<PAGE>
United States
Securities and Exchange Commission
Washington, D.C. 20549
-------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 7, 1996
ADAMS OUTDOOR ADVERTISING LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Commission File No. 333-3338
MINNESOTA 41-1540241
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
-------------------
ADAMS OUTDOOR ADVERTISING, INC.
(Exact name of registrant as specified in its charter)
Commission File No. 333-3338-01
MINNESOTA 41-154024
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1380 West Paces Ferry Road, N.W.
Suite 170, South Wing
Atlanta, GA 30327
(Address of principal executive offices)
(404) 233-1366
(Registrant's telephone number, including area code)
<PAGE>
Item 2. Acquisition or Disposition of Assets
Pursuant to a Purchase Agreement (the "Purchase Agreement") dated October
25, 1996 with James McAndrew ("McAndrew") and Matthew Outdoor Advertising
Acquisition Co., L.P. ("Matthew"), as amended on November 7, 1996, Adams Outdoor
Advertising Limited Partnership completed the acquisition (the "Pocono
Acquisition") an outdoor advertising business from McAndrew and Matthew in and
around Pocono, Pennsylvania (the "Pocono Business") for approximately $8.2
million in cash. Adams Outdoor acquired the Pocono Business by purchasing all of
its outstanding shares of PA Outdoor Advertising, Inc., a Pennsylvania
corporation from McAndrew and certain assets related to the Pocono Business from
Matthew. Through the Pocono Acquisition, Adams Outdoor acquired approximately
750 display faces in the Northeast Pennsylvania area. Such properties were
previously used for outdoor advertisements in the outdoor advertising industry
and Adams Outdoor intends to continue to use such properties for the same
purposes.
The purchase price of the Pocono Acquisition was determined by negotiation
with the sellers and was based on an evaluation by Adams Outdoor of the probable
cash flow to be generated by the acquired assets, the cost of duplicating or
replacing the acquired assets and other similar factors. Adams Outdoor financed
the purchase price paid in the Pocono Acquisition and certain fees and expenses
associated with the Pocono Acquisition from the proceeds of borrowing under its
existing credit facility agented by the Canadian Imperial Bank of Commerce (the
"Credit Facility").
Pursuant to an Asset Purchase Agreement (the "Asset Purchase Agreement")
dated November 18, 1996 with Morgan Newsome Monroe, Inc., a South Carolina
corporation ("MNM") and its principal shareholders, on December 2, 1996, Adams
Outdoor completed the acquisition (the "Newsome Acquisition") of substantially
all of assets of MNM used in connection with the outdoor advertising business
conducted under the name Newsome Outdoor Advertising for approximately $13.35
million in cash. Through the Newsome Acquisition, Adams Outdoor acquired
approximately 2,150 display faces in and around Charleston, Florence, Laurens
and Orangeburg, South Carolina. Such properties were previously used for outdoor
advertisements in the outdoor advertising industry and Adams Outdoor intend to
continue to use such properties for the same purpose.
The purchase price of the Newsome Acquisition was determined by negotiation
with the seller and was based on an evaluation by Adams Outdoor of the probable
cash flow to be generated by the acquired assets, the cost of duplicating or
replacing the acquired assets and other similar factors. In connection with the
Newsome Acquisition, the Credit Facility was amended and restated (as so amended
and restated, the "Amended Credit Facility") to provide for a commitment of $35
million thereunder. Adams Outdoor financed the purchase price paid in the
Newsome Acquisition and certain fees and expenses associated
<PAGE>
with the Newsome Acquisition from the proceeds of borrowings under the Amended
Credit Facility.
Item 7. Financial Statements and Exhibits
(a)(4); (b)(2) It is currently impracticable to provide the required
financial statements and pro forma financial information for the transaction
described in Item 2 above at the time of this Report on Form 8-K. The required
financial statements and pro forma financial information shall be filed under
cover of a Form 8-K as soon as is practicable, but not later than 60 days of the
filing of this report on Form 8-K.
(c) Exhibits
Exhibit Number Description
-------------- -----------
4.5 Amended and Restated Credit Agreement dated as of
December 2, 1996 among Adams Outdoor Advertising
Limited Partnership
10.6 Purchase Agreement among Adams Outdoor Advertising
Limited Partnership and James P. McAndrew and Matthew
Outdoor Advertising Acquisition Co., L.P. dated as of
October 25, 1996
10.7 First Amendment to Purchase Agreement dated as of
November 7, 1996 among Adams Outdoor Advertising
Limited Partnership, James P. McAndrew and Matthew
Outdoor Advertising Acquisition Co., L.P.
10.8 Asset Purchase Agreement by and between Morgan Newsome
Monroe, Inc., Adams Outdoor Advertising Limited
Partnership, Phillip J. Newsome, Rodney R. Monroe and
John F. Morgan dated as of November 18, 1996.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their behalf by the
undersigned hereunto duly authorized.
Dated: December 13, 1996 ADAMS OUTDOOR ADVERTISING LIMITED PARTNERSHIP
By: Adams Outdoor Advertising Inc., its
general partner
/s/ J. Kevin Gleason
By: _________________________________________
J. Kevin Gleason, Chief Executive Officer
ADAMS OUTDOOR ADVERTISING, INC.
/s/ J. Kevin Gleason
By: _________________________________________
J. Kevin Gleason, Chief Executive Officer
3
<PAGE>
EXECUTION COPY
================================================================================
AMENDED AND RESTATED
CREDIT AGREEMENT
among
ADAMS OUTDOOR ADVERTISING LIMITED PARTNERSHIP,
The Several Lenders
from Time to Time Parties Hereto
and
CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY
as Agent
Dated as of December 2, 1996
================================================================================
<PAGE>
TABLE OF CONTENTS
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Page
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<CAPTION>
<S> <C> <C>
SECTION 1. DEFINITIONS 1
1.1 Defined Terms................................... 1
1.2 Other Definitional Provisions................... 16
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS............... 16
2.1 Revolving Credit Commitments.................... 16
2.2 Procedure for Revolving Credit Borrowing........ 17
2.3 Commitment Fee.................................. 17
2.4 Termination or Reduction of Commitments......... 17
2.5 Repayment of Revolving Credit Loans; Evidence of
Debt.......................................... 18
2.6 Optional Prepayments; Mandatory Prepayments..... 19
2.7 Conversion and Continuation Options............. 20
2.8 Minimum Amounts and Maximum Number of Tranches.. 20
2.9 Interest Rates and Payment Dates................ 21
2.10 Computation of Interest and Fees............... 21
2.11 Inability to Determine Interest Rate........... 22
2.12 Pro Rata Treatment and Payments................ 22
2.13 Illegality..................................... 23
2.14 Requirements of Law............................ 23
2.15 Taxes.......................................... 25
2.16 Indemnity...................................... 26
SECTION 3. REPRESENTATIONS AND WARRANTIES................ 27
3.1 Financial Condition............................. 27
3.2 No Change....................................... 28
3.3 Existence; Compliance with Law.................. 28
3.4 Power; Authorization; Enforceable Obligations... 28
3.5 No Legal Bar.................................... 28
3.6 No Material Litigation.......................... 29
3.7 No Default...................................... 29
3.8 Ownership of Property; Liens.................... 29
3.9 Intellectual Property........................... 29
3.10 No Burdensome Restrictions..................... 29
3.11 Taxes.......................................... 30
3.12 Federal Regulations............................ 30
3.13 ERISA.......................................... 30
3.14 Investment Company Act; Other Regulations...... 31
3.15 Subsidiaries................................... 31
3.16 Purpose of Revolving Credit Loans.............. 31
3.17 Environmental Matters.......................... 31
3.18 Regulation H................................... 32
3.19 Accuracy and Completeness of Information....... 33
3.20 Solvency....................................... 33
3.21 Leaseholds, Permits, etc....................... 33
3.22 Signs.......................................... 33
3.23 Ownership of Borrower and Managing General
Partner....................................... 34
3.24 Real Property.................................. 34
3.25 Phantom Stock Agreements....................... 34
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 4. CONDITIONS PRECEDENT.......................... 34
4.1 Conditions to Effectiveness...................... 34
4.2 Conditions to Each Revolving Credit Loan......... 35
SECTION 5. AFFIRMATIVE COVENANTS.......................... 36
5.1 Financial Statements............................. 36
5.2 Certificates; Other Information.................. 37
5.3 Payment of Obligations........................... 39
5.4 Maintenance of Existence......................... 39
5.5 Maintenance of Property; Insurance............... 39
5.6 Inspection of Property; Books and Records;
Discussions.................................... 39
5.7 Notices.......................................... 39
5.8 Environmental Laws............................... 40
5.9 Environmental Reports............................ 41
5.10 Further Assurances.............................. 41
5.11 Additional Collateral........................... 41
5.12 Key Main Life Insurance......................... 43
5.13 Phase I Environmental Reports................... 43
SECTION 6. NEGATIVE COVENANTS............................. 43
6.1 Financial Condition Covenants.................... 44
6.2 Limitation on Indebtedness....................... 45
6.3 Limitation on Liens.............................. 45
6.4 Limitation on Guarantee Obligations.............. 47
6.5 Limitation on Fundamental Changes................ 47
6.6 Limitation on Sale of Assets..................... 47
6.7 Limitation on Dividends.......................... 48
6.8 Limitation on Investments, Loans and Advances.... 48
6.9 Limitation on Optional Payments and Modifications
of Debt Instruments............................ 49
6.10 Limitation on Transactions with Affiliates...... 49
6.11 Limitation on Changes in Fiscal Year............ 50
6.12 Limitation on Negative Pledge Clauses........... 50
6.13 Limitation on Lines of Business................. 50
6.14 Limitation on Deferred Management Compensation.. 50
6.15 Phantom Stock Agreements........................ 51
6.16 Limitation on Non-Acquisition Capital
Expenditures.................................. 51
SECTION 7. EVENTS OF DEFAULT.............................. 51
SECTION 8. THE AGENT...................................... 54
8.1 Appointment...................................... 54
8.2 Delegation of Duties............................. 55
8.3 Exculpatory Provisions........................... 55
8.4 Reliance by Agent................................ 55
8.5 Notice of Default................................ 56
8.6 Non-Reliance on Agent and Other Lenders.......... 56
8.7 Indemnification.................................. 57
8.8 Agent in Its Individual Capacity................. 57
8.9 Successor Agent.................................. 57
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
SECTION 9. MISCELLANEOUS................................. 58
9.1 Amendments and Waivers.......................... 58
9.2 Notices......................................... 58
9.3 No Waiver; Cumulative Remedies.................. 59
9.4 Survival of Representations and Warranties...... 59
9.5 Payment of Expenses and Taxes................... 59
9.6 Successors and Assigns; Participations and
Assignments
9.7 Adjustments; Set-off............................ 63
9.8 Counterparts.................................... 63
9.9 Severability.................................... 64
9.10 Integration.................................... 64
9.11 GOVERNING LAW.................................. 64
9.12 Submission To Jurisdiction; Waivers............ 64
9.13 Acknowledgements............................... 65
9.14 WAIVERS OF JURY TRIAL.......................... 65
</TABLE>
EXHIBITS
A - Form of Revolving Credit Note
B - Form of Global Consent
C - Form of Compliance Certificate
D - Form of Mortgage Supplement
E - Form of Opinion of Counsel to Borrower
F - Form of Assignment and Acceptance
SCHEDULES
1.1 Addresses for Notices, Commitments
3.6 Litigation
3.17 Environmental Matters
3.21 Leaseholds, Permits, etc.
3.23 Ownership
6.2 Indebtedness
6.3 Liens
6.4 Guarantee Obligations
6.8 Newsome Acquisition
-iii-
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December 2, 1996,
among Adams Outdoor Advertising Limited Partnership, a Minnesota limited
partnership (the "Borrower"), the several banks and other financial institutions
from time to time parties to this Agreement (the "Lenders") and Canadian
Imperial Bank of Commerce, New York Agency, as agent for the Lenders hereunder.
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders and the Agent are parties to the
Credit Agreement dated as of March 12, 1996 (as amended, the "Original Credit
Agreement"), and the Borrower has requested that the Original Credit Agreement
be amended and restated to increase the amount of the revolving credit facility
provided for therein from $15,000,000 to $35,000,000 and to make certain the
modifications thereto; and
WHEREAS, the Lenders are agreeable to the Borrower's request and to
amending and restating the Original Credit Agreement on the terms and conditions
set forth herein to effect such request and modifications;
NOW THEREFORE, the parties hereto agree that on the Closing Date (as
hereinafter defined) the Original Credit Agreement shall be amended and restated
to read in its entirety as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
"ABR": on any particular date, a rate of interest per annum equal to
the higher of:
(a) the rate of interest most recently announced by CIBC-Bank at its
Domestic Lending Office as its prime rate (which rate is not
necessarily intended to be the lowest rate of interest charged by
CIBC-Bank in connection with extensions of credit); and
(b) the Federal Funds Rate for such date plus .50%.
"ABR Loans": Loans the rate of interest applicable to which is based
upon the ABR.
"Adams": Mr. Stephen Adams, the chairman of the Managing General
Partner.
"Adams Sons": the collective reference to Mr. Stephen M. Adams, Mr.
Mark C. Adams, Mr. Scott L. Adams and Mr. Kent R. Adams.
<PAGE>
"Affiliate": as to any Person, any other Person (other than a
Restricted Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For purposes
of this definition, "control" of a Person means the power, directly or
indirectly, to direct or cause the direction of the management and policies
of such Person, whether by contract or otherwise.
"Agent": Canadian Imperial Bank of Commerce, New York Agency,
together with its affiliates, as the arranger of the Commitments and as the
agent for the Lenders under this Agreement and the other Loan Documents.
"Agreement": this Amended and Restated Credit Agreement, as amended,
supplemented or otherwise modified from time to time.
"Applicable Margin": for each Type of Loan, if the Leverage Ratio at
any time of determination:
(i) is greater than or equal to 5.5 to 1.0, the rate per annum set forth
under the relevant column heading below:
ABR Loans Eurodollar Loans
--------- ----------------
2.000% 3.000%
(ii) is greater than or equal to 5.0 to 1.0 but less than 5.5 to 1.0, the
rate per annum set forth under the relevant column heading below:
ABR Loans Eurodollar Loans
--------- ----------------
1.500% 2.500%;
(iii) is greater than or equal to 4.5 to 1.0 but less than 5.0 to 1.0,
the rate per annum set forth under the relevant column heading below:
ABR Loans Eurodollar Loans
--------- ----------------
1.250% 2.250%;
(iv) is greater than or equal to 4.0 to 1.0 but less than 4.5 to 1.0, the
rate per annum set forth under the relevant column heading below:
ABR Loans Eurodollar Loans
--------- ----------------
1.000% 2.000%;
or (v) is less than 4.0 to 1.0, the rate per annum set forth under the
relevant column heading below:
<PAGE>
3
ABR Loans Eurodollar Loans
--------- ----------------
0.750% 1.750%
Any change in the Applicable Margin required hereunder shall be deemed to
occur on the date which is five Business Days after each date the Borrower
delivers its financial statements required by subsection 5.1(a) or 5.1(b),
as the case may be, and the Compliance Certificate required by subsection
5.2(c) substantially in the form of Exhibit C; provided, that if the
Borrower fails to deliver such financial statements and Compliance
Certificate on or before the date such statements or Compliance Certificate
are required to be delivered pursuant to subsection 5.1(a) or 5.1(b), as
the case may be, and subsection 5.2(c), the Leverage Ratio, until the date
which is five Business Days after such financial statements and Compliance
Certificate are so delivered, shall, for purposes of determining the
Applicable Margin, be deemed to be greater than or equal to 5.5 to 1.0 and,
thereafter, shall be the Leverage Ratio actually set forth on such
Compliance Certificate.
"Assignee": as defined in subsection 9.6(c).
"Available Commitment": as to any Lender at any time, an amount equal
to the excess, if any, of (a) the amount of such Lender's Commitment over
(b) the aggregate principal amount of all Loans made by such Lender then
outstanding.
"Borrowing Date": any Business Day specified in a notice pursuant to
subsection 2.2 or 2.6 as a date on which the Borrower requests the Lenders
to make Loans hereunder.
"Business": as defined in subsection 3.17.
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law
to close.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"Cash Equivalents": (a) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured by
the United States Government or any agency thereof, (b) certificates of
deposit and eurodollar time deposits with maturities of one year or less
from the date of acquisition and overnight bank deposits of any Lender or
of any commercial bank having capital and surplus in excess of
$500,000,000, (c) repurchase
<PAGE>
4
obligations of any Lender or of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more
than 30 days with respect to securities issued or fully guaranteed or
insured by the United States Government, (d) commercial paper of a domestic
issuer rated at least A-2 by Standard and Poor's Ratings Service ("S&P") or
P-2 by Moody's Investors Service, Inc. ("Moody's"), (e) securities with
maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by
any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of
which state, commonwealth, territory, political subdivision, taxing
authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's, (f) securities with maturities of one year or less
from the date of acquisition backed by standby letters of credit issued by
any Lender or any commercial bank satisfying the requirements of clause (b)
of this definition or (g) shares of money market mutual or similar funds
which invest exclusively in assets satisfying the requirements of clauses
(a) through (f) of this definition.
"Change of Control": any action or event whereby Adams ceases to
directly or indirectly own (a) at least 50.1% of the voting interest in the
Managing General Partner, (b) at least 50.1% of the right to participate in
the selection of the governing body, partners, managers or others that will
control the management and policies of Borrower and (c) at least 50.1% of
the economic interest in the Borrower.
"CIBC-Bank": Canadian Imperial Bank of Commerce, a Canadian Chartered
bank, or one or more of its agencies, branches or affiliates in its or
their respective capacity or capacities, as the case may be, as a Lender or
Lenders hereunder.
"Closing Date": the date on which the conditions precedent set forth
in subsection 4.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": with respect to a Loan Party, the assets of such Loan
Party, now owned or hereinafter acquired, upon which a Lien is purported to
be created by any Security Document to which such Loan Party is a party.
"Commitment": as to any Lender, the obligation of such Lender to make
Revolving Credit Loans to the Borrower hereunder in an aggregate principal
amount at any one time outstanding not to exceed the amount set forth
opposite such Lender's name on Schedule 1.1, as such amount may be reduced
<PAGE>
5
from time to time in accordance with the provisions of this Agreement.
"Commitment Percentage": as to any Lender at any time, the percentage
which such Lender's Commitment then constitutes of the aggregate
Commitments (or, at any time after the Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such
Lender's Revolving Credit Loans then outstanding constitutes of the
aggregate principal amount of the Revolving Credit Loans then outstanding).
"Commitment Period": the period from and including the date hereof to
but not including the Termination Date or such earlier date on which the
Commitments shall terminate as provided herein.
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of
Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
"Consolidated Working Capital": at any time, the excess, if any, of
the consolidated current assets of the Borrower and its Restricted
Subsidiaries over the consolidated current liabilities of the Borrower and
its Restricted Subsidiaries.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Debt Service": for any period, the sum of (a) the amount (which may
in no event be less than zero) determined by subtracting (x) the aggregate
amount of the Commitments scheduled to be in effect at the end of such
period from (y) the aggregate principal amount of the Revolving Credit
Loans outstanding at the beginning of such period and (b) total Interest
Expense for such period.
"Default": any of the events specified in Section 7, whether or not
any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Deferred Management Compensation": deferred compensation obligations
of the Borrower pursuant to the Phantom Stock Agreements.
"Dollars" and "$": dollars in lawful currency of the United States of
America.
<PAGE>
6
"Domestic Subsidiary": any Subsidiary of the Borrower organized under
the laws of any jurisdiction within the United States.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability
or standards of conduct concerning protection of human health or the
environment, as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
in Regulation D of such Board) maintained by a member bank of such System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum equal to the
rate at which CIBC-Bank is offered Dollar deposits at or about 10:00 A.M.,
New York City time, two Business Days prior to the beginning of such
Interest Period in the interbank eurodollar market where the eurodollar and
foreign currency and exchange operations in respect of its Eurodollar Loans
are then being conducted for delivery on the first day of such Interest
Period for the number of days comprised therein and in an amount comparable
to the amount of its Eurodollar Loan to be outstanding during such Interest
Period.
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
<PAGE>
7
"Event of Default": any of the events specified in Section 7,
provided that any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.
"Excess Cash Flow": for any period, Operating Cash Flow for such
period minus the sum of (a) Fixed Charges for such period, (b) capital
expenditures during such period for acquisitions permitted in accordance
with subsection 6.9 and (c) plus decreases in Consolidated Working Capital
(or less increases in Consolidated Working Capital) (d) plus reasonable
reserves established by the Borrower in accordance with GAAP; provided that
for purposes of this definition, the following items shall be excluded from
changes in Consolidated Working Capital: cash, Cash Equivalents, the
current portion of long-term Indebtedness and the principal balance of the
Revolving Credit Loans.
"FDIC": the Federal Deposit Insurance Corporation or any successor
thereto.
"Federal Funds Rate": for any particular date, an interest rate per
annum equal to the interest rate (rounded upward to the nearest 1/16th of
1%) offered in the interbank market to CIBC-Bank as the overnight Federal
Funds Rate at or about 10:00 A.M., New York City time, on such day (or, if
such day is not a Business Day, for the next preceding Business Day).
"Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"Fixed Charges": for any period, the sum of the following with
respect to the Borrower and its Restricted Subsidiaries: (i) Debt Service
for such period, (ii) lease payments during such period (to the extent not
deducted in determining consolidated net income for such period and not
constituting a capital expenditure during such period), (iii) non-
acquisition capital expenditures during such period, (iv) cash payments
during such period of Deferred Management Compensation (other than the
$2,000,000 payment permitted to be made by the Borrower on the date of the
Original Credit Agreement) and (v) tax distributions during such period.
"Fixed Charge Coverage": for any period, Operating Cash Flow for such
period divided by Fixed Charges for such period.
"Foreign Subsidiary": any Subsidiary of the Borrower organized under
the laws of any jurisdiction outside the United States of America.
<PAGE>
8
"GAAP": generally accepted accounting principles in the United States
of America consistent with those utilized in preparing the audited
financial statements referred to in subsection 3.1.
"Gleason": Mr. Kevin Gleason, a Limited Partner of the Borrower.
"Global Consent": the consent to be executed by each Loan Party other
than the Borrower, substantially in the form of Exhibit C hereto.
"Global Security Agreement": the agreement, substantially in the form
of Exhibit B to the Original Credit Agreement, executed and delivered by
each Loan Party pursuant to the Original Credit Agreement pursuant to which
Liens securing the Obligations have been created on all the issued and
outstanding Capital Stock of the Managing General Partner, the Borrower and
each Subsidiary of the Borrower and on all of the other assets of the
Borrower, as amended, supplemented or otherwise modified from time to time.
"Governmental Authority": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements
of instruments for
<PAGE>
9
deposit or collection in the ordinary course of business. The amount of
any Guarantee Obligation of any guaranteeing person shall be deemed to be
the lower of (a) an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Guarantee Obligation is
made and (b) the maximum amount for which such guaranteeing person may be
liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which
such guaranteeing person may be liable are not stated or determinable, in
which case the amount of such Guarantee Obligation shall be such
guaranteeing person's maximum reasonably anticipated liability in respect
thereof as determined by the Borrower in good faith.
"Indebtedness": of any Person at any date, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of
property or services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with customary
practices), (b) any other indebtedness of such Person which is evidenced by
a note, bond, debenture or similar instrument, (c) all obligations of such
Person under Financing Leases, (d) all obligations of such Person in
respect of acceptances issued or created for the account of such Person and
(e) all liabilities secured by any Lien on any property owned by such
Person even though such Person has not assumed or otherwise become liable
for the payment thereof.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Coverage Ratio": for any period, Operating Cash Flow for
such period divided by Interest Expense for such period.
"Interest Expense": the aggregate amount of interest paid or payable
during the relevant period by the Borrower and its Restricted Subsidiaries
in respect of Indebtedness (taking into account net amounts payable or
receivable during such period under interest rate swaps, caps, collars and
other hedging agreements), including any interest, fees and costs paid or
accrued under the Loan Documents (excluding closing costs and fees).
"Interest Payment Date": (a) as to any ABR Loan, the last day of each
March, June, September and December, (b) as to any Eurodollar Loan having
an Interest Period of three months or less, the last day of such Interest
Period, and (c) as to any Eurodollar Loan having an Interest Period
<PAGE>
10
longer than three months, each day which is three months, or a whole
multiple thereof, after the first day of such Interest Period and the last
day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(a) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three, six or, if agreed to by all Lenders,
twelve months thereafter, as selected by the Borrower in its notice of
borrowing or notice of conversion, as the case may be, given with
respect thereto; and
(b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three, six or, if agreed to by all Lenders, twelve
months thereafter, as selected by the Borrower by irrevocable notice
to the Agent not less than three Business Days prior to the last day
of the then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest Periods
are subject to the following:
(1) if any Interest Period pertaining to a Eurodollar Loan would
otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless
the result of such extension would be to carry such Interest Period
into another calendar month in which event such Interest Period shall
end on the immediately preceding Business Day;
(2) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date;
(3) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of a calendar month; and
(4) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Eurodollar Loan.
"Leverage Ratio": on any date, Total Debt on such date divided by
Operating Cash Flow for the then most recently
<PAGE>
11
ended period of four consecutive fiscal quarters for which the Borrower
shall have delivered financial statements to the Lenders pursuant to
subsection 5.1(a) or (b).
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement
and any Financing Lease having substantially the same economic effect as
any of the foregoing).
"Limited Partners": the collective reference to Adams, the Adams Sons
and Gleason.
"Loan Documents": this Agreement, the Revolving Credit Notes, the
Mortgages, the Mortgages, the Global Security Agreement and the Global
Consent.
"Loan Parties": the Borrower, the Managing General Partner, each
owner of shares of Capital Stock of the Managing General Partner, the
Limited Partners and each Subsidiary of the Borrower which is a party to a
Loan Document.
"Managing General Partner": Adams Outdoor Advertising, Inc., a
Minnesota corporation.
"Material Adverse Effect": a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) or
prospects of the Borrower and its Restricted Subsidiaries taken as a whole
or (b) the validity or enforceability of this or any of the other Loan
Documents or the rights or remedies of the Agent or the Lenders hereunder
or thereunder.
"Material Environmental Amount": an amount payable by the Borrower
and/or its Subsidiaries in excess of $500,000 for remedial costs,
compliance costs, compensatory damages, punitive damages, fines, penalties
or any combination thereof.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Mortgage": each of the Mortgages, substantially in the form of
Exhibit D to the Original Credit Agreement,
<PAGE>
12
executed and delivered by the Borrower pursuant to the Original Credit
Agreement, as amended, supplemented or otherwise modified from time to
time.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Net Proceeds": of any event of a type described in subsection
2.4(c), an amount equal to the gross proceeds thereof net of any and all
costs and expenses reasonably incurred by the Borrower or any Restricted
Subsidiary, as the case may be, in connection therewith, including, without
limitation, legal or brokerage fees, and any taxes payable or any taxes
that would have been payable by the Borrower had it been a C corporation,
with respect thereto.
"Non-Excluded Taxes": as defined in subsection 2.17.
"Operating Cash Flow": for any period, the sum of (a) consolidated
net income (excluding barter gains and losses and extraordinary, unusual
and non-recurring gains and losses (including, without limitation, net
gains or losses on disposals of property and equipment)) of the Borrower
and its Restricted Subsidiaries for such period plus (b) the sum of the
following to the extent deducted in determining such consolidated net
income: depreciation, amortization, interest expense, tax expense and any
other non-cash expense and Deferred Management Compensation (including,
without limitation, any Deferred Management Compensation paid on the
Closing Date); provided, however, that for purposes of this definition, any
acquisition or disposition by the Borrower or any Restricted Subsidiary of
assets constituting an operating business or of the stock of any Person
which shall occur during any period shall be deemed to have occurred on the
first day of such period, and Operating Cash Flow shall be computed on the
basis of such assumption.
"PA Outdoor, Inc.": a Pennsylvania corporation which is a Restricted
Subsidiary.
"Participant": as defined in subsection 9.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"Permitted Disposition": any sale or other disposition of property,
business or assets permitted by subsection 6.6(d).
"Permitted Holder": means Adams, his spouse and legal descendants and
trusts for the exclusive benefit of any of the foregoing persons.
<PAGE>
13
"Permitted Restricted Payments": Restricted Payments, as hereinafter
defined, made (a) subsequent to the date of delivery to the Lenders
pursuant to subsection 5.1(a) of the audited financial statements of the
Borrower for any fiscal year and prior to the last day of the fiscal year
immediately succeeding such fiscal year, (b) only if such the Leverage
Ratio as at the last day of such fiscal year (as reflected in such
financial statements) is at least 4.5 to 1.0 and (c) in an aggregate amount
for such fiscal year not in excess of the lesser of (i) the portion of
Excess Cash Flow for such fiscal year that is not required to be used to
reduce the Commitments pursuant to subsection 2.4(d) hereof and (ii)
$1,000,000.
"Person": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Phantom Stock Agreements": the agreements entered into, in writing,
between the Borrower and certain of its employees, and any comparable
subordinated incentive compensation agreements with its employees,
providing for incentive compensation on the basis of the increase in value
of the Borrower or a division or Restricted Subsidiary thereof.
"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Pro Forma Debt Service": for any period, the sum of (a) the amount
(which may in no event be less than zero) determined by subtracting the
amount of the Commitments scheduled to be in effect at the end of such
period from the aggregate principal amount of the Revolving Credit Loans
outstanding at the beginning of such period and (b) the aggregate amount of
Interest Expense reasonably expected to be incurred during such period
(taking into account all scheduled reductions in principal during such
period and, in the case of interest which is calculated on a floating
basis, assuming that the rate in effect at the beginning of such period
will remain in effect throughout such period).
"Properties": as defined in subsection 3.17.
"Register": as defined in subsection 9.6(d).
"Regulation U": Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
<PAGE>
14
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. (S)
2615.
"Required Lenders": at any time, Lenders the Commitment Percentages
of which aggregate more than 66-2/3%.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Restricted Payment": as defined in subsection 6.7.
"Responsible Officer": the chief executive officer and the president
of the Borrower or, with respect to financial matters, the chief financial
officer of the Borrower.
"Restricted Subsidiary": any subsidiary of the Borrower other than an
Unrestricted Subsidiary. Unless otherwise qualified, all references to a
"Restricted Subsidiary" or to "Restricted Subsidiaries" in this Agreement
shall refer to a Restricted Subsidiary or Restricted Subsidiaries of the
Borrower.
"Revolving Credit Commitment": as to any Lender, the obligation of
such Lender to make Revolving Credit Loans to the Borrower in an aggregate
principal amount at any one time outstanding not to exceed the amount set
forth under the heading "Revolving Credit Commitments" opposite such
Lender's name on Schedule 1.1, as such amount may be changed from time to
time pursuant to this Agreement.
"Revolving Credit Commitment Period": the period from and including
the date hereof to but not including the Termination Date or such earlier
date on which the Revolving Credit Commitments shall terminate as provided
herein.
"Revolving Credit Loans": as defined in subsection 2.1.
"Revolving Credit Note": as defined in subsection 2.5(e).
<PAGE>
15
"Security Documents": the collective reference to the Mortgages, the
Global Security Agreement, and all other security documents hereafter
delivered to the Agent granting a Lien on any asset or assets of any Person
to secure the obligations and liabilities of the Borrower hereunder and
under any of the other Loan Documents or to secure any guarantee of any
such obligations and liabilities.
"Senior Notes": the 10.75% Unsecured Senior Notes due 2006 of the
Borrower to be issued pursuant to the Indenture, dated March 12, 1996,
between the Borrower and United States Trust Company of New York, as
Trustee.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Subsidiary": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person.
"Tax Distributions": Distributions to the partners of the Borrower,
calculated to include income and gain in excess of any prior allocation of
loss and deduction, based on estimates of the amount of federal, state and
local income taxes that the Borrower would be required to pay with respect
to a fiscal year as if, for the applicable fiscal year, the Borrower were
treated as a C corporation incorporated under the laws of the State of
Minnesota rather than as a partnership; provided that (a) the aggregate
amount of such distributions in respect of any period does not exceed the
aggregate amount of income taxes that would have been payable by the
Borrower in respect of its operations for such period if the Borrower were
taxed as a C corporation and (b) such distributions are made only when and
to the extent that such partners are obligated to make estimated and final
tax payments in accordance with applicable law.
"Termination Date": December 31, 2001.
"Total Debt": Indebtedness of the Borrower and its Restricted
Subsidiaries plus Guarantee Obligations of the Borrower and its Restricted
Subsidiaries of Indebtedness of any other Person, all as determined on a
consolidated basis.
"Tranche": the collective reference to Eurodollar Loans the then
current Interest Periods with respect to all
<PAGE>
16
of which begin on the same date and end on the same later date (whether or
not such Eurodollar Loans shall originally have been made on the same day).
"Transferee": as defined in subsection 9.6(f).
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
"Unrestricted Subsidiary": Adams In-Store Advertising, LLC, a
Minnesota limited liability company, a Subsidiary of the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Notes or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in any Notes, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to the
Borrower and its Restricted Subsidiaries not defined in subsection 1.1 and
accounting terms partly defined in subsection 1.1, to the extent not defined,
shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Lender severally agrees to make revolving credit loans
("Revolving Credit Loans") to the Borrower from time to time during the
Commitment Period in an aggregate principal amount at any one time outstanding
not to exceed the amount of such Lender's Commitment. During the Commitment
Period the Borrower may use the Commitments by borrowing, prepaying the
Revolving Credit Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as determined
by the Borrower and notified to the Agent in accordance with subsections 2.2 and
2.7, provided that no Revolving Credit Loan shall be made as a Eurodollar Loan
after the day that is one month prior to the Termination Date.
<PAGE>
17
2.2 Procedure for Revolving Credit Borrowing. The Borrower may
borrow under the Commitments during the Commitment Period on any Business Day,
provided that the Borrower shall give the Agent irrevocable notice (which notice
must be received by the Agent prior to 10:00 A.M., New York City time, (a) three
Business Days prior to the requested Borrowing Date, if all or any part of the
requested Revolving Credit Loans are to be initially Eurodollar Loans, or (b)
one Business Day prior to the requested Borrowing Date, otherwise), specifying
(i) the amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether
the borrowing is to be of Eurodollar Loans, ABR Loans or a combination thereof
and (iv) if the borrowing is to be entirely or partly of Eurodollar Loans, the
amounts of each such Type of Loan and the lengths of the initial Interest
Periods therefor. Each borrowing under the Commitments shall be in an amount
equal to (x) in the case of ABR Loans, $100,000 or a whole multiple thereof (or,
if the then Available Commitments are less than $100,000, such lesser amount)
and (y) in the case of Eurodollar Loans, $1,000,000 or a whole multiple of
$100,000 in excess thereof. Upon receipt of any such notice from the Borrower,
the Agent shall promptly notify each Lender thereof. Each Lender will make the
amount of its pro rata share of each borrowing available to the Agent for the
account of the Borrower at the office of the Agent specified in subsection 10.2
prior to 11:00 A.M., New York City time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Agent. Such borrowing will then
be made available to the Borrower by the Agent crediting the account of the
Borrower on the books of such office with the aggregate of the amounts made
available to the Agent by the Lenders and in like funds as received by the
Agent.
2.3 Commitment Fee. The Borrower agrees to pay to the Agent for the
account of each Lender a commitment fee for the period from and including the
first day of the Commitment Period to the Termination Date, computed at the rate
of .50% per annum on the average daily amount of the Available Commitment of
such Lender during the period for which payment is made, payable quarterly in
arrears on the last day of each March, June, September and December and on the
Termination Date or such earlier date as the Commitments shall terminate as
provided herein, commencing on the first of such dates to occur after the date
hereof.
2.4 Termination or Reduction of Commitments. (a) The Borrower shall
have the right, upon not less than five Business Days' notice to the Agent, to
terminate the Commitments or, from time to time, to reduce the amount of the
Commitments. Any such reduction shall be in an amount equal to $100,000 or a
whole multiple thereof and shall reduce permanently the Commitments then in
effect.
(b) On the last day of each March, June, September and December to
occur during each of the calendar years set forth below, the Commitment of each
Lender shall be reduced by such
<PAGE>
18
Lender's Commitment Percentage of one-fourth (or, in the case of 2001, all) of
the amount set forth below opposite such calendar year:
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
1998 $ 4,000,000
1999 $ 8,000,000
2000 $10,000,000
2001 $13,000,000
</TABLE>
(c) In the event that the Borrower or any of its Restricted
Subsidiaries shall receive any Net Proceeds from (i) a Permitted Disposition,
(ii) the removal of any sign (whether as a result of condemnation proceedings or
otherwise), (iii) any insurance policy covering any loss with respect to any of
its property, plant or equipment or (iv) any litigation, the Commitments shall
be automatically reduced on the date of receipt thereof by an amount equal to
such Net Proceeds, provided, that if on or before such date the Borrower shall
deliver to the Agent a certificate stating that the Borrower intends to utilize
such proceeds to acquire new signs or other assets or to repair any property,
plant or equipment with respect to which an insured loss shall have occurred or
to replace any removed sign, then the Borrower may do so and the Commitments
shall be automatically reduced on the date which is one year following the date
of receipt thereof by the portion of such Net Proceeds, if any, not utilized
within such one-year period to acquire new signs or other assets or to repair
any property, plant or equipment with respect to which an insured loss shall
have occurred or to replace any removed sign, provided, however, that, if a
Default or Event of Default shall occur during such one-year period on or before
any portion of any such Net Proceeds shall be so utilized, the Commitments shall
(provided that such Default or Event of Default shall be then continuing) be
automatically reduced by an amount equal to such unutilized portion on the date
on which the Agent shall so notify the Borrower.
(d) If the Leverage Ratio as of the last day of any fiscal year,
commencing with the fiscal year ending December 31, 1998, is equal to or greater
than 4.5 to 1.0, then on the earlier of (i) the date of delivery of the audited
financial statements for such fiscal year pursuant to subsection 5.1(a) and (ii)
March 31 of the succeeding calendar year, the Commitments shall be reduced
automatically by an amount equal to 50% of the Excess Cash Flow for such fiscal
year.
2.5 Repayment of Revolving Credit Loans; Evidence of Debt. (a) The
Borrower hereby unconditionally promises to pay to the Agent for the account of
each Lender the then unpaid principal amount of each Revolving Credit Loan of
such Lender on the Termination Date (or such earlier date on which the Revolving
Credit Loans become due and payable pursuant to Section 7). The
<PAGE>
19
Borrower hereby further agrees to pay interest on the unpaid principal amount of
the Revolving Credit Loans from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in subsection 2.9.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Revolving Credit Loan of such Lender from time to time,
including the amounts of principal and interest payable and paid to such Lender
from time to time under this Agreement.
(c) The Agent shall maintain the Register pursuant to subsection
9.6(d), and a subaccount therein for each Lender, in which shall be recorded (i)
the amount of each Revolving Credit Loan made hereunder, the Type thereof and
each Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) both the amount of any sum received by the Agent
hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 2.5(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Agent to maintain the Register or any such account,
or any error therein, shall not in any manner affect the obligation of the
Borrower to repay (with applicable interest) the Revolving Credit Loans made to
such Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the Agent by any
Lender, the Borrower will execute and deliver to such Lender a promissory note
of the Borrower evidencing the Revolving Credit Loans of such Lender,
substantially in the form of Exhibit A with appropriate insertions as to date
and principal amount (a "Revolving Credit Note").
2.6 Optional Prepayments; Mandatory Prepayments. (a) The Borrower
may at any time and from time to time prepay the Revolving Credit Loans, in
whole or in part, without premium or penalty, upon, in the case of Eurodollar
Loans, at least three Business Days' irrevocable notice to the Agent, and in the
case of ABR Loans, at least one Business Day's irrevocable notice to the Agent,
specifying the date and amount of prepayment and whether the prepayment is of
Eurodollar Loans or ABR Loans thereof. Upon receipt of any such notice the
Agent shall promptly notify each Lender thereof. If any such notice is given,
the amount specified in such notice shall be due and payable on the date
specified therein, together with any amounts payable pursuant to subsection
2.16. Partial prepayments shall
<PAGE>
20
be in an aggregate principal amount of $100,000 or a whole multiple thereof.
(b) If, after giving effect to any reduction of the Commitments
pursuant to subsection 2.4, the aggregate principal amount of Revolving Credit
Loans then outstanding exceeds the Commitments as so reduced, the Borrower shall
prepay the Revolving Credit Loans in an amount equal to such excess. Each
prepayment of the Revolving Credit Loans pursuant to this subsection 2.6(b)
shall be accompanied by payment in full of all accrued interest thereon to and
including the date of such prepayment, together with any additional amounts
owing pursuant to subsection 2.16.
2.7 Conversion and Continuation Options. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to ABR Loans by giving the Agent
at least two Business Days' prior irrevocable notice of such election; provided
that any such conversion of Eurodollar Loans may only be made on the last day of
an Interest Period with respect thereto. The Borrower may elect from time to
time to convert ABR Loans to Eurodollar Loans by giving the Agent at least three
Business Days' prior irrevocable notice of such election. Any such notice of
conversion to Eurodollar Loans shall specify the length of the initial Interest
Period or Interest Periods therefor. Upon receipt of any such notice the Agent
shall promptly notify each Lender thereof. All or any part of outstanding
Eurodollar Loans and ABR Loans may be converted as provided herein, provided
that (i) no ABR Loan may be converted into a Eurodollar Loan when any Event of
Default has occurred and is continuing and the Agent has or the Required Lenders
have determined that such a conversion is not appropriate and (ii) no ABR Loan
may be converted into a Eurodollar Loan after the date that is one month prior
to the Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
notice to the Agent, in accordance with the applicable provisions of the term
"Interest Period" set forth in subsection 1.1, of the length of the next
Interest Period to be applicable to such Eurodollar Loans, provided that no
Eurodollar Loan may be continued as such (i) when any Event of Default has
occurred and is continuing and the Agent has or the Required Lenders have
determined that such a continuation is not appropriate or (ii) after the date
that is one month prior to the Termination Date provided, further, that if the
Borrower shall fail to give such notice or if such continuation is not permitted
such Eurodollar Loans shall be automatically converted to ABR Loans on the last
day of such then expiring Interest Period.
2.8 Minimum Amounts and Maximum Number of Tranches. All borrowings,
conversions and continuations of Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after
<PAGE>
21
giving effect thereto, the aggregate principal amount of the Eurodollar Loans
comprising each Eurodollar Tranche shall be equal to $1,000,000 or a whole
multiple of $100,000 in excess thereof. In no event shall there be more than
five Eurodollar Tranches outstanding at any time.
2.9 Interest Rates and Payment Dates. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to
the ABR plus the Applicable Margin.
(c) If all or a portion of (i) any principal of any Revolving Credit
Loan, (ii) any interest payable thereon, (iii) any commitment fee or (iv) any
other amount payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), the principal of the Revolving Credit
Loans and any such overdue interest, commitment fee or other amount shall bear
interest at a rate per annum which is (x) in the case of principal, the rate
that would otherwise be applicable thereto pursuant to the foregoing provisions
of this subsection plus 2% or (y) in the case of any such overdue interest,
commitment fee or other amount, the rate described in paragraph (b) of this
subsection plus 2%, in each case from the date of such non-payment until such
overdue principal, interest, commitment fee or other amount is paid in full (as
well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (d) of this
subsection shall be payable from time to time on demand.
2.10 Computation of Interest and Fees. (a) Commitment fees and,
whenever it is calculated on the basis of the prime rate of CIBC-Bank, interest
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed; and, otherwise, interest shall be calculated
on the basis of a 360-day year for the actual days elapsed. The Agent shall as
soon as practicable notify the Borrower and the Lenders of each determination of
a Eurodollar Rate. Any change in the interest rate on a Revolving Credit Loan
resulting from a change in the ABR or the Eurocurrency Reserve Requirements
shall become effective as of the opening of business on the day on which such
change becomes effective. The Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of each such
change in interest rate.
(b) Each determination of an interest rate by the Agent pursuant to
any provision of this Agreement shall be conclusive and binding on the Borrower
and the Lenders in the
<PAGE>
22
absence of manifest error. The Agent shall, at the request of the Borrower,
deliver to the Borrower a statement showing the quotations used by the Agent in
determining any interest rate pursuant to subsection 2.9(a) or (c).
2.11 Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(a) the Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist
for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Agent shall have received notice from the Majority Lenders
that the Eurodollar Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Agent shall give telecopy or telephonic notice thereof to the Borrower and
the Lenders as soon as practicable thereafter. If such notice is given (x) any
Eurodollar Loans requested to be made on the first day of such Interest Period
shall be made as ABR Loans, (y) any ABR Loans that were to have been converted
on the first day of such Interest Period to Eurodollar Loans shall be converted
to or continued as ABR Loans and (z) any outstanding Eurodollar Loans shall be
converted, on the first day of such Interest Period, to ABR Loans. Until such
notice has been withdrawn by the Agent, no further Eurodollar Loans shall be
made or continued as such, nor shall the Borrower have the right to convert ABR
Loans to Eurodollar Loans.
2.12 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee hereunder and any reduction of the Commitments of the Lenders
shall be made pro rata according to the respective Commitment Percentages of the
Lenders. Each payment (including each prepayment) by the Borrower on account of
principal of and interest on the Revolving Credit Loans shall be made pro rata
according to the respective outstanding principal amounts of the Revolving
Credit Loans then held by the Lenders. All payments (including prepayments) to
be made by the Borrower hereunder, whether on account of principal, interest,
fees or otherwise, shall be made without set off or counterclaim and shall be
made prior to 12:00 Noon, New York City time, on the due date thereof to the
Agent, for the account of the Lenders, at the Agent's office specified in
subsection 10.2, in Dollars and in immediately available funds. The Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received. If any payment hereunder becomes due and payable on a
<PAGE>
23
day other than a Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
(b) Unless the Agent shall have been notified in writing by any
Lender prior to a borrowing that such Lender will not make the amount that would
constitute its Commitment Percentage of such borrowing available to the Agent,
the Agent may assume that such Lender is making such amount available to the
Agent, and the Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to
the Agent by the required time on the Borrowing Date therefor, such Lender shall
pay to the Agent, on demand, such amount with interest thereon at a rate equal
to the daily average Federal Funds Effective Rate for the period until such
Lender makes such amount immediately available to the Agent. A certificate of
the Agent submitted to any Lender with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error. If such
Lender's Commitment Percentage of such borrowing is not made available to the
Agent by such Lender within three Business Days of such Borrowing Date, the
Agent shall also be entitled to recover such amount with interest thereon at the
rate per annum applicable to ABR Loans hereunder, on demand, from the Borrower.
2.13 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert ABR Loans to Eurodollar Loans shall forthwith be cancelled and (b) such
Lender's Revolving Credit Loans then outstanding as Eurodollar Loans, if any,
shall be converted automatically to ABR Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs
on a day which is not the last day of the then current Interest Period with
respect thereto, the Borrower shall pay to such Lender such amounts, if any, as
may be required pursuant to subsection 2.16.
2.14 Requirements of Law. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Note or any Eurodollar Loan made by it,
or change the basis of taxation of payments to such Lender in respect
thereof (except for
<PAGE>
24
Non-Excluded Taxes covered by subsection 2.15 and changes in the rate of
tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition; and the
result of any of the foregoing is to increase the cost to such Lender, by
an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, the
Borrower shall promptly pay such Lender such additional amount or amounts
as will compensate such Lender for such increased cost or reduced amount
receivable.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, the Borrower shall promptly pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction arising from and after the later of (i) the effective date of such
adoption of or change in any Requirement of Law or (ii) the date which is 60
days prior to the date of the receipt by the Borrower of notice from such Lender
of the nature of the change and the amount of such change.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this subsection, it shall promptly notify the Borrower (with a copy
to the Agent) of the event by reason of which it has become so entitled. A
certificate as to any additional amounts payable pursuant to this subsection
submitted by such Lender to the Borrower (with a copy to the Agent) shall be
conclusive in the absence of manifest error. The agreements in this subsection
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.
<PAGE>
25
2.15 Taxes. (a) All payments made by the Borrower under this
Agreement and any Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Agent or any Lender as a result of a
present or former connection between the Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Agent or such Lender having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement or any Revolving Credit Note). If any such non-excluded taxes,
levies, imposts, duties, charges, fees deductions or withholdings ("Non-Excluded
Taxes") are required to be withheld from any amounts payable to the Agent or any
Lender hereunder or under any Note, the amounts so payable to the Agent or such
Lender shall be increased to the extent necessary to yield to the Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender that is not organized under the
laws of the United States of America or a state thereof if such Lender fails to
comply with the requirements of paragraph (b) of this subsection. Whenever any
Non-Excluded Taxes are payable by the Borrower, as promptly as possible
thereafter the Borrower shall send to the Agent for its own account or for the
account of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agent and the Lenders for
any incremental taxes, interest or penalties that may become payable by the
Agent or any Lender as a result of any such failure. The agreements in this
subsection shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(i) deliver to the Borrower and the Agent (A) two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224, or
successor applicable form, as the case may be, and (B) an Internal Revenue
Service Form W-8 or W-9, or successor applicable form, as the case may be;
<PAGE>
26
(ii) deliver to the Borrower and the Agent two further copies of
any such form or certification on or before the date that any such form or
certification expires or becomes obsolete and after the occurrence of any
event requiring a change in the most recent form previously delivered by it
to the Borrower; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the Borrower
or the Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the Agent.
Such Lender shall certify (i) in the case of a Form 1001 or 4224, that it is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes and (ii) in the case of a
Form W-8 or W-9, that it is entitled to an exemption from United States backup
withholding tax. Each Person that shall become a Lender or a Participant
pursuant to subsection 9.6 shall, upon the effectiveness of the related
transfer, be required to provide all of the forms and statements required
pursuant to this subsection, provided that in the case of a Participant such
Participant shall furnish all such required forms and statements to the Lender
from which the related participation shall have been purchased.
2.16 Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Revolving
Credit Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Bank on such amount
by placing such amount on deposit for a
<PAGE>
27
comparable period with leading banks in the interbank eurodollar market. This
covenant shall survive the termination of this Agreement and the payment of the
Revolving Credit Loans and all other amounts payable hereunder.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this Agreement and
to make the Revolving Credit Loans, the Borrower hereby represents and warrants
to the Agent and each Lender that:
3.1 Financial Condition. The consolidated balance sheet of the
Borrower and its consolidated Restricted Subsidiaries as at December 31, 1995
and the related consolidated statements of income and of cash flows for the
fiscal year ended on such date, reported on by KPMG Peat Marwick LLP, copies of
which have heretofore been furnished to each Lender, are complete and correct
and present fairly the consolidated financial condition of the Borrower and its
consolidated Restricted Subsidiaries as at such date, and the consolidated
results of their operations and their consolidated cash flows for the fiscal
year then ended. The unaudited consolidated balance sheet of the Borrower and
its consolidated Restricted Subsidiaries as at September 30, 1996 and the
related unaudited consolidated statements of income and of cash flows for the
nine-month period ended on such date, certified by a Responsible Officer, copies
of which have heretofore been furnished to each Lender, are complete and correct
and present fairly the consolidated financial condition of the Borrower and its
consolidated Restricted Subsidiaries as at such date, and the consolidated
results of their operations and their consolidated cash flows for the nine-month
period then ended (subject to normal year-end audit adjustments). All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by such accountants or Responsible Officer,
as the case may be, and as disclosed therein). Neither the Borrower nor any of
its consolidated Restricted Subsidiaries had, at the date of the most recent
balance sheet referred to above, any material Guarantee Obligation, contingent
liability or liability for taxes, or any long-term lease or unusual forward or
long-term commitment, including, without limitation, any interest rate or
foreign currency swap or exchange transaction, which is not reflected in the
foregoing statements or in the notes thereto. During the period from September
30, 1996 to and including the date hereof there has been no sale, transfer or
other disposition by the Borrower or any of its consolidated Restricted
Subsidiaries of any material part of its business or property and no purchase or
other acquisition of any business or property (including any capital stock of
any other Person) material in relation to the consolidated financial condition
of the Borrower and its consolidated Restricted Subsidiaries at September 30,
1996, other than the acquisition of substantially
<PAGE>
28
all the assets of the Pocono region operations of Matthew Outdoor Advertising
Co., L.P.
3.2 No Change. Since September 30, 1996 (a) there has been no
development or event which has had or could have a Material Adverse Effect and
(b) no distributions have been paid or made upon the partnership interests in
the Borrower nor have any of the partnership interests in the Borrower been
redeemed, retired, purchased or otherwise acquired for value by the Borrower or
any of its Restricted Subsidiaries.
3.3 Existence; Compliance with Law. Each of the Borrower and its
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has the power and
authority, and the legal right, to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification and (d) is in compliance
with all Requirements of Law except to the extent that the failure to comply
therewith could not, in the aggregate, have a Material Adverse Effect.
3.4 Power; Authorization; Enforceable Obligations. The Borrower and
each other Loan Party has the power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and to borrow
hereunder and has taken all necessary action to authorize the borrowings on the
terms and conditions of this Agreement and any Notes and to authorize the
execution, delivery and performance of the Loan Documents to which it is a
party. No consent or authorization of, filing with, notice to or other act by
or in respect of, any Governmental Authority or any other Person is required in
connection with the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of the Loan Documents to which the
Borrower or any other Loan Party is a party. This Agreement has been, and each
other Loan Document to which it is a party will be, duly executed and delivered
on behalf of the Borrower and each other Loan Party. This Agreement
constitutes, and each other Loan Document to which it is a party when executed
and delivered will constitute, a legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
3.5 No Legal Bar. The execution, delivery and performance of the
Loan Documents to which the Borrower and each other Loan Party is a party, the
borrowings hereunder and the use
<PAGE>
29
of the proceeds thereof will not violate any Requirement of Law or Contractual
Obligation of the Borrower or of any of its Restricted Subsidiaries or any other
Loan Party and will not result in, or require, the creation or imposition of any
Lien on any of its or their respective properties or revenues pursuant to any
such Requirement of Law or Contractual Obligation.
3.6 No Material Litigation. Except as set forth on Schedule 3.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Restricted Subsidiaries or
against any of its or their respective properties or revenues (a) with respect
to any of the Loan Documents or any of the transactions contemplated hereby or
thereby, or (b) which could reasonably be expected to have a Material Adverse
Effect.
3.7 No Default. Neither the Borrower nor any of its Restricted
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
3.8 Ownership of Property; Liens. Each of the Borrower and its
Restricted Subsidiaries has good record and marketable title in fee simple to,
or a valid leasehold interest in, all its real property, and good title to, or a
valid leasehold interest in, all its other property, and none of such property
is subject to any Lien except as permitted by subsection 6.3.
3.9 Intellectual Property. The Borrower and each of its Restricted
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those the failure to own or license
which could not reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). No claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor does the
Borrower know of any valid basis for any such claim. The use of such
Intellectual Property by the Borrower and its Restricted Subsidiaries does not
infringe on the rights of any Person, except for such claims and infringements
that, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
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30
3.10 No Burdensome Restrictions. No Requirement of Law or
Contractual Obligation of the Borrower or any of its Restricted Subsidiaries
could reasonably be expected to have a Material Adverse Effect.
3.11 Taxes. Each of the Borrower and its Restricted Subsidiaries has
filed or caused to be filed all tax returns which, to the knowledge of the
Borrower, are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any the amount or validity of
which are currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or its Restricted Subsidiaries, as the case may be); no
tax Lien has been filed, and, to the knowledge of the Borrower, no claim is
being asserted, with respect to any such tax, fee or other charge.
3.12 Federal Regulations. No part of the proceeds of any Loans will
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation G or Regulation U of the
Board of Governors of the Federal Reserve System as now and from time to time
hereafter in effect. If requested by any Lender or the Agent, the Borrower will
furnish to the Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form G-1 or FR Form U-1 referred to in
said Regulation G or Regulation U, as the case may be.
3.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no
Lien in favor of the PBGC or a Plan has arisen, during such five-year period.
The present value of all accrued benefits under each Single Employer Plan (based
on those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits. Neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan, and neither the
Borrower nor any Commonly Controlled Entity would become subject to any
liability under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent.
<PAGE>
31
3.14 Investment Company Act; Other Regulations. The Borrower is not
an "investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. The
Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
3.15 Subsidiaries. As of the date hereof, the Borrower does not have
any Subsidiaries other than PA Outdoor, Inc. and the Unrestricted Subsidiary.
3.16 Purpose of Revolving Credit Loans. The proceeds advanced on the
Closing Date (as defined in the Original Credit Agreement) with respect to the
initial Revolving Credit Loan were used only to pay costs, fees and expenses
incurred by the Borrower with respect to the Original Credit Agreement and, to
the extent not so used, to repay certain Indebtedness owed to Heller Financial,
Inc. The proceeds of all other Revolving Credit Loans shall be used by the
Borrower to refinance existing debt, to finance capital expenditures, permitted
acquisitions and for working capital purposes in the ordinary course of
business.
3.17 Environmental Matters. Except as set forth on Schedule 3.17:
(a) The facilities and properties owned, leased or operated by the
Borrower or any of its Subsidiaries (the "Properties") do not contain, and
have not previously contained, any Materials of Environmental Concern in
amounts or concentrations which (i) constitute or constituted a violation
of, or (ii) could reasonably be expected to give rise to liability under,
any Environmental Law except in either case insofar as such violation or
liability, or any aggregation thereof, is not reasonably likely to result
in the payment of a Material Environmental Amount.
(b) The Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, in all
material respects with all applicable Environmental Laws, and there is no
contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the business operated
by the Borrower or any of its Subsidiaries (the "Business") which could
materially interfere with the continued operation of the Properties or
materially impair the fair saleable value thereof.
(c) Neither the Borrower nor any of its Subsidiaries has received
any notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Business,
nor
<PAGE>
32
does the Borrower have knowledge or reason to believe that any such notice
will be received or is being threatened except insofar as such notice or
threatened notice, or any aggregation thereof, does not involve a matter or
matters that is or are reasonably likely to result in the payment of a
Material Environmental Amount.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a
location which could reasonably be expected to give rise to liability
under, any Environmental Law, nor have any Materials of Environmental
Concern been generated, treated, stored or disposed of at, on or under any
of the Properties in violation of, or in a manner that could reasonably be
expected to give rise to liability under, any applicable Environmental Law
except insofar as any such violation or liability referred to in this
paragraph, or any aggregation thereof, is not reasonably likely to result
in the payment of a Material Environmental Amount.
(e) No judicial proceeding or governmental or administrative action
is pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or will be
named as a party with respect to the Properties or the Business, nor are
there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the Properties or
the Business except insofar as such proceeding, action, decree, order or
other requirement, or any aggregation thereof, is not reasonably likely to
result in the payment of a Material Adverse Amount.
(f) There has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related
to the operations of the Borrower or any Subsidiary in connection with the
Properties or otherwise in connection with the Business, in violation of or
in amounts or in a manner that could reasonably give rise to liability
under Environmental Laws except insofar as any such violation or liability
referred to in this paragraph, or any aggregation thereof, is not
reasonably likely to result in the payment of a Material Environmental
Amount.
3.18 Regulation H. No Mortgage encumbers improved real property
which is located in an area that has been identified by the Secretary of Housing
and Urban Development as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act of
1968.
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33
3.19 Accuracy and Completeness of Information. No fact is known to
the Borrower which has had or could reasonably be expected to have a Material
Adverse Effect, which has not been disclosed to the Lenders by the Borrower in
writing prior to the date hereof. No document furnished or statement made in
writing to the Lenders by the Borrower in connection with the negotiation,
preparation or execution of or pursuant to this Agreement or any of the other
Loan Documents contains any untrue statement of a material fact or omits to
state any such material fact necessary in order to make the statements contained
therein not misleading, in either case which has not been corrected,
supplemented or remedied by subsequent documents furnished or statements made in
writing to the Lenders prior to the date hereof.
3.20 Solvency. On the date hereof, (a) the property, at the fair
valuation, of the Borrower exceeds the Borrower's debts, (b) the Borrower is
able to pay its liability on its debts as such debts become absolute and
matured, and (c) the Borrower has sufficient capital with which to conduct its
business. For purposes of this subsection, "debt" means "liability on a claim",
"claim" means any (i) right to payment, whether or not such a right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured or (ii) right to
an equitable remedy for breach of performance if such breach gives rise to a
right to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured,
or unsecured.
3.21 Leaseholds, Permits, etc. Except as set forth on Schedule 3.21,
the Borrower possesses or has the right to use, all leaseholds, easements,
franchises and permits and all authorizations and other rights which are
material to and necessary for the conduct of its business. Except as set forth
on such Schedule, and except for such noncompliance with the foregoing which
could not reasonably be expected to have a Material Adverse Effect, all of the
foregoing are in full force and effect, and the Borrower is in substantial
compliance with the foregoing without any known conflict with the valid rights
of others. Except as set forth in such Schedule, no event has occurred which
permits, or after notice or lapse of time or both would permit, the revocation
or termination of any such leasehold, easement, franchise, license or other
right, which termination or revocation would, considered as a whole reasonably
be expected to have a Material Adverse Effect, except that certain of the
leasehold interests of the Borrower which, taken in the aggregate, may be
material to the Borrower, are tenancies at will which may be terminated by the
lessor thereunder at any time upon delivery of the requisite notice required by
state law.
3.22 Signs. The Borrower has delivered to Agent a complete and
correct list of the location by county and state of
<PAGE>
34
each sign owned by the Borrower and its Restricted Subsidiaries as of the date
hereof.
3.23 Ownership of Borrower and Managing General Partner. Schedule
3.23 accurately sets forth the ownership of the Borrower and of the Managing
General Partner as of the date hereof.
3.24 Real Property. The Borrower has delivered to the Agent a
detailed description, including the location by county and state, of each parcel
of real property owned by the Borrower and its Restricted Subsidiaries as of the
date hereof.
3.25 Phantom Stock Agreements. The Borrower has delivered to Agent a
complete and correct copy of each Phantom Stock Agreement in effect as of the
date hereof.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Effectiveness. The effectiveness of this Agreement
is subject to the satisfaction on or before December 15, 1996 of the following
conditions precedent:
(a) Loan Documents. The Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of the
Borrower, with a counterpart for each Lender, (ii) the Global Consent,
executed and delivered by a duly authorized officer of each Loan Party
other than the Borrower, with a counterpart or a conformed copy for each
Lender and (iii) each of the Mortgage Supplements, each executed and
delivered by a duly authorized officer of the party thereto, with a
counterpart or a conformed copy for each Lender.
(b) Proceedings of the Borrower. The Agent shall have received, with
a counterpart for each Lender, a copy of the resolutions, in form and
substance satisfactory to the Agent, of the Borrower, in the form of
resolutions of the Board of Directors of the Managing General Partner
authorizing (i) the execution, delivery and performance of this Agreement
and the other Loan Documents to which it is a party, (ii) the borrowings
contemplated hereunder and (iii) the granting by it of the Liens created
pursuant to the Security Documents, certified by the Secretary or an
Assistant Secretary of the Managing General Partner as of the Closing Date,
which certificate shall be in form and substance satisfactory to the Agent
and shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded.
(c) Borrower Incumbency Certificate. The Agent shall have received,
with a counterpart for each Lender, a Certificate of the Borrower, dated
the Closing Date, as to
<PAGE>
35
the incumbency and signature of the officers of the Managing General
Partner executing any Loan Document satisfactory in form and substance to
the Agent, executed by the President or any Vice President and the
Secretary or any Assistant Secretary of the Managing General Partner.
(d) Corporate Proceedings of the Managing General Partner. The
resolutions described in subsection 4.1(b) above shall include the
resolutions, in form and substance satisfactory to the Agent, of the Board
of Directors of the Managing General Partner authorizing (i) the execution,
delivery and performance of the Loan Documents to which the Managing
General Partner is a party and (ii) the granting by it of the Liens created
pursuant to the Global Security Agreement, certified by the Secretary or an
Assistant Secretary of the Managing General Partner as of the Closing Date,
which certificate shall be in form and substance satisfactory to the Agent
and shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded.
(e) Managing General Partner Incumbency Certificate. The Incumbency
Certificate described in subsection 4.1(c) above shall include a
certificate of the Managing General Partner, dated the Closing Date, as to
the incumbency and signature of the officers of the Managing General
Partner executing any Loan Document satisfactory in form and substance to
the Agent, executed by the President or any Vice President and the
Secretary or any Assistant Secretary of the Managing General Partner.
(f) Organizational Documents. The Agent shall have received, with a
counterpart for each Lender, true and complete copies of the partnership
agreement, or as the case may be, certificate of incorporation and by-laws
of each Loan Party which is not a natural person, certified as of the
Closing Date as complete and correct copies thereof by the Secretary or an
Assistant Secretary of the Managing General Partner.
(g) Fees. The Agent shall have received the fees to be received on
the Closing Date as separately agreed upon with the Borrower.
(h) Legal Opinion. The Agent shall have received, with a counterpart
for each Lender, the executed legal opinion of Kaplan, Strangis and Kaplan,
P.A., counsel to the Borrower, substantially in the form of Exhibit E; such
legal opinion shall cover such other matters incident to the transactions
contemplated by this Agreement as the Agent may reasonably require;.
4.2 Conditions to Each Revolving Credit Loan. The agreement of each
Lender to make any Revolving Credit Loan
<PAGE>
36
requested to be made by it on any date (including, without limitation, its
initial Revolving Credit Loan) is subject to the satisfaction of the following
conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by the Borrower or any other Loan Party in or pursuant to
the Loan Documents shall be true and correct in all material respects on
and as of such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the Revolving
Credit Loans requested to be made on such date.
(c) Additional Matters. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement the other Loan Documents shall
be satisfactory in form and substance to the Agent, and the Agent shall
have received such other documents and legal opinions in respect of any
aspect or consequence of the transactions contemplated hereby or thereby as
it shall reasonably request.
Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date thereof that the conditions contained in
this subsection have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect or any amount is owing to any Lender or the Agent hereunder or under any
other Loan Document, the Borrower shall and (except in the case of delivery of
financial information, reports and notices) shall cause each of its Restricted
Subsidiaries to:
5.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within 120 days after the
end of each fiscal year of the Borrower, a copy of the consolidated balance
sheet of the Borrower and its consolidated Restricted Subsidiaries as at
the end of such year and the related consolidated statements of income and
retained earnings and of cash flows for such year, setting forth in each
case in comparative form the figures for the previous year, reported on
without a "going concern" or like qualification or exception, or
qualification arising out of the scope of the audit, by KPMG Peat Marwick
LLP or other independent certified public accountants of nationally
recognized standing;
<PAGE>
37
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the
Borrower and its consolidated Restricted Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of income and
retained earnings and of cash flows of the Borrower and its consolidated
Restricted Subsidiaries for such quarter and the portion of the fiscal year
through the end of such quarter, setting forth in each case in comparative
form the figures for the previous year, certified by a Responsible Officer
as being fairly stated in all material respects (subject to normal year-end
audit adjustments);
(c) within 20 days of each month-end, monthly operating statements,
with unaudited balance sheets and income statements on a market-by-market
basis for each of the Borrower's markets and on a consolidated basis,
including in each case a comparison to budget and to the prior fiscal year;
and
(d) concurrently with the information furnished in accordance with
subsections 5.2(a), (b) and (c) above, corresponding financial statements
for the Unrestricted Subsidiary.
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
5.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 5.1(a), a certificate of the independent
certified public accountants reporting on such financial statements stating
that in making the examination necessary therefor no knowledge was obtained
of any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 5.1(a), (b) and (c), (x) a certificate of a
Responsible Officer stating that, to the best of such Officer's knowledge,
during such period (i) no Restricted Subsidiary has been formed or acquired
(or, if any such Restricted Subsidiary has been formed or acquired, the
Borrower has complied with the requirements of subsection 5.10 with respect
thereto), (ii) neither the Borrower nor any of its Restricted Subsidiaries
has changed
<PAGE>
38
its name, its principal place of business, its chief executive office or
the location of any material item of tangible Collateral without complying
with the requirements of this Agreement and the Security Documents with
respect thereto, (iii) the Borrower has observed or performed all of its
covenants and other agreements, and satisfied every condition, contained in
this Agreement and the other Loan Documents to be observed, performed or
satisfied by it, and that such Officer has obtained no knowledge of any
Default or Event of Default except as specified in such certificate and (y)
a certificate of a Responsible Officer, substantially in the form of
Exhibit C (the "Compliance Certificate"), showing in detail reasonably
satisfactory to the Agent compliance by the Borrower with the covenants
contained in subsections 6.1 (except that such Compliance Certificate
delivered with respect to the first two months of any fiscal quarter need
not show such compliance with subsections 6.1(a), (b) and (d)), 6.8, 6.9(e)
and 6.15 and, to the extent not otherwise required to be delivered pursuant
to subsection 5.1 and 5.2, statements of the Borrower's and its Restricted
Subsidiaries' cash flows for the periods covered by such covenants with
respect to which compliance is to be demonstrated in such Compliance
Certificate, and a computation of the amount of the Borrower's and its
Restricted Subsidiaries' capital expenditures made during such period and
during the portion of the fiscal year through the end of the period covered
by such Compliance Certificate;
(c) not later than thirty days prior to the end of each fiscal year
of the Borrower, a copy of the projections by the Borrower of the operating
budget and cash flow budget of the Borrower and its Restricted Subsidiaries
for the succeeding fiscal year, such projections to be accompanied by a
certificate of a Responsible Officer to the effect that such projections
have been prepared on the basis of sound financial planning practice and
that such Officer has no reason to believe they are incorrect or misleading
in any material respect;
(d) not later than April 15 of any year, commencing April 15, 1997, a
report prepared by the Chief Financial Officer of the Borrower and
concurred with by the Borrower's auditors (i) calculating the amount of
federal, state and local income taxes that would have been payable by the
Borrower in respect of its operations for the immediately preceding year if
the Borrower were taxed as a C corporation and (ii) comparing the amount
described in clause (i) immediately preceding with the aggregate amount of
Tax Distributions made in respect of such immediately preceding year;
<PAGE>
39
(e) within five days after the same are sent, copies of all financial
statements and reports which the Borrower sends to its partners as a group;
and
(f) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
5.3 Payment of Obligations. Pay, discharge or otherwise satisfy in
all material respects at or before maturity or before they become delinquent, as
the case may be, all its obligations of whatever nature, except where the amount
or validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Borrower or its Restricted Subsidiaries, as the
case may be.
5.4 Maintenance of Existence. Preserve, renew and keep in full force
and effect its corporate existence and take all reasonable action to maintain
all rights, privileges and franchises necessary or desirable in the normal
conduct of its business except as otherwise permitted pursuant to subsection
6.5; comply with all Contractual Obligations and Requirements of Law except to
the extent that failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
5.5 Maintenance of Property; Insurance. Keep all property useful and
necessary in its business in good working order and condition; maintain with
financially sound and reputable insurance companies insurance on all Collateral
in accordance with the requirements of the relevant Security Document, and
maintain with respect to all its other property insurance in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business; and furnish to each Lender, upon written request, full information as
to the insurance carried.
5.6 Inspection of Property; Books and Records; Discussions. Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of the Borrower and its
Subsidiaries with officers and employees of the Borrower and its Subsidiaries
and with its independent certified public accountants.
<PAGE>
40
5.7 Notices. Promptly give notice to the Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation in excess of $500,000 of the Borrower or any of its Subsidiaries
or (ii) litigation, investigation or proceeding which may exist at any time
between the Borrower or any of its Subsidiaries and any Governmental
Authority, which in the case of clause (ii), if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of its
Subsidiaries in which the amount involved is $250,000 or more and not
covered by insurance or in which injunctive or similar relief is sought;
(d) the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal from,
or the termination, Reorganization or Insolvency of, any Multiemployer Plan
or (ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the terminating,
Reorganization or Insolvency of, any Plan; and
(e) any other development or event which could reasonably be expected
to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
5.8 Environmental Laws. (a) Comply with, and ensure compliance by
all tenants and subtenants, if any, with, all applicable Environmental Laws and
obtain and comply in all material respects with and maintain, and ensure that
all tenants and subtenants obtain and comply in all material respects with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws except to the extent that
failure to do so could not be reasonably expected to have a Material Adverse
Effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all
<PAGE>
41
material respects with all lawful orders and directives of all Governmental
Authorities regarding Environmental Laws except to the extent that the same are
being contested in good faith by appropriate proceedings and the pendency of
such proceedings could not be reasonably expected to have a Material Adverse
Effect.
5.9 Environmental Reports. If a Default or Event of Default
caused by any representation made pursuant to subsection 3.17 proving to have
been incorrect or any failure to comply with subsection 5.8 shall have occurred
and be continuing, at the request of the Required Lenders through the Agent,
provide to the Lenders within 60 days after such request, at the expense of the
Borrower, an environmental site assessment report for the Properties which are
the subject of such Default or Event of Default, prepared by an environmental
consulting firm reasonably acceptable to the Agent, describing in reasonable
detail the circumstances giving rise to such Default or Event of Default the
estimated cost of remediation thereof.
5.10 Further Assurances. Upon the request of the Agent, promptly
perform or cause to be performed any and all acts and execute or cause to be
executed any and all documents (including, without limitation, financing
statements and continuation statements) for filing under the provisions of the
Uniform Commercial Code or any other Requirement of Law which are necessary or
advisable to maintain in favor of the Agent, for the benefit of the Lenders,
Liens on the Collateral that are duly perfected in accordance with all
applicable Requirements of Law.
5.11 Additional Collateral. (a) With respect to any assets acquired
after the Closing Date by the Borrower or any of its Restricted Subsidiaries
that are intended to be subject to the Lien created by any of the Security
Documents but which are not so subject (other than (x) any assets described in
paragraph (b) or (c) of this subsection and (y) immaterial assets a Lien on
which cannot be perfected by filing UCC-1 financing statements), promptly (and
in any event within 30 days after the acquisition thereof): (i) execute and
deliver to the Agent such amendments to the relevant Security Documents or, in
the case of real property, such Mortgages or such other documents as the Agent
shall deem necessary or advisable to grant to the Agent, for the benefit of the
Lenders, a Lien on such assets, (ii) take all actions necessary or advisable to
cause such Lien to be duly perfected in accordance with all applicable
Requirements of Law, including, without limitation, the filing of financing
statements in such jurisdictions as may be requested by the Agent, and (iii) if
requested by the Agent, deliver to the Agent Lien searches and legal opinions
relating to the matters described in clauses (i) and (ii) immediately preceding,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Agent.
<PAGE>
42
(b) With respect to any Person that, subsequent to the Closing Date,
becomes a Restricted Subsidiary (other than a Foreign Restricted Subsidiary),
promptly upon the request of the Agent: (i) execute and deliver to the Agent,
for the benefit of the Lenders, a new pledge agreement or such amendments to the
Global Security Agreement as the Agent shall deem necessary or advisable to
grant to the Agent, for the benefit of the Lenders, a Lien on the Capital Stock
of such Restricted Subsidiary which is owned by the Borrower or any of its
Restricted Subsidiaries, (ii) deliver to the Agent the certificates representing
such Capital Stock, together with undated stock powers executed and delivered in
blank by a duly authorized officer of the Borrower or such Restricted
Subsidiary, as the case may be, (iii) cause such new Restricted Subsidiary (A)
to become a party to the Global Security Agreement, in each case pursuant to
documentation which is in form and substance satisfactory to the Agent, and (B)
to take all actions necessary or advisable to cause the Lien created by the
Global Security Agreement to be duly perfected in accordance with all applicable
Requirements of Law, including, without limitation, the filing of financing
statements in such jurisdictions as may be requested by the Agent and (iv) if
requested by the Agent, deliver to the Agent legal opinions relating to the
matters described in clauses (i), (ii) and (iii) immediately preceding, which
opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Agent.
(c) With respect to any Person that, subsequent to the Closing Date,
becomes a Foreign Subsidiary, promptly upon the request of the Agent: (i)
execute and deliver to the Agent a new pledge agreement or such amendments to
the Global Security Agreement as the Agent shall deem necessary or advisable to
grant to the Agent, for the benefit of the Lenders, a Lien on the Capital Stock
of such Foreign Subsidiary which is owned by the Borrower or any of its Foreign
Subsidiaries (provided that in no event shall more than 65% of the Capital Stock
of any such Foreign Subsidiary be required to be so pledged), (ii) deliver to
the Agent any certificates representing such Capital Stock, together with
undated stock powers executed and delivered in blank by a duly authorized
officer of the Borrower or such Foreign Subsidiary, as the case may be, and take
or cause to be taken all such other actions under the law of the jurisdiction of
organization of such Foreign Subsidiary as may be necessary or advisable to
perfect such Lien on such Capital Stock and (iii) if requested by the Agent,
deliver to the Agent legal opinions relating to the matters described in clauses
(i) and (ii) immediately preceding, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Agent.
(d) Deliver to the Agent in respect of each parcel covered by each
Mortgage executed and delivered to the Agent subsequent to the date hereof
pursuant to subsection 5.11(a), a mortgagee's title policy (or policies) or
marked up unconditional
<PAGE>
43
binder for such insurance. Each such policy shall (i) be in an amount
satisfactory to the Agent; (ii) be issued at ordinary rates; (iii) insure that
the Mortgage insured thereby creates a valid first Lien on such parcel free and
clear of all defects and encumbrances, except such as may be approved by the
Agent; (iv) name the Agent for the benefit of the Lenders as the insured
thereunder; (v) be in the form of ALTA Loan Policy - 1970 (Amended 10/17/70);
(vi) contain such endorsements and affirmative coverage as the Agent may request
and (vii) be issued by title companies satisfactory to the Agent (including any
such title companies acting as co-insurers or reinsurers, at the option of the
Agent). The Agent shall have received evidence satisfactory to it that all
premiums in respect of each such policy, and all charges for mortgage recording
tax, if any, have been paid.
(e) Deliver to the Agent a copy of all recorded documents referred
to, or listed as exceptions to title in, the title policy or policies referred
to in subsection 5.11(d) and a copy, certified by such parties as the Agent may
deem appropriate, of all other documents affecting the property covered by each
Mortgage executed and delivered to the Agent subsequent to the date hereof
pursuant to subsection 5.11(a).
(f) If requested by the Agent, deliver to the Agent in connection
with each Mortgage executed and delivered to the Agent subsequent to the date
hereof pursuant to subsection 5.11(a), (i) a policy of flood insurance which (A)
covers any parcel of improved real property which is encumbered by such
Mortgage, (B) is written in an amount not less than the outstanding principal
amount of the indebtedness secured by such Mortgage which is reasonably
allocable to such real property or the maximum limit of coverage made available
with respect to the particular type of property under the National Flood
Insurance Act of 1968, whichever is less, and (C) has a term ending not earlier
than the maturity of the indebtedness secured by such Mortgage and (ii)
confirmation that the Borrower has received the notice required pursuant to
Section 208(e)(3) of Regulation H of the Board of Governors of the Federal
Reserve System.
5.12 Key Man Life Insurance. Obtain, within 30 days form the Closing
Date, a key man life insurance policy on the life of Kevin Gleason, in the
amount of at least $1,000,000, and enter into documentation reasonably
satisfactory to the Agent to assign the Borrower's rights under such key man
life insurance policy to the Agent for the ratable benefit of the Lenders.
5.13 Phase I Environmental Reports. Furnish to the Agent, within 60
days from the Closing Date, copies of Phase I environmental reports prepared by
a nationally recognized environmental consulting firm or firms satisfactory to
the Agent on behalf of the Borrower covering such properties of the Borrower as
shall be satisfactory to the Agent.
<PAGE>
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect or any amount is owing to any Lender or the Agent hereunder or under any
other Loan Document, the Borrower shall not, and (except with respect to
subsection 6.1) shall not permit any of its Restricted Subsidiaries to, directly
or indirectly:
6.1 Financial Condition Covenants.
(a) Interest Coverage. Permit the ratio of Operating Cash Flow to
Interest Expense for any period of four consecutive fiscal quarters (or, in
the case of each of the first three full fiscal quarters following the
Closing Date, for the respective periods of one, two and three consecutive
fiscal quarters) ending during any "Test Period" set forth below to be less
than the ratio set forth opposite such Test Period below:
Test Period Interest Coverage Ratio
----------- -----------------------
Closing Date to 6/29/97 1.50 to 1.00
6/30/97 to 6/29/98 1.60 to 1.00
6/30/98 to 6/29/99 1.70 to 1.00
6/30/99 to 12/30/99 1.80 to 1.00
12/31/99 to 12/30/2000 1.90 to 1.00
12/31/2000 to Termination Date 2.00 to 1.00
(b) Fixed Charge Coverage. Permit the ratio of Operating Cash Flow to
Fixed Charges for any period of four consecutive fiscal quarters (or, in
the case of each of the first three full fiscal quarters following the
Closing Date, for the respective periods of one, two and three consecutive
fiscal quarters) ending during any "Test Period" set forth below to be less
than or equal to the ratio set forth opposite such Test Period below:
Test Period Fixed Charge Coverage Ratio
----------- ---------------------------
Closing Date through 12/31/99 1.10 to 1.00
1/1/2000 and thereafter 1.15 to 1.00
<PAGE>
45
(c) Leverage Ratio. Permit the Leverage Ratio at any time during any
"Test Period" set forth below to exceed the ratio set forth opposite such
Test Period below:
<TABLE>
<CAPTION>
Test Period Leverage Ratio
----------- --------------
<S> <C>
Closing Date to 6/29/97 5.75 to 1.00
6/30/97 to 12/30/97 5.50 to 1.00
12/31/97 to 6/29/98 5.25 to 1.00
6/30/98 to 12/30/98 5.00 to 1.00
12/31/98 to 12/30/99 4.75 to 1.00
12/31/99 to 12/30/2000 4.50 to 1.00
12/31/2000 to Termination Date 4.00 to 1.00
</TABLE>
(d) Pro Forma Debt Service Coverage Ratio. Permit the ratio of (i)
Operating Cash Flow for any period of four consecutive fiscal quarters to
(ii) Pro Forma Debt Service for the immediately succeeding period of four
consecutive fiscal quarters to be less than 1.25 to 1.00.
6.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of the Borrower under this Agreement;
(b) Indebtedness of the Borrower to any Subsidiary and of any
Restricted Subsidiary to the Borrower or any other Restricted Subsidiary;
(c) Indebtedness of the Borrower and any of its Restricted
Subsidiaries incurred to finance the acquisition of fixed or capital assets
(whether pursuant to a loan, a Financing Lease or otherwise) in an
aggregate principal amount not exceeding as to the Borrower and its
Restricted Subsidiaries $1,500,000 at any time outstanding;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 6.2;
(e) Indebtedness of a Person which becomes a Restricted Subsidiary
after the date hereof, provided that (i) such indebtedness existed at the
time such Person became a Restricted Subsidiary and was not created in
anticipation thereof and (ii) immediately after giving effect to the
acquisition of such Person by the Borrower no Default or Event of Default
shall have occurred and be continuing;
(f) Indebtedness of the Borrower under the Senior Notes; and
(g) until paid using proceeds for the issuance of the Senior Notes as
provided in subsection 4.1(l) hereof, the Indebtedness to be Refinanced.
<PAGE>
46
6.3 Limitation on Liens. Create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Borrower or its
Restricted Subsidiaries, as the case may be, in conformity with GAAP (or,
in the case of Foreign Restricted Subsidiaries, generally accepted
accounting principles in effect from time to time in their respective
jurisdictions of incorporation);
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are
not overdue for a period of more than 60 days or which are being contested
in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or such Restricted Subsidiary;
(f) Liens in existence on the date hereof listed on Schedule 6.3,
securing Indebtedness permitted by subsection 6.2(d), provided that no such
Lien is spread to cover any additional property after the Closing Date and
that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower and its Restricted
Subsidiaries permitted by subsection 6.2(c) incurred to finance the
acquisition of fixed or capital assets, provided that (i) such Liens shall
be created substantially simultaneously with the acquisition of such fixed
or capital assets, (ii) such Liens do not at any time encumber any property
other than the property financed by such Indebtedness, (iii) the amount of
Indebtedness secured thereby is not increased and (iv) the principal amount
of
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47
Indebtedness secured by any such Lien shall at no time exceed 100% of the
original purchase price of such property;
(h) Liens on the property or assets of a corporation which becomes a
Restricted Subsidiary after the date hereof securing Indebtedness permitted
by subsection 6.2(e), provided that (i) such Liens existed at the time such
corporation became a Restricted Subsidiary and were not created in
anticipation thereof, (ii) any such Lien is not spread to cover any
property or assets of such corporation after the time such corporation
becomes a Restricted Subsidiary, and (iii) the amount of Indebtedness
secured thereby is not increased;
(i) Until the Closing Date, the Liens securing the Indebtedness to be
Refinanced; and
(j) Liens created pursuant to the Security Documents.
6.4 Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date hereof and listed
on Schedule 6.4; and
(b) guarantees made in the ordinary course of its business by the
Borrower of obligations of any of its Restricted Subsidiaries, which
obligations are otherwise permitted under this Agreement.
6.5 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
(a) any Restricted Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower shall be
the continuing or surviving corporation) or with or into any one or more
wholly owned Restricted Subsidiaries of the Borrower (provided that the
wholly owned Restricted Subsidiary or Restricted Subsidiaries shall be the
continuing or surviving corporation); and
(b) any wholly owned Restricted Subsidiary may sell, lease, transfer
or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or any other wholly owned
Restricted Subsidiary of the Borrower.
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48
6.6 Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Restricted Subsidiary,
issue or sell any shares of such Restricted Subsidiary's Capital Stock to any
Person other than the Borrower or any wholly owned Restricted Subsidiary,
except:
(a) the sale or other disposition of property in the ordinary course
of business;
(b) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the
compromise or collection thereof;
(c) as permitted by subsection 6.5(b); and
(d) the sale or other disposition of any other property, business or
assets; provided that the aggregate book value of all property, business
and assets so sold or disposed of shall not exceed an amount equal to 10%
of Operating Cash Flow of the Borrower and its Restricted Subsidiaries for
the year ending December 31, 1995; provided further that (i) there exists
no Default or Event of Default before or after such sale or other
disposition, (ii) the Commitments are reduced in connection therewith to
the extent required by subsection 2.4(c), (iii) such sale or other
disposition is effected on an arm's length basis and (iv) with respect to
any such sale having a purchase price in excess of $250,000, either (x) at
least 85% of the purchase price thereof shall be payable in cash or Cash
Equivalents or (y) after giving effect to such sale, the Borrower will hold
in the aggregate no more than $1,000,000 of such sale proceeds other than
in cash or Cash Equivalents.
6.7 Limitation on Dividends. Make or pay any distributions in
respect of the partnership interests in the Borrower or purchase, redeem or
otherwise acquire any such partnership interest (any of the foregoing, a
"Restricted Payment"), except that, so long as (a) no Default or Event of
Default shall have occurred and be continuing at the time of or immediately
after giving effect thereto, and (b) (except in the case of Tax Distributions
with respect to the 1995 fiscal year) there shall have been delivered to each
Lender a certificate of the Borrower's Chief Financial Officer confirming the
accuracy of the statement referred to in clause (a) immediately preceding, and
certifying that, after giving effect to such Restricted Payment, the Borrower
will be in compliance on a pro forma basis with the covenants contained in
subsection 6.1 from the date of such Restricted Payment and setting forth in
reasonable detail the computations supporting the statements made in such
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49
certificate, the Borrower may make (i) Tax Distributions and (ii) Permitted
Restricted Payments.
6.8 Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of or any assets constituting a
business unit of, or make any other investment in, any Person, except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) loans and advances to employees of the Borrower or its Restricted
Subsidiaries for travel, entertainment and relocation expenses in the
ordinary course of business in an aggregate amount for the Borrower and its
Restricted Subsidiaries not to exceed $200,000 at any one time outstanding;
(d) investments by the Borrower in its Restricted Subsidiaries and
investments by such Restricted Subsidiaries in the Borrower and in other
Restricted Subsidiaries;
(e) investments by the Borrower in, and loans and advances by the
Borrower to, its Unrestricted Subsidiary in an aggregate amount not to
exceed $2,500,000 at any one time outstanding;
(f) the acquisition by the Borrower of substantially all the assets
of Morgan Newsome Monroe, Inc. on the terms and conditions set forth in
Schedule 6.8; and
(g) acquisitions the aggregate purchase price payable for which does
not exceed $15,000,000 in the aggregate or $5,000,000 in any fiscal year,
provided that no such acquisition shall be permitted unless (i) no Default
or Event of Default shall have occurred and be continuing at the time of
such acquisition or would result therefrom, (ii) in the case of any
acquisition for which the aggregate purchase price is greater than or equal
to $3,000,000, after giving effect to such acquisition the Borrower will be
in compliance on a pro forma basis with the covenants contained in
subsection 6.1 from the date of such acquisition, (iii) the business and/or
assets which are the subject of such acquisition are located within markets
being serviced by the Borrower on the date hereof, (iv) such acquisition
shall have been negotiated on an arms-length basis and (v) in the case of
any acquisition for which the aggregate purchase price is greater than or
equal to $3,000,000, not less than 20 Business Days prior to the date of
consummation of such acquisition the Borrower shall have delivered to each
Lender information reasonably satisfactory to each Lender regarding
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50
such acquisition (including, without limitation, information with respect
to revenue, cash flow, purchase price and number of signs acquired
(categorized by sign type)) and a certificate of the Borrower's Chief
Financial Officer confirming the statements made in clauses (i) and (ii)
above and setting forth in reasonable detail the computations supporting
the statements made in such certificate.
6.9 Limitation on Optional Payments and Modifications of Debt
Instruments. (a) Make any optional payment or prepayment on or redemption or
purchase of any of the Senior Notes or Indebtedness (other than the Loans) or
(b) amend, modify or change, or consent or agree to any amendment, modification
or change to any of the terms relating to the payment or prepayment of principal
of or interest on, any such Senior Notes, or of Indebtedness (other than any
such amendment, modification or change which would extend the maturity or reduce
the amount of any payment of principal thereof or which would reduce the rate or
extend the date for payment of interest thereon).
6.10 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of the Borrower's or such Subsidiary's business and (c) upon
fair and reasonable terms no less favorable to the Borrower or such Subsidiary,
as the case may be, than it would obtain in a comparable arm's length
transaction with a Person which is not an Affiliate.
6.11 Limitation on Changes in Fiscal Year. Permit the fiscal year of
the Borrower to end on a day other than December 31.
6.12 Limitation on Negative Pledge Clauses. Enter into with any
Person any agreement, other than (a) this Agreement, (b) the Indenture relating
to the Senior Notes and (c) any industrial revenue bonds, purchase money
mortgages or Financing Leases permitted by this Agreement (in which cases, any
prohibition or limitation shall only be effective against the assets financed
thereby), which prohibits or limits the ability of the Borrower or any of its
Restricted Subsidiaries to create, incur, assume or suffer to exist any Lien
upon any of its property, assets or revenues, whether now owned or hereafter
acquired.
6.13 Limitation on Lines of Business. Enter into any business,
either directly or through any Restricted Subsidiary, except for the owning,
operating or managing of the outdoor advertising business or out-of-house media
business.
6.14 Limitation on Deferred Management Compensation. Make or permit
to be made any payments of Deferred Management
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51
Compensation, except for payments thereof in an aggregate amount not to exceed
(a) $2,000,000 in fiscal year 1996 or (b) $1,000,000 in any fiscal year
thereafter (provided that, to the extent that the aggregate amount of such
payments made in any fiscal year are less than $1,000,000, an amount equal to
such difference shall be added to the permitted amount for the immediately
succeeding fiscal year); provided that no such payment shall be permitted unless
(i) no Default or Event of Default shall have occurred and be continuing at the
time of such payment or would result therefrom, (ii) after giving effect to such
payment the Borrower will be in compliance on a pro forma basis with the
covenants contained in subsection 6.1 from the date of such acquisition, (iii)
it is made in any fiscal year subsequent to the date of delivery to the Lenders
pursuant to subsection 5.1(a) of the audited financial statements of the
Borrower for the fiscal year immediately preceding such fiscal year and prior to
the last day of such fiscal year and (iv) there shall have been delivered to
each Lender a certificate of the Borrower's Chief Financial Officer confirming
the statements made in clauses (i) and (ii) above and setting forth in
reasonable detail the computations supporting the statements made in such
certificate.
6.15 Phantom Stock Agreements. (a) Amend any of the subordination
provisions of any Phantom Stock Agreement or amend any other provision of any
such Phantom Stock Agreement in any way which would result in a violation by the
Borrower of the provisions of subsection 6.14 or (b) enter into any new Phantom
Stock Agreement which does not contain substantially identical terms to the
Phantom Stock Agreements in effect on the date hereof (except for the amounts
payable to the respective parties thereto).
6.16 Limitation on Non-Acquisition Capital Expenditures. Make any
non-acquisition capital expenditures in excess of $3,000,000 in any fiscal year,
increased in years after 1996 by $250,000 per year, but not to exceed $4,000,000
in any fiscal year.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Revolving
Credit Loan when due in accordance with the terms thereof or hereof; or the
Borrower shall fail to pay any interest on any Loan, or any other amount
payable hereunder, within two days after any such interest or other amount
becomes due in accordance with the terms thereof or hereof; or
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52
(b) Any representation or warranty made or deemed made by the
Borrower or any other Loan Party herein or in any other Loan Document or
which is contained in any certificate, document or financial or other
statement furnished by it at any time under or in connection with this
Agreement or any such other Loan Document shall prove to have been
incorrect in any material respect on or as of the date made or deemed made;
or
(c) The Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in subsections 5.10(d)
and (e) of this Agreement, Section 6 of this Agreement, subsection 5.6,
5.8(b) or 5.9(a) of the Global Security Agreement or Section 6, 7 or 11 of
any Mortgage; or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in paragraphs
(a) through (c) of this Section), and such default shall continue
unremedied for a period of 30 days; or
(e) The Borrower or any of its Restricted Subsidiaries shall (i)
default in any payment of principal of or interest of any Indebtedness
(other than the Loans) or in the payment of any Guarantee Obligation,
beyond the period of grace (not to exceed 30 days), if any, provided in the
instrument or agreement under which such Indebtedness or Guarantee
Obligation was created; or (ii) default in the observance or performance of
any other agreement or condition relating to any such Indebtedness or
Guarantee Obligation or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is
to cause, or to permit the holder or holders of such Indebtedness or
beneficiary or beneficiaries of such Guarantee Obligation (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries)
to cause, with the giving of notice if required, such Indebtedness to
become due prior to its stated maturity or such Guarantee Obligation to
become payable; provided, however, that no Default or Event of Default
shall exist under this paragraph unless the aggregate amount of
Indebtedness and/or Guarantee Obligations in respect of which any default
or other event or condition referred to in this paragraph shall have
occurred shall be equal to at least $500,000; or
(f) (i) The Borrower, any of its Subsidiaries, or Adams shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an
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53
order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a receiver,
trustee, custodian, conservator or other similar official for it or for all
or any substantial part of its assets, or the Borrower, any of its
Subsidiaries or Adams shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against the Borrower, any
of its Subsidiaries or Adams any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against the Borrower, any of its Subsidiaries or
Adams any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for
any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (iv) the
Borrower, any of its Subsidiaries or Adams shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v)
the Borrower, any of its Subsidiaries or Adams shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with respect
to a Plan; and in each case in clauses (i) through (vi) above, such event
or
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54
condition, together with all other such events or conditions, if any,
involve an aggregate amount in excess of $500,000; or
(h) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance) of $500,000 or more, and all such
judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 60 days from the entry thereof; or
(i) (i) Any of the Security Documents shall cease, for any reason, to
be in full force and effect, or the Borrower or any other Loan Party which
is a party to any of the Security Documents shall so assert or (ii) the
Lien created by any of the Security Documents shall cease to be enforceable
and of the same effect and priority purported to be created thereby; or
(j) There shall occur any Change of Control; or
(k) If the aggregate number of signs owned by the Borrower or any of
its Restricted Subsidiaries at the beginning of any period of twelve
consecutive months that are destroyed or otherwise lost to the Borrower or
such Restricted Subsidiary during such period (whether as a result of a
casualty loss, a governmental condemnation, a termination or expiration of
a lease or otherwise (but excluding as a result of a sale of assets
permitted hereunder)) and that shall not have been replaced by the end of
such period (whether with the proceeds of insurance, condemnation awards or
otherwise) shall exceed (i) in the case of the signs in a single market,
the greater of (x) 10% of the signs in such market at the beginning of such
period and (y) 50 signs or (ii) in the case of the signs in all the
Borrower's markets, a number of signs which, at the beginning of such
period, were contributing to annual advertising revenues of the Borrower
and its Restricted Subsidiaries an aggregate amount equal to more than 5%
of the Borrower's advertising revenues for the Borrower's 1995 fiscal year;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement shall immediately become due and payable, and (B) if such
event is any other Event of Default, either or both of the following actions may
be taken: (i) with the consent of the Required Lenders, the Agent may, or upon
the request of the Required Lenders, the Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the
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55
Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Agent may, or upon the request of the Required Lenders,
the Agent shall, by notice to the Borrower, declare the Loans hereunder (with
accrued interest thereon) and all other amounts owing under this Agreement to be
due and payable forthwith, whereupon the same shall immediately become due and
payable. Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 8. THE AGENT
8.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes the Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
8.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
8.3 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except for its or such Person's own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrower or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of the Borrower to perform its obligations hereunder
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56
or thereunder. The Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower.
8.4 Reliance by Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the Agent. The Agent may deem and treat the payee of any Revolving
Credit Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with a request of the Required
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Revolving Credit Loans.
8.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the Agent
receives such a notice, the Agent shall give notice thereof to the Lenders. The
Agent shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders; provided that unless and
until the Agent shall have received such directions, the Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
8.6 Non-Reliance on Agent and Other Lenders. Each Lender expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Agent hereinafter taken, including
any review of the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by the Agent to any Lender. Each
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57
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make its Revolving
Credit Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the Agent or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrower which may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
8.7 Indemnification. The Lenders agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Commitment Percentages in effect on the date on which indemnification
is sought, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of the Revolving Credit Loans) be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of, the Commitments, this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Agent's gross negligence or willful misconduct. The
agreements in this subsection shall survive the payment of the Loans and all
other amounts payable hereunder.
8.8 Agent in Its Individual Capacity. The Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower as though the Agent were not the Agent hereunder and
under the other Loan Documents. With respect to the Revolving Credit Loans made
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58
by it, the Agent shall have the same rights and powers under this Agreement and
the other Loan Documents as any Lender and may exercise the same as though it
were not the Agent, and the terms "Lender" and "Lenders" shall include the Agent
in its individual capacity.
8.9 Successor Agent. The Agent may resign as Agent upon 10 days'
notice to the Lenders. If the Agent shall resign as Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent (provided
that it shall have been approved by the Borrower), shall succeed to the rights,
powers and duties of the Agent hereunder. Effective upon such appointment and
approval, the term "Agent" shall mean such successor agent, and the former
Agent's rights, powers and duties as Agent shall be terminated, without any
other or further act or deed on the part of such former Agent or any of the
parties to this Agreement or any holders of the Revolving Credit Loans. After
any retiring Agent's resignation as Agent, the provisions of this Section 8
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement and the other Loan Documents.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement nor any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Agent may, from time to time, (a) enter into with the Borrower written
amendments, supplements or modifications hereto and to the other Loan Documents
for the purpose of adding any provisions to this Agreement or the other Loan
Documents or changing in any manner the rights of the Lenders or of the Borrower
hereunder or thereunder or (b) waive, on such terms and conditions as the
Required Lenders or the Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification
shall (i) reduce the amount or extend the scheduled date of maturity of any
Revolving Credit Loan, or reduce the stated rate of any interest or fee payable
hereunder or extend the scheduled date of any payment thereof or increase the
aggregate amount or extend the expiration date of any Lender's Commitment or of
any scheduled mandatory reduction thereof, in each case without the consent of
each Lender affected thereby, or (ii) amend, modify or waive any provision of
this subsection or reduce the percentage specified in the definition of Required
Lenders, or consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement and the other Loan Documents or
release all or substantially all of the Collateral, in each case without the
<PAGE>
59
written consent of all the Lenders, or (iii) amend, modify or waive any
provision of Section 8 without the written consent of the then Agent. Any such
waiver and any such amendment, supplement or modification shall apply equally to
each of the Lenders and shall be binding upon the Borrower, the Lenders, the
Agent and all future holders of the Revolving Credit Loans. In the case of any
waiver, the Borrower, the Lenders and the Agent shall be restored to their
former positions and rights hereunder and under the other Loan Documents, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing; no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereon.
9.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand or
by overnight courier, when delivered, (b) in the case of delivery by mail, three
days after being deposited in the mails, postage prepaid, or (c) in the case of
delivery by facsimile transmission, when sent and receipt has been confirmed,
addressed as follows in the case of the Borrower and the Agent, and as set forth
in Schedule 1.1 in the case of the other parties hereto, or to such other
address as may be hereafter notified by the respective parties hereto:
The Borrower: Adams Outdoor Advertising Limited
Partnership
1380 W. Paces Ferry Road, N.W.
Suite 170, South Wing
Atlanta, Georgia 30327
Attention: Mr. Abe Levine
Fax: (404) 233-1901
The Agent: Canadian Imperial Bank of Commerce,
New York Agency
425 Lexington Avenue
New York, New York 10017
Attention: Mr. Matthew Jones
Fax: (212) 856-3558
provided that any notice, request or demand to or upon the Agent or the Lenders
pursuant to subsection 2.2, 2.4, 2.6, 2.8, 2.9 or 2.14 shall not be effective
until received.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Agent or any Lender, any right, remedy,
power or privilege hereunder or under the other Loan Documents shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges
<PAGE>
60
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.
9.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
9.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Agent for all its out-of-pocket costs and expenses incurred in
connection with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation of the transactions contemplated hereby and thereby,
including, without limitation, the reasonable fees and disbursements of counsel
to the Agent, (b) to pay or reimburse each Lender and the Agent for all its
costs and expenses incurred in connection with the enforcement or preservation
of any rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the fees and disbursements of counsel
to each Lender and of counsel to the Agent, (c) to pay, indemnify, and hold each
Lender and the Agent harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold each Lender and the Agent harmless from and against
any and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents and any such other
documents, including, without limitation, any of the foregoing relating to the
violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of the Borrower, any of its Subsidiaries or any of
the Properties (all the foregoing in this clause (d), collectively, the
"indemnified liabilities"), provided that the Borrower shall have no obligation
hereunder to the Agent or any Lender with respect to indemnified liabilities
arising from the gross negligence or willful misconduct of the Agent or any such
Lender. The agreements in this subsection shall survive repayment of the
Revolving Credit Loans and all other amounts payable hereunder.
9.6 Successors and Assigns; Participations and Assignments. (a)
This Agreement shall be binding upon and inure
<PAGE>
61
to the benefit of the Borrower, the Lenders, the Agent and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other entities ("Participants") participating interests in any
Revolving Credit Loan owing to such Lender, any Commitment of such Lender or any
other interest of such Lender hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Revolving Credit Loan for all purposes under this Agreement and the
other Loan Documents, and the Borrower and the Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. No Lender shall
be entitled to create in favor of any Participant, in the participation
agreement pursuant to which such Participant's participating interest shall be
created or otherwise, any right to vote on, consent to or approve any matter
relating to this Agreement or any other Loan Document except for those specified
in clauses (i) and (ii) of the proviso to subsection 9.1. The Borrower agrees
that if amounts outstanding under this Agreement are due or unpaid, or shall
have been declared or shall have become due and payable upon the occurrence of
an Event of Default, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement, provided that, in purchasing such participating
interest, such Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in subsection 9.7(a) as fully as if it
were a Lender hereunder. The Borrower also agrees that each Participant shall
be entitled to the benefits of subsections 2.14, 2.15 and 2.16 with respect to
its participation in the Commitments and the Revolving Credit Loans outstanding
from time to time as if it was a Lender; provided that, in the case of
subsection 2.15, such Participant shall have complied with the requirements of
said subsection and provided, further, that no Participant shall be entitled to
receive any greater amount pursuant to any such subsection than the transferor
Lender would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had no
such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable
<PAGE>
62
law, at any time and from time to time assign to any Lender or any affiliate
thereof or, with the consent of the Borrower and the Agent (which in each case
shall not be unreasonably withheld), to an additional bank or financial
institution (an "Assignee") all or any part of its rights and obligations under
this Agreement and the other Loan Documents pursuant to an Assignment and
Acceptance, substantially in the form of Exhibit F, executed by such Assignee,
such assigning Lender (and, in the case of an Assignee that is not then a Lender
or an affiliate thereof, by the Borrower and the Agent) and delivered to the
Agent for its acceptance and recording in the Register, provided that, in the
case of any such assignment to an additional bank or financial institution, the
sum of the aggregate principal amount of the Revolving Credit Loans and the
aggregate amount of the Available Commitment being assigned is in an amount
equal to at least $5,000,000 (or such lesser amount as may be agreed to by the
Borrower and the Agent). Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder with a Commitment as set forth therein,
and (y) the assigning Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such assigning Lender shall cease to be a party hereto). Notwithstanding any
provision of this paragraph (c) and paragraph (e) of this subsection, the
consent of the Borrower shall not be required, and, unless requested by the
Assignee and/or the assigning Lender, new Revolving Credit Notes shall not be
required to be executed and delivered by the Borrower, for any assignment which
occurs at any time when any of the events described in Section 7(f) shall have
occurred and be continuing.
(d) The Agent, on behalf of the Borrower, shall maintain at the
address of the Agent referred to in subsection 9.2 a copy of each Assignment and
Acceptance delivered to it and a register (the "Register") for the recordation
of the names and addresses of the Lenders and the Commitment of, and principal
amount of the Revolving Credit Loans owing to, each Lender from time to time.
The entries in the Register shall be conclusive, in the absence of manifest
error, and the Borrower, the Agent and the Lenders may (and, in the case of any
Revolving Credit Loan or other obligation hereunder not evidenced by a Revolving
Credit Note, shall) treat each Person whose name is recorded in the Register as
the owner of a Revolving Credit Loan or other obligation hereunder as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of any Revolving
Credit Loan or other obligation hereunder not evidenced by a Revolving Credit
Note shall be effective only upon appropriate entries with respect thereto being
made in the Register. The Register shall
<PAGE>
63
be available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Borrower and the Agent) together
with payment to the Agent of a registration and processing fee of $3,000 payable
by such assignor and/or such Assignee, the Agent shall (i) promptly accept such
Assignment and Acceptance and (ii) on the effective date determined pursuant
thereto record the information contained therein in the Register and give notice
of such acceptance and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee
any and all financial information in such Lender's possession concerning the
Borrower and its Affiliates which has been delivered to such Lender by or on
behalf of the Borrower pursuant to this Agreement or which has been delivered to
such Lender by or on behalf of the Borrower in connection with such Lender's
credit evaluation of the Borrower and its Affiliates prior to becoming a party
to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this subsection concerning assignments of Revolving
Credit Loans and Revolving Credit Notes relate only to absolute assignments and
that such provisions do not prohibit assignments creating security interests,
including, without limitation, any pledge or assignment by a Lender of any
Revolving Credit Loan or Revolving Credit Note to any Federal Reserve Bank in
accordance with applicable law.
9.7 Adjustments; Set-off. (a) If any Lender (a "Benefitted Lender")
shall at any time receive any payment of all or part of its Revolving Credit
Loans, or interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 7(f), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Revolving Credit Loans, or
interest thereon, such benefitted Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such other Lender's
Revolving Credit Loan, or shall provide such other Lenders with the benefits of
any such collateral, or the proceeds thereof, as shall be necessary to cause
such benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided, however, that
if all or any portion of such excess payment or benefits is thereafter recovered
from such benefitted Lender, such purchase
<PAGE>
64
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise) to set-
off and appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower. Each Lender agrees promptly to notify
the Borrower and the Agent after any such set-off and application made by such
Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application.
9.8 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Agent.
9.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Agent and the Lenders with respect
to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Agent or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
<PAGE>
65
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgement in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in subsection 9.2 or at such other
address of which the Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this subsection any special, exemplary, punitive or consequential
damages.
9.13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Agent nor any Lender has any fiduciary relationship
with or duty to the Borrower arising out of or in connection with this
Agreement or any of the other Loan Documents, and the relationship between
Agent and Lenders, on one hand, and the Borrower, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among the Borrower and the Lenders.
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66
9.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENT AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
<PAGE>
67
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
ADAMS OUTDOOR ADVERTISING LIMITED
PARTNERSHIP
By: ADAMS OUTDOOR ADVERTISING, INC.
/s/ Abe Levine
By: ---------------------------
Title: Vice President
CANADIAN IMPERIAL BANK OF COMMERCE,
New York Agency, as Agent
/s/ Matthew B. Jones
By: -------------------------------
Title: Authorized Signatory
CIBC, INC., as a Lender
/s/ Matthew B. Jones
By: -------------------------------
Title: Authorized Signatory
<PAGE>
PURCHASE AGREEMENT
AMONG
ADAMS OUTDOOR ADVERTISING LIMITED PARTNERSHIP
AND
JAMES P. MCANDREW
AND
MATTHEW OUTDOOR ADVERTISING ACQUISITION CO., L.P.
October 25, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION HEADINGS PAGE
<S> <C>
1. Definitions...................................................... 1
2. Purchase and Sale of Company Shares.............................. 5
(a) Basic Transaction........................................ 5
(b) Purchase Price........................................... 6
(c) The Closing.............................................. 6
(d) Deliveries at the Closing................................ 6
(f) Certain Consents......................................... 7
3. Representations and Warranties Concerning the Transaction........ 7
(a) Representations and Warranties of the Sellers............ 7
(b) Representations and Warranties of the Buyer.............. 8
4. Representations and Warranties Concerning the Pocono Business.... 9
(a) Organization, Qualification, and Corporate Power......... 9
(b) Capitalization........................................... 9
(c) Noncontravention......................................... 9
(d) Brokers' Fees............................................ 10
(e) Title to Tangible Assets................................. 10
(f) Financial Statements..................................... 10
(g) Events Subsequent to Most Recent Fiscal Month End........ 10
(h) Legal Compliance......................................... 11
(i) Tax Matters.............................................. 11
(j) Real Property............................................ 11
(k) Intellectual Property.................................... 12
(l) Contracts................................................ 12
(m) Advertising Structures................................... 13
(n) Advertising Contracts.................................... 13
(o) Permits.................................................. 13
(p) Site Leases.............................................. 13
(q) Powers of Attorney....................................... 13
(r) Litigation............................................... 14
(s) Employee Benefits........................................ 14
(t) Certain Business Relationships with the Company.......... 14
(u) Environmental Matter..................................... 15
(v) Insurance................................................ 15
(w) Completeness of Assets................................... 15
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
5. Pre-Closing Covenants............................................ 16
(a) General.................................................. 16
(b) Notices and Consents..................................... 16
(c) Operation of Business; Reorganization.................... 16
(d) Full Access.............................................. 16
(e) Notice of Developments................................... 16
(f) Disclosure Schedule and Annex I.......................... 17
(g) Hired Employees.......................................... 17
6. Further Assurances............................................... 17
7. Conditions to Obligation to Close................................ 17
(a) Conditions to Obligation of the Buyer.................... 17
(b) Conditions to Obligation of the Sellers.................. 18
8. Remedies for Breaches of This Agreement.......................... 19
(a) Survival of Representations and Warranties............... 19
(b) Indemnification Provisions for Benefit of the Buyer...... 19
(c) Indemnification Provisions for Benefit of the Sellers.... 20
(d) Matters Involving Third Parties.......................... 20
(e) Determination of Adverse Consequences.................... 21
(f) ......................................................... 21
9. Termination...................................................... 21
(a) Termination of Agreement................................. 21
(b) Effect of Termination.................................... 22
10. Miscellaneous................................................... 22
(a) Nature of Certain Obligations............................ 22
(b) Press Releases and Public Announcements.................. 22
(c) 401(k) Plan Transfer of Assets........................... 22
(d) No Third Party Beneficiaries............................. 22
(e) Entire Agreement......................................... 23
(f) Succession and Assignment................................ 23
(g) Counterparts............................................. 23
(h) Headings................................................. 23
(i) Notices.................................................. 23
(j) Governing Law............................................ 24
(k) Amendments and Waivers................................... 24
(l) Severability............................................. 24
(m) Expenses................................................. 24
(n) Construction............................................. 24
(o) Incorporation of Exhibits, Annexes, and Schedules........ 25
(p) Enforcement.............................................. 25
</TABLE>
ii
<PAGE>
PURCHASE AGREEMENT
This Purchase Agreement (the "Agreement") entered into as of October 25,
1996, by and among Adams Outdoor Advertising Limited Partnership, a Minnesota
limited partnership (the "Buyer"), James P. McAndrew ("McAndrew") and Matthew
Outdoor Advertising Acquisition Co., L.P., a Delaware limited partnership
("Matthew") (McAndrew and Matthew are referred to herein collectively, as
"Sellers.") (The Buyer, McAndrew and Matthew are referred to collectively herein
as the "Parties.")
W I T N E S S E T H
WHEREAS, Matthew owns and operates an outdoor advertising business,
including billboards and posters, in and around the Pocono region (the "Pocono
Business") through its Northeast Pennsylvania (Pocono) Division ("Division");
WHEREAS, in 1995 Matthew acquired the Pocono Business from PA Outdoor,
Inc., a Pennsylvania corporation (the "Company") in consideration of certain
limited partnership interests in Matthew;
WHEREAS, Matthew and the Company intend to reorganize through a redemption
of the Company's Matthew limited partnership interests in exchange for
substantially all of the assets of the Division other than the Matthew Pocono
Assets (as defined herein) (the "Reorganization");
WHEREAS, McAndrew owns all of the outstanding capital stock of the Company;
WHEREAS, Buyer desires to acquire the Pocono Business by acquiring all of
the outstanding capital stock of the Company and the Pocono Matthew Assets from
McAndrew and Matthew, respectively;
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
1. Definitions.
"Accredited Investor" has the meaning set forth in Regulation D promulgated
under the Securities Act.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable
amounts paid in settlement, liabilities, obligations, taxes, liens, losses,
expenses, and fees, including court costs and reasonable attorneys' fees and
expenses.
1
<PAGE>
"Advertising Contract" has the meaning set forth in (S)4(n) below.
"Affiliate" means, when used with reference to a specified Person, any
other Person that directly, or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with the specified
Person. For purposes of this definition of Affiliate, "control" means the
possession, directly or indirectly, of the power to direct or to cause the
direction of management and policies of the Person in question, whether through
the ownership of voting securities or by contract or otherwise.
"Affiliated Group" means any affiliated group within the meaning of Code
(S)1504.
"Asset Purchase Price" has the meaning set forth in (S)2(b) below.
"Assumed Liabilities" means (i) the liabilities of Matthew to the extent
reflected on the schedule of Working Capital at Closing, and (ii) the
liabilities and obligations of Matthew arising after the Closing pursuant to
those (A) Advertising Contracts, Site Leases, purchase money financing and other
written contracts and commitments included within the Matthew Pocono Assets and
listed on Exhibit C, and (B) the employment agreements listed on (S)4(l) of the
Disclosure Schedule between Matthew and those Employees of the Division who are
Hired Employees.
"Bill of Sale" means that Bill of Sale, Assignment and Assumption Agreement
in the form attached hereto as Exhibit A.
"Billboard" has the meaning set forth in (S)4(m) below.
"Billboard Leases" means those leases under which Matthew is the lessee for
those Billboards listed in (S)4(m) which are identified as Matthew Sub-Leased
Structures.
"Business Assets" means, collectively, the Matthew Pocono Assets and all
the assets of the Company.
"Buyer" has the meaning set forth in the preface above.
"CIBC" means the Canadian Imperial Bank of Commerce.
"Closing" has the meaning set forth in (S)2(e) below.
"Closing Date" has the meaning set forth in (S)2(c) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning set forth in the preface above.
"Company Shares" means the 306 shares of the Class A Voting Common Stock,
no par value $.01 per share, being all of the Company's issued and outstanding
stock.
2
<PAGE>
"Confidential Information" means any information concerning the businesses
and affairs of the Company that is not already generally available to the
public.
"Current Assets" means net accounts receivable (after allowance for bad
debts) and, to the extent that the Buyer receives the benefit thereof, prepaid
leases and prepaid other expenses.
"Current Liabilities" means all liabilities or obligations relating to the
Pocono Business that would be required under GAAP to be reflected as a liability
on a balance sheet dated as of the date of determination of Current Liabilities.
"CVF Fee" means the broker fee of Campell Vanderslice Furman, L.P. in the
amount of $185,000 with respect to the transactions contemplated under this
Agreement.
"Disclosure Schedule" has the meaning set forth in (S)4 below.
"Employee Benefit Plan" means any (a) nonqualified deferred compensation or
retirement plan or arrangement which is an Employee Pension Benefit Plan, (b)
qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan), or (d) Employee Welfare Benefit Plan or material fringe
benefit plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA (S)3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA (S)3(1).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Excluded Assets" means those assets of the Division specifically set forth
on Exhibit B hereto which will not be acquired by Buyer pursuant to this
Agreement.
"Financial Statements" has the meaning set forth in (S)4(f) below.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"Hired Employees" has the meaning set forth in (S)5(g).
"Income Tax" means any federal, state, local, or foreign income tax,
including any interest, penalty, or addition thereto, whether disputed or not.
"Income Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Income Taxes, including
any schedule or attachment thereto.
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"Indemnified Party" has the meaning set forth in (S)8(d) below.
"Indemnifying Party" has the meaning set forth in (S)8(d) below.
"Knowledge" means actual knowledge without independent investigation.
"McAndrew" has the meaning set forth in the preface above.
"Matthew" has the meaning set forth in the preface above.
"Matthew Pocono Assets" means the assets used in the operation of the
Pocono Business that are not otherwise owned by the Company or Excluded Assets,
including the assets specifically set forth on Exhibit C hereto and including
$250,000 of Working Capital as of the Closing Date.
"Most Recent Financial Statements" has the meaning set forth in (S)4(f)
below.
"Most Recent Fiscal Month End" has the meaning set forth in (S)4(f) below.
"Multiemployer Plan" has the meaning set forth in ERISA (S)3(37).
"NonCompetition Agreement" means a NonCompetition Agreement between Buyer
and Matthew in the form of Exhibit D hereto.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Party" has the meaning set forth in the preface above.
"Permit" has the meaning set forth in (S)4(o) below.
"Permitted Liens" means (a) liens for Property Taxes not yet due and
payable, and (b) purchase money liens and liens securing rental payments under
capital lease arrangements listed on Exhibit C.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"Pocono Business" has the meaning set forth in the Preface above.
"Property Tax" means any property, ad valorem, franchise, net worth,
capital stock or similar type tax.
"Purchase Price" has the meaning set forth in (S)2(b) below.
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"Reorganization" has the meaning set forth in the preface above.
"Reportable Event" has the meaning set forth in ERISA (S)4043.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance, charge,
or other security interest or options or rights of any third parties with
respect thereto.
"Sellers" has the meaning set forth in the preface above.
"Site Lease" has the meaning set forth in (S)4(p) below.
"Sublease" means a Sublease from Matthew to Buyer with respect to the
Division's headquarters office space in Bangor, Pennsylvania for a mutually
agreeable period at a monthly rental equal to the rental paid by Matthew for
such space.
"Stock Purchase Price" has the meaning set forth in (S)2(b) below.
"Subsidiary" means any corporation with respect to which a specified Person
(or a Subsidiary thereof) owns a majority of the common stock or has the power
to vote or direct the voting of sufficient securities to elect a majority of the
directors.
"Third Party Claim" has the meaning set forth in (S)8(d) below.
"Working Capital" means, as of a given date, the excess of Current Assets
over Current Liabilities of the Division.
2. Purchase and Sale of Company Shares and Pocono Assets.
(a) Basic Transaction.
(i) At the Closing, on and subject to the terms and conditions of this
Agreement, (x) the Buyer agrees to purchase from McAndrew, and McAndrew
agrees to sell to the Buyer, all of the Company Shares free and clear of
any Security Interest for the Stock Purchase Price, (y) the Buyer agrees to
purchase from Matthew, and Matthew agrees to sell to the Buyer, all of the
Matthew Pocono Assets free and clear of any Security Interest other than
Permitted Liens for the Asset Purchase Price; and (z) Matthew agrees to
enter into the NonCompetition Agreement.
(ii) At the Closing, Matthew will deliver to the Buyer a Schedule of
the Working Capital of the Division as of Closing, which schedule will be
prepared in a manner consistent with the preparation of the Most Recent
Financial Statements and shall reflect Current Assets of the Division and
Current Liabilities of the Division of the same kind and nature reflected
in the Most Recent Financial Statements;
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provided, however, that the Schedule shall reflect accrued salaries only
for Hired Employees. Buyer shall review the schedule delivered by Matthew,
and Matthew and the Buyer agree to resolve at Closing any objections raised
by the Buyer with respect thereto so that the schedule referred to herein
is mutually acceptable to Matthew and the Buyer. All of the Current Assets
and the Current Liabilities to the extent reflected on such Schedule shall
be Matthew Pocono Assets and Assumed Liabilities, respectively; provided,
however, that to the extent that Working Capital as shown on such Schedule
is less than $250,000, Matthew shall retain and agree to pay and perform
and there shall be excluded from Assumed Liabilities certain identified
Current Liabilities acceptable to the Sellers and the Buyer representing an
amount of Current Liabilities which would be necessary to result in
increasing Working Capital to approximately, but not less than, $250,000;
and provided further, that to the extent that Working Capital as shown on
such Schedule exceeds $250,000, Matthew shall retain and there shall be
excluded from the Matthew Pocono Assets certain identified accounts
receivable acceptable to the Sellers and the Buyer representing an amount
of accounts receivable from the Current Assets which would be necessary to
result in decreasing Working Capital to approximately, but not less than,
$250,000.
(b) Purchase Price. At the Closing, the Buyer agrees to pay Eight Million
Two Hundred Fifteen Thousand Dollars ($8,215,000) (the "Purchase Price") by wire
transfer in immediately available funds, of which One Million Four Hundred Fifty
Thousand Dollars ($1,450,000) ("Asset Purchase Price") shall be delivered to
Matthew for the Matthew Pocono Assets and the balance ("Stock Purchase Price")
shall be delivered to McAndrew for the Company Shares. As additional
consideration for the Matthew Pocono Assets the Buyer shall assume the Assumed
Liabilities. In addition Buyer agrees to pay Matthew $100,000, by wire transfer
in immediately available funds, as consideration for the NonCompetition
Agreement. Upon the execution of this Agreement, the Buyer shall pay a $100,000
deposit to the Sellers which, upon the Closing, shall be credited to the Stock
Purchase Price and the Asset Purchase Price pro rata based on the ratio each
bears to the total Purchase Price. The $100,000 deposit shall be non-refundable
unless the Buyer terminates this Agreement in accordance with (S)9(a)(iii)
hereof, in which case the deposit shall be returned to the Buyer in addition to
any other remedy to which the Buyer may be entitled hereunder.
(c) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Powell, Goldstein,
Frazer & Murphy in Atlanta, Georgia, commencing at 9:00 a.m. local time on
October 31, 1996 or such other date as the Buyer and the Sellers may mutually
determine (the "Closing Date").
(d) Deliveries at the Closing. At the Closing, (i) the Sellers will deliver
to the Buyer the various certificates, instruments, and documents referred to in
(S)7(a) below, (ii) the Buyer will deliver to the Sellers the various
certificates, instruments, and documents referred to in (S)7(b) below, (iii)
McAndrew will deliver to the Buyer stock certificates representing all of the
Company Shares, endorsed in blank or accompanied by duly executed assignment
documents, (iv) Matthew and the Buyer will each execute and deliver a
counterpart of the Bill of Sale with respect to the Matthew Pocono Assets and
the Assumed Liabilities, and (v) the Buyer will deliver to each of the Sellers
the consideration specified in (S)2(b) above and to
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Campell Vanderslice Furman, L.P. the CVF Fee, by wire transfer inimmediately
available funds.
(f) Certain Consents. The Disclosure Schedule identifies each agreement,
contract, permit or similar asset to be assigned to the Company in the
Reorganization or to the Buyer as a Matthew Pocono Asset pursuant to this
Agreement which may not be assigned hereunder without the consent of another
person or written notice being given to another person. Delivery of the consents
listed on Exhibit E (being consents necessary to the assignment of any Site
Leases that individually account for more than 1% of the Pocono Business'
revenues but excluding any requirement which consists solely of prior written
notice of transfer) by Matthew to the Buyer is a condition to the obligation of
the Buyer to consummate the transactions contemplated hereunder. With respect to
any consent not obtained at or prior to Closing, Buyer may waive such condition
and, with respect to the agreement, contract, permit or similar asset for which
consent has not been contained, this Agreement shall not constitute an agreement
to assign the same if an attempted or actual assignment would constitute a
breach thereof or be unlawful, and Matthew and the Buyer, to the maximum extent
permitted by law and any terms of or limitations relating to such asset, shall
use their reasonable best efforts to obtain for Buyer the benefits thereunder,
and shall cooperate to the maximum extent permitted by law and any terms of or
limitations relating to such asset, in any reasonable arrangement designed to
provide such benefits to the Buyer, including any sublease or subcontract or
similar arrangement, and if the Buyer has obtained such benefits, the Buyer
shall discharge Matthew's obligations thereunder arising from and after the
Closing Date, except for those obligations arising because of Matthew's breach.
3. Representations and Warranties Concerning the Transaction.
(a) Representations and Warranties of the Sellers. Each of the Sellers,
severally and not jointly, represents and warrants to the Buyer that the
statements contained in this (S)3(a) are correct and complete as of the date of
this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this (S)3(a)) with respect to himself or itself,
except as set forth in Annex I to be delivered by Matthew to Buyer as provided
in (S)5(f) hereof.
(i) Organization of Certain Sellers. Matthew is a partnership, duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation and duly authorized to conduct business
and is in good standing under the laws of each jurisdiction where such
qualification is required, except where the lack of such qualification
would not have a material adverse effect on the financial condition of
Matthew taken as a whole.
(ii) Authorization of Transaction. The Seller has full power and
authority to execute and deliver this Agreement and to perform his or its
obligations hereunder. This Agreement constitutes the valid and legally
binding obligation of the Seller, enforceable in accordance with its terms
and conditions. The Seller need not give
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any notice to, make any filing with, or obtain any authorization, consent,
or approval of any government or governmental agency in order to consummate
the transactions contemplated by this Agreement.
(iii) Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated
hereby, will (A) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which the Seller is
subject or, with respect to Matthew, any provision of its partnership
agreement, or (B) except as set forth in (S)3(a)(iii) of Annex I, conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel any agreement, contract, lease, license, instrument, or
other arrangement to which the Seller is a party or by which he or it is
bound or to which any of his or its assets is subject.
(iv) Brokers' Fees. Except for fees owed to Campell Vanderslice
Furman, L.P., the Seller has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
(v) Title to Company Shares. Except for a pledge of the Company
Shares to CIBC, McAndrew has good title to the Company Shares, free and
clear of all Security Interests.
(b) Representations and Warranties of the Buyer. The Buyer represents and
warrants to the Sellers that the statements contained in this (S)3(b) are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this (S)3(b)),
except as set forth in Annex II attached hereto.
(i) Organization of the Buyer. The Buyer is a partnership duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation. The Buyer is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction where
such qualification is required, except where the lack of such qualification
would not have a material adverse effect on the financial condition of the
Buyer taken as a whole.
(ii) Authorization of Transaction. The Buyer has full power and
authority to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement constitutes the valid and legally
binding obligation of the Buyer, enforceable in accordance with its terms
and conditions. The Buyer need not give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any government
or governmental agency in order to consummate the transactions contemplated
by this Agreement.
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(iii) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby,
will (A) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Buyer is subject or
any provision of its charter or bylaws or (B) conflict with, result in a
breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Buyer is a party or by which
it is bound or to which any of its assets is subject.
(iv) Brokers' Fees. The Buyer has no liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which any Seller could
become liable or obligated.
(v) Investment. The Buyer is an Accredited Investor acquiring the
Company Shares for investment purposes only and not with a view to or for
sale in connection with any distribution thereof within the meaning of the
Securities Act.
4. Representations and Warranties Concerning the Pocono Business. Matthew
represents and warrants to the Buyer that the statements contained in this (S)4
are correct and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
(S)4), except as set forth in the disclosure schedule to be delivered by Matthew
to the Buyer as provided in (S)5(f) hereof, as the same may be amended as
provided herein (the "Disclosure Schedule"). The parties acknowledge that Annex
I and the Disclosure Schedule shall not be attached upon execution hereof, but
that, upon delivery of Annex I and the Disclosure Schedule in accordance with
(S)5(f), each shall be attached and incorporated herein by reference.
(a) Organization, Qualification, and Corporate Power. The Company is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Pennsylvania. The Company is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction where such
qualification is required, except where the lack of such qualification would not
have a material adverse effect on the financial condition of the Company taken
as a whole. The Company has full corporate power and authority to carry on the
Pocono Business and to own and use the properties used in the Division.
(b) Capitalization. The Company has authorized capital stock consisting
of: 2,500 shares of Class A Voting Common Stock, no par value, of which 306
shares are issued and outstanding; and 2,500 shares of Class B Common Voting
Stock, no par value, of which no shares are issued and outstanding. All of the
issued and outstanding Company Shares have been duly authorized, are validly
issued, fully paid, and nonassessable, and are held of record by McAndrew.
There are no outstanding or authorized options, warrants, purchase rights,
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subscription rights, conversion rights, exchange rights, or other contracts or
commitments that could require the Company to issue, sell, or otherwise cause to
become outstanding any of its capital stock. There are no outstanding or
authorized stock appreciation, phantom stock, profit participation, or similar
rights with respect to the Company.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Company is subject or any provision
of the charter or bylaws of the Company or (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel any notice under
any agreement, contract, lease, license, instrument, or other arrangement to
which the Company is a party or by which it is bound or to which any of its
assets is subject (or result in the imposition of any Security Interest upon any
of its assets), except as set forth in (S) 4(c) of the Disclosure Schedule. The
Company is not required to give any notice to, make any filing with, or obtain
any authorization, consent, or approval of any government or governmental agency
in order for the Parties to consummate the transactions contemplated by this
Agreement, except where the failure to give notice, to file, or to obtain any
authorization, consent, or approval would not have a material adverse effect on
the financial condition of the Company together with the Matthew Pocono Assets
taken as a whole or on the ability of the Parties to consummate the transactions
contemplated by this Agreement.
(d) Brokers' Fees. The Company has no liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
(e) Title to Tangible Assets. Matthew has as of the date hereof good and
valid title, or, with respect to the Site Leases and any other leases included
in the Matthew Pocono Assets, a valid lessee's interest to the Matthew Pocono
Assets. Matthew will have as of the Closing Date good and valid title, or, with
respect to the Site Leases and any other leases included in the Matthew Pocono
Assets, a valid lessee's interest to the Matthew Pocono Assets. The Company
will have at Closing good and valid title, or, with respect to the Site Leases
or any other lease in the assets of the Company, a valid lessee's interest to
the assets used in the operation of the Division, other than the Matthew Pocono
Assets and the Excluded Assets.
(f) Financial Statements. Attached hereto as (S)4(f) of the Disclosure
Schedule are the following financial statements (collectively, the "Financial
Statements"): (i) unaudited statements of operating income as of and for the
fiscal years ended December 31, 1995 and December 31, 1994 for the Company; and
(ii) pro forma balance sheets of the Company (after giving effect to the
Reorganization) and statements of operating income (the "Most Recent Financial
Statements") as of and for the nine months ended September 30, 1996 for the
Pocono Business (the "Most Recent Fiscal Month End"). The Financial Statements
have been prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered thereby and present fairly the financial
condition of the Pocono Business as
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of such dates and the results of operations of the Pocono Business for such
periods; provided, however, that the Most Recent Financial Statements have been
prepared after giving effect to the Reorganization and are subject to normal
year-end adjustments and that all the Financial Statements lack footnotes and
other presentation items required under GAAP; and provided, further, that the
Financial Statements have been prepared without any allocation of corporate
overhead. The term "corporate overhead," as used in this Agreement, does not
include any Division level operating expenses.
(g) Events Subsequent to Most Recent Fiscal Month End. Since the Most
Recent Fiscal Month End, there has not been any material adverse change in the
financial condition of the Division or the Company and the Matthew Pocono Assets
taken as a whole.
(h) Legal Compliance. Each of the Company and Matthew has complied in all
material respects with all applicable laws (including rules, regulations, codes,
plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder)
of federal, state, local, and foreign governments (and all agencies thereof).
(i) Tax Matters.
(i) Each of the Company and Matthew has filed all Income Tax Returns
that it was required to file, and has paid all Income Taxes shown thereon
as owing.
(ii) No Income Tax Returns with respect to the Company or Matthew for
taxable periods ended on or after December 31, 1992 have been audited, and
no Income Tax Returns of the Company or Matthew are currently the subject
of audit. The Sellers have delivered to the Buyer correct and complete
copies of all Income Tax Returns filed by the Company for periods after
December 31, 1992.
(iii) The Company and Matthew have not waived any statute of
limitations in respect of Income Taxes or agreed to any extension of time
with respect to an Income Tax assessment or deficiency.
(iv) The Company is not a party to any Income Tax allocation or
sharing agreement.
(v) The Company has not been a member of an Affiliated Group filing a
consolidated federal Income Tax Return.
(vi) On the Closing Date, none of the Buyer, the Company or the
Business Assets shall be liable or responsible for any tax arising or
relating to any period prior to the Closing Date, except to the extent
included in Current Liabilities. In determining whether a tax (other than
a Property Tax) relates to a period prior to or after the Closing Date, the
Company shall be treated as if its books had been closed on the Closing
Date and the liability for such tax shall be allocated between the
respective periods (i.e., before and after the Closing Date), based upon
the actual events occurring during those periods. In the case of a
Property Tax relating to those
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periods, the liability for such tax shall be allocated between the two
periods (i.e., before and after the Closing Date) as if such tax accrued
ratably over the period covering such tax, regardless of the actual lien
date for payment of the tax.
(j) Real Property.
(i) Neither Matthew nor the Company owns any real property as of the
date hereof used in the operation of the Division, except for the perpetual
easements listed in Section 4(j)(i) of the Disclosure Schedule. With
respect to each such easement, the Company has, and at the Closing, Matthew
or the Company will have, good and marketable title to the perpetual
easement, free and clear of any Security Interest, covenant or other
restriction, except for taxes or installments of special assessments not
yet delinquent, recorded covenants and other restrictions, and utility
easements, building restrictions, zoning restrictions, and other
restrictions which do not impair the current use of the easement.
(ii) Section 4(j)(ii) of the Disclosure Schedule lists all real
property leased or subleased to Matthew or the Company (other than real
property subject to Site Leases) that is used in the operation of the
Division. The Sellers have delivered to the Buyer correct and complete
copies of the leases and subleases listed in (S)4(j)(ii) of the Disclosure
Schedule (as amended to date). Each lease and sublease listed in
(S)4(j)(ii) of the Disclosure Schedule is in full force and effect, and
there exists no fact which, with the passage of time or the giving of
notice, would constitute a default by Matthew or the Company or, to
Sellers' knowledge, any other party thereto, under any such lease or
entitle any other party to terminate or amend such lease. Neither Matthew
nor the Company has received any written notice that any other party to any
such lease intends to cancel or terminate any such lease.
(iii) The real property easements listed in Section 4(j)(i) of the
Disclosure Schedule, the leases listed on Section 4(j)(ii) of the
Disclosure Schedule and the Site Leases constitute all real estate or
interests in real estate (excluding Billboards) necessary to operate the
Pocono Business. Except as set forth in Schedule 4(j)(iii), there is no
pending or, to Sellers' knowledge, threatened condemnation or similar
proceeding that would adversely affect or impair the rights of the Company
or Matthew with respect to such real property or such leases or would
adversely affect or impair the operation of the Pocono Business thereon.
(k) Intellectual Property. Section 4(k) of the Disclosure Schedule
identifies all of Matthew's trade names, trademarks and patents used in the
operation of the Division and any registrations thereof which have been issued
to Matthew, identifies any pending patent application or application for
trademark registration to Matthew, and identifies any material license or
agreement which Matthew holds from or has granted to any third party with
respect to any of its intellectual property used in connection with the
operation of the Division (excluding in all events any "shrink-wrap" software
license and any list of names of advertisers, lessors or other similar lists).
Other than the name "Pocono Outdoor
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Advertising" or as indicated on (S)4(k) of the Disclosure Schedule, all such
trade names, trademarks, patents or other intellectual property are Excluded
Assets.
(l) Contracts. Section 4(l) of the Disclosure Schedule lists all written
agreements (other than Advertising Contracts or Site Leases) to which Matthew
is, or the Company will be at Closing, a party, the performance of which will
involve consideration paid by or to the Company in excess of $5,000 per annum
and that relate to the operation of the Division. The Sellers have delivered to
the Buyer a correct and complete copy of each contract or other agreement listed
in (S)4(l) of the Disclosure Schedule (as amended to date).
(m) Advertising Structures. Section 4(m) of the Disclosure Schedule lists
all outdoor advertising structures used in the operation of the Division (the
"Billboards"). Each of the Billboards is (i) in condition to accept faces; and
(ii) in good condition and repair. Matthew has obtained all material Permits
necessary for the installation, maintenance and operation of the Billboards. The
Sellers shall have delivered to the Buyer a correct and complete copy of each
Billboard Lease prior to Closing. Each of the Billboard Leases is in full force
and effect and, to Seller's knowledge, there exists no fact which, with the
passage of time or the giving of notice, would constitute a material default by
Matthew or any other party thereto under any such Billboard Lease.
(n) Advertising Contracts. Section 4(n) of the Disclosure Schedule (as
amended to date) lists all written contracts to which Matthew is a party or to
which the Company will be a party at Closing relating to the display of outdoor
advertising (the "Advertising Contracts"). The Advertising Contracts all are in
full force and effect, and, to Sellers' knowledge, there exists no fact which,
with the passage of time or the giving of notice, would constitute a material
default by Matthew or the Company under any of the Advertising Contracts or
entitle any other party to terminate or amend any of such agreements. Neither
Matthew nor the Company has received any written notice that any other party to
any of the material Advertising Contracts intends to cancel or terminate any
such contract.
(o) Permits. Section 4(o) of the Disclosure Schedule lists all governmental
permits, certificates, registrations, licenses and authorizations to erect and
maintain advertising structures and to occupy advertising sites relating to the
Division to which Matthew has any right, title or interest (the "Permits"). The
Permits constitute all material governmental permits, certificates,
registrations, licenses and authorizations necessary to operate the Pocono
Business. To the extent Matthew transfers Billboards to the Company in the
Reorganization, Matthew will also transfer all of its rights in the Permits
related to such Billboards to the Company in the Reorganization and such
transfer will not adversely affect or impair the Permits. Matthew is, and at the
Closing the Company and Matthew will be, in material compliance with the terms
of the Permits. The Sellers are not aware of any fact or event which constitutes
a violation of any Permit and the Sellers have not received any written notice
that any agency or authority issuing any Permit intends to cancel, terminate,
modify, amend or impose any conditions with respect to any Permit.
(p) Site Leases. Section 4(p) of the Disclosure Schedule lists all written
agreements, leases and licenses (other than Permits) held by Matthew or the
Company for the use of real
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estate on which the Billboards are or may be located (the "Site Leases"). Each
Site Lease listed in (S)4(p) of the Disclosure Schedule is in full force and
effect, except as listed in (S) 4(p) of the Disclosure Schedule, and, to
Sellers' knowledge, there exists no fact which, with the passage of time or the
giving of notice, would constitute a material default by Matthew or the Company
or any other party thereto, under any such Site Lease. Neither Matthew nor the
Company has received any written notice that any other party to any of the Site
Leases intends to cancel or terminate such Site Lease.
(q) Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of the Company.
(r) Litigation. Section 4(r) of the Disclosure Schedule sets forth each
instance in which the Company or Matthew (with respect to the Pocono Business)
(i) is subject to any outstanding injunction, judgment, order, decree, ruling,
or charge or (ii) is a party to any action, suit, proceeding, hearing, or
investigation of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction.
(s) Employee Benefits.
(i) The Company does not maintain any Employee Benefit Plans or have
any employees. Section 4(s) of the Disclosure Schedule lists each Employee
Benefit Plan that Matthew maintains or to which Matthew contributes. None
of the Company, the Buyer or the Business Assets shall be liable for,
charged with or obligated with respect to any such Employee Benefit Plan or
any other obligation of Matthew to its employees, except for accrued
salaries to the extent reflected on the schedule of Working Capital at
Closing and those employment agreements included within the Assumed
Liabilities.
(A) Each such Employee Benefit Plan (and each related trust,
insurance contract, or fund) complies in form and in operation in all
material respects with the applicable requirements of ERISA and the
Code.
(B) The 401(k) Plan maintained by the Company or Matthew is the
subject of a favorable determination letter from the Internal Revenue
Service to the effect that in form it meets the requirements of Code
(S)401(a).
(C) The Sellers have delivered to the Buyer correct and complete
copies of the plan documents and summary plan descriptions, the most
recent determination letter received from the Internal Revenue
Service, the most recent Form 5500 Annual Report, and all related
trust agreements, insurance contracts, and other funding agreements
which implement each such Employee Benefit Plan.
(ii) With respect to each Employee Benefit Plan that the Company
maintains or ever has maintained or to which it contributes, ever has
contributed, or ever has been required to contribute:
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(A) Section 4(s) of the Disclosure Schedule identifies any
Multiemployer Plan or Employee Benefit Plan that was or has been
subject to Title IV of ERISA.
(B) No action, suit, proceeding, hearing, or investigation with
respect to the administration or the investment of the assets of any
such Employee Benefit Plan (other than routine claims for benefits) is
pending.
(t) Certain Business Relationships with the Company. Except as set forth
in (S)4(t) of the Disclosure Schedule, none of the Sellers and their Affiliates
has been involved in any material business arrangement or relationship with the
Company or with Matthew with respect to the operation of the Division within the
past twelve months and none of the Sellers or their Affiliates owns any asset
(other than the Matthew Pocono Assets which will be transferred to Buyer at
Closing), tangible or intangible, which is used in the operation of the
Division. Except as set forth in (S)4(t) of the Disclosure Schedule, (i) there
are no commitments to, and no income reflected in the Financial Statements or
the Most Recent Financial Statements has been derived from, any Affiliate of a
Seller or any division of Matthew other than the Division, and (ii) following
the Closing, neither the Company nor the Buyer shall have any obligation of any
kind or description to any such Affiliate or any such division of Matthew.
Except for items of corporate overhead, (x) no material expense relating to the
operation of the Pocono Business has been borne by an Affiliate of any Seller or
by a division of Matthew other than the Division, and (y) all material expenses
relating to the operation of the Pocono Business have been reflected in the
Financial Statements and the Most Recent Statements. The Sellers do not have
any reasonable basis to believe that the Business will lose any employees
(except for those who will not be Hired Employees as contemplated herein),
agent, advertiser or any other advantageous arrangement as a result of the
consummation of the transactions contemplated hereby.
(u) Environmental Matters.
(i) There have been no claims, litigation, administrative proceedings,
actual or, to Sellers' Knowledge, threatened, or judgments or orders,
against or applicable to the Company or the Division relating to any
hazardous substances or hazardous wastes with respect to any real property
used in the Division, including the property under Site Leases.
(ii) To Sellers' knowledge, there have been no hazardous substances or
hazardous wastes, as defined by the Resource Conservation and Recovery Act
(42 U.S.C. Subsection 6901, et seq.) and the Comprehensive Environmental
Responsibility Compensation and Liability Act (42 U.S.C. Subsection 9601,
et seq,), stored, handled, or disposed of on such real property by Matthew
or the Company in material violation of applicable environmental laws.
(v) Insurance. With respect to the Division, Matthew maintains adequate
insurance protection against all liabilities, claims, and risks against which it
is customary in the industry to insure.
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(w) Completeness of Assets. The Business Assets and the Excluded Assets
constitute all assets used in the operation of the Pocono Business. At Closing,
the rights and properties of the Company together with the Matthew Pocono Assets
and the Excluded Assets will include all the rights and property necessary to
the operation of the Division in the manner it is presently conducted.
(x) Accounts Receivable. The accounts receivable of the Pocono Business
reflected in the Financial Statements and the Most Recent Financial Statements
are accounts which were generated in the ordinary course of operation of the
Pocono Business by the Company or by Matthew with genuine expectation by the
Company and Matthew of collection thereof.
(y) Liabilities. The Company has no liabilities, and, on the Closing Date,
the Company will have no liabilities of a kind customarily accrued, reserved
against or disclosed in a corporate balance sheet prepared in accordance with
GAAP, other than liabilities included in the calculation of Working Capital.
5. Pre-Closing Covenants. The Parties agree as follows with respect to the
period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties will use his or its reasonable best
efforts to take all action and to do all things necessary, proper, or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions set
forth in (S)7 below).
(b) Notices and Consents. Each of the Parties will (and the Sellers will
cause the Company to) give any notices to, make any filings with, and use its
reasonable best efforts to obtain any authorizations, consents, and approvals of
governments and governmental agencies or third parties necessary to consummate
the transactions contemplated herein.
(c) Operation of Business; Reorganization. Matthew will not cause or permit
the Division, and McAndrew will not cause or permit the Company, to engage in
any practice, take any action, or enter into any transaction outside the
Ordinary Course of Business, except for the consummation of the Reorganization.
Matthew will, and McAndrew will cause the Company to, consummate the
Reorganization at or prior to Closing such that the representations and
warranties set forth in (S)4 as to the Company after giving effect to the
Reorganization shall be true and correct in all material respects.
(d) Full Access. The Sellers will permit representatives of the Buyer to
have access in a manner so as not to interfere with the normal business
operations of the Division at all reasonable times to all premises, properties,
personnel, books, records (including tax records), contracts, and documents of
or pertaining to the Division or the Company. The Buyer will treat and hold as
such any Confidential Information it receives from any of the Sellers and the
Company in the course of the reviews contemplated by this (S)5(d), will not use
any of the Confidential Information except in connection with this Agreement,
and, if this Agreement is terminated for any reason whatsoever, will return to
the Sellers and the
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Company all tangible embodiments (and all copies) of the Confidential
Information which are in its possession.
(e) Notice of Developments.
(i) Matthew shall notify the Buyer of any development causing a breach
of any of the representations and warranties in (S)4 above. Unless the
Buyer terminates this Agreement pursuant to (S)9(a)(iii) below by reason of
the development and exercises that right in accordance with (S)9(a)(iii)
below, the written notice pursuant to this (S)5(e)(i) will be deemed to
have amended the Disclosure Schedule, to have qualified the representations
and warranties contained in (S)4 above, and to have cured any
misrepresentation or breach of warranty that otherwise might have existed
hereunder by reason of the development.
(ii) Each Party will give prompt written notice to the others of any
material adverse development causing a breach of any of his or its own
representations and warranties in (S)3 above. No disclosure by any Party
pursuant to this (S)5(e)(ii), however, shall be deemed to amend or
supplement Annex I, Annex II, or the Disclosure Schedule or to prevent or
cure any misrepresentation or breach of warranty.
(f) Disclosure Schedule and Annex I. Matthew shall prepare and deliver to
Buyer a complete and up-to-date Disclosure Schedule and the Sellers shall
prepare and deliver to Buyer an up-to-date Annex I within five (5) days after
the execution of this Agreement for attachment and incorporation by reference to
this Agreement.
(g) Hired Employees. Buyer shall inform Matthew in writing at least five
business (5) days prior to the Closing Date of those employees of the Division
to whom Buyer will offer employment ("Hired Employees").
6. Further Assurances. In case at any time after the Closing any further
action is necessary to carry out the purposes of this Agreement, each of the
Parties will take such further action (including the execution and delivery of
such further instruments and documents) as any other Party reasonably may
request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under (S)8 below).
7. Conditions to Obligation to Close.
(a) Conditions to Obligation of the Buyer. The obligation of the Buyer to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in (S)3(a) and (S)4
above shall be true and correct in all material respects at and as of the
Closing Date;
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(ii) the Sellers shall have performed and complied with all of their
covenants hereunder in all material respects through the Closing;
(iii) there shall not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the
transactions contemplated by this Agreement;
(iv) Matthew shall have delivered to the Buyer a certificate to the
effect that each of the conditions specified above in (S)7(a)(i)-(iii) is
satisfied in all respects;
(v) CIBC shall have consented to the transactions set forth herein and
released its security interest in the Company Shares and the Matthew Pocono
Assets;
(vi) the Buyer shall have received written confirmation from CIBC that
CIBC has received the amount of the Stock Purchase Price and deposited a
portion thereof into a CIBC account to secure McAndrew's obligation to pay
taxes with respect to the sale of the Company Shares and applied the
balance to the payment of Matthew's obligations to CIBC;
(vii) Matthew shall have entered into and delivered the NonCompetition
Agreement and the Sublease;
(viii) Matthew shall have delivered the Bill of Sale and any other
documents necessary to evidence the transfer of the Matthew Pocono Assets;
(ix) the Buyer shall have received from counsel to the Sellers an
opinion addressed to the Buyer in form and substance reasonably
satisfactory to counsel to Buyer, dated as of the Closing Date; and
(x) all actions to be taken by the Sellers in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form
and substance to the Buyer.
The Buyer may waive any condition specified in this (S)7(a) at or prior to the
Closing.
(b) Conditions to Obligation of the Sellers. The obligation of the Sellers
to consummate the transactions to be performed by them in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in (S)3(b) above
shall be true and correct in all material respects at and as of the Closing
Date;
(ii) the Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
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(iii) there shall not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the
transactions contemplated by this Agreement;
(iv) the Buyer shall have delivered to the Sellers a certificate to
the effect that each of the conditions specified above in (S)7(b)(i)-(iii)
is satisfied in all respects;
(v) CIBC shall have consented to the transactions set forth herein and
released its security interest in the Company Shares and the Matthew Pocono
Assets;
(vi) Buyer shall have delivered the Bill of Sale and any other
documents necessary to evidence the assumption of the Assumed Liabilities;
(vii) the Sellers shall have received from counsel to the Buyer an
opinion addressed to the Sellers, and dated as of the Closing Date in form
and substance reasonably satisfactory to counsel to Sellers; and
(viii) all actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form
and substance to the Sellers.
The Sellers may waive any condition specified in this (S)7(b) at or prior to the
Closing.
8. Remedies for Breaches of This Agreement.
(a) Survival of Representations and Warranties. All of the representations
and warranties of Matthew contained in (S)4 above shall survive the Closing
hereunder (unless the Buyer knew or had reason to know of any misrepresentation
or breach of warranty at the time of Closing other than knowledge of the Buyer
obtained from the notice from Matthew given pursuant to (S)5(e)(i) above) and
continue in full force and effect for the following periods thereafter:
(i) With respect to claims arising from a breach of the
representations and warranties of Matthew contained in (S)(S)4(e), 4(i),
4(s), 4(u) and claims for fraud, such claims shall survive the Closing,
subject only to any applicable statute of limitations; and
(ii) With respect to claims arising from any other representation and
warranty of Matthew contained in (S)4 above, such claims shall survive the
Closing for a period of one (1) year thereafter.
All of the representations and warranties of the Parties contained in (S)3 above
shall survive the Closing (unless the damaged Party knew or had reason to know
of any misrepresentation or breach of warranty at the time of Closing other than
knowledge of the Buyer obtained from the notice from Matthew given pursuant to
(S)5(e)(i) above) and continue in full force
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and effect for a period of five years thereafter (subject to any applicable
statutes of limitations, except with respect to claims arising from a breach of
the representations and warranties of the Sellers contained in (S)3(a)(v), or
claims against any Party for fraud, which claims shall survive the Closing
subject only to any applicable statute of limitations).
(b) Indemnification Provisions for Benefit of the Buyer.
(i) In the event any of the Sellers breaches any of their
representations, warranties, and covenants contained herein (other than the
covenants in (S)2(a) above and the representations and warranties in
(S)3(a) above), and, if there is an applicable survival period pursuant to
(S)8(a) above, provided that the Buyer makes a written claim for
indemnification against Matthew pursuant to (S)10(h) below within such
survival period, then Matthew agrees to indemnify the Buyer from and
against any Adverse Consequences the Buyer shall suffer through and after
the date of the claim for indemnification resulting from the breach;
provided, however, that Matthew shall not have any obligation to indemnify
the Buyer from and against any Adverse Consequences caused by the breach of
any representation or warranty of Matthew contained in (S)4 above (A) until
the Buyer has suffered Adverse Consequences by reason of all such breaches
in excess of a $50,000 aggregate deductible (after which point Matthew will
be obligated only to indemnify the Buyer from and against further Adverse
Consequences) or thereafter (B) to the extent the Adverse Consequences the
Buyer has suffered by reason of all such breaches exceeds an aggregate
ceiling equal to the Purchase Price (after which point Matthew will have no
obligation to indemnify the Buyer from and against further Adverse
Consequences).
(ii) In the event any of the Sellers breaches any of his or its
respective covenants in (S)2(a) above or any of his or its respective
representations and warranties in (S)3(a) above, and, if there is an
applicable survival period pursuant to (S)8(a) above, provided that the
Buyer makes a written claim for indemnification against the Seller pursuant
to (S)10(h) below within such survival period, then such Seller agrees to
indemnify the Buyer from and against the entirety of any Adverse
Consequences the Buyer shall suffer through and after the date of the claim
for indemnification resulting from the breach. The obligation of Sellers
pursuant to this (S)8(b)(ii) are several and not joint.
(c) Indemnification Provisions for Benefit of the Sellers. In the event
the Buyer breaches any of its representations, warranties, and covenants
contained herein, and, if there is an applicable survival period pursuant to
(S)8(a) above, provided that any of the Sellers makes a written claim for
indemnification against the Buyer pursuant to (S)10(h) below within such
survival period, then the Buyer agrees to indemnify each of the Sellers from and
against the entirety of any Adverse Consequences the Seller shall suffer through
and after the date of the claim for indemnification resulting from the breach.
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(d) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the "Indemnified
Party") with respect to any matter (a "Third Party Claim") which may give
rise to a claim for indemnification against any other Party (the
"Indemnifying Party") under this (S)8, then the Indemnified Party shall
promptly (and in any event within ten business days after receiving notice
of the Third Party Claim) notify each Indemnifying Party thereof in
writing.
(ii) Any Indemnifying Party will have the right to assume and
thereafter conduct the defense of the Third Party Claim with counsel of his
or its choice reasonably satisfactory to the Indemnified Party; provided,
however, that the Indemnifying Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnified Party (not to be
withheld unreasonably) unless the judgment or proposed settlement involves
only the payment of money damages and does not impose an injunction or
other equitable relief upon the Indemnified Party.
(iii) Unless and until an Indemnifying Party assumes the defense of
the Third Party Claim as provided in (S)8(d)(ii) above, however, the
Indemnified Party may defend against the Third Party Claim in any manner he
or it reasonably may deem appropriate.
(iv) In no event will the Indemnified Party consent to the entry of
any judgment or enter into any settlement with respect to the Third Party
Claim without the prior written consent of each of the Indemnifying Parties
(not to be withheld unreasonably).
(e) Determination of Adverse Consequences. The Parties shall make
appropriate adjustments for tax benefits and insurance coverage in determining
Adverse Consequences for purposes of this (S)8.
(f) Exclusive Remedy. Except for the termination provisions in (S)9 below,
the indemnification provisions in this (S)8 are the exclusive remedy of the
Parties for any breach of a representation, warranty, or covenant contained
herein.
9. Termination.
(a) Termination of Agreement. Certain of the Parties may terminate this
Agreement as provided below:
(i) the Buyer and the Sellers may terminate this Agreement by mutual
written consent at any time prior to the Closing;
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(ii) the Buyer may terminate this Agreement by giving written notice
to the Sellers at any time prior to the Closing if the Disclosure Schedule
or Annex I delivered pursuant to (S)5(f) discloses information about the
Company, the Matthew Pocono Assets or the Pocono Business not acceptable to
the Buyer (but not constituting a breach of Sellers' representations and
warranties made herein), as determined in the Buyer's sole discretion, or
if the Buyer's investigation of the Company, the Matthew Pocono Assets or
the Pocono Business otherwise reveals information about the Company, the
Matthew Pocono Assets or the Pocono Business which makes it inadvisable in
the Buyer's sole judgment to consummate the transactions contemplated
herein.
(iii) the Buyer may terminate this Agreement by giving written notice
to the Sellers at any time prior to the Closing (A) in the event any of the
Sellers has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, the Buyer has notified
the Sellers of the breach, and the breach has continued without cure for a
period of ten (10) business days after the notice of breach or has not been
cured prior to the Closing Date, (B) in the event that the Disclosure
Schedule or Annex I delivered pursuant to (S)5(f) discloses information
about the Company, the Matthew Pocono Assets or the Pocono Business which
is inconsistent in any material respect with the information regarding the
same provided by Sellers to Buyer prior to the date hereof, or (C) if the
Closing shall not have occurred on or before November 18, 1996, by reason
of the failure of any condition precedent under (S)7(a) hereof (unless the
failure results primarily from the Buyer itself breaching any
representation, warranty, or covenant contained in this Agreement); and
(iv) the Sellers may terminate this Agreement by giving written notice
to the Buyer at any time prior to the Closing (A) in the event the Buyer
has breached any material representation, warranty, or covenant contained
in this Agreement in any material respect, any of the Sellers has notified
the Buyer of the breach, and the breach has continued without cure for a
period of ten (10) business days after the notice of breach or has not been
cured prior to the Closing Date, or (B) if the Closing shall not have
occurred on or before November 18, 1996, by reason of the failure of any
condition precedent under (S)7(b) hereof (unless the failure results
primarily from any of the Sellers themselves breaching any representation,
warranty, or covenant contained in this Agreement).
(b) Effect of Termination. If any Party terminates this Agreement pursuant
to (S)9(a) above, all rights and obligations of the Parties hereunder shall
terminate without any liability of any Party to any other Party (except for any
liability of any Party then in breach); provided, however, that the
confidentiality provisions contained in (S)5(d) above shall survive termination,
and provided, further, that the Buyer shall be entitled to a refund of the
$100,000 deposit from Sellers only in the event of a termination by Buyer based
on (S)9(a)(iii) above.
10. Miscellaneous.
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(a) Nature of Certain Obligations.
(i) The covenants of each of the Sellers in (S)2(a) above concerning
the sale of the Company Shares or the Matthew Pocono Assets to the Buyer
and the representations and warranties of each of the Sellers in (S)3(a)
above concerning the transaction are several obligations. The particular
Seller making the representation, warranty, or covenant will be solely
responsible to the extent provided in (S)8 above for any Adverse
Consequences the Buyer may suffer as a result of any breach thereof.
(ii) The remainder of the representations, warranties, and covenants
of the Sellers in this Agreement shall be the sole responsibility of
Matthew and Buyer shall have no recourse to McAndrew therefore. Matthew
will be responsible to the extent provided in (S)8 above for any Adverse
Consequences the Buyer may suffer as a result of any breach thereof.
(b) Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing without the prior written approval of the
Buyer and the Sellers; provided, however, that any Party may make any public
disclosure it believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly-traded securities (in which
case the disclosing Party will use its reasonable best efforts to advise the
other Parties prior to making the disclosure).
(c) 401(k) Plan Transfer of Assets. None of the Buyer, the Company or
the Pocono Business shall have any liability for or obligation with respect to
the 401(k) Plan administered by Matthew prior to the Closing, and Matthew shall
administer any such 401(k) Plan in accordance with the terms thereof and in
accordance with applicable law.
(d) No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(e) Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements, or representations by or among the Parties,
written or oral, to the extent they have related in any way to the subject
matter hereof.
(f) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of his
or its rights, interests, or obligations hereunder without the prior written
approval of the Buyer and the Sellers; provided, however, that the Buyer may
assign all of its rights, interests and obligations hereunder to one of its
Subsidiaries; provided, further, that in such event the Buyer shall not be
relieved of any of its obligations hereunder.
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(g) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(h) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(i) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing and shall be deemed duly given (i)
on the date on which the same was delivered in person or by courier, including,
but not limited to, overnight express mail couriers, provided that a receipt is
obtained for a courier delivery; or (ii) two (2) business days after the same
was sent by registered or certified mail, return receipt requested, postage
prepaid, and addressed to the intended recipient as set forth below:
If to the Sellers: James P. McAndrew
19 Lenore Road
Califon, New Jersey 07831
Matthew Outdoor Advertising Co., L.P.
420A South First Street
Bangor, Pennsylvania 18013
With a copy to: Powell, Goldstein, Frazer & Murphy
191 Peachtree Street
Atlanta, Georgia 30303
Attn: William B. Shearer, Esq.
If to the Buyer: Adams Outdoor Advertising Limited Partnership
1380 West Paces Ferry Road
Suite 170, South Wing
Atlanta, Georgia 30327
Attn: Mr. Kevin Gleason
With a copy to: Kaplan, Strangis & Kaplan P.A.
5500 Norwest Center
90 South 7th Street
Minneapolis, MN 55402
Attn: Robert T. York, Esq.
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is received by the intended recipient. Any Party may change the
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address to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Parties notice in the manner
herein set forth.
(j) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Pennsylvania without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Pennsylvania or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Pennsylvania.
(k) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Sellers. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(l) Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(m) Expenses. Each of the Buyer, Sellers and the Company will bear its or
his own costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby;
provided, however, that Buyer shall pay the CVF Fee at Closing on behalf of
Sellers.
(n) Construction. The Parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
(o) Incorporation of Exhibits, Annexes, and Schedules. The Exhibits,
Annexes, and Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
(p) Enforcement. Each of the Parties submits to personal jurisdiction in
the State of Pennsylvania for the enforcement of this Agreement.
Notwithstanding the foregoing, nothing contained in this Agreement shall prevent
a party from bringing any action against another party within any other state or
country. Initiating such proceeding or taking such action in any jurisdiction
shall not constitute a waiver of the submission made by a party to personal
jurisdiction within the State of Pennsylvania.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
BUYER:
ADAMS OUTDOOR ADVERTISING
LIMITED PARTNERSHIP
By Its Managing General Partner,
Adams Outdoor Advertising, Inc.
/s/ Abe Levine
By:______________________________________
Abe Levine
Name:____________________________________
Vice President
Title:___________________________________
Abe Levine
Vice President
SELLERS:
/s/ James P. McAndrew
_________________________________________
James P. McAndrew
MATTHEW OUTDOOR ADVERTISING
ACQUISITION CO., L.P.
By its General Partner,
Matthew Outdoor Advertising
Acquisition Co., Inc.
/s/ James P. McAndrew
_________________________________________
James P. McAndrew, President
<PAGE>
FIRST AMENDMENT TO PURCHASE AGREEMENT
This First Amendment dated as of November 7, 1996 to that certain
Purchase Agreement among Adams Outdoor Advertising Limited Partnership
("Buyer"), James P. McAndrew ("McAndrew") and Matthew Outdoor Advertising
Acquisition Co., L.P., ("Matthew") dated as of October 25, 1996 ("Purchase
Agreement"). All capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Purchase Agreement.
WHEREAS, the parties hereto have agreed to amend the Purchase Agreement to
reflect McAndrew's contribution of the Company Shares to Matthew as part of the
Reorganization;
NOW, THEREFORE, in consideration of the premises and mutual promises herein
made, the Parties agree as follows:
1. Reorganization. For all purposes of the Purchase Agreement, the term
"Reorganization" shall mean, in addition to those matters described as such in
the Purchase Agreement, the subsequent contribution by McAndrew of the Company
Shares to Matthew and its general partner, Matthew Outdoor Advertising
Acquisition Co., Inc. ("GP"), and the contribution by the GP of the Company
Shares so received to Matthew so that, upon the completion of the Reorganization
and prior to the Closing, all the Company Shares shall be owned by Matthew.
2. Sale of Company Shares. Notwithstanding anything to the contrary in
the Purchase Agreement, the Company Shares shall be sold to Buyer by Matthew,
all representations, warranties, covenants and agreements of McAndrew under the
Purchase Agreement shall be representations, warranties, covenants and
agreements of Matthew only, and McAndrew individually shall no longer be a party
to the Purchase Agreement. Accordingly, all references to the term "McAndrew"
in Sections 2 through 10 of the Purchase Agreement shall be replaced by the term
"Matthew" and all references to the term "Sellers" throughout the Purchase
Agreement shall be replaced by the term "Seller" and appropriate grammatical
changes made to reflect the amendment of the term from plural to singular;
provided, however, that the following sections of the Purchase Agreement are
specifically amended as follows:
(a) In (S)1, the following definitions shall each be amended in its
entirety to read as follows:
"McAndrew" means James P. McAndrew.
"Seller" means Matthew.
(b) The text of (S)3(a)(v) is amended in its entirety to read as
follows:
Except for a pledge of the Company Shares to CIBC,
McAndrew has as of the date
<PAGE>
hereof, and Matthew will have as of the Closing Date, good title
to the Company Shares, free and clear of all Security Interests.
(c) The second sentence of (S)4(b) is amended in its entirety to read
as follows:
All of the issued and outstanding Company Shares have
been duly authorized, are validly issued, fully paid and
nonassessable, and are held of record by McAndrew as of the date
hereof and will be held of record by Matthew as of the Closing
Date.
(d) The text of (S)7(a)(vi) shall be deleted in its entirety and the
section marked "intentionally omitted."
(e) The text of (S)10(a) shall be deleted in its entirety and the
section marked "intentionally omitted."
(f) The requirement to send a notice to McAndrew individually in
(S)10(i) shall be deleted from such section.
(g) Exhibit B and C are replaced in their entirety by the Exhibits B
and C attached hereto.
3. Schedule of Working Capital. The parties agree that, notwithstanding
anything to the contrary in (S)2(a)(ii) of the Purchase Agreement regarding the
preparation of the Schedule of Working Capital of the Division of Closing
("Schedule of Working Capital"), the Schedule of Working Capital attached hereto
shall serve as the Schedule of Working Capital for all purposes of the Purchase
Agreement. The parties acknowledge (i) that such Schedule has been prepared as
of October 31, 1996, rather than the Closing Date, with only those items
expressly noted thereon as having been prorated through the Closing Date; (ii)
that all accounts receivable currently in collection have been excluded
therefrom and will be Excluded Assets under the Purchase Agreement and (iii)
that certain amounts historically accounted for as prepaid expenses have been
excluded from the current assets reflected on such Schedule.
4. Accounts Receivable. Matthew agrees to promptly remit to Buyer any
and all payments received by Matthew for accounts receivable reflected on the
Schedule of Working Capital. The parties agree that Matthew's obligation
pursuant to this paragraph is not subject to the $50,000 aggregate deductible
described in (S)8(b)(i) of the Purchase Agreement.
5. GMAC Financing Agreement. The parties agree that in lieu of obtaining
consent to the assignment of the GMAC financing agreement listed on Exhibit C
for the 1995 Toyota Corolla (Beige), Buyer shall prepay the amount due under
such agreement and
-2-
<PAGE>
Matthew shall promptly assign the title to the vehicle to Buyer as soon as it is
released by GMAC.
6. No Further Amendment. Except as expressly amended or modified herein,
the Purchase Agreement remains in full force and effect.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
ADAMS OUTDOOR ADVERTISING
LIMITED PARTNERSHIP
By Its Managing General Partner,
Adams Outdoor Advertising, Inc.
/s/ Abe Levine
By:
--------------------------------------
Abe Levine
Name:
------------------------------------
Vice President
Title:
------------------------------------
MATTHEW OUTDOOR ADVERTISING
ACQUISITION CO., L.P.
By its General Partner,
Matthew Outdoor Advertising
Acquisition Co., Inc.
/s/ James P. McAndrew
-----------------------------------------
James P. McAndrew, President
The undersigned enters into this Amendment only for the purposes of evidencing
the undersigned's agreement to, and only to the extent the Amendment provides
for, the undersigned's removal as a party to the Purchase Agreement.
/s/ James P. McAndrew
-----------------------------------------
James P. McAndrew
-3-
<PAGE>
ASSET PURCHASE AGREEMENT
between
MORGAN NEWSOME MONROE, INC.
("SELLER")
and
ADAMS OUTDOOR ADVERTISING LIMITED PARTNERSHIP
("BUYER")
Dated November 18, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
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<S> <C>
SECTION 1. PURCHASE AND SALE OF ASSETS........................ 1
1.1 Assets to be Transferred.................................. 1
(a) Personal Property......................................... 1
(b) Inventories............................................... 1
(c) Real Property............................................. 2
(d) Real Estate Site Leases................................... 2
(e) Leasehold Improvements.................................... 2
(f) Permits, Licenses and Authorizations...................... 2
(g) Advertising Contracts and Agreements...................... 2
(h) Accounts Receivable....................................... 2
(i) Prepaid Expenses.......................................... 2
(j) Intangibles............................................... 2
(k) Computer Hardware and Computer Software................... 3
(l) Barter and Trade Receivables.............................. 3
(m) Records................................................... 3
(n) New Builds................................................ 3
1.2 Access to Seller Records.................................. 3
1.3 Consideration............................................. 3
1.4 Net Working Capital....................................... 4
1.5 Closing Cut-off........................................... 4
1.6 Allocation of Consideration............................... 5
1.7 Assumption of Liabilities................................. 5
SECTION 2. REPRESENTATIONS AND WARRANTIES OF SELLER........... 5
2.1 Organization and Good Standing........................... 6
2.2 Authorization............................................ 6
2.3 Absence of Violation..................................... 6
2.4 Binding Obligation....................................... 6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
2.5 Consents................................................ 6
2.6 Financial Statements.................................... 6
2.7 Accounts Receivable..................................... 7
2.8 Conduct of Business and Absence of Adverse Change....... 7
2.9 Taxes................................................... 8
2.10 Licenses and Authorizations............................. 8
2.11 ........................................................ 8
2.12 Real Property........................................... 8
2.13 Other Contracts and Commitments......................... 8
2.14 Insurance............................................... 9
2.15 Franchises, Trademarks, Patents, Etc.................... 9
2.16 Reports................................................. 9
2.17 Books and Records....................................... 9
2.18 Title to Assets and Warranties.......................... 9
2.19 Employees............................................... 10
2.20 Labor Relations......................................... 10
2.21 Environmental Matters................................... 10
2.22 Compliance with Applicable Laws......................... 10
2.23 Transactions with Related Parties....................... 11
2.24 Advertisers............................................. 11
2.25 Trade Outs.............................................. 12
2.26 Broker's or Finder's Fees............................... 12
2.27 [Deleted]............................................... 12
2.28 Litigation and Disputes................................. 12
2.29 Copies of Documents..................................... 12
2.30 Disclosure.............................................. 12
SECTION 3. REPRESENTATIONS AND WARRANTIES OF BUYER........... 12
3.1 Organization and Standing............................... 12
3.2 Authorization........................................... 12
</TABLE>
<PAGE>
3.3 Absence of Violation................................................... 12
3.4 Binding Obligation..................................................... 13
3.5 Litigation and Disputes................................................ 13
3.6 Consents............................................................... 13
3.7 Disclosure............................................................. 13
SECTION 4. AFFIRMATIVE COVENANTS OF SELLER................................. 13
SECTION 5. NEGATIVE COVENANTS OF SELLER.................................... 15
SECTION 6. ADDITIONAL UNDERTAKINGS AND COVENANTS........................... 16
6.1 Announcements and Disclosures.......................................... 16
6.3 Covenant Not To Compete Agreement by Monroe............................ 16
6.4 Covenant Not to Compete and Sale of Name by Newsome.................... 16
SECTION 7. CLOSING......................................................... 17
7.1 Closing................................................................ 17
7.2 Deliveries by Seller................................................... 17
7.3 Deliveries by Buyer.................................................... 18
7.4 Control of Business.................................................... 18
SECTION 8. SURVIVAL OF REPRESENTATIONS: INDEMNIFICATION:
REMEDIES........................................................ 18
8.1 Survival of Representations............................................ 18
8.2 Indemnification by Seller.............................................. 18
8.3 Indemnification by Buyer............................................... 19
8.4 Indemnification Procedures............................................. 19
SECTION 9. CONDITIONS PRECEDENT............................................. 21
9.1 Buyer's Performance..................................................... 21
9.2 Seller's Performance.................................................... 21
SECTION 10. ESCROW PROVISIONS.............................................. 21
10.3 Disposition Of Deposit in the Event the Closing does Not
Occur................................................................. 21
10.4 Disposition Of Deposit in the Event the Closing Does
Occur................................................................. 22
10.5 Provisions as to Escrow Agent......................................... 22
<PAGE>
SECTION 11. MISCELLANEOUS.................................................. 23
11.1 Additional Actions and Documents...................................... 23
11.2 Expenses.............................................................. 23
11.3 Entire Agreement; Amendment........................................... 23
11.4 Waiver................................................................ 23
11.5 Severability.......................................................... 23
11.6 Confidentiality....................................................... 24
11.7 Governing Law......................................................... 24
11.8 Notices............................................................... 24
11.9 Headings.............................................................. 25
11.10 No Third Party Beneficiaries......................................... 25
11.11 Execution in Counterparts............................................ 25
11.12 Binding Effect....................................................... 26
11.13 Attorneys' Fees...................................................... 26
<PAGE>
ASSET PURCHASE AGREEMENT
------------------------
THIS AGREEMENT, made and entered into this 18th day of November, 1996 by
and between MORGAN NEWSOME MONROE, INC., a South Carolina corporation
("Seller"), ADAMS OUTDOOR ADVERTISING LIMITED PARTNERSHIP, a Minnesota limited
partnership ("Buyer") and PHILLIP J. NEWSOME ("Newsome"), RODNEY R. MONROE
("Monroe") and JOHN F. MORGAN ("Morgan") (referred to collectively as
"Principals").
WHEREAS, Seller owns and operates certain outdoor advertising structures,
shop and office equipment, vehicles, furniture, fixtures, leasehold improvements
and other assets used in connection with the outdoor advertising business
conducted principally in and around Charleston, Florence, Laurens and
Orangeburg, South Carolina, under the name and style of "Newsome Outdoor
Advertising" (such business, together with the properties and assets used or
usable in the operation thereof, are herein referred to as the "Business");
WHEREAS, Seller desires to sell to Buyer and Buyer desires to purchase from
Seller all of the properties and assets used and useable in connection with the
Business, all subject to the terms and conditions hereinafter set forth,
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:
SECTION 1. PURCHASE AND SALE OF ASSETS.
---------------------------
1.1 Assets to be Transferred. Subject to and in reliance upon the
representations, warranties and agreements herein set forth, and subject to the
terms and conditions herein contained, on the Closing Date (defined in Section
7), Seller agrees to convey, sell, assign, transfer and deliver to Buyer, and to
perform all of its obligations pursuant to this Agreement, and Buyer agrees to
perform all of its obligations pursuant to this Agreement and to purchase and
accept, all of the properties, assets, and business, of every kind and
description, wherever located, constituting all of the assets and properties
used or useable in the Business (collectively the "Assets"). The Assets include
but are not limited to the following:
(a) Personal Property. All painted bulletins, poster panel and other
outdoor advertising displays and structures, wherever located, and all
machinery, equipment, vehicles, furniture, tools, spare parts and other tangible
personal property used or useable in the operation of the Business together with
such additions, modifications and replacements thereto (and subject to deletions
therefrom in connection with any such replacements) as may be made by Seller in
the ordinary course of business between the date of such Schedule and the
Closing Date.
(b) Inventories. All inventories of materials, work-in-progress, finished
products and supplies used or useable in the operation of the Business as of the
Closing Date.
(c) Real Property. All real property owned by Seller as of
<PAGE>
the Closing Date, including, specifically, the Real Property listed on Schedule
1.1(c) hereto.
(d) Real Estate Site Leases. The leases, licenses, easements and other
agreements granting to Seller the right to place and construct outdoor
advertising displays on real property in effect on the Closing Date together
with-all of Seller's improvements on the real property which is the subject
matter of such leases and rights and appurtenances thereto, including any
renewals, extensions, amendments or modifications thereof and including all
prepaid rents thereunder (to the extent such are included as Current Assets in
the calculation of Net Working Capital and any additional agreements and leases
made or entered into by Seller in the ordinary course of business between the
date of this Agreement and the Closing Date (the "Site Leases"). Between the
date of this Agreement and the Closing Date, Seller shall not terminate any Site
Lease except those which lapse or are terminated in the ordinary course of
business in accordance with their terms.
(e) Leasehold Improvements. All leasehold improvements located on the
premises used by Seller as its offices, plant and warehouse.
(f) Permits, Licenses and Authorizations. The permits, licenses, permits
and authorizations used or useable in the operation of the Business.
(g) Advertising Contracts and Agreements. All contracts and orders for the
renting of outdoor advertising displays and all other agreements commitments,
executory contracts and orders relating to the contracts, including any
renewals, extensions, amendments or modifications thereof, and any additional
agreements, commitment, executory contracts and orders made or entered into by
the Seller in the ordinary course of business between the date of this Agreement
and the Closing Date (the "Advertising Contracts"). Between the date of this
Agreement and the Closing Date, Seller shall not terminate any such contracts or
agreements except those which lapse or are terminated in the ordinary course of
business in accordance with their terms.
(h) Accounts Receivable. All advertising revenue receivable and other
accounts receivable of Seller at face value as of the Closing Date (the
"Accounts Receivable").
(i) Prepaid Expenses. All prepaid expenses and other prepaid items
relating to the Business.
(j) Intangibles. All copyrights and applications therefor, trademarks,
service marks, trade secret rights, patents, patent rights, trade names,
tradename rights or other similar rights used or useable in the Business
including, specifically, any logo or mark used in connection therewith and the
good will of the Business as a going concern, including lists of customers and
suppliers, correspondence, purchase orders and the general intangibles of the
Business.
2
<PAGE>
(k) Computer Hardware and Computer Software. The computer hardware and, to
the extent assignable, computer software used or useable in the Business,
together with copies of source code, instruction manuals and other data for the
effective use thereof.
(l) Barter and Trade Receivables. Barter and trade credits or receivables
existing on the Closing Date.
(m) Records. All logs, books, business and financial records (or true
copies thereof) maintained by or on behalf of Seller and advertising material
used by Seller in connection with or relating to the Business other than stock
transfer and minute books.
(n) New Builds. The new outdoor advertising structures constructed or to
be constructed prior to Closing set forth on the attached schedule 1.1(n)
hereinafter the "New Builds."
1.2 Access to Seller Records. Seller shall afford Buyer and its employees
and agents access from and after the date hereof to all other documents and
information in Seller's possession as may be reasonably necessary to enable
Buyer to conduct due diligence (in addition to the due diligence previously
conducted by Buyer under the Letter of Intent dated September 10, 1996) and plan
for and see to the efficient and proper conduct of the Business and
administration of the Assets from and after the Closing Date, including, without
limitation, all historical files, records and, to the extent permitted by law,
historical personnel data in connection with the Business.
1.3 Consideration. The purchase price for the Assets shall be paid as
follows:
(a) Upon the execution of this Agreement, Buyer shall pay the sum of
Fifty Thousand and No/100 ($50,000.00) Dollars (the "Deposit") to the Escrow
Agent to be held in accordance with Section 9 of this Agreement. The Deposit is
currently being held by Escrow Agent pursuant to a letter of intent between the
Buyer and Seller dated September 10, 1996, and Escrow Agent is hereby authorized
and directed by Buyer and Seller that henceforth the Earnest Money shall be held
by the Escrow Agent pursuant to Section 10 of this Agreement.
(b) At the Closing, Buyer shall pay the Seller the amount of
$13,350,000.00 less credit for the Deposit, by wire transfer of immediately
available funds to Seller's counsel's trust account; and
(c) Buyer shall pay the Seller an amount equal to the Net Working
Capital (as hereinafter defined) in accordance with the provisions of Section
1.4 by wire transfer of immediately available funds to an account designated by
Seller; and
(d) assume the Assumed Liabilities (as hereinafter defined).
1.4 Net Working Capital. Within fifteen (15) days of the
3
<PAGE>
Closing, the Seller will deliver to the Buyer a schedule of the Net Working
Capital of the Seller as of the Closing, which schedule will be prepared in a
manner consistent with the preparation of the Financial Statements (as
hereinafter defined) and shall reflect the Current Assets (as hereinafter
defined) of the Seller and the Current Liabilities (as hereinafter defined) of
the Seller as of the Closing Date. Within five (5) days of receipt of such
schedule, Buyer shall review said schedule and the Seller and the Buyer agree to
resolve within five (5) days thereafter any objections raised by the Buyer with
respect thereto so that the schedule referred to herein is mutually acceptable
to the Seller and the Buyer. Upon the final determination thereof, the amount of
Net Working Capital shall be paid by the Buyer to the Seller in cash. As used in
this Agreement, "Net Working Capital" means, as of a given date, the excess of
Current Assets over Current Liabilities. For purposes of this Agreement,
"Current Assets" means accounts receivable (trade) at their face value, account
receivables (other) at their face value, inventory at its cost to Seller,
prepaid lease expenses and prepaid other expenses of the Seller to the extent
that the Buyer receives the benefit thereof. For purposes of this Agreement,
"Current Liabilities" means accrued lease expenses, customer deposits, accrued
tangible property tax for the year 1996 (which if paid by the Date of Closing
shall become "prepaid other expenses") and the estimated completion costs of any
New Builds which have not been constructed by the Closing.
1.5 Closing Cut-off. The expenses of the Business accrued to twelve
o'clock midnight of the day prior to the Date of Closing shall, except as
otherwise provided in this Agreement, be for the account of Seller and
thereafter shall be for the account of Buyer. The items to be prorated
hereunder shall include but not be limited to items such as power and utility
charges (to be estimated based upon prior billing period); property taxes
assessed during the year in which the Closing Date occurs (to be estimated based
on prior year's taxes, if current year has not been billed). Seller shall pay
all payroll taxes for its employees for periods of employment with the Seller,
Buyer shall pay all payroll taxes for its employees for periods of employment
with the Buyer and payroll taxes shall not be prorated. Wages and commissions
(including commissions based on sales reflected in accounts receivable),
vacation pay or allowances, sick pay, severance pay and all related payroll
costs or accrual therefor for employees of Seller shall not be prorated and
shall be discharged by Seller on or before the Closing Date. Insurance premiums
and nontransferable permit or license fees shall not be prorated and do not
constitute a part of the Assets.
There shall be no proration of prepaid unearned Advertising Contracts so
long as the maximum amount of prepaid unearned Advertising Contracts does not
exceed Sixty Thousand and No/100 ($60,000.00) Dollars. From the date of this
Agreement to the Closing, Seller shall not modify or accelerate its billing
practices or procedures. Buyer shall receive the revenue from all billings for
periods after November 30, 1996.
Seller agrees to leave its lease rent bank account open for
4
<PAGE>
ninety (90) days after the Date of Closing and its general checking account open
for sixty (60) days after the Date of Closing.
Prorations shall be finally determined on and as of the Closing Date.
Seller shall prepare for the Closing a list, certified by Seller to be true and
correct, delineating the allocation specified in this Section.
1.6 Allocation of Consideration. Buyer and Seller agree to allocate the
consideration payable hereunder prior to the Closing Date in a manner consistent
with Internal Revenue Code Section 1060 and the Regulations promulgated
thereunder and agree to timely file Internal Revenue Service Form 8594, and to
take all actions consistent therewith. Nothing in this Agreement shall be
construed to mean that a party hereto or other person (a) must use, for any one
or more purposes, any price or other allocation provided for in this Agreement
if such party or person reasonably believes that such use is not in accordance
with law, or (b) must make, or cooperate in the making of, any return or report
to any governmental authority in any manner that such person or such party
reasonably believes is not in accordance with law.
1.7 Assumption of Liabilities. At the Closing, Buyer shall assume and
agree to pay the following liabilities of Seller (collectively the "Assumed
Liabilities"): (i) obligations arising after the Closing Date under the Site
Leases and the Advertising Contracts; (ii) the Current Liabilities of Seller in
connection with the operation of the Business arising in the ordinary course of
the Business and in existence on the Closing Date to the extent included in the
determination of Net Working Capital contemplated by Section 1.4 hereof; (iii)
barter and trade liabilities existing on the Closing Date to the extent that
they do not exceed the realizable fair market value of the barter and trade
credits and receivables existing on the Closing and acquired pursuant to Section
1.1 hereof; (iv) the responsibility and liability arising after the Closing Date
for the matters set forth on Schedule 2.28; (v) one-half (1/2) of the total of
any Site Lease rent checks not presented for payment at Seller's bank within
ninety (90) days of the Date of Closing; (vi) any accounts payable which have
been paid by checks that have not been presented for payment at Seller's bank
within ninety (90) days from the Date of Closing to the extent Seller has paid
Buyer the amount thereof. Except for the Assumed Liabilities, Buyer is not
hereby agreeing to assume and Buyer shall have no obligation to pay any
liability of Seller or pertaining to the Assets or the Business of any nature
whatsoever, contingent or otherwise. Without limiting the generality of the
foregoing, it is specifically understood that the Buyer does not assume any
employment contract, severance liability, litigation (except as provided in this
Agreement), or accrued commissions. Seller agrees that the Assets conveyed to
Buyer on the Closing Date pursuant to this Agreement will be conveyed to Buyer
and received by Buyer free and clear of all liens and encumbrances.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller hereby represents and warrants to Buyer that as of the
5
<PAGE>
date hereof and the Closing Date:
2.1 Organization and Good Standing. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
South Carolina and has all the corporate power and authority to carry on its
business as currently conducted, to enter into this Agreement and to carry out
the transactions contemplated hereby. Seller has disclosed to Buyer and Buyer
consents that Seller intends to liquidate and dissolve its corporate entity
following the Closing.
2.2 Authorization. The execution and delivery of this Agreement by Seller
and the consummation by Seller of the transactions contemplated hereby have been
duly authorized by the boards of directors and shareholders of the entities
constituting the Seller. Seller has taken all action necessary for Seller to
enter into this Agreement and for Seller to consummate the transactions
contemplated hereby.
2.3 Absence of Violation. Except as is set forth in this Agreement, to
the best of Seller's knowledge, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
constitute a violation of, or a default under, or conflict with, any term or
provision of the Articles of Incorporation or bylaws of Seller or any contract
or agreement where such violation or breach would have a material adverse effect
on the Business as a whole.
2.4 Binding Obligation. This Agreement constitutes a valid and binding
obligation of Seller, enforceable in accordance with its terms. Each document
and instrument to be executed by Seller pursuant hereto, when executed and
delivered in accordance with the provisions hereof, shall be a valid and binding
obligation of Seller, enforceable in accordance with its terms.
2.5 Consents. Seller is not subject to any statute, law, ordinance,
regulation, rule determination, order, judgment, writ, injunction, decree,
charter, or bylaw, which would prevent the execution or delivery or performance
of this Agreement or the consummation of the transactions contemplated hereby.
2.6 Financial Statements. Seller has delivered to Buyer true, correct and
complete copies of the financial statements described in Schedule 2.6 hereto
(the "Financial Statements"). The Financial Statements: (a) are true, correct
and complete in all material respects, (b) are in accordance with the books and
records of Seller, (c) present fairly the financial position of Seller as of
their respective dates, and the results of operations and changes in financial
position for the respective periods indicated, and (d) are prepared in
accordance with other comprehensive basis of accounting principles ("OCBOA")
consistently applied during the periods involved. All prepaid expenses, if any,
included in any Financial Statement represent payments theretofore made or
incurred, the benefit and advantage of which may be obtained and enjoyed by
Buyer. Seller does not have, and on the Closing Date, Seller will not have any
liabilities required to be reflected in
6
<PAGE>
the Financial Statements which are not fully reflected on or reserved against in
the Financial Statements other than (i) such liabilities as are disclosed herein
or in any Schedule hereto or (ii) liabilities incurred by Seller between the
date of the last Financial Statement and the Closing Date in the ordinary course
of business and consistent with the limitations and restrictions contained in
this Agreement.
2.7 Accounts Receivable. The accounts receivable of Seller reflected in
the Financial Statements are accounts which were generated by Seller with
genuine expectation of collection thereof.
2.8 Conduct of Business and Absence of Adverse Change. Since the date of
the most recent Financial Statement, there has been no material adverse change
in the business, operations, prospects, assets, properties or commitments of
Seller or in the condition (financial or otherwise) of the Business, and no fact
or condition exists or to Seller's knowledge is contemplated or threatened which
might cause such material adverse change in the future. Since the date of the
most recent Financial Statement), the Business has been conducted only in the
ordinary course, and Seller has not (a) incurred material loss of, or injury to,
the assets or properties of the Business as the result of any fire, explosion,
flood, windstorm, earthquake, labor trouble, riot, accident, act of God or
public enemy or armed forces, or other cause; (b) mortgaged, pledged or
subjected to lien, charge, security interest or any other encumbrance any of its
assets or properties; (c) sold, exchanged, transferred or otherwise disposed of
any of its assets or properties, or cancelled any debts or claims, except in
each case in the ordinary course of business; (d) written down the value of any
assets or properties or written off as uncollectible any notes or accounts
receivable, except write-downs and write-offs in the ordinary course of
business, none of which, individually or in the aggregate, are material to it;
(e) entered into any transactions other than in the ordinary course of business;
(f) increased the rate of compensation payable, or to become payable, by it to
any of its employees that Buyer intends to hire (and has informed Seller of such
intention), over the rate being paid to them on the date of the most recent
Financial Statement except for increases to such compensation made in the
ordinary course of business, consistent with prior employee evaluation practices
and compensation policies of Seller and severance payments made in conjunction
with this transaction; (g) made or permitted any amendment or termination of any
contract, agreement or license to which it is a party or which it owns,
otherwise than in the ordinary course of business; (h) through negotiation or
otherwise made any commitment or incurred any liability to any labor
organization; (j) made any change in any method of accounting or accounting
practice or any credit collection or payment practice except in the ordinary
course of business; or (k) agreed, whether in writing or not, to do any of the
foregoing. From the date hereof, Seller will not, without Buyer's approval,
directly or indirectly, do or agree to do any of the foregoing.
2.9 Taxes. Seller has filed all federal, state, county and local income,
excise, property, withholding, workers unemployment
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compensation, franchise or doing business and other tax returns which are
required to be filed by Seller; and such returns are true, correct and complete
in all material respects. Seller has paid or will pay all Taxes, estimated
taxes, interest, penalties, assessments and deficiencies which have become due
in respect of such Taxes. There are no liens outstanding for any Taxes upon any
of the Assets except for the continuing lien of property taxes for the current
and future years. For the purposes of this Agreement, "Taxes" means all taxes,
charges, fees, levies, penalties, or other assessments, including without
limitation, income, excise, property, sales, and franchise taxes, imposed with
respect to the Business or the transactions contemplated hereby by the United
States, or any state, county, local, or foreign government or a subdivision or
agency thereof, and including any interest, penalties or additions attributable
thereto.
2.10 Licenses and Authorizations. On the date hereof, Seller has to the
best of Seller's knowledge, the licenses, permits and authorizations which are
required for the operation of the Business as operated by the Seller on the date
hereof.
2.11 Deleted.
2.12 Real Property. Attached hereto as Schedule 1.1(c) is a complete and
accurate list of all real property and interests in real property owned by the
Seller (the "Real Property"). The Seller has and, at the Closing, will have
good and marketable title to the Real Property, and it will be conveyed free and
clear of any mortgage, pledge, lien, encumbrance, charge, or security interest.
The Real Property constitutes all real estate or interest in real estate
necessary to operate the Business. There is no pending, or to the Seller's
knowledge, threatened condemnation or similar proceeding that would adversely
affect or impair the rights of the Buyer with respect to such Real Property or
would adversely affect or impair the operation of the Business thereon. All
improvements on the Real Property are in good repair (ordinary wear and tear for
comparable properties excepted).
2.13 Other Contracts and Commitments. Except for the Site Leases and the
Advertising Contracts (the "Scheduled Contracts") Seller is not a party to any
oral or written (i) contract for the employment of any officer, employee,
consultant or independent contractor; (ii) license agreement or sales agency,
advertising, or brokerage contract; (iii) contract with any labor organization
or other collective bargaining unit; (iv) contract for the future purchase of
materials, supplies, services, merchandise or equipment involving payments of
more than $5,000 over its remaining term (including periods covered by any
option to renew by either party); (v) contract for the purchase, sale or lease
of any real estate or other properties; (vi) profit-sharing, bonus, incentive
compensation, deferred compensation, stock option, severance pay, stock
purchase, employee benefit, insurance, hospitalization, pension, retirement or
other similar plan or agreement; (vii) agreement or arrangement for the sale of
any of its assets or properties or the grant of any preferential rights to
purchase any of its assets, properties or rights, other than in the ordinary
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course of business; (viii) contract which contains any provisions requiring
Seller to indemnify any other party thereto; (ix) joint venture agreement or
arrangement or other agreement involving the sharing of profits; (x) outstanding
loan to any person or entity or receivable due from any shareholder of Seller or
persons or entities controlling, controlled by or under common control with
Seller; (xi) other contract, commitment or agreement which by its terms does not
terminate or is not terminable by Seller within 30 days or upon 30 days' (or
less) notice; or (xii) contract, commitment or agreement with or to any Seller
or any entity in which any Seller has a material interest.
2.14 Insurance. None of the insurance is being assigned and Seller shall
cancel all such insurance after Closing.
2.15 Franchises, Trademarks, Patents, Etc. Except for the tradename
"Newsome Outdoor Advertising," Seller owns or licenses no franchises, licenses,
trademarks, trade names, service marks, service names, copyrights, patents and
applications which are used in the operation of the Business. Seller has
received no written notice to the effect that any service or publication
rendered by Seller may infringe any trademark, trade name, copyright or patent,
trade secret or legally protectable right of another.
2.16 Reports. All returns, reports and statements relating to the Business
currently required to be filed by Seller with any governmental instrumentality
have been filed and complied with and are true, correct and complete. All such
reports, returns and statements shall continue to be filed on a current basis
until the Closing Date, and will be true, correct and complete.
2.17 Books and Records. The books of account and other records of Seller
are complete and accurate, and the matters contained therein are appropriately
and accurately reflected in the Financial Statements.
2.18 Title to Assets and Warranties. Seller is conveying the Assets to
Buyer free and clear of all liens, mortgages, pledges, and encumbrances. Except
as set forth in this Agreement, to the best of Seller's knowledge, Seller has
good and marketable title to the Assets. Seller is not warranting and Buyer
acknowledges and agrees that it is Buyer's responsibility to obtain all
necessary consents relative to the transfer of the Site Leases, Advertising
Contracts and permits for railroad right-of-way locations. BUYER ACKNOWLEDGES
AND AGREES THAT IT HAS HAD THE OPPORTUNITY TO CONDUCT ITS OWN "DUE DILIGENCE"
INSPECTION OF THE ASSETS AND FURTHER ACKNOWLEDGES AND AGREES THAT EXCEPT FOR THE
EXPRESS WARRANTIES AND REPRESENTATIONS MADE BY SELLER IN THIS SECTION 2 OF THIS
AGREEMENT, SELLER IS CONVEYING THE ASSETS "AS IS" AND SELLER HAS NOT MADE AND
DOES NOT MAKE ANY WARRANTIES, REPRESENTATIONS, OR COVENANTS OF ANY KIND OR
CHARACTER WHATSOEVER WITH RESPECT TO THE ASSETS EITHER EXPRESS OR IMPLIED.
2.19 Employees. Seller has no employee benefit plans, personnel policies,
employee benefit brochures or handbooks, personnel brochures or handbooks,
contracts with employees,
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deferred compensation agreements, pension, profit sharing and retirement plans,
and other agreements with employees of Seller (collectively, the "Employee
Agreements"). Seller is discontinuing its Business and terminating all of its
employees effective as of the Date of Closing.
There are no "employee benefit plans" ("Plans") as such term is defined in
Section 3 (3) of the Employee Retirement Income Security Act of 1974 ("ERISA")
maintained by Seller or under which Seller has any liability.
2.20 Labor Relations. None of Seller's employees are represented by any
union. There are no strikes, work stoppages, grievance proceedings or other
controversies pending or to Seller's knowledge threatened between Seller on the
one hand, and, on the other hand, any employees of Seller or any union or other
collective bargaining unit representing such employees. Seller has complied and
is in compliance with all laws and regulations relating to the employment of
labor, including (without limitation) provisions relating to wages, hours,
collective bargaining, occupational safety and health, equal employment
opportunity, and the withholding of income taxes and social security
contributions that are applicable to Seller.
2.21 Environmental Matters. To the best of Seller's knowledge:
(a) Seller is, and has been, in material compliance with all
applicable federal, state and local environmental protection laws, rules,
regulations and orders applicable to it or the conduct of its business;
(b) There are not, and have not been claims of noncompliance against
Seller relating to the materials or substances produced, discharged, released or
emitted from or by Seller or its business;
(c) Seller has all permits and other approvals required for the
generation, handling, treatment, storage and disposal of wastes produced in its
business and the storage, treatment, discharge, emission and disposal of
hazardous waste, hazardous substances, pollutants, contaminants, materials,
products and by-products from its business; and
(d) There has been no intentional disposal of hazardous substances,
wastes, pollutants, contaminants, materials, products or by-products by Seller
and no discharge, disposal, spill or intentional release of hazardous
substances, wastes, pollutants, contaminants, materials, products or by-products
by Seller which Seller is required by law to report to any governmental agency.
2.22 Compliance with Applicable Laws. Except as set forth in Schedule 2.28
attached hereto and to the best of Seller's knowledge, Seller has complied and
is in substantial compliance with all statutes, laws, ordinances, regulations,
rules, orders, determinations, writs, injunctions, awards, judgments and decrees
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applicable to Seller, to the Assets, or to the operation and conduct of the
Business. To the best of Seller's knowledge, no employee, agent, representative
or other person acting on the authority of Seller has paid or received any bribe
or other unlawful payment of money or other thing of value, or furnished or been
given any other unlawful inducement to or from any person, business association
or governmental entity in the United States or elsewhere in connection with or
in furtherance of the business of Seller and Seller's business is not in any
manner dependent upon the making or receipt of such payment, discounts or other
inducements.
2.23 Transactions with Related Parties. Except for shareholder loans, no
present or former officer or director or shareholder of Seller or a Predecessor,
and no affiliate of such an officer or director or shareholder, is currently a
party to any transaction with Seller, including, without limitation, any
contract, agreement or other arrangement providing for the employment of,
furnishing of services by, rental of real or personal property from or otherwise
requiring payments to any such officer, direct or, shareholder or affiliate.
There are no commitments to and no income reflected in the Financial Statements
has been derived from any affiliate of Seller or a Predecessor and, following
the Closing, Buyer shall have no obligation of any kind or description to any
such affiliate. No expense relating to the operation of the Business has been
borne by an affiliate of Seller or a Predecessor. Seller has no reason to
believe that any income reflected on the Financial Statements is dependent upon
or conditioned on the Business's affiliation with any affiliate and has no
reason to believe that any income source will not be available to Buyer after
Closing due to lack of such affiliation. Seller has no reason to believe that
any expense reflected on the Financial Statements will be affected by loss of
the Business' affiliation with any affiliate and has no reason to believe that
any expense will increase for Buyer after the Closing due to the lack of such
affiliation. As used in this Agreement, "affiliate" means: (a) with respect to
a person, any member of such person's family; (b) with respect to an entity, any
officer, director, shareholder, partner or investor or in such entity or of or
in any affiliate of such entity; and (c) with respect to a person or entity, any
person or entity which directly or indirectly controls, is controlled by, or is
under common control with such person or entity; and "control" means possession,
directly or indirectly, of power to direct or cause the direction of management
or policies (whether through ownership of voting securities, by contract or
otherwise).
2.24 Advertisers. Seller does not have any information and has no reason
to believe that any of such advertisers intend to cease advertising with the
Business, nor has any information been brought to the attention of Seller which
might reasonably lead it to believe any of such advertisers intends to alter the
amount of such purchases.
2.25 Trade Outs. There are no trade or barter agreements of Seller
(advertising exchanged for goods and services with third
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parties) as of the date hereof.
2.26 Broker's or Finder's Fees. No agent, broker, investment banker, or
other person or firm acting on behalf of Seller or under its authority is or
will be entitled to any broker's or finder's fee or any other commission or
similar fee, directly or indirectly, in connection with the transactions
contemplated by this Agreement.
2.27 [Deleted]
2.28 Litigation and Disputes. Attached hereto as Schedule 2.28 is a list
of litigation or threatened litigation matters or administrative proceedings to
which Seller is a party. At Closing, Buyer shall assume the responsibility and
liability arising after Closing for the matters set forth on Schedule 2.28. At
Closing Seller and Buyer shall execute the necessary documents to substitute
Buyer as the party in all of the matters listed on Schedule 2.28.
2.29 Copies of Documents. True, correct and complete copies of all Site
Leases, Advertising Contracts, insurance policies, mortgages, indentures, notes,
leases, agreements, contracts and other instruments and documents listed in all
Schedules attached hereto have been heretofore made available to Buyer.
2.30 Disclosure. The representations and warranties by Seller in this
Agreement do not contain any untrue or misleading statement of material fact or
omit any material fact known to Seller and necessary to make the statements
contained therein not materially misleading.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF BUYER.
---------------------------------------
Buyer hereby represents and warrants to Seller that as of the
date hereof and the Closing Date:
3.1 Organization and Standing. Buyer is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Minnesota. Buyer has all the partnership power and authority to carry on its
business as currently conducted, to enter into this Agreement and to carry out
the transactions contemplated hereby and thereby.
3.2 Authorization. The execution and delivery of this Agreement by Buyer
and the consummation by Buyer of the transactions contemplated hereby have been
duly authorized. Buyer has taken all partnership action necessary for Buyer to
enter into this Agreement and for Buyer to consummate the transactions
contemplated hereby and thereby.
3.3 Absence of Violation. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
constitute a violation of, or a default under, or conflict with, any term or
provision of the partnership agreement of Buyer or any contract, commitment,
indenture, lease or other agreement to which Buyer is a party or by which Buyer
is
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bound.
3.4 Binding Obligation. This Agreement constitutes a valid and binding
obligation of Buyer, enforceable in accordance with the respective terms. Each
document and instrument to be executed by Buyer pursuant hereto, when executed
and delivered in accordance with the provisions hereof, shall be a valid and
binding obligation of Buyer, enforceable in accordance with its terms.
3.5 Litigation and Disputes. There are no actions, suits, claims,
arbitrations, proceedings or investigations pending, threatened or, to the
knowledge of Buyer, reasonably anticipated against or affecting Buyer or its
assets, properties or business, or this Agreement, at law or in equity or
admiralty, before or by any arbitrator or governmental authority, and Buyer is
not operating under, subject to or in default with respect to, any order, writ,
injunction, decree or judgment or any court or governmental authority. Buyer is
not currently involved in any dispute with any of its agents, suppliers,
business consultants to other independent contractors affecting it or its
assets, properties or business.
3.6 Consents. Buyer is not subject to any statute, law, ordinance,
regulation, rule, determination, order, judgment, writ, injunction, decree,
charter, bylaw, mortgage, deed of trust, indenture, note, agreement, commitment,
lease, contract, instrument or other restriction of any kind or character
whatsoever which would prevent the execution or delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby or
thereby, or would result in any penalty, forfeiture or contract termination as a
result thereof, without the consent of the holders of or parties to such
instruments or any other parties.
3.7 Disclosure. The representations and warranties by the Buyer in this
Agreement do not contain any untrue or misleading statement of material fact or
omit any material fact known to Buyer and necessary to make the statements
contained therein not materially misleading.
SECTION 4. AFFIRMATIVE COVENANTS OF SELLER. Between the date
of this Agreement and the Closing Date, Seller will:
(a) Continue to operate the Business in the usual and
ordinary course of business, in conformity with all applicable laws, ordinances,
regulations, rules and orders, and consistent with past practice (including
expenditures for capital improvements and expenditures for advertising to
promote the Business).
(b) Use its best efforts to preserve the Business intact and to
preserve the goodwill and business of the advertisers, suppliers and others
having business relations with Seller, and continue to conduct the financial
operations of the Business, including its credit and collection policies, with
the same effort, to the same extent and in the same manner as in the prior
conduct of the business of Seller. Without limiting the generality of the
foregoing, Seller shall not, after the date hereof and prior to the
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Closing Date, accelerate the collection of any account receivable, provide any
inducement to any advertiser to prepay any account receivable or to otherwise
modify its normal collection practices. Seller will use its best efforts to
consummate the transaction contemplated hereby and will not voluntarily take any
course of action inconsistent with the consummation of such transactions.
(c) Provide Buyer and representatives of Buyer with reasonable access
during normal business hours to the properties, titles, contracts, books, files,
logs, records and affairs of Seller, and furnish such additional information
concerning the Business as Buyer may from time to time reasonably request it
being understood, however, that no such investigation shall affect the
representations and warranties of Seller or the conditions to Closing contained
in this Agreement.
(d) Maintain all the Assets in their present good operating condition,
repair and order, reasonable wear and tear in ordinary usage excepted, and
maintain the inventories of the Business at the levels normally maintained for
the Business.
(e) Maintain the books, accounts and records of the Business in the
usual and ordinary manner and deliver to Buyer copies of monthly operating
statements and balance sheets for the Business and any other information
concerning the financial condition of the Business as Buyer may from time to
time reasonably request and which is prepared by Seller or caused by Seller to
be prepared in the ordinary course of business.
(f) Pay or cause to be paid or provided for all property, sales, use,
franchise, excise, social security, withholding, workers compensation and
unemployment insurance taxes and all other taxes of or relating to the Business,
and employees, required to be paid to city, county, state, federal and other
governmental units up to the Closing Date.
(g) Maintain in full force and effect all of its existing casualty,
liability, and other insurance through the day following the Closing Date in
amounts not less than those in effect on the date hereof.
(h) Notify Buyer in writing of any material adverse change in the
assets, liabilities, business, operations, prospects, properties or condition
(financial or otherwise) of the Business including, but not limited to,
information (including copies of all documents and records relating thereto)
concerning all material claims asserted against or affecting the Business or its
assets, properties or business and concerning all (regardless of materiality
thereof) actions, suits or proceedings instituted or threatened against or
affecting the Business or its assets, properties or business before or by any
court or governmental authority.
(i) Keep Buyer informed on a regular basis concerning the management
of the Assets, any material new contracts, agreements commitments or
transactions proposed to be entered into
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or employees proposed to be engaged in by Seller, and any other material
developments relating to the Business; provided, however, that notwithstanding
the foregoing or any other provision of this Agreement, between the date hereof
and the Closing, Buyer, its employees and agents shall not directly or
indirectly control, supervise or direct or attempt to control, supervise or
direct the operation of the Publications, but such operation shall be the sole
responsibility of and in the complete discretion of Seller.
(j) Permit Buyer and its representatives, agents, employees and
independent contractors, at Buyer's expense, to conduct inspections, to audit
the books and records of Seller and to verify revenue of the Publications and,
in connection therewith, Seller agrees to give such instructions to its
independent accountants as Buyer may reasonably request.
SECTION 5. NEGATIVE COVENANTS OF SELLER.
----------------------------
Between the date hereof and the Closing Date, except as contemplated by
this Agreement, Seller will not, without the prior written consent of Buyer:
(a) With respect to employees of the Business, except for separation
bonuses and payments, enter into any agreements with employees, increase the
compensation or bonuses payable to or to become payable by Seller to any of the
employees or effect any changes in the management, personnel policies or
employee benefits, except in accordance with existing employment policies and
practices.
(b) Create, assume or permit to exist any new mortgage, deed of trust
or pledge, or further subject to any lien or encumbrance any, of the Assets,
whether now owned or hereafter acquired.
(c) Enter into any contracts, leases, commitments, understandings,
licenses, or other agreements or incur any obligation or liability (contingent
or absolute), except current liabilities incurred in the ordinary course of
business and obligations under the contracts listed in the Schedules attached
hereto; provided, however, that Seller may enter into such other contracts,
leases, commitments, understandings, licenses or other agreements in the
ordinary course of business which are consistent with Seller's past business
practices.
(d) Do or omit to do any act (or permit such action or omission) which
will cause a material breach of any contract, understanding, commitment,
obligation, lease, license or other agreement to which Seller is a party or by
which Seller is bound; or enter into or become subject to any employment, labor
or union contract, any professional service contract not terminable at will, or
any bonus, pension, insurance, profit sharing, deferred compensation,
retirement, hospitalization, employee benefit, or other similar plan; or
increase the salary, wages or benefits payable or to become payable to any
employee, or pay or arrange to pay any bonus payment to any employee.
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(e) Sell, exchange, transfer or otherwise dispose of any of the
Assets.
(f) Enter into any transaction other than in the ordinary course of
business.
(g) Make or permit any amendment or termination of any material
contract, agreement or license to which Seller is a party or which it owns,
otherwise than in the ordinary course of business.
(h) Make any material change in any method of accounting or accounting
practice.
(i) Agree, whether in writing or not, to do any of the foregoing.
SECTION 6. ADDITIONAL UNDERTAKINGS AND COVENANTS.
-------------------------------------
6.1 Announcements and Disclosures. Except as hereinafter set forth or as
may be reasonably necessary or appropriate to perform or to anticipate
performance of the transactions contemplated by this Agreement, no party hereto
will release information to the public or any governmental authority concerning
this Agreement or the transactions contemplated hereby without first consulting
with and obtaining the consent of the other parties hereto; it being understood,
however, that none of the parties can be prevented by this Agreement from
compliance with requirements of the law. Buyer may disclose or release any
documents or other information in connection with the financing for the
acquisition herein contemplated. Seller may disclose the pending sale to its
employees, vendors, customers and independent contractors.
6.2 Covenant Not To Compete By Seller. At Closing, Seller shall execute
and deliver a Non-Compete Agreement in the form attached hereto as Schedule 6.2.
The consideration for such non-compete is included in the purchase price.
6.3 Covenant Not To Compete Agreement by Monroe. At the Closing, Monroe
shall execute and deliver a Non-Compete Agreement in the form attached hereto as
Schedule 6.3. In addition to the Purchase Price, Buyer shall pay to Monroe in
cash at the Closing the amount of Three Hundred Seventy-Five Thousand and No/100
($375,000.00) Dollars as consideration for Monroe to enter into and perform
under the Covenant Not To Compete Agreement.
6.4 Covenant Not to Compete and Sale of Name by Newsome. At the Closing,
Newsome shall execute and deliver a Non-Compete Agreement and Bill of Sale in
the form attached hereto as Schedule 6.4. In addition to the Purchase Price,
Buyer shall pay to Newsome in cash at the Closing the amount of One Million Two
Hundred Seventy Five Thousand and No/100 ($1,275,000.00) Dollars as
consideration for Newsome to enter into and perform under the Non-Compete
Agreement and Bill of Sale.
6.5 Covenant Not To Compete By Morgan. At the Closing,
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Morgan shall execute and deliver a Non-Compete Agreement in the form attached
hereto as Schedule 6.5. In addition to the Purchase Price, Buyer shall pay to
Morgan in cash at the Closing the amount of One Hundred and No/100 ($100.00)
Dollars as consideration for Morgan to enter into and perform under the Covenant
Not To Compete Agreement.
SECTION 7. CLOSING.
-------
7.1 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall occur on November 29, 1996, or at such other
time as the parties shall mutually agree. The Closing shall take place at the
offices of Seller in St. George, South Carolina, or such other place as the
parties may agree. The date on which Closing occurs is referred to herein as
the "Closing Date".
7.2 Deliveries by Seller. At the Closing, Seller shall execute where
appropriate and deliver to Buyer the following:
(a) bills of sale, instruments of assignment and other transfer and
lien release documents as may be necessary to transfer the Assets to Buyer free
and clear of all liens, claims and encumbrances;
(b) a good standing certificate for Seller as of a date not more than
10 days prior to the Closing Date issued by the Secretary of State of the State
of South Carolina, and of each state in which Seller is qualified to do business
as a foreign corporation;
(c) the books and records of Seller other than corporate minute and
stock books;
(d) a certified copy of the resolutions adopted by the board of
directors and shareholders of the Seller approving this Agreement and the
transactions contemplated hereby;
(e) an opinion of counsel for Seller, dated as of the Closing Date, in
form and substance satisfactory to the Buyer;
(f) the Non-Compete Agreement executed by Monroe;
(g) the Non-Compete Agreement and Bill of Sale executed by Newsome;
(h) the Non-Compete Agreement executed by Seller;
(i) the Non-Compete Agreement executed by Morgan; and
(j) such other certificates and instruments as Buyer may reasonably
request in writing to evidence the consummation of the transactions contemplated
hereby.
7.3 Deliveries by Buyer. On the Closing Date, Buyer shall
execute where appropriate and deliver to Seller the following:
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(a) the purchase price for the assets. The Escrow Agent shall deliver
the Earnest Money and the Buyer shall pay the balance by wire transfer into
Seller's counsel's trust account.
(b) an assumption agreement whereby Buyer assumes the Assumed
Liabilities;
(c) a certified copy of the resolutions adopted by the board of
directors of Buyer authorizing the transactions contemplated by this Agreement
approving this Agreement and the transactions contemplated hereby;
(d) an opinion of counsel for Buyer, dated as of the Closing Date, in
form and substance satisfactory to the Seller; and
(e) such other certificates and instruments as Seller may reasonably
request in writing to evidence the consummation of the transactions contemplated
hereby.
Within twenty (20) days after the Closing Date the Buyer shall deliver the
amount equal to the Net Working Capital by wire transfer to an account
designated by Seller.
7.4 Control of Business. Until the Closing hereunder, Seller shall have
complete control of the Business and the Assets, subject to the terms and
provisions of this Agreement. Buyer shall be entitled, however, to reasonable
inspection of the Assets, the operation thereof, all records relating thereto
and to notice of any developments which are not in the ordinary course of
business. From and after the Closing hereunder, Buyer shall have complete
control of the Business, its equipment and operation, and the Assets.
SECTION 8. SURVIVAL OF REPRESENTATIONS: INDEMNIFICATION: REMEDIES.
-------------------------------------------------------
8.1 Survival of Representations. All representations, warranties,
covenants, agreements and indemnities made by any party to this Agreement herein
shall also be deemed made on and as of the Closing Date as though such
representations, warranties, covenants, agreements and indemnities were made on
and as of such date, and all such representations, warranties, covenants,
agreements and indemnities shall survive the Closing and any investigation,
audit or inspection at any time made by or on behalf of any party hereto.
8.2 Indemnification by Seller. Seller hereby agrees to indemnify, defend
and hold harmless Buyer and its shareholders, officers, directors, employees,
agents and affiliates from and against all demands, claims, actions or causes of
action, assessments, losses, damages, liabilities, costs and expenses including,
but not limited to, interest, penalties and reasonable attorneys' fees and
disbursements, asserted against, relating to, imposed upon or incurred by Buyer
or said indemnified related party, directly or indirectly, by reason of or
resulting from:
(a) any breach of the representations and warranties or
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noncompliance with any covenants, agreements or undertakings by Seller contained
in or made pursuant to this Agreement;
(b) any and all liabilities or claims (absolute, contingent or
existing) against Buyer arising or accruing from events, occurrences or
omissions prior to the close of business on the Closing Date relating to the
operation of the Business, provided, however, specifically excluded from this
indemnification are the Assumed Liabilities; and
(c) any and all liabilities to or claims of a third party arising out
of litigation due to the conduct of the business of Seller prior to the close of
business on the Closing Date, provided, however, specifically excluded from this
indemnification are those matters set forth on Schedule 2.28 attached hereto and
the Assumed Liabilities.
8.3 Indemnification by Buyer. Buyer hereby agrees to indemnify, defend and
hold harmless Seller and its shareholders, officers, directors, employees,
agents and affiliates from and against all demands, claims, actions or causes of
action, assessments, losses, damages, liabilities, costs and expenses,
including, but not limited to, interest, penalties and reasonable attorneys'
fees and disbursements, asserted against, relating to, imposed upon or incurred
by Seller or said indemnified related party, directly or indirectly, by reason
of or resulting from:
(a) any breach of the representations and warranties or noncompliance
with any covenants, agreements or undertakings by Buyer contained in or made
pursuant to this Agreement;
(b) any claim for rent payable or other liabilities in respect of the
Assumed Liabilities;
(c) any and all liabilities or claims (absolute, contingent or
existing) against Seller arising or accruing from events, occurrences or
omissions after the close of business on the Closing Date relating to the
operation of the Business by Buyer; or
(d) any and all liabilities to or claims of a third party arising out
of the matters set forth on Schedule 2.28 and any litigation due to the conduct
of the business of Buyer subsequent to the close of business on the Closing
Date, whether or not disclosed on any Schedule attached hereto.
8.4 Indemnification Procedures. The following provisions shall apply to
any indemnification under this Section 8:
(a) In order for the party from whom indemnity may be sought (the
"Indemnitor") to be fully informed at all times concerning its possible
obligations to give indemnity to the claimant thereof under the provisions of
this Section 8 (the "Indemnitee") and to permit the amounts thereof to be
minimized, if the Indemnitee suffers or is threatened with or incurs any loss,
damage or expense for which it would be entitled to be indemnified, the
Indemnitee shall give written notice to Indemnitor accompanied,
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if requested by Indemnitor, with documentation demonstrating the Indemnitee's
possible right to receive indemnity and setting forth the amount of the claimed
damage on account thereof. If the Indemnitor disputes the propriety of any such
claim, the parties shall be free to dispose of such dispute as they see fit, by
litigation or otherwise. With respect to any claim made by any third party
which, if established, would entitle the Indemnitee to receive indemnity from
the Indemnitor, the Indemnitee shall forward to the Indemnitor the original or a
copy of such claim and all documents received from the third party in support of
its claim. If within fifteen days of the notice of such claim, Indemnitor
requests in writing that such third party claim not be paid, Indemnitee shall
not pay such claim, Indemnitor shall, at its expense (including employment of
counsel acceptable to the Indemnitee), settle, compromise or litigate such claim
in good faith, and shall keep the Indemnitee and its counsel adequately informed
of any action taken in the progress thereof; provided, however, that the
Indemnitee shall not be required to refrain from paying any such claim which has
matured to a court judgment or decree unless a timely appeal is taken therefrom
and a proper appeal bond posted by the Indemnitor, nor shall Indemnitee be
required to refrain from paying any claim where such action would result in the
foreclosure of a lien upon any of the properties of Indemnitee or an order
restraining or enjoining Indemnitee, temporarily or permanently, from the
operation of its business in the normal course. If, by the expiration of
fifteen days after notice of such a claim is given to Indemnitor, Indemnitor has
not notified Indemnitee that it will undertake to settle, compromise or litigate
such claim, Indemnitee shall be entitled to settle, compromise or litigate such
claim by counsel of its choice.
(b) Each party will cooperate with the other in resolving or
attempting to resolve any claim and will permit the other party access to all
books and records which might be useful for such purpose, during normal business
hours and at the place where the same are normally kept, with full right to make
copies thereof or extracts therefrom at the cost of the copying party.
(c) Failure to give notice or otherwise comply with the terms of this
Section 8.4 shall not invalidate any claim for indemnity except to the extent
that the failure to give such notice or otherwise comply with the provisions of
this section shall have resulted in actual damage to the other party. Indemnity
shall be due only to the extent of the loss or damage actually suffered (i.e.,
reduced by any offsetting or related asset or service received and by any
recovery from any third party, such as an insurer). Indemnitor shall be
subrogated to all rights of Indemnitee against any third party with respect to
any claim which Indemnitee was paid.
(d) Notwithstanding the foregoing, (i) no Indemnitor shall be liable
for indemnification claims hereunder until the aggregate amount of such claims
exceeds Fifty Thousand and No/100 ($50,000.00) Dollars from and after which time
the Indemnitor shall be liable for all claims hereunder (including the first
Fifty Thousand and No/100 ($50,000.00) Dollars in such claims) and (ii) any
claim for indemnity shall be asserted, if at all, on or before the second
anniversary of the Closing Date.
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SECTION 9. CONDITIONS PRECEDENT.
9.1 Buyer's Performance. The obligations of Buyer hereunder are subject to
the conditions that on or before the Closing Date hereunder:
(a) All conditions required by this Agreement to be performed or
complied with prior to or at the Closing Date hereunder shall have been so
performed or complied with.
(b) Except for the matters set forth on Schedule 2.28, no litigation,
investigation or proceeding, including but not limited to bankruptcy or
insolvency proceedings, shall have been instituted or threatened against Seller
which would materially adversely affect the Business or the Assets and/or the
operation of the Business or the Assets, and there shall have been no materially
adverse change in the condition of the Business or the Assets.
(c) Seller shall have executed and delivered at the Closing all of the
instruments required of it herein and all of the representations and warranties
of Seller shall be substantially true and correct on the Closing Date to the
extent that the Business is not materially adversely affected and each and all
of the agreements and covenants of Seller to be performed on or before the
Closing Date pursuant to the Agreement shall have been duly performed.
9.2 Seller's Performance. The obligations of Seller hereunder are subject
to the conditions that on or prior to the Closing Date:
(a) All conditions required by this Agreement to be performed or
complied with prior to or at the Closing Date hereunder shall have been so
performed or complied with.
(b) Buyer shall have executed and delivered at the Closing all of the
instruments required of it herein and all of the representations and warranties
of Buyer shall be true and correct on the Closing Date and each and all of the
agreements and covenants of Buyer to be performed on or before the Closing Date
pursuant to this Agreement shall have been duly performed.
SECTION 10. ESCROW PROVISIONS.
10.1 Appointment of Escrow Agent. The parties hereby designate Nelson
Mullins Riley & Scarborough, L.L.P. to act as Escrow Agent hereunder. The
Escrow Agent shall be bound by the provisions of this Article 10, but not by any
other provisions of this Agreement.
10.2 The Deposit. Upon the execution of this Agreement, Buyer has
delivered to the Escrow Agent the Deposit as provided in Section 1.3, and the
Escrow Agent hereby acknowledges receipt thereof. The Escrow Agent shall hold
the Deposit in Escrow Agent's Trust Account.
10.3 Disposition Of Deposit in the Event the Closing does Not Occur. In
the event that this Agreement is terminated in any manner other than as
specified in subparagraph 9.1 above, the Escrow Agent shall deliver the Deposit
to Seller.
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10.4 Disposition Of Deposit in the Event the Closing Does Occur. At
Closing the Escrow Agent shall deliver the Deposit to the Seller as part of the
purchase price to be paid by Buyer.
10.5 Provisions as to Escrow Agent.
(a) The Escrow Agent shall be protected in acting upon any written
notice, statement, certificate, waiver, consent or other instrument or document
which the Escrow Agent believes to be genuine.
(b) It is understood and agreed that the duties of the Escrow Agent
hereunder are purely ministerial in nature and that the Escrow Agent shall not
be liable for any error or judgement, or for any act done or step taken or
omitted in good faith, or for anything which the Escrow Agent may do or refrain
from doing in connection with this Agreement, except that the Escrow Agent shall
be liable for its own gross negligence or willful misconduct. In no event shall
the Escrow Agent be required to account for any application of funds subsequent
to disposition thereof in accordance with this Agreement by the Escrow Agent.
(c) The Escrow Agent may consult with and obtain advice from legal
counsel in the event of any dispute or question as to the construction of any of
the provisions hereof or the Escrow Agent's duties hereunder, the Escrow Agent
shall incur no liability and shall be fully protected in acting in accordance
with the opinion of its legal counsel. The Escrow Agent shall not be
responsible in any manner whatsoever for any failure or inability of any of the
other parties hereto, or anyone else, to perform or comply with any provisions
of this Agreement or any other agreement or undertaking.
(d) If at any time the Escrow Agent shall be in doubt as to the party
or parties entitled to receive any or all of the Deposit, the Escrow Agent may
apply to a court for a determination of the party or parties entitled to receive
the same, and the Escrow Agent shall incur no liability therefor.
(e) If at any time the Escrow Agent shall receive conflicting notices,
claims, demands or instructions with respect to any disbursement from the
Deposit, or if for any other reason its shall be unable in good faith to
determine the party or parties entitled to receive a disbursement from the
Deposit, the Escrow Agent may refuse to make such disbursement until the Escrow
Agent shall have received instructions in writing signed by all of the other
parties hereto, or until directed by a final order of a court (in an action
brought by the Escrow Agent pursuant to paragraph (d) of this Section or by any
other person), whereupon the Escrow Agent shall make such disbursement in
accordance with such instructions or order.
SECTION 11. MISCELLANEOUS.
11.1 Additional Actions and Documents. Each of the parties hereto hereby
agrees to take or cause to be taken such further actions, to execute, deliver
and file or cause to be executed, delivered and filed such further documents and
instruments, and to obtain such consents, as may be necessary or as may be
reasonably
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requested in order fully to effectuate the purposes, terms and conditions of
this Agreement, whether before, at or after the Closing.
11.2 Expenses. Each party hereto shall pay its own expenses incident to
this Agreement and the transactions contemplated hereunder, including all legal
and accounting fees and disbursements.
11.3 Entire Agreement; Amendment. This Agreement, including the Schedules
hereto and other writings referred to herein or delivered pursuant hereto,
constitutes the entire agreement among the parties hereto with respect to the
transactions contemplated herein, and it supersedes all prior oral or written
agreements, commitments or understandings with respect to the matters provided
for herein. No amendment, modification or discharge of this Agreement shall be
valid or binding unless set forth in writing and duly executed by the party
against whom enforcement of the amendment, modification, or discharge is sought.
All schedules and exhibits hereto shall be deemed part of this Agreement and
incorporated herein, where applicable, as if fully set forth herein.
11.4 Waiver. No delay or failure on the part of any party hereto in
exercising any right, power or privilege under this Agreement or under any other
instruments given in connection with or pursuant to this Agreement shall impair
any such right, power or privilege to be construed as a waiver of any default or
any acquiescence therein. No single or partial exercise of any such right,
power or privilege shall preclude the further exercise of such right, power or
privilege, or the exercise of any other right, power or privilege. No waiver
shall be valid against any part hereto unless made in writing and signed by the
party against whom enforcement of such waiver is sought and then only to the
extent expressly specified therein.
11.5 Severability. If any part of any provision of this Agreement or any
other agreement, document or writing given pursuant to or in connection with
this Agreement shall be invalid or unenforceable in any respect, such part shall
be ineffective to the extent of such invalidity or unenforceability only,
without in any way affecting the remaining parts of such provision or the
remaining provisions of this Agreement.
11.6 Confidentiality. Buyer agrees that any information stamped, marked
or designated by Seller as confidential, shall be maintained as confidential by
Buyer and Buyer agrees not to disclose any such information to any person
whatsoever other than is necessary to disclose such information to its own
employees and other representatives (including prospective lenders) (and shall
advise such person of the confidential nature of the information) for the
purpose of effecting the transaction contemplated by this Agreement (including
the financing thereof) unless such information becomes otherwise publicly
available or Buyer is required to make such disclosure by order of a court or
governmental agency. Buyer agrees that, in the event this Agreement is not
closed for any reason whatsoever, all documents and copies embodying such
information shall be, at the request of Seller, delivered to Seller. Buyer
agrees to endeavor to have executed by such
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employees and agents of the Buyer as may, from time to time be designated by the
Seller, a confidentiality letter in such form as is mutually agreed to between
the Buyer and the Seller, it being understood that the Buyer shall not be
obligated to make any payment of money to any such person in order to induce
such person to execute such confidentiality undertaking.
11.7 Governing Law. This Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto, shall be governed
by and construed in accordance with the laws of the State of South Carolina.
11.8 Notices. All notices, requests and other communications from any of
the parties hereto to the other shall be in writing and shall be considered to
have been duly given or served when personally delivered (in the case of a
corporate entity, to an executive officer of such party), or on the first day
after the date of deposit with Federal Express for next day delivery, postage
prepaid, or on the third day after deposit in the United States mail, certified
or registered, return receipt requested, postage prepaid, or on the date of
telecopy, fax or similar telephonic transmission during normal business hours,
provided that the recipient has specifically acknowledged by telephone receipt
of such telecopy, fax or telephonic transmission; addressed, in all cases, to
the party at his or its address set forth below, or to such other address as
such party may hereafter designate by written notice to the other parties.
If to Seller:
Mr. John F. Morgan
Invesco Capital Management
1315 Peachtree Street, Suite 300
Atlanta, Georgia 30309
with a copy to (which copy shall not constitute notice)
John C. Stewart, Jr., Esquire
Nelson Mullins Riley & Scarborough, L.L.P.
Suite 301, 2411 N. Oak Street
Post Office Box 3939
Myrtle Beach, SC 29577
If to Buyer:
Adams Outdoor Advertising Limited Partnership
1380 W. Paces Ferry Road, N.W.
Suite 170, South Wing
Atlanta, GA 30327
with a copy to (which copy shall not constitute notice):
Kaplan, Strangis and Kaplan, P.A.
5500 Norwest Center
90 South Seventh Street
Minneapolis, MN 55402
Attention: Andris A. Baltins, Esq.
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11.9 Headings. Article and Section headings contained in this Agreement
are inserted for convenience of reference only, shall not be deemed to be a part
of this Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.
11.10 No Third Party Beneficiaries. Nothing in this Agreement, express or
implied, is intended to confer upon any person, other than the parties hereto,
John F. Morgan, Phillip J. Newsome, Rodney Monroe and their respective
successors and permitted assigns, any right, remedy or claim under or by reason
of this Agreement or of any term, condition or covenant hereof.
11.11 Execution in Counterparts. To facilitate execution, this Agreement
may be executed in as many counterparts as may be required, and it shall not be
necessary that the signatures of, or on behalf of, each party, or that the
signatures of all persons required to bind any party, appear on each
counterpart; but it shall be sufficient that the signature of, or on behalf of,
each party, or that the signatures of the persons required to bind any party,
appear on one or more of the counterparts. All counterparts shall collectively
constitute a single agreement. It shall not be necessary in making proof of
this Agreement to produce or account for more than a number of counterparts
containing the respective signatures of, or on behalf of, all of the parties
hereto.
11.12 Binding Effect. Subject to any provisions hereof restricting
assignment, this Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and assigns.
11.13 Attorneys' Fees. In the event of any dispute hereunder between the
parties hereto, the party prevailing in any litigation instituted hereunder
shall be entitled to recover from the other its costs and expenses thereof,
including, specifically, its reasonable attorneys' fees.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement,
or have caused this Agreement to be duly executed on their behalf, as of the day
and year first above written.
WITNESSES: SELLER:
MORGAN NEWSOME MONROE, INC.
/s/ Jessica K. Smith By: /s/ Phillip J. Newsome
- ------------------------------ ---------------------------
/s/ Kimberly M. Lawrence Its: President
- ------------------------------ --------------------------
WITNESSES: PRINCIPALS:
/s/ Jessica K. Smith /s/ Phillip J. Newsome
- ------------------------------ ------------------------------
/s/ Kimberly M. Lawrence Phillip J. Newsome
- ------------------------------
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/s/ Jessica K. Smith /s/ John F. Morgan
- ------------------------------ ------------------------------
/s/ Kimberly M. Lawrence John F. Morgan
- ------------------------------
/s/ Jessica K. Smith /s/ Rodney R. Monroe
- ------------------------------ ------------------------------
/s/ Kimberly M. Lawrence Rodney R. Monroe
- ------------------------------
WITNESSES: BUYER:
ADAMS OUTDOOR ADVERTISING
LIMITED PARTNERSHIP
By: Adams Outdoor Advertising, Inc.
Its Managing General Partner
/s/ Jessica K. Smith /s/ Abe Levine
- ------------------------------ By: --------------------------
/s/ Kimberly M. Lawrence Vice President
- ------------------------------ Its: -------------------------
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