted.
7.1.2 The execution, delivery and performance of this
Agreement by Buyer has been duly authorized and approved by
Buyer; and this Agreement and each instrument executed and
delivered by Buyer have been duly executed by and constitute
valid and binding obligations of Buyer enforceable according
to their terms subject, however, to any state or federal
laws for debtor relief or general principles of equitable
relief.
7.1.3 All actions and proceedings required by law to be taken
by Buyer at or prior to the Closing in connection with this
Agreement and the transactions provided for have been duly
and validly taken or waived by Seller.
7.2 Seller shall not have discovered any material error,
misstatement or omission in the representations and warranties made by
Buyer which alone or in the aggregate are materially adverse to Buyer
or Seller if this transaction is completed. The representations and
warranties of Buyer contained in this Agreement shall be true on and
as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date,
except for any variations therein resulting from actions contemplated
or permitted by this Agreement, which variations shall not be
materially adverse to Buyer and each and all the covenants to be
performed by Buyer on or before the Closing Date shall have been duly
performed. Buyer shall deliver to Seller a certificate to that
effect, dated the Closing Date, and executed by an authorized officer
of Buyer.
7.3 If required by law, Buyer and Seller shall have complied
with all requirements imposed by such agencies of the U.S. Government
as may be necessary for the valid and legal consummation of the
transactions contemplated hereby.
7.4 No court of competent jurisdiction or governmental agency
shall have issued an order, binding on Seller, enjoining the closing
of the transactions contemplated herein.
8. CLOSING.
8.1 The transactions required under this Agreement to be
consummated at the Closing shall take place in Dallas, Texas, at such
date ("Closing Date"), and time as Seller and Buyer may agree, as
close as possible to the execution of this Agreement, but in no event
later than September 18, 1996, or the third business day after Buyer
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receives the Exhibits to this Agreement from Seller, whichever is
later.
8.2 In addition to, and without limiting any other provision of
this Agreement, Chase agrees to do, execute, perform and deliver at
the Closing the following:
8.2.1 The opinion of counsel of Chase as specified in Section
6.1.
8.2.2 The requisite instruments of conveyance, including, but
not limited to, a Xxxx of Sale and assignments.
8.2.3 Appropriate instruments of transfer to Buyer all
parcels of real estate or leaseholds covered by this
Agreement.
8.2.4 Evidence satisfactory to Buyer showing compliance with
provisions of any applicable requirement of the U.S.
Government or any entity of state or local government.
8.2.5 An Escrow Agreement in the form attached as Exhibit
1.4(c).
8.2.6 The certificate described in Section 6.2.
8.2.7 The certified copy described in Section 6.7.
8.2.8 The Incumbency Certificate described in Section 6.8.
8.2.9 The sublease described in Section 6.11, if appropriate.
8.2.10 Such other instruments as counsel for Buyer may
reasonably request.
8.3 In addition to, and without limiting any other provisions of
this Agreement, Buyer agrees to do, execute, perform and deliver at
the Closing the following:
8.3.1 The opinion of Buyer's counsel as specified in Section
7.1.
8.3.2 The amounts specified in Sections 1.4(b) and 1.4(c) in
the form of an interbank transfer of immediately available
funds.
8.3.3 Evidence satisfactory to Seller showing compliance with
provisions of any applicable requirement of the U.S.
Government or any entity of state or local government.
8.3.4 The sublease described in Section 6.11, if appropriate.
8.3.5 The certificate described in Section 7.2.
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8.3.6 Such other instruments as counsel for Seller may
reasonably request.
9. POST-CLOSING COVENANTS.
9.1 Buyer and Seller agree to retain and permit each other
access to relevant pre-closing accounting records and corporate
books of Seller regarding the Assets for a period of six (6)
years following the Closing Date for any proper purpose. "Proper
purpose" means the preparation and review of any federal, state
or local tax filing or governmental report, filing, or
application or the enforcing of rights against third parties or
the enforcing of rights under this Agreement.
9.2 Seller and Buyer agree to cooperate in the preparation
of any governmental reports and to furnish reasonably requested
information needed for the preparation of governmental reports.
9.3 Buyer agrees to interview all persons listed in Exhibit
2.13.4 for possible employment with Buyer on terms and conditions
of employment comparable to those set forth in Exhibits 2.13.4
and 2.15, for a period of at least ninety days after the Closing
Date, subject to Buyer's right to terminate said employees for
cause. In the event that Buyer does not so employ any such
person(s), Buyer will pay Seller within ten days after the
Closing Date an amount equal to ninety days' base compensation of
such person(s).
10. INDEMNITY.
10.1 Chase agrees to indemnify Buyer against all claims,
losses, expenses, obligations, damages and liabilities
(including, without limitation, costs and expenses of litigation
and attorneys' fees), except for items as to which proration has
been waived pursuant to Section 1.4.1, occurring or arising from
the following: (1) any breach of any representation or warranty
or failure to do and perform any covenant or agreement of Seller
contained in this Agreement; (2) any obligation, debt or
liability of Seller or any claim based upon any other occurrence
arising from the operation of the Assets anywhere, or from the
operation of Seller's entire business anywhere, prior to the
Closing, the obligation for which is not expressly assumed or
agreed to be assumed by Buyer; or (3) any claim of any finder or
broker claiming to have been engaged by Seller or owed
compensation by Seller as a result of the transactions
contemplated in this Agreement.
10.2 Buyer agrees to indemnify Seller against all claims,
losses, expenses, obligations, damages and liabilities
(including, without limitation, costs and expenses of litigation
and attorneys' fees), except for items as to which
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proration has been waived pursuant to Section 1.4.1, occurring or
arising from the following: (1) any breach of any representation
or warranty or failure to do and perform any covenant or
agreement of Buyer contained in this Agreement; (2) any
obligation, debt or liability of Buyer or any claim based upon
any other occurrence arising from the operation of the Assets
anywhere, or from the operation of Buyer's entire business
anywhere, after the Closing, the obligation for which is not
expressly assumed or agreed to be assumed by Seller; or (3) any
claim of any finder or broker claiming to have been engaged by
Buyer or owed compensation by Buyer as a result of this
transaction.
10.3 Within a reasonable time after receipt of notification
of a claim, the indemnified party shall notify the indemnifying
party of any claim or demand which the indemnified party has
determined has given rise to a right of indemnification. Such
notice shall specify the agreement, representation or warranty
with respect to which the claim is made, the facts giving rise to
the claim, the alleged basis for the claim, and the amount (to
the extent then determinable) of liability for which indemnity is
asserted. Failure to give the foregoing notice shall not be
deemed a waiver of any claim or a bar to the assertion of such
claim unless and to the extent an indemnifying party is able to
establish damage or prejudice arising from the delay, in which
case such failure shall be a waiver and bar only to the extent of
such damage or prejudice. In the event any action, suit or
proceeding is brought against the indemnified party with respect
to which it may make a claim for indemnification, the
indemnifying party shall assume the defense of such action, suit
or proceeding and shall hire attorneys and other professionals
reasonably acceptable to the indemnified party. The defense
shall include all settlement negotiations and arbitration, trial,
appeal or other proceedings which indemnifying party's counsel
shall. deem appropriate, all of which shall be at the discretion
of and conducted by the indemnifying party. The indemnified
party shall have the right to be represented by advisory counsel
and accountants, at its expense, and shall be kept informed of
such action, suit or proceeding at reasonable times at all stages
thereof, whether or not so represented. The parties agree to
make available to each other, their counsel and accountants all
information and documents reasonably available to them which
relate to such proceedings or litigation, and the parties further
agree to render to each other such assistance as they may
reasonably require of each other in order to ensure the proper
and adequate defense of any such action, suit or proceeding.
Each party shall promptly notify the other party of any audit or
examination of its books and records undertaken by federal or
state tax authorities and the results of any such audit or
examination, if such audit or examination is reasonably expected
to impact the other party.
10.4 In the event that any party does not provide
indemnification as required by the terms of this Article 10, and
an indemnified party shall pay or suffer a loss
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due to an indemnified liability, the party or parties failing to
provide indemnification shall pay all expenses suffered by the
indemnified party including legal expenses of compelling the
indemnifying party or parties to provide indemnification to so
provide.
If any party brings a legal action to compel an
indemnification and loses, the losing party or parties shall pay
all reasonable costs of litigation and the legal expenses of the
defendant in that action.
Provided further, if any indemnified party shall pay or
suffer a loss of assets due to an indemnified liability, then
interest on any such amount shall accrue and be paid by the
indemnifying party or parties to the indemnified party or parties
from time to time, on demand, at the prime rate of interest (or
such other reference or base rate, as applicable) of the LaSalle
National Bank of Chicago, plus 2%, per annum, computed from the
date of such payment by the indemnified party to and including
the date upon which such indemnified party is reimbursed for such
payment.
10.5 The indemnity agreements contained in this Section 10 and in
other provisions of this Agreement shall not apply to the extent any
otherwise indemnifiable loss is covered by valid and collectible
insurance.
11. FINDERS. Seller and Buyer represent and warrant that they have not
dealt with any finder or broker, they have not had communications with any
individual acting in such capacity with regard to these transactions, and
they are not in any way obligated to compensate any such person.
12. MISCELLANEOUS.
12.1 This Agreement may be amended or modified by, and only by, a
written document executed by all of the parties.
12.2 The titles of the sections of this Agreement are for convenience
of reference only and are not to be considered in construing this
Agreement.
12.3 This Agreement and any documents specifically referred to
constitute the entire understanding between the parties with respect
to the subject matter, superseding all negotiations, prior discussions
and preliminary agreements. This Agreement may be executed in any
number of counterparts.
12.4 The representations and warranties by the parties shall survive
the Closing for a period of two years. All covenants and agreements
shall also survive the Closing unless they expire by their terms on or
before Closing.
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12.5 It is expressly understood and agreed that Buyer and Seller or
their respective officers or agents have not made any warranty or
agreement, express or implied, except as are expressly provided, as to
the tax consequences of this transaction or the tax consequences of
any transaction pursuant to or arising out of this Agreement.
12.6 Other than to a subsidiary or affiliate of Buyer, this Agreement
may not be assigned without the prior written consent of the other
party. This Agreement will be binding upon and inure to the benefit of
the parties, their successors or permitted assigns, and the parties
agree for themselves, their successors or permitted assigns, to
execute any instrument and to perform any acts which may be necessary
or proper to carry out the purposes of this Agreement. Any assignment
of this Agreement to a subsidiary or affiliate of Buyer shall not
relieve Buyer of its obligations under this Agreement.
12.7 The Exhibits to this Agreement shall be as of the Closing Date
unless otherwise stated, but Seller shall provide Buyer with the
certification provided for in Section 6.2.
12.8 This Agreement shall be construed in accordance with the laws of
the State of Texas. Any suit to enforce or construe this Agreement
shall be filed in an appropriate state or federal court in Dallas
County, Texas.
12.9 The parties acknowledge that one or more of the principals of
Seller is a licensed real estate broker in the State of Texas.
12.10 As used in this Agreement, the terms "affiliate of" or
"affiliated with," when used with respect to an entity, refer to
relationship with the entity by blood or marriage within the third
civil degree of relationship, or a business, partnership, or firm in
which the entity is an officer, director, shareholder, employee, or
consultant or which is more than 10% owned or controlled by the entity
(or which owns or controls the entity).
12.11 All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if
delivered in person or by electronic facsimile with receipt
acknowledged and copies sent by mail as provided below to the
respective persons named below or if mailed by certified or registered
mail, postage prepaid, return receipt requested:
If to Seller:
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Xxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxx
SRM Investments, Inc.
0000 Xxxxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
(Phone: 000-000-0000)
(Fax: 000-000-0000)
With a copy to:
P. Xxxxxxx Xxxx, Esq.
Xxxxxxxxxxx & Price, L.L.P.
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
(Phone: 000-000-0000)
(Fax: 000-000-0000)
If to Buyer:
Xxxxx X. Xxxxxxx
Xxxx X. Xxxxx
Universal Outdoor, Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
(Phone: 000-000-0000)
(Fax: 000-000-0000)
Any party may change the address to which notification is to be
given by notice to all other parties given in the manner specified in
this Section.
12.12 The parties acknowledge that this Agreement has been executed
prior to preparation of some or all of the Exhibits to this Agreement,
which are to be prepared by Seller and furnished to Buyer for Buyer's
review. The obligation of Buyer to close and pay the remainder of the
Purchase Price specified in Sections 1.4(b) and 1.4(c) is subject to
Buyer's acceptance of the Exhibits, which will not be unreasonably
withheld.
IN WITNESS WHEREOF, all of the parties hereto have executed and delivered
this Agreement as of the day and year first above written.
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BUYER:
UNIVERSAL OUTDOOR, INC.
By:
------------------------------
Its:
------------------------------
SELLER:
SRM INVESTMENTS, INC., D/B/A THE CHASE COMPANY
By:
------------------------------
Its:
------------------------------
-----------------------------------
Xxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxxx
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INDEX TO EXHIBITS
-----------------
1.1 Market
1.3.1 List of Real Property and Leases
1.3.2 List of Sign Structures
1.3.3 List of Advertising Contracts
1.3.4 List of Contract Rights
1.3.5 List of Unbuilt Sign Structures
1.3.6 List of Permits
1.3.8 List of Telephone Numbers
1.3.11 Retained Accounts Receivable
1.3.11A List of Accounts Receivable
1.3.11B Retained Accounts Receivable
1.4(b) Seller's Wire Instructions
1.4(c) Escrow Agreement
1.6 Asset Allocation
1.7 Noncompetition, Nonsolicitation and Nondisclosure Agreement
2.2 Exceptions to Permit Warranty
2.3 June 30, 1996 Chase Financial Statements
2.4 Adverse Changes
2.5.3 Oral or Written Contracts
2.10 Encumbrances
2.11 Repair Schedule
2.13.4 List of Employees
2.15 Employee Benefit Plans
2.17 Subleases
2.18 Description of Barter Transactions
2.26 Third-Party Rights to Acquire Assets
2.27 Claims Filed Against Seller
4.1.3 Non-Agency Advertising Commissions
4.1.4 Assumed Promissory Notes
4.1.5 Assumed Accounts Payable
6.1 Form of Seller's Legal Opinion
7.1 Form of Buyer's Legal Opinion
NONCOMPETITION, NONSOLICITATION
AND NONDISCLOSURE AGREEMENT
THIS AGREEMENT, made and entered into as of this _____ day of __________,
1996 by and among SRM Investments, Inc., d/b/a The Chase Company, a Texas
corporation ("Chase"), Xxxxx Xxxxx ("Xxxxx") and Xxxxxxx Xxxxxxxx ("Xxxxxxxx")
(Xxxxx, Xxxxx and Xxxxxxxx are collectively referred to as "Seller") and
UNIVERSAL OUTDOOR, INC., an Illinois corporation, ("Buyer").
W I T N E S S E T H
In consideration of the purchase by Buyer of certain Assets from Seller and
the benefits of such purchase inuring to Seller pursuant to the Asset Purchase
Agreement, and in reliance upon the undertaking of Seller to enter into this
Noncompetition, Nonsolicitation and Nondisclosure Agreement, Seller and Buyer
agree as follows:
1. DEFINITIONS AND INTERPRETATION.
1.1 DEFINITIONS. In this Noncompetition, Nonsolicitation and
Nondisclosure Agreement ("Agreement") the words and expressions defined
below shall have the meanings assigned to them (unless the context
otherwise requires):
(a) "DEFINED TERMS": Unless otherwise defined, the terms used
in this Agreement shall have the same meanings as those used in the
Asset Purchase Agreement.
(b) "AFFILIATE": means any person related to Skorburg or Xxxxx
by blood or marriage within the third civil degree of relationship or
a business, partnership or firm in which Seller is an officer,
director, shareholder, employee or consultant or which is more than
10% owned or controlled or directed by Seller (or which owns or
controls Seller).
PRONOUNS. Unless the context otherwise requires, words importing
the singular only shall include the plural and vice versa, words importing
the masculine only shall include the feminine gender or neuter and words
importing natural persons shall also include corporations, unincorporated
associations and partnerships.
EXHIBITS. Any and all Exhibits attached or delivered pursuant to
this Agreement or the Asset Purchase Agreement, shall be deemed
incorporated by this reference and shall be construed and have the same
force and effect as if expressly set out in the body of this Agreement.
2. NONCOMPETITION AND OTHER RESTRICTIVE COVENANTS.
For and in consideration of the purchase of certain Assets of Seller, and
other good and valuable consideration, the receipt and sufficiency of which is
acknowledged and expressed, Seller agrees that:
(a) With regard to the rights to operate outdoor advertising
displays at the locations being purchased by Buyer in the Asset
Purchase Agreement, the parties agree that setting a definite term to
protect the legitimate expectations of Buyer is difficult because of
the long-term nature of the Leases and Permits being purchased and the
ongoing uncertainty of the duration of any Lease renewal or
extensions. Therefore, it is the express intention and agreement of
the parties that the duration of the Seller's agreement not to compete
for Leases or Permits or renewals of Leases or Permits or otherwise
interfere with Buyer's rights to operate the signs at the locations
where the signs are now located should extend as long as is necessary
to protect the value to Buyer of the Assets purchased. The parties
specifically agree that the term of twenty (20) years from the date of
execution is a reasonable restriction on Seller's competition for
Leases and Permits because it allows two (2) standard ten (10) year
extensions of those Leases which are currently in need of renewal.
(b) During the ten (10) year period commencing with the Closing
Date, Seller and any Affiliate will afford Buyer a right of first
refusal with respect to any sale by Seller of any outdoor advertising
Lease, Sign, or Permit within the Market.
(c) Seller shall not solicit any employee, independent
contractor or other person currently providing services to Seller to
terminate or refuse such services to Buyer within 5 years after the
Closing Date unless such employee, independent contractor or other
person has been terminated or is no longer doing business with Buyer.
(d) Except to the extent Seller is required by any Court order
to disclose said information or are otherwise required by law to
disclose said information, Seller agrees to keep secret and to
maintain the secrecy of all information pertaining to the Assets and
further agrees that Seller shall not disclose such information to any
third party for any purpose, without the express written permission of
Buyer.
3. REMEDIES.
Seller expressly further acknowledges and agrees that the period of
restriction and the territory provided in this Agreement are necessary to
protect Buyer and its successors and assigns in the use and enjoyment of the
Assets purchased by Buyer. Seller agrees that damages cannot adequately
compensate Buyer in the event of a violation of any of the above restrictive
covenants, and that injunctive relief shall be essential for the protection of
Buyer, its successors and assigns. Accordingly, Seller agrees and consents
that, in the event of a violation or breach of any of said restrictive
covenants,
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Buyer shall be entitled to obtain injunctive relief against Seller but upon due
notice, in addition to such other relief as may be available at law or in
equity. Obtainment of such injunction by Buyer shall not be considered an
election of remedies or a waiver of any right to assert any other remedies
available at law or in equity. To the extent any provision hereof is deemed
unenforceable by virtue of its scope in terms of territory, business activities
or length of time, but may be made enforceable by limitations thereon, Seller
agrees that such reductions or limitations may be made so that the same shall be
enforceable to the fullest extent permissible under the laws and public policies
applied in such jurisdiction in which enforcement is sought.
In the event Buyer obtains a final judgment or arbitration award against
Seller or a settlement is reached between the parties to this Agreement, as a
result of Seller's breach of the provisions of this Agreement, in addition to
any other remedies provided herein, Buyer may, in addition to such judgment,
award or settlement obtain its reasonable costs of enforcement of this
Agreement, including all legal expenses. Final judgment means a judgment for
which no appeal has been filed despite the expiration of the time allowed
therefor under applicable law, or as to which all available appeals have been
exhausted.
4. PROCEDURE FOR NOTICES.
Any notice or demand which may be given under this Agreement shall be in
writing and shall be served by personal delivery or by Federal Express or
similar agency or by sending the same by first class prepaid registered or
certified mail, return receipt requested, addressed to the party to be served at
the address shown in the Asset Purchase Agreement or such other address as any
party hereto may from time to time notify the other for this purpose. Any
notice sent by first class prepaid registered or certified mail shall be deemed
to have been served on the third business day next following the date an which
it was properly posted. In proving service of any notice which is mailed it
shall be sufficient to prove that the envelope containing the same was properly
addressed and was delivered or sent by first class prepaid registered or
certified mail as aforesaid.
IN WITNESS WHEREOF, each of the parties hereto or their duly authorized
representatives have executed this Noncompetition, Nonsolicitation and
Nondisclosure Agreement, all as of the day and year first above written.
UNIVERSAL OUTDOOR, INC.,
An Illinois Corporation
By:
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Its:
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SRM INVESTMENTS, INC., D/B/A THE CHASE COMPANY,
A Texas Corporation
By:
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Its:
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Xxxxx X. Xxxxx
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Xxxxxxx X. Xxxxxxxx
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