<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 333-12427
UNIVERSAL OUTDOOR, INC.
ILLINOIS 36-2827496
-------------------------- --------------------------------
(STATE OR OTHER JURISDICTION (IRS EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION)
321 NORTH CLARK STREET, SUITE 1010, CHICAGO, ILLINOIS 60610
REGISTRANT'S TELEPHONE NUMBER: (312) 644-8673
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES X NO
----- -----
THE NUMBER OF SHARES OUTSTANDING OF THE REGISTRANT'S COMMON STOCK, $0.01
PAR VALUE, AS OF NOVEMBER 12, 1996 WAS 10,000.
<PAGE>
PART I
------
FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS
UNIVERSAL OUTDOOR,INC.
----------------------
BALANCE SHEETS
--------------
(Dollars in Thousands)
ASSETS
------
September 30, December 31,
1996 1995
------------- ------------
(Unaudited)
CURRENT ASSETS:
Cash $ 848 19
Accounts receivable 10,476 5,059
Other receivables 513 201
Prepaid land rents 2,678 1,043
Prepaid insurance and other 2,044 1,029
-------- --------
Total current assets 16,559 7,351
-------- --------
PROPERTY AND EQUIPMENT 159,961 55,346
-------- --------
OTHER ASSETS:
Non-compete agreements, net of accumulated
amortization of $5,352 and $4,505 1,290 1,995
Finance costs, net of accumulated
amortization of $1,284 and $835 7,185 3,196
Excess of cost over fair value of
assets acquired, net of accumulated
amortization of $374 and $230 2,899 700
Other costs associated with acquisitions,
net of accumulated amortization of $832
and $686 585 525
Deposits 5,035 20
-------- --------
Total other assets 16,994 6,436
-------- --------
$193,514 $ 69,133
======== ========
LIABILITIES AND COMMON STOCKHOLDERS' DEFICIT
--------------------------------------------
CURRENT LIABILITIES:
Current maturities of long term debt $ - $ 58
Accounts payable 1,699 1,225
Accrued interest 2,798 1,054
Accounts payable-affiliates 52,827 234
Deferred revenue 391 468
Accrued expenses 5,340 409
-------- --------
Total current liabilities 63,055 3,448
-------- --------
LONG TERM DEBT, less current maturities 106,669 76,079
-------- --------
COMMON STOCKHOLDERS EQUITY (DEFICIT):
Common stock, $.01 par value, 1,500,000
shares authorized; and 10,000
shares issued and outstanding - -
Additional paid in capital 52,523 22,535
Accumulated deficit (28,733) (32,929)
-------- --------
Total common stockholders' equity (deficit) 23,790 (10,394)
-------- --------
$193,514 $ 69,133
======== ========
See accompanying notes to financial statements.
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UNIVERSAL OUTDOOR,INC.
----------------------
STATEMENTS OF OPERATIONS
------------------------
(Unaudited)
(Dollars in Thousands)
For the For the
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- ---------------------
1996 1995 1996 1995
---- ---- ---- ----
Revenues $20,942 $ 9,999 $50,308 $28,290
Less agency commissions 2,299 1,059 5,426 2,940
------- ------- ------- -------
Net revenues 18,643 8,940 44,882 25,350
------- ------- ------- -------
Operating expenses:
Direct cost of revenues 6,512 3,379 16,032 9,645
General and administrative
expenses 1,709 1,037 4,785 3,187
Depreciation and amortization 4,532 1,850 9,207 5,387
------- ------- ------- -------
12,753 6,266 30,024 18,219
------- ------- ------- -------
Operating income 5,890 2,674 14,858 7,131
Other (income) expenses:
Interest expense 2,808 2,055 8,679 6,114
Interest expense - amortization
of deferred financing costs - 99 215 320
Miscellaneous (5) 11 1,668 32
(Gain) loss on disposal of
assets and other expenses 10 - 10 -
------- ------- ------- -------
Total other expense 2,813 2,165 10,572 6,466
------- ------- ------- -------
Net income (loss) $ 3,077 $ 509 $ 4,286 $ 665
======= ======= ======= =======
See accompanying notes to financial statements.
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UNIVERSAL OUTDOOR, INC.
-----------------------
STATEMENTS OF CASH FLOW
-----------------------
(Unaudited)
(Dollars in Thousands)
For the Nine Months Ended
September 30,
1996 1995
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ 4,286 $ 665
Depreciation and amortization 7,974 5,757
Costs related to acquisitions 1,750 -
Loss (gain) on sale of property and equipment - -
Changes in assets and liabilities:
Accounts receivable and other receivables (1,856) (409)
Prepaid land rents, insurance and other (678) (189)
Accounts payable and accrued expenses 3,062 (417)
Accounts payable - affiliate 52,593 (386)
Accrued interest 1,728 1,809
Other (9) -
--------- -------
Net cash provided by operation activities 68,850 6,830
--------- -------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Capital expenditures (4,313) (4,257)
Acquisitions net of cash acquired (124,035) (2,075)
Other payments (2) -
Payment for consulting agreement - (1,400)
Acquisition costs (74) (99)
--------- -------
Net cash used in investing activities (128,424) (7,831)
--------- -------
CASH FLOWS USED IN FINANCING:
Proceeds from issuance of LTD 75,000 -
Principal payments of LTD (47,329) (87)
Net borrowings (repayments) of line of credit 2,822 1,416
Deferred financing costs - (234)
Additional paid in capital 30,000 -
Dividend paid to parent (90) (90)
--------- -------
Net cash used/received in financing 60,403 1,005
--------- -------
NET INCREASE (DECREASE) IN CASH 829 4
CASH AT BEGINNING $ 19 11
========= =======
CASH AT END $ 848 $ 15
========= =======
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid during the period $ 6,943 $ 4,177
========= =======
See accompanying notes to financial statements.
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UNIVERSAL OUTDOOR, INC.
-----------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION OF UNAUDITED FINANCIAL STATEMENTS:
- ----------------------------------------------------------------
The interim financial statements contained herein have been prepared by
management and are unaudited. The financial statements should be read in
conjunction with the financial statements and the notes thereto included in the
Annual Report on Form 10-K of Universal Outdoor, Inc. ("Universal") for the year
ended December 31, 1995.
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments, which were of a normal recurring nature, necessary to
present fairly the financial position of Universal as of September 30, 1996, and
the results of its operations and its cash flows for the periods presented
herein.
Earnings per share calculations have not been prepared because Universal is a
wholly-owned subsidiary of Universal Outdoor Holdings, Inc. (The "Holding
Company").
Prior to the Refinancing Plan, Universal Outdoor, Inc., Universal Outdoor II
Holding Company, Outdoor Properties, Inc., Midwest Outdoor Management, Inc. and
CBT Development, Inc. were under common ownership and control. In connection
with the Refinancing Plan, (i) a wholly-owned subsidiary of the Holding Company
was merged with and into Universal Outdoor, Inc. Which thereupon became a
wholly-owned subsidiary of the Holding Company and (ii) Universal Outdoors, Inc.
acquired all the assets, in consideration of the assumption of all the
liabilities, of each of Outdoor Properties, Inc., Midwest Outdoor Management,
Inc. and CBT Development, Inc.
NOTE 2 - REFINANCING PLAN:
- -------------------------
Effective November 18, 1993, Universal executed a Refinancing Plan to extend the
average life of its obligations, thereby enhancing its operations and financial
flexibility. As part of the Refinancing Plan, Universal combined, in a single
operating entity (Universal Outdoor, Inc.) under the Holding Company, business
activities previously conducted by separate affiliated corporations, repaid
certain outstanding indebtedness, issued $65.0 million Senior Notes due 2003 of
Universal Outdoor, Inc. and replaced its existing bank credit facility.
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In addition, the Refinancing Plan provided for the amendment of the terms of the
redeemable preferred stock of the Holding Company to allow the provisions of the
indenture governing the $65.0 million Senior Notes due 2003 to restrict payments
by the operating company to the Holding Company until the $65.0 million Senior
Notes due 2003 have been retired.
NOTE 3 - ACQUISITIONS:
- ---------------------
On September 16, 1996 and September 19, 1996, respectively, the Company acquired
certain assets of (i) Iowa Outdoor Displays for approximately $1.8 million in
cash and (ii) The Chase Company for approximately $5.8 million in cash. As a
result of these acquisitions, Universal acquired approximately 160 advertising
display faces consisting primarily of posters in and around Des Moines and
approximately 245 advertising display faces consisting primarily of bulletins in
and around Dallas.
On April 5, 1996 the Company purchased all outstanding stock of NOA Holding
Company, Inc. for approximately $90 million, including fees and expenses
associated with the transaction. As a result of the acquisition, Universal
acquired signboards in the Minneapolis/St. Paul, Minnesota and Jacksonville,
Florida markets. The Company financed the acquisition with $84.7 million in
bank borrowings and $30 million in cash proceeds from the sale of equity of the
Holding Company to an investor group.
In the first quarter of 1996, the Company acquired signboards in the Chicago
market through two asset purchase agreements. In January, the Company purchased
160 display faces from Adsign, Inc. for $12.5 million which was paid in cash.
In March 1996, the Company purchased 18 structures from Image Media, Inc. for
$1.2 million which was paid in cash. Both investments were financed with
borrowings against the Acquisition Line of Credit.
NOTE 4 - RELATED PARTY TRANSACTIONS:
- -----------------------------------
In June 1994, Universal's parent entity, the Holding Company, advanced
approximately $1.2 million to Universal in the form of an inter-company loan
which was a portion of the proceeds from the sale by the Holding Company of its
notes and warrants. Universal does not pay interest on this loan, and as of
September 30, 1996, $210,000 was outstanding.
NOTE 5 - COMMITMENTS AND CONTINGENCIES:
- --------------------------------------
Universal is subject to various litigation in the normal course of business.
Such litigation includes claims by municipalities that certain outdoor
advertising structures should be removed. The ultimate outcome of current and
future litigation cannot be presently determined. Management believes the
outcome of current litigation will not have a significant impact on Universal.
-5-
<PAGE>
NOTE 6 - COMMON STOCK OFFERING
- ------------------------------
On July 23, 1996 the Holding Company completed an initial public offering of
7,130,000 shares of Common Stock (the "Offering"), which included the
Underwriters' exercises of their over-allotment option. Proceeds to the Holding
Company from the Offering totaled $62.4 million. All of the proceeds were used
to reduce the outstanding indebtedness. In conjunction with this, the Company
modified the acquisition term loan and acquisition revolving credit line to
provide for a single acquisition revolving credit line in the amount of $87.5
million.
NOTE 7 - SUBSEQUENT EVENTS
- --------------------------
The POA Acquisition was consummated on October 8, 1996, pursuant to a merger of
(Outdoor Advertising Holdings, Inc. (OAH) with and into a subsidiary of the
Company for approximately $240 million in cash. As a result of the POA
Acquisition, the Company acquired a total of approximately 6,337 advertising
display faces
On October 10, 1996, the Holding Company completed a secondary offering of
6,500,000 shares of Common Stock (the "Second Offering"). Proceeds to the
Holding Company from the Second Offering totaled $202.9 million. The proceeds
were used to repurchase certain outstanding notes and finance a portion of the
purchase price payable in connection with certain of the acquisitions.
On October 10, 1996, the Company completed a $225 million debt offering of
9 3/4 % Senior Subordinated Notes due 2006( the "Debt Offering"). Proceeds to
the Company from the Debt Offering totaled $217.7 million. The proceeds were
used to repurchase certain outstanding notes and finance a portion of the
purchase price payable in connection with certain of the acquisitions.
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSES OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
RESULTS OF OPERATIONS
COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995
Net revenues of Universal Outdoor, Inc. (the "Registrant") increased
77.0% to $44.9 million during the first nine months of 1996 compared to $25.4
million in the corresponding 1995 period. This increase was a result of
inclusion of approximately $13.9 million of revenues from the Minneapolis and
Jacksonville markets (the "Naegele Markets") which were acquired from NOA
Holding Company in April 1996 (the "Naegele Acquisition"). The remaining
$5.6 million or 22.0% increase in net revenues was a result of higher
advertising rates and occupancy levels on the Company's signboards and
inclusion for the full quarter of signboard revenues from the acquisitions of
Image Media, Inc. and AdSign, Inc. Overall net revenues from tobacco
advertising increased to $5.3 million in the first nine months of 1996
compared to $3.2 million in the 1995 period. This increase was due mainly to
the inclusion of tobacco revenues from the Naegele Markets. As a percentage
of net revenues, tobacco advertising sales decreased to 11.9% in the first
nine months of 1996 compared to 12.7% in the 1995 period.
Direct cost of revenues increased to $16.0 million in the first nine months
of 1996 compared to $9.6 million in the 1995 period. The Naegele Markets
accounted for $4.6 million of the increase. As a percentage of net revenues,
however, direct cost of revenues decreased to 35.6% in the first nine months of
1996 compared to 38.0% in the 1995 period as a result of economies of scale
associated with the increased revenues.
General and administrative expenses increased to $4.8 million in the first
nine months of 1996 from $3.2 million in the 1995 period. As a percentage of
net revenues, general and administrative expenses decreased to 10.7% in the
first nine months of 1996 compared to 12.6% in the 1995 period. This percentage
decrease was due to the addition of the new markets' revenues without a
significant increase in staffing or other corporate overhead expenses.
Depreciation and amortization expense increased to $9.2 million in the
first nine months of 1996 compared to $5.4 million in the 1995 period. This
increase was due to significant increases in the fixed assets as a result of the
acquisitions consummated in such period.
Total interest expense increased to $8.9 million in the first nine months
of 1996 compared to $6.4 million in the 1995 period. The increase resulted from
increased debt outstanding under the credit facility which was incurred to
finance the Naegele Acquisition.
Other expenses increased to $1.8 million in 1996, consisting of a one-time
charge for expenses arising out of the Naegele Acquisition.
The foregoing factors contributed to the Registrant's $4.3 million net
income in the first nine months of 1996 compared to $.6 million net income in
the 1995 period.
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<PAGE>
COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995
Net revenues increased 109.0% to $18.6 million during the three months
ended September 30, 1996 compared to $8.9 million in the corresponding 1995
period. The Naegele Markets contributed $7.1 million of this increase. The
remaining $1.8 million or 20.0% increase in net revenues was a result of
higher advertising rates and occupancy levels on the Company's signboards and
inclusion for the full quarter of signboard revenues from the acquisitions
Image Media, Inc. and AdSign, Inc. Overall net revenues from tobacco
advertising increased to $1.9 million in the third quarter of 1996 from $1.1
in the comparable 1995 period as a result of the Naegele Acquisition. As a
percentage of net revenues, tobacco advertising sales increased to 10.2% for
the three months ended September 30, 1996 from 12.4% in the 1995 period.
Direct cost of revenues increased to $6.5 million in the third quarter of
1996 compared to $3.4 million in the 1995 period. The Naegele Markets accounted
for $2.4 million of the increase. As a percentage of net revenues, however,
direct cost decreased to 34.9% for the third quarter of 1996 compared to 37.8%
for the 1995 period as a result of economies of scale associated with increased
revenues.
General and administrative expenses increased to $1.7 million in the third
quarter of 1996 from $1.0 million in the 1995 period. The Naegele Markets
accounted for $.5 million of the increase. As a percentage of net revenues,
general and administrative expenses decreased to 9.1% for the 1996 period
compared to 11.6% in the 1995 period, reflecting further economies of scale
associated with the increased revenues.
Depreciation and amortization expense increased to $4.5 million for the
three months ended September 30, 1996 from $1.9 million for the 1995 period.
This increase was due to significant increases in the fixed assets as a result
of the acquisitions consummated in such period.
Total interest expense increased to $2.8 million in the third quarter of
1996 compared to $2.2 million in the 1995 period. The increase resulted from
increased debt outstanding under the credit facility which was incurred to
finance the Naegele Acquisition.
The foregoing factors contributed to the Registrant's $3.1 million net
income for the three months ended September 30, 1996 compared to the $509,000
net income in the 1995 period.
LIQUIDITY AND CAPITAL RESOURCES
The Registrant has pursued and continues to pursue a strategy of growth
primarily through (i) the development of new outdoor advertising structures
in each of its existing markets and (ii) the acquisition of existing outdoor
advertising properties. In April 1996, the Registrant consummated the
Naegele Acquisition pursuant to which the Company acquired approximately
2,550 display faces (of which approximately 1,455 are located in the
Minneapolis/St. Paul market and approximately 1,095 are located in the
Jacksonville market) and approximately 840 painted bulletin faces (of which
approximately 440 are located in the Minneapolis/St. Paul market and
approximately 400 are located in the Jacksonville market). The purchase
price of the Naegele
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<PAGE>
Acquisition, including fees and expenses associated with the transaction, was
approximately $90 million. In connection therewith, the Registrant, its
current lender, LaSalle National Bank, and an additional bank, Bankers Trust
Company, (i) refinanced the Registrant's existing credit facility with a
revolving credit facility (the "Revolving Facility") and (ii) provided an
additional extension of credit for purposes of acquisition financing (the
"Acquisition Facility," and together with the Revolving Facility, the "Prior
Facilities") and, specifically, the financing, in part, of the Naegele
Acquisition.
In August, 1996 the Registrant entered into an agreement to acquire
operations located in five markets in the southeast United States in a
transaction with Outdoor Advertising Holdings, Inc. ("OAH") (the "POA
Acquisition"). The POA Acquisition was consummated in October 1996, pursuant
to a merger of OAH with and into a subsidiary of the Registrant for
approximately $240 million in cash. As a result of the POA Acquisition, the
Registrant acquired a total of approximately 6,337 advertising display faces.
In September, 1996 the Registrant, through a newly-formed subsidiary,
acquired the option (the Memphis/Tunica Option") to purchase during the
period from December 1, 1996 to December 31, 1996 certain assets located in
and around Memphis, Tennessee and Tunica County, Mississippi (the
"Memphis/Tunica Acquisition"). The purchase price of the Memphis/Tunica
Option was $5 million. The purchase price of the Memphis/Tunica Acquisition
is approximately $71 million (inclusive of the price of the Memphis/Tunica
Option) plus 100,000 shares of Common Stock of Universal Outdoor
Holdings, Inc. ("Holdings"), the parent of the Registrant. Upon consummation
of the Memphis/Tunica Acquisition, the Registrant will acquire a total of
approximately 2,018 advertising display faces located in and around Memphis,
Tennessee.
In September, 1996, the Registrant acquired certain assets of (i) Iowa
Outdoor Displays for approximately $1.8 million in cash (the "Iowa
Acquisition") and (ii) The Chase Company for approximately $5.8 million in
cash (the "Dallas Acquisition", and together with the Iowa Acquisition, the
"Additional Acquisitions"). As a result of the Additional Acquisitions, the
Registrant acquired approximately 160 advertising display faces consisting
primarily of posters in and around Des Moines and approximately 245
advertising display faces consisting of bulletins in and around Dallas.
At September 30, 1996 approximately $41.1 million was outstanding under
the Acquisition Facility. The Acquisition Facility consisted of an available
acquisition term loan in the amount of $75 million and an acquisition
revolving credit line in the amount of $12.5 million for a total
availability of $87.5 million. In addition, the lenders extended the
Revolving Credit Facility in the amount of $12.5 million, of which nothing
was outstanding at September 30, 1996.
In October 1996, the Registrant amended and restated the Prior
Facilities which became the New Credit Facility. The New Credit Facility
originally provided for a total loan commitment of $300 million whereby
approximately $212.5 million of the New Credit Facility was to mature on
September 30, 2003 with the remaining amount maturing on September 30, 2004.
Upon the consummation of the Offering (as hereafter defined), $75 million
of the term portion of the New Credit Facility was paid in full and is no
longer available. Once repaid, the remaining amounts under the term portion
may not be reborrowed.
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<PAGE>
In addition to the amounts drawn under the Prior Facilities, in April
1996 Holdings sold a minority portion of its capital stock for $30 million in
cash proceeds which was used to finance the remaining amount of the Naegele
Acquisition and to refinance the existing indebtedness.
The credit agreements governing the New Credit Facility contain certain
restrictions with respect to the Registrant's ability to (i) incur additional
indebtedness and contingent liabilities, (ii) create liens and (iii) pay
dividends and effect certain other transactions involving the capital stock
of the Registrant. In addition, the indenture governing the Registrant's
outstanding senior notes (the "Indenture") contains a number of restrictive
covenants including limitations on additional debt incurrence based on a cash
flow ratio test and limitations on distributions to shareholders based on a
net income test.
On July 23, 1996, Holdings completed an initial public offering of
7,130,000 shares of Common Stock (the "Offering") which included the
underwriters' exercises of their over-allotment option. Proceeds to Holdings
from the Offering totaled $62.4 million. All of the proceeds were used to
reduce outstanding indebtedness under the Prior Facilities. In conjunction
with this, the Registrant modified the acquisition term loan and acquisition
revolving credit line to provide for a single acquisition revolving credit
line in the amount of $87.5 million.
On October 10, 1996, Holdings completed a secondary offering of
6,500,000 shares of Common Stock (the "Second Offering"). Proceeds to the
Registrant from the Second Offering totaled $202.9 million. The proceeds
were used to repurchase certain outstanding notes and finance a portion of
the purchase price payable in connection with certain of the acquisitions
consummated during the period.
On October 10, 1996, the Registrant completed a $225 million debt
offering of 9-3/4% Senior Subordinated Notes due 2006 (the "Debt Offering").
Proceeds to the Registrant from the Debt Offering totaled $217.7 million.
The proceeds were used to repurchase certain outstanding notes and finance a
portion of the purchase price payable in connection with certain of the
acquisitions consummated during the period.
Net cash provided by operating activities increased to $68.9 million for
the nine months ended September 30, 1996 from $6.8 million for the 1995
period. Net cash provided by operating activities reflects the Registrant's
net loss adjusted for non-cash items, the cash provided by the Offering, and
the use or source of cash for the net change in working capital.
The Registrant's net cash used in investing activities of $128.4 million
for the nine months ended September 30, 1996 includes cash used for
acquisitions of $124.0 million and other capital expenditures of $4.3
million. Capital expenditures have been made primarily to develop new
structures in each of its markets. The Registrant intends to continue to
develop new structures in its markets and to consider potential acquisitions
in the Midwestern region and contiguous markets. Management believes that
its internally generated funds, together with available borrowings under the
New Credit Facility or proceeds from additional equity offerings by Holdings,
will be sufficient to satisfy its cash requirements, including anticipated
capital expenditures, for the foreseeable future.
For the nine months ended September 30, 1996, $60.4 million was provided
by financing activities due to increased borrowings on the Acquisition
Facility and the sale of capital stock by Holdings. As compared to the 1995
period, when $1.0 million was provided by financing activities as a result of
borrowings on the credit facility.
-10-
<PAGE>
PART II
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OTHER INFORMATION
-----------------
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
By unanimous written consent dated July 26, 1996, Universal Outdoor
Holdings, Inc., the sole shareholder of the Registrant, approved certain
amendments to the articles of incorporation and by-laws of the Registrant.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS. Certain of the documents listed below have heretofore
been filed by the Registrant with the Securities and Exchange Commission
(Commission File No. 333-12427), and each such document is incorporated
herein by reference as indicated below:
NUMBER DESCRIPTION
- ------ -----------
2.1 Agreement and Plan of Merger dated August 27, 1996 between the
Registrant, Universal Acquisition Corp. and Outdoor Advertising
Holdings, Inc. (incorporated herein by reference to Exhibit 2.5 of
Universal Outdoor Holdings, Inc. Registration Statement on Form S-1
(Commission File No. 333-12457) (the "Registration Statement"))
2.2 Option and Asset Purchase Agreement dated September 12, 1996 between
the Registrant and certain selling institutions (incorporated herein by
reference to Exhibit 2.6 of the Registration Statement)
2.3 Asset Purchase Agreement dated September 12, 1996 between the
Registrant and Iowa Outdoor, Inc.
2.4 Asset Purchase Agreement dated September 11, 1996 between the Company
and The Chase Company (incorporated herein by reference to Exhibit 2.8
of the Registration Statement)
2.5 Stock Purchase Agreement between the Registrant and certain
institutions and individuals relating to the sale of the capital
stock of NOA Holding Company (incorporated herein by reference to
Exhibit 2.1 of Universal Outdoor Holdings, Inc. Current Report on
Form 8-K dated April 5, 1996 (Commission File No. 33-82582))
3.1 Third Restated Articles of Incorporation of the Registrant
(incorporated herein by reference to Exhibit 3.1 of the Registrant's
Registration Statement on Form S-1 (Commission File No. 333-12427)
(the "Registrant's Registration Statement"))
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<PAGE>
NUMBER DESCRIPTION
- ------ -----------
3.2 Second Amended and Restated By-Laws of the Registrant (incorporated
herein by reference to Exhibit 3.2 of the Registrant's Registration
Statement)
4.1 Indenture between the Registrant and the United States Trust Company of
New York (incorporated herein by reference to Exhibit 4.1 of the
Registrant's Registration Statement)
10.1 Amendment to Option Exchange Agreement dated July 26, 1996 among the
Registrant, Universal Outdoor Holdings, Inc., Daniel L. Simon, Brian T.
Clingen and William H. Smith (incorporated herein by reference to
Exhibit 10.8 of the Registration Statement)
10.2 Fee Letter between the Registrant, Universal Outdoor Holdings, Inc. and
Kelso & Company, L.P. (incorporated herein by reference to Exhibit 10.9
of the Registration Statement)
10.3 Joint Management Agreement between Universal Outdoor Management
Company, Inc. and certain individuals (incorporated herein by
reference to Exhibit 10.11 of the Registration Statement)
10.4 Amendment to Revolving Credit Agreement among the Registrant and
various lending institutions (incorporated herein by reference to
Exhibit 10.9 of Universal Outdoor Holdings, Inc. Registration
Statement on Form S-1 (Commission File No. 333-5351) (the
"Initial Registration Statement"))
10.5 Amendment to Acquisition Credit Agreement among the Registrant and
various lending institutions (incorporated herein by reference to
Exhibit 10.10 of the Initial Registration Statement)
10.6 Amended and Restated Revolving Credit Agreement dated October 8,
1996 among the Registrant and various lending institutions
(incorporated by reference to Exhibit 10.1 of the Registration
Statement)
10.7 Amended and Restated Acquisition Credit Agreement dated October 8,
1996 among the Registrant and various lending institutions
(incorporated herein by reference to Exhibit 10.2 of the Registration
Statement)
27 Financial Data Schedule
(b) REPORTS ON FORM 8-K - The Registrant did not file a Current
Report on Form 8-K during the quarter ended September 30, 1996.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNIVERSAL OUTDOOR, INC.
(Registrant)
November 14, 1996 /s/ Brian T. Clingen
-----------------------------------
Brian T. Clingen
Vice President and Chief Financial Officer
/s/ Paul G. Simon
-----------------------------------
Paul G. Simon
Vice President, Secretary and General Counsel
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INDEX TO EXHIBITS
NUMBER DESCRIPTION PAGE
- ------ ----------- ----
2.1 Agreement and Plan of Merger dated August 27, 1996 between the
Registrant, Universal Acquisition Corp. and Outdoor Advertising
Holdings, Inc. (incorporated herein by reference to Exhibit 2.5
of the Registration Statement)
2.2 Option and Asset Purchase Agreement dated September 12, 1996
between the Registrant and certain selling institutions
(incorporated herein by reference to Exhibit 2.6 of the
Registration Statement)
2.3 Asset Purchase Agreement dated September 12, 1996 between the
Registrant and Iowa Outdoor, Inc.
2.4 Asset Purchase Agreement dated September 11, 1996 between the
Company and The Chase Company (incorporated herein by reference
to Exhibit 2.8 of the Registration Statement)
2.5 Stock Purchase Agreement between the Registrant and certain
institutions and individuals relating to the sale of the capital
stock of NOA Holding Company (incorporated herein by reference to
Exhibit 2.1 of Universal Outdoor Holdings, Inc. Current Report on
Form 8-K dated April 5, 1996 (Commission File No. 33-82582))
3.1 Third Restated Articles of Incorporation of the Registrant
(incorporated herein by reference to Exhibit 3.1 of the
Registrant's Registration Statement)
3.2 Second Amended and Restated By-Laws of the Registrant
(incorporated herein by reference to Exhibit 3.2 of the
Registrant's Registration Statement)
4.1 Indenture between the Registrant and the United States Trust
Company of New York (incorporated herein by reference to
Exhibit 4.1 of the Registrant's Registration Statement)
10.1 Amendment to Option Exchange Agreement dated July 26, 1996
among the Registrant, Universal Outdoor Holdings, Inc.,
Daniel L. Simon, Brian T. Clingen and William H. Smith
(incorporated herein by reference to Exhibit 10.8 of the
Registration Statement)
10.2 Fee Letter between the Registrant, Universal Outdoor
Holdings, Inc. and Kelso & Company, L.P. (incorporated herein
by reference to Exhibit 10.9 of the Registration Statement)
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NUMBER DESCRIPTION PAGE
- ------ ----------- ----
10.3 Joint Management Agreement between Universal Outdoor Management
Company, Inc. and certain individuals (incorporated herein by
reference to Exhibit 10.7 of the Registration Statement)
10.4 Amendment to Revolving Credit Agreement among the Registrant and
various lending institutions (incorporated herein by reference to
Exhibit 10.9 of the Initial Registration Statement)
10.5 Amendment to Acquisition Credit Agreement among the Registrant and
various lending institutions (incorporated herein by reference to
Exhibit 10.10 of the Initial Registration Statement)
10.6 Amended and Restated Revolving Credit Agreement dated October 8,
1996 among the Registrant and various lending institutions
(incorporated herein by reference to Exhibit 10.1 of the
Registration Statement)
10.7 Amended and Restated Acquisition Credit Agreement dated October 8,
1996 among the Registrant and various lending institutions
(incorporated herein by reference to Exhibit 10.2 of the
Registration Statement)
27 Financial Data Schedule
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ASSET PURCHASE AGREEMENT
THIS AGREEMENT, made and entered into this 12th day of September, 1996, by
and among MOUNTAIN MEDIA, INC., a Pennsylvania corporation doing business as
Iowa Outdoor Displays ("IOD") and ROBERT H. LAMBERT, ("Lambert")(IOD and Lambert
are collectively referred to as "Seller") and UNIVERSAL OUTDOOR, INC., an
Illinois corporation, ("Buyer").
W I T N E S S E T H :
In consideration of the respective representations, warranties and
covenants contained in this Agreement and other good and valuable consideration,
the sufficiency and receipt of which is hereby acknowledged, Buyer and Seller
agree as follows:
l. Transfer of Assets.
1.1 Buyer agrees that at the Closing it shall acquire all of the
business and assets of Seller, whether disclosed or undisclosed,
wherever located, which are used in the outdoor advertising business
in the market described in Exhibit 1.1, ("Market"), including, but not
limited to, those assets listed on Exhibits or Schedules attached to
this Agreement ("Assets"), and Seller agrees to transfer, assign,
convey and deliver to Buyer all of the Assets, in exchange solely for
the consideration specified under the provisions of Section 1.4 herein
("Purchase Price"), plus the assumption of certain obligations of
Seller as specified.
1.2 The consideration payable by Buyer, as specified in Section
1.1, includes any applicable sales taxes or other taxes imposed upon
the transfer of the Assets to Buyer.
1.3 The Assets shall include, but shall not be limited to, the
following, all of which are located in the Market:
1.3.1 All interest in and to real property as
described on Exhibit 1.3.1 including all leasehold interests
of Seller in and to real property, and all easements and
licenses, including prepaid ground rents.
1.3.2 All sign structures, whether owned or leased,
and any fixtures and leasehold
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interests in sign structures, and all lights, electrical
hook ups, catwalks and other appurtenant equipment in the
Market which are described in Exhibit 1.3.2.
1.3.3 All rights and entitlement of Seller in and
to advertising contracts which are listed in Exhibit 1.3.3.
1.3.4 All other contract rights and entitlements
related to the business of Seller, whether oral or written
in excess of $5,000, including those set forth in 1.3.4.
1.3.5 All rights and obligations of Seller in and
to sign constructions. All such rights and a list of any
contractors are listed in Exhibit 1.3.5. For purposes of
this subsection "sign constructions" shall mean any
locations as to which Seller has a perfected or partial
right or expectancy to construct signs.
1.3.6 All governmental permits, licenses, approvals
or authorizations necessary for Seller to conduct its
outdoor business within the Market. Seller shall cooperate
with Buyer in the assignment and transfer to Buyer of all
such governmental permits, licenses, approvals or
authorizations, including state and local sign permits. All
such sign permits and all other material permits, licenses,
approvals or authorizations are listed in Exhibit 1.3.1 and
1.3.6.
1.3.7 All other assets and property of Seller used
in the Market in Seller's outdoor advertising business, such
as motor vehicles, office equipment and machinery, sign
panels, lighting fixtures, furniture, inventories of raw
materials, supplies, customer lists, business records, and
work in progress. A list of all other material assets is
set out in Exhibit 1.3.7.
1.3.8 All deposits from customers held by Seller
arising from transactions in the Market. A list of all
deposits from customers is set forth in Exhibit 1.3.8.
1.3.9 All telephone numbers and listings used by
Seller in the Market. Seller will not change said telephone
numbers. A list of all
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telephone numbers and listings is attached as Exhibit 1.3.9.
1.3.10 [Intentionally Deleted]
1.3.11 Data regarding lessors, advertisers and
other business data in machine-readable form.
1.3.12 All accounts receivables and prepaid expenses
of IOD attached as Exhibit 1.3.12.
1.4 Buyer shall pay to Seller a Purchase Price for the Assets
of: (a) One Million Seven Hundred Twenty-Five Thousand Dollars
($1,725,000) in cash or by wire transfer at Closing at Seller's
direction as shown on Exhibit 1.4(a) and (b) Seventy-Five Thousand
Dollars ($75,000) payable into escrow pursuant to the terms of the
Escrow Agreement attached Exhibit 1.4(b). The Purchase Price set
forth herein is subject to the following adjustments:
1.4.1 [Intentionally Deleted]
1.4.2 Minus the amounts which will credit Buyer for
the following:
1.4.2.1 $1000 for the Construction of one face on
Route 48, Shenandoah.
1.4.2.2 Any advertising services delivered after
Closing for which Seller has already received payment as
reflected on Exhibit 1.3.8.
1.4.3 Other than as provided for in Section 1.4.2,
all items of income and expense listed below relating to the
Assets will be prorated as of the Closing Date, with Seller
liable to the extent such items relate to any time period up
to and including the Closing Date, and Buyer liable to the
extent such items relate to periods on or subsequent to the
Closing Date: (a) personal property, real estate, occupancy
and water taxes, if any, on or with respect to the Assets;
(b) rents, taxes and other items payable by Seller under any
contract to be assigned to or assumed by Buyer; (c) the
amount of sewer rents and charges for water, telephone,
electricity and other utilities and
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fuel; and (d) [Intentionally Deleted] (e) all items paid or
payable on or after the Closing Date under any of the
Assumed Obligations (as such term is defined in Section 4.1
herein) to the extent not specifically referenced in
clauses (a) - (d) above which are normally prorated in
connection with similar transactions;
The net aggregate amount of the prorations described in
(a) - (d) shall be added to or subtracted from the base
amount payable by Buyer to Seller on the Closing Date. If
current payments with respect to items to be prorated
pursuant to this Section 1.4.3 are not ascertainable on or
before the Closing Date, such payments shall be prorated on
the basis of the most recently ascertainable bill therefor
and shall be reprorated between Seller and Buyer when the
current bills with respect to such items have been issued
and a cash settlement shall be made within thirty (30) days
thereafter.
The prorated items known to the parties at Closing are
as listed on Exhibit 1.4.3
1.5 The Purchase Price will be paid by Buyer plus or minus the
amount, if any, by which the Purchase Price is adjusted pursuant to
subsection 1.4 of this Agreement
1.6 The parties hereto agree that the allocated Asset values
attached hereto, designated Exhibit 1.6, fairly and accurately
represent the respective values of the Asset categories of Seller
purchased by Buyer pursuant to the Asset Agreement.
1.7 At the Closing, Seller shall execute the Non-Competition,
Non-Solicitation and Non-Disclosure Agreement substantially in the
form set forth in Exhibit 1.7(a).
If Seller violates this Section 1.7 and the Non-competition, Non-
Solicitation and Non-Disclosure Agreement referenced herein, and Buyer
obtains a final judgment or arbitration award or a settlement is
reached with Seller for damages as a result of this violation, Buyer
may offset the amount of this judgment, arbitration award or
settlement against any amounts owed by Buyer. "Final" shall mean any
judgment for which no appeal has been filed during the thirty (30)
days following the
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entry of the judgment order. Provided, however, Buyer's claim shall
not be limited to the amount of any offset available.
1.8 After the Closing, Buyer shall have the right to use the
name Iowa Outdoor Displays and all other trade names used by Seller in
the Market. Buyer shall also have the right for one year from the
Closing Date to endorse the name Iowa Outdoor Displays to all checks
which, pursuant to the terms of this Agreement, are the property of
Buyer.
2. Representations and Warranties of Seller. Seller represents and
warrants to Buyer as an inducement to Buyer to purchase the Assets of Buyer
pursuant to the terms of this Agreement as follows:
2.1 IOD is a Pennsylvania corporation, duly organized, validly
existing and in good standing under the laws of that state, and has
the corporate power to own its property and carry on its business as
now being conducted, and to execute and deliver the Asset Purchase
Agreement and any other agreements to be entered into by Seller in
connection with the Asset Purchase Agreement.
2.2 Seller is properly qualified as a foreign corporation to do
business in the jurisdictions listed in the attachment hereto
designated as Exhibit 2.2. These are the only jurisdictions where
Seller is required to be qualified as a foreign corporation in order
to conduct business in the Market.
2.3 To the best of Seller's knowledge, except as set forth on
Exhibit 2.3, there are no violations of applicable laws or
regulations, including, but not limited to, zoning regulations and
building permits or other permits related to sign structures have
occurred that would have a material adverse effect on the future
operation of any Asset.
2.4 Attached as Exhibit 2.4 are unaudited balance sheets and
comparative operating statements of Seller's business in the Market as
of July 31, 1996 (the "Financial Statements"). These Financial
Statements are in accordance with the books and records of Seller and
fairly and accurately present its financial position as of that date
in accordance with generally accepted accounting principles.
2.5 Since the date of the Financial Statements, except as
disclosed in Exhibit 2.5 attached hereto, to the best of Seller's
knowledge there have been no material adverse
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changes in the general affairs, management or financial position or
financial condition of Seller with respect to the Market.
2.6 The Exhibits attached to this Agreement are correct in all
material respects including specifically the following:
2.6.1 The information about contracts attached as
Exhibit 1.3.3 and Exhibit 1.3.4 to this Agreement is true
and correct as of the date set forth in said Exhibit.
Except as set forth in Exhibit 2.6.1, said contracts (1) are
in full force and effect (2) have not been breached by
Seller or to the best of Seller's knowledge, any of the
parties thereto; and (3) all payments required under said
contracts have been made except those not yet due and
payable provided the current portion of which is included
as a Current Liabilities. Seller has no "percentage
rental" leases.
2.6.2 All sign leases to which Seller is a Lessee are
in full force and effect.
2.6.3 [Intentionally Deleted]
2.6.4 Exhibit 2.6.4 lists agreements, whether oral or
written requiring payments or performance by IOD after
Closing other than Lease payments and the following
agreements:
(a) Each material contract, agreement or commitment
for the sale or lease of Seller's Assets, products or
services, excluding advertising contracts and
contracts to provide advertising allowances or
promotional services which are listed in
Exhibit 1.3.4.
(b) Each contract with any dealer, distributor,
broker, agent or sales representative.
(c) Employment contracts, including union
contracts, executed by any officer, director,
employee or consultant of Seller.
2.7 There are no unfair labor practice charges pending, or to
the best of Seller's knowledge, threatened against Seller. Seller has
not engaged in any unfair labor practices, and there is no strike,
dispute, request for representation or work stoppage pending or
threatened against Seller by or with respect to any such employees.
2.8 The execution, delivery and performance of this
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Agreement by Seller, including, without limitation, all conveyances,
transfers, assignments and deliveries contemplated herein, have been
duly and effectively authorized and approved by IOD's board of
directors and shareholders and all other persons, businesses, banks
and governmental bodies or courts whose approval is required. This
Agreement and each and every instrument executed and delivered
hereunder by Seller shall constitute a valid and binding obligation of
Seller enforceable according to their terms.
2.9 The performance of this Agreement by Seller will not
conflict with or violate the provisions of any material agreement or
instrument binding upon Seller
2.10 Except as set forth in Exhibit 2.10, there is no suit,
action, arbitration or legal, administrative or other proceeding or
governmental investigation pending or, after due inquiry, to the best
of Seller's knowledge, threatened against or affecting the business,
Assets or financial conditions of Seller within the Market which would
have any material adverse effect on Seller's performance of this
Agreement and the transactions contemplated herein. Seller is not in
default with respect to any order, writ, injunction or decree of any
federal, state, local or foreign court, department, agency or
instrumentality.
2.11 Except as set forth on Exhibit 2.11, at Closing Seller will
convey good and merchantable title to all Assets and Seller's title to
all property included in the Assets required to be disclosed in the
Exhibits to this Agreement is not encumbered in any manner other than
for liens for taxes not yet due.
2.12 All Assets are useable in the ordinary course of business
in accordance with industry standards except those listed in Exhibit
2.12. Seller has no knowledge of any defects in the condition of any
of the said Assets, ordinary wear and tear excepted.
2.13 Seller represents and warrants to Buyer that as of the date
of this Agreement the following environmental representations and
warranties are true:
2.13.1 Seller has not caused or permitted its
operations on any real estate owned or leased by Seller to
generate, manufacture, refine, transport, treat, store,
handle, dispose, transfer, produce or process hazardous
substances or other dangerous or toxic substances or solid
wastes, except in
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compliance with all applicable federal, state and local
laws or regulations, and has not caused or to the best of
Seller's knowledge permitted and has no knowledge of the
release of any hazardous substances that have gone onto or
offsite of any real estate owned or leased by Seller (other
than the disposal of paints, pastes and similar chemicals
through approved channels) and Seller has no knowledge that
any person or entity has in the past utilized any real
estate owned or leased by Seller in a manner which has
created any hazardous substance on or off any real estate
owned or leased by Seller. There are no pending and, to the
best of Seller's knowledge, no threatened claims, suits,
administrative proceedings, or other actions by a Court or
governmental entity with regard to hazardous substances on
any real estate owned or leased by Seller except as set
forth in Exhibit 2.13.1.
2.13.2 Seller agrees to indemnify and hold harmless
Buyer, its successors, and assigns against and in respect of
any and all damages, claims, losses, liabilities and
expenses, including, without limitation, reasonable legal,
accounting, consulting, engineering and other expenses,
which may be imposed upon or incurred by Buyer, its
successors or assigns, or asserted against the Buyer, their
successors or assigns by any other party or parties
(including, without limitation, a governmental entity),
arising out of or in connection with any environmental
condition, resulting from activity of Seller prior to
Closing. The indemnification obligations of Seller in this
Section 2.13.2 shall survive and extend to the fifth
anniversary of Closing subject to the limits stated in
Section 10.5.
2.14 As of the date of this Agreement, Seller knows of no
individual, partnership, corporation or other entity in the Market who
makes it a practice to destroy billboards as part of a campaign or
concerted effort to damage billboard companies.
2.15 Except current liabilities incurred or paid in the ordinary
course of business and obligations under contracts entered into or
performed in the ordinary course of business Seller has not since the
date of the Financial Statements attached as Exhibit 2.4:
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2.15.1 incurred or become subject to any obligations
or liabilities (absolute or contingent) which have a
material adverse effect on the Assets;
2.15.2 mortgaged, pledged or subjected to any lien,
charge or encumbrance any of its assets covered by this
Agreement(other than liens for taxes not yet due;
2.15.3 entered into any transaction other than in
the ordinary course of business in any way affecting the
Assets, except for this Agreement and the transactions
contemplated hereunder;
2.15.4 increased, without the knowledge of Buyer,
the general rate of compensation payable to any of its
employees or made or accrued for any new employee benefit
plans for employees. A list of employees who work on a full
time basis and all compensation and bonus arrangements for
these employees is set forth in Exhibit 2.15.4;
2.15.5 made, accrued or become liable in any way for
any bonus, profit sharing, pension, incentive compensation
or other similar payments to any employee; or
2.15.6 suffered any other event or condition of any
character which has materially adversely affected Seller's
business.
2.16 The accounts receivable of Seller reflected in the Financial
Statements attached hereto as Exhibit 2.4 and the accounts receivable
of Seller resulting from its business operations through the Closing
Date have been or, to the best of Seller's knowledge, will be
collected in the ordinary course of business, considering the offset
for the reserve for doubtful accounts on the same basis as used by
Seller in the past. Seller shall continue through the Closing Date
its normal and customary collection efforts with regard to such
accounts receivable and shall not make any operational changes in
anticipation of this transaction. Said accounts receivable arose out
of bona fide transactions in the ordinary course of business and are
not subject to any right of offset or counterclaim except for any
barter or lease trade out arrangements disclosed in Section 2.21.
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2.17 Except as set forth in Exhibit 2.17, Seller does not sponsor
or participate in any (i) life, health, accident or disability or any
other "employee welfare benefit plan" as defined in Section 3(l) of
ERISA, or (ii) any "employee pension benefit plan" as defined in
Section 3(2) of ERISA. Exhibit 2.17 also discloses the Seller's
vacation, sick leave and holiday policies.
2.18 Pursuant to the terms of this Agreement, is delivering to
Buyer all Assets used in the Market by Seller to operate its business
except Seller's Automobile.
2.19 Seller has paid all federal and municipal taxes, including
real and personal property, sales and use taxes it is required to pay.
2.20 Seller has not sublet any property except as disclosed in
Exhibit 2.20.
2.21 Seller has not engaged in any "bartering" or "lease trade
outs" of accounts receivable or advertising space except as set forth
in Exhibit 2.21.
2.22 The supplies owned by Seller being purchased by Buyer, which
are current assets, are useable by Buyer, both as to quality and
quantity, in the ordinary course of business in accordance with
industry standards.
2.23 [Intentionally Deleted]
2.24 [Intentionally Deleted]
2.25 Seller has all permits and licenses needed to operate the
Assets being purchased by Buyer and no one has challenged the validity
of those permits and licenses except as set forth in Exhibit 2.25.
2.26 No Major Advertiser of Seller has advised Seller that it
will not renew or it is going to breach or terminate its advertising
contracts when it is assigned to Buyer. The term "Major Advertiser"
as used herein shall mean any advertiser whose annual payments are
Five Thousand Dollars ($5,000.00) in the aggregate or more. No group
of advertisers whose annual payments exceed Forty Thousand Dollars
($40,000) have advised Seller they will not renew or are going to
breach or terminate their advertising contracts when they are assigned
to Buyer.
2.27 Seller has not received notice of any tax audits against
Seller.
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2.28 Seller shall be responsible for providing any notice of
layoff or plant closing required in connection with the transaction
contemplated herein pursuant to the Federal Worker Adjustment and
Retraining Notification Act of 1988, any successor federal law, and
any applicable state or local plant closing notification statute, and
Seller shall bear any liability or obligation that may rise or accrue
as the result of improper or untimely notice or that may arise from
any person claiming wrongful termination or change of employment as a
result of any action or omissions of Seller with respect to the
transactions set forth in this Agreement.
2.29 All dues owed by Seller to any outdoor advertising
association have been paid.
2.30 There are no agreements or undertakings pursuant to which
any third party has or may have the right to acquire from Seller any
of the stock or (except in the ordinary course of business) Assets of
Seller.
2.31 To the best of Seller's knowledge, except as set forth on
Exhibit 2.31, after Closing Buyer will have the exclusive right to use
the Seller's name and all other trade names used by Seller in the
outdoor advertising business in the outdoor advertising market area
where Seller currently transacts business.
2.32 To the best of Seller's knowledge, in the five years prior
to Closing, no employee of Seller, lessor, business invitee, or other
person has suffered personal injury or property damage as a result of
any action involving the business or Assets of Seller within the
Market such that a claim has been or may be raised against Seller
directly or indirectly or under the workman's compensation laws of any
state except as set forth in Exhibit 2.32.
2.33 Seller shall have delivered to Buyer under this Agreement
sign structures containing, in the aggregate, at least 155 advertising
faces.
2.34 Except as disclosed on Exhibit 2.34, following Closing,
neither Seller nor any affiliates, officers, directors or shareholders
of IOD nor any person related to or affiliated with Lambert will have
any direct, indirect or beneficial ownership of any real or personal
property which is in any way involved with or related to the operation
of the Assets and property of Seller used in the Market in Seller's
outdoor advertising business being purchased by Buyer.
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3. Representations and Warranties of Buyer. Buyer represents and
warrants to Seller as follows:
3.1 Buyer has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of
Illinois, with full power and authority to own its properties and
carry on its business as now being conducted and to execute and
deliver this Asset Purchase Agreement and any other Agreements to be
entered into by Buyer in connection with this Asset Purchase
Agreement.
3.2 The performance of this Agreement by Buyer will not conflict
with or violate the provisions of any material agreement or instrument
binding upon Buyer; and the execution, delivery and performance of
this Agreement shall have been duly and effectively authorized by
Buyer prior to Closing. This Agreement and each and every instrument
executed and delivered by Buyer shall constitute a valid and binding
obligation of Buyer.
3.3 There is no suit, action, arbitration or legal,
administrative or other proceeding or governmental investigation
pending or, to the best of Buyer's knowledge, threatened against or
affecting the business, assets or financial conditions of Buyer which
would have any material adverse effect on Buyer's performance of this
Agreement and the transactions contemplated. Buyer is not in default
with respect to any order, writ, injunction or decree of any federal,
state, local or foreign court, department, agency or instrumentality.
3.4 Buyer shall use its best efforts to perform and fulfill all
conditions and obligations on its part to be performed and fulfilled
under this Agreement, to the end that the transactions contemplated by
this Agreement shall be fully carried out.
4. Assumption of Obligations.
4.1 Buyer does not assume any obligations or liabilities of
Seller of any kind or nature, except as to those post-closing matters
specified below.
4.1.1 Post-closing liabilities under leases
affecting the Assets or within the Market; and which have
not been paid, performed or discharged by Seller.
4.1.2 Post-closing obligations to deliver
advertising services pursuant to advertising
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contracts purchased pursuant to this Agreement in the
Market.
4.2 Anything to the contrary notwithstanding, it is expressly
understood that Buyer shall not assume any of the following
obligations or liabilities of Seller:
4.2.1 Any city, state or federal tax liabilities
for any kind of tax for any period prior to and including
the Closing Date. Real and personal property taxes shall be
prorated as of the Closing Date, based upon bills received,
when received.
4.2.2 Any income tax liability arising from the
sale of Assets to Buyer or conveyance of Assets to Buyer or
any liquidation and dissolution of Seller.
4.2.3 Any obligation, commitment or liability of or
claim against Seller which constitutes or arises from a
breach by Seller of any representation, warranty or
covenant.
4.2.4 Any obligation, commitment or liability of or
claim against Seller which may arise from Seller's operation
of the Assets prior to the Closing Date.
4.2.5 Any obligation, commitment or liability of or
claim against Seller which may arise from the rendering of
professional, legal, accounting, appraisal, engineering or
other similar services to Seller in connection with the
transactions.
4.2.6 Any liability of Seller under profit-sharing
or similar employee benefit plans or any other employee
benefit collective bargaining agreement, employment
agreement or salary or bonus arrangement.
4.3 Seller herewith agrees that it shall pay promptly when due,
or contest, any and all liabilities of Seller arising in the Market
not assumed by Buyer at Closing or discharged by Seller prior to
Closing, if Seller's failure to pay would have a material adverse
effect on Buyer, provided that Seller may contest the assertion of any
such liability to the extent reasonably prudent and Buyer shall
cooperate fully in any such contest. If Seller elects to contest any
such liability and fails to succeed in such contest after any appeals,
then Seller
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shall promptly pay such liability. Seller shall give Buyer written
notice before Seller begins contesting any such liability unless
Seller does not have adequate time, in which event, Seller shall give
Buyer said written notice within five (5) business days after Seller
begins contesting any such liability.
In the event that Seller is contesting any liability not assumed
by Buyer under the terms of the Asset Agreement, Seller shall make it
clear to the third party that Seller and not Buyer is the entity
disputing the matter.
4.4 Installments of special assessments levied against real
estate included in the Assets shall be the obligation of Seller if due
on or before the Closing Date and the obligation of Buyer if due after
the Closing Date.
4.5 Prior to the Closing and for six months thereafter, Seller
shall cooperate with Buyer to obtain all consents, approvals, and
certificates and licenses and permits, and other documents required or
appropriate in connection with the performance by it of this Agreement
and the consummation of the transactions contemplated hereby or
otherwise required in order to prevent the breach of any
representation and warranty set forth herein; provided, however, that
no contact will be made by the Seller with any third party to obtain
any Consent except in accordance with arrangements previously agreed
to by Buyer.
4.6 Excluding workmen's compensation, Seller shall be
responsible for all claims associated with health, illness or injury
insofar as they relate to events or conditions existing on or before
the Closing Date and relating to employees or their dependents (or
others) to the extent that event or condition has been reported on or
before the Closing Date to Seller or to a medical professional or as
to which medical treatment has been obtained on or before the Closing
Date; provided, however, that Buyer's health plans will (to the extent
they would cover medical expenses for a condition arising after the
Closing Date) cover medical expenses for continuing employees incurred
after the Closing Date to the extent said medical expenses result from
a medical condition existing on or before the Closing Date that have
not been so reported or the subject of such treatment.
Seller shall be responsible for all workmen's compensation claims
associated with health, illness or
14
<PAGE>
injury insofar as they relate to events occurring on or before the
Closing Date.
4.7 Seller shall offer continuation coverage under its
applicable group health plans to all employees of Seller and their
covered dependents who incur a "qualifying event" (within the meaning
of section 4980(B) of the Code and section 603 of ERISA) as a result
of or in connection with the transactions contemplated by this
Agreement. Such coverage shall comply with the continuation coverage
requirements (including any applicable notice provisions) of section
4980(B) of the Code and Part 6 of Title I of ERISA and any applicable
state law continuation coverage requirements.
5. Conduct of Business Pending Closing. Seller represents, warrants
and agrees that from the date of this Agreement until the Closing as to the
Markets and Assets:
5.1 The business of Seller will be conducted in the usual and
ordinary course, the character of the business will not change, no
different business will be undertaken within the Market, and Seller
will, in accordance with its past practices, preserve for Buyer the
relationship with suppliers, customers and others having business
relations with Seller, including those employees of Seller which Buyer
intends to hire after Closing.
5.2 Except in the ordinary course of business, Seller will not
enter into any contract, agreement, commitment or understanding with
respect to employing any agents, wholesalers, dealers, brokers or
consultants in the development and sale of their services which
requires an expenditure of more than $5,000 without the prior written
authorization of Buyer.
5.3 As to the Market or Assets in the Market, Seller will not:
(i) mortgage, pledge or subject to any lien, charge or
encumbrance any of its Assets in the Market;
(ii) sell or transfer any of its Assets in the Market, except in
the ordinary course of business, or any permits, licenses, approvals,
or authorization or except in the ordinary course of business, cancel
any debts or claims;
(iii) knowingly enter into any transaction outside the ordinary
course of business.
(iv) make, accrue or become liable in any way for
15
<PAGE>
any bonus (other than those which Seller shall pay in full),
profit-sharing, pension, incentive compensation or other similar
payments to any employee in the Market inconsistent with prior
practices or other than as shown on a Schedule or Exhibit to this
Agreement;
(v) make or permit any amendment or early termination of any
contract, except in the ordinary course of business;
(vi) through negotiations or otherwise, make any commitment affecting
the Market or incur any liability affecting the Market to labor
organizations without the prior written approval of Buyer;
(vii) make any material alteration to the normal and customary
pricing in the Market or terms and conditions of sale extended to
Seller's customers; or
(vii) discharge or satisfy any lien or encumbrance affecting the
Market or pay any obligation or liability affecting the Market
(absolute or contingent), except as required or allowed hereunder.
5.4 Seller shall maintain books of account consistent with past
accounting practices as described in Section 2.4. Seller will not
materially alter its current insurance coverage without the prior
written consent of Buyer.
5.5 Prior to this Agreement, Seller has made available to Buyer
and its representatives certain information and records relating to
the business and affairs of Seller as requested by Buyer. During the
normal business hours throughout the period from this date to the
Closing Date, Seller will give to Buyer and its accountants, counsel,
appraisers and other representatives full access to all properties,
contracts, commitments, books and records or Seller pertaining to the
Market. Buyer will keep such information confidential and not
disclose or use such information except for purposes of this Agreement
until Closing.
5.6 Prior to Closing, Buyer shall not have the risk of loss with
respect to the Assets to be conveyed pursuant to this Agreement. In
the event, between the date of this Agreement and the Closing Date,
any parcel of improved real property or personal property being
purchased, or leased as a part of this transaction, including but not
limited to, the office furniture and equipment, fixtures, leasehold
improvements, equipment, vehicles or other personal property is
materially damaged or destroyed by fire or other casualty or in the
event
16
<PAGE>
that the sign structures to be purchased are materially damaged
or destroyed by fire or other casualty, and if as a result the Assets
are materially diminished in value, Buyer may elect to terminate this
Agreement, and all obligations of the parties shall cease and neither
party shall have any further rights against the other. Seller shall
have the right within thirty (30) days to remedy or repair such damage
or destruction and (subject to the terms and conditions of this
Agreement) thereupon require Buyer to close. Seller shall immediately
notify the Buyer in writing of the occurrence of any fire or other
casualty. Buyer shall notify Seller in writing within two days of
Buyer's receipt of Seller's notice whether Buyer elects to consummate
this transaction.
6. Conditions to Obligations of Buyer to Consummate the Transaction.
The obligations of Buyer to be performed at the Closing shall be subject to
the satisfaction or the waiver in writing by Buyer on or prior to the
Closing Date of the following conditions:
6.1 Buyer shall have received an opinion from counsel for Seller
in the form attached as Exhibit 6.1 which shall be reasonably
satisfactory to Buyer, dated the Closing Date, to the effect that;
6.1.1 IOD is a corporation duly organized, existing
and in good standing under the laws of the State of
Pennsylvania and has the corporate power to carry on its
business as now being conducted in the Market, and is not
required to qualify to do business in any state where the
nature of its business or assets require qualification.
6.1.2 Such counsel does not know of any pending or
threatened lawsuits against Seller other than those
described in Exhibit 2.10 or elsewhere in this Agreement.
6.1.3 The execution, delivery and performance of
this Agreement by Seller has been duly authorized and
approved by its Board of Directors and this Agreement and
each instrument executed and delivered herewith by Seller
has been duly executed by and constitute valid and binding
obligations of Seller on the Closing Date enforceable
according to their terms except to the extent enforceability
is limited by applicable bankruptcy and insolvency laws and
by general principles of equity. Counsel may take exception
to the enforceability of the noncompetition and
17
<PAGE>
nonsolicitation provisions of the instruments and other
generally accepted exceptions.
6.1.4 This Agreement and each instrument have been
duly executed and delivered by Seller.
6.1.5 [Intentionally Deleted]
6.1.6 [Intentionally Deleted]
6.1.7 When the Bill of Sale or other conveyance
instruments shall have been delivered to Buyer by Seller,
such delivery will transfer to Buyer good title to the
Assets, and the Assets to the best of counsel's knowledge is
will be free and clear of all liens, encumbrances, claims,
charges and assessments whatsoever, other than any incurred
by Buyer.
6.2 Buyer shall not have discovered and given notice to Seller
prior to closing of any material error, misstatement or omission in
the representations and warranties made by Seller which alone or in
the aggregate are materially adverse to Seller or to Buyer if the
transaction is completed, unless Seller has covered the same to
Buyer's reasonable satisfaction. The representations and warranties
and Exhibits or Schedules of Seller contained in this Agreement shall
be true on and as of the Closing Date with the same effect as though
such representations and warranties have been made on and as of such
date, except for any variations resulting from actions contemplated or
permitted by this Agreement, which variations shall not be materially
adverse, and each and all of the covenants to be performed by Seller
on or before the Closing Date pursuant to the terms shall have been
duly performed in all material respects. Seller shall deliver to
Buyer a certificate to that effect, dated the Closing Date, certifying
to all the foregoing, and executed by an authorized officer of Seller.
6.3 All contracts, leases and options, permits and rights
employed by Seller in the conduct of its business in the Market, to
the extent assignable by Seller, shall be assigned to Buyer at
Closing, and Seller will use reasonable business efforts to obtain and
provide to Buyer at Closing any third parties' consents required for
18
<PAGE>
such assignments.
6.4 If required by law, Seller shall have complied with all
requirements imposed by such agencies of the U. S. Government as may
be necessary for the valid and legal consummation of the transactions
contemplated by this Agreement.
6.5 No court or governmental agency shall have issued an order,
binding on Buyer, enjoining the closing of the transactions
contemplated herein, and no proceeding shall be pending or threatened
that could result in such order.
6.6 [Intentionally Deleted]
6.7 Seller shall have delivered a certificate that there has
been no material adverse change in the exhibits prepared for this
Agreement between the date of the exhibit and the Closing Date.
6.8 There shall be no existing or threatened suit, action,
arbitration or legal, administrative or other proceeding or
governmental investigation pending or, after due inquiry, to the best
of Seller's knowledge, threatened against or affecting the business,
assets or financial conditions of Seller within the Market which would
have any material adverse effect on Seller's performance of this
Agreement and the transactions contemplated, including that listed in
Exhibit 2.10 or elsewhere in this Agreement.
6.9 Seller shall deliver a certified copy of the Board of
Directors resolution approving this transaction and the execution of
this Agreement.
6.10 Seller shall deliver an Incumbency Certificate to Buyer as
to Seller.
6.11 Seller shall deliver to Buyer copies of all books, records
and documents relating to the Assets at the Closing. Seller shall
retain its minute books and Corporate records.
6.12 Seller shall have terminated or reassigned all of Seller's
employees in the Market.
7. Conditions to Obligations of Seller to Consummate the
Transaction. The obligations of Seller to be performed at the Closing
shall be subject to the satisfaction or the waiver in writing by Seller on
or prior to the Closing Date of the following conditions:
19
<PAGE>
7.1 Seller shall have received an opinion of Buyer's counsel in
the form attached as Exhibit 7.1 and which shall be reasonably
satisfactory to Seller, dated the Closing Date, to the effect that:
7.1.1 Buyer is a corporation duly organized,
existing and in good standing under the laws of the State of
Illinois and has the corporate power to carry on its
business as now being conducted.
7.1.2 The execution, delivery and performance of
this Agreement by Buyer has been duly authorized and
approved; and this Agreement and each instrument executed
and delivered by Buyer have been duly executed by and
constitute valid and binding obligations of Buyer
enforceable according to their terms subject, however, to
any state or federal laws for debtor relief or general
principles of equitable relief.
7.1.3 All actions and proceedings required by law
or this Agreement to be taken by Buyer at or prior to the
Closing in connection with this Agreement and the
transactions provided for have been duly and validly taken
or waived by Seller.
7.2 Seller shall not have discovered any material error,
misstatement or omission in the representations and warranties made by
Buyer which alone or in the aggregate to Buyer or Seller if this
transaction is completed unless Buyer has covered the same to Seller's
reasonable satisfaction. The representations and warranties of Buyer
contained in this Agreement shall be true on and as of the Closing
Date with the same effect as though such representations and
warranties had been made on and as of such date, except for any
variations therein resulting from actions permitted by this Agreement,
which variations shall not be materially adverse to Buyer and each and
all the covenants to be performed by Buyer on or before the Closing
Date shall have been duly performed in all material respects. Buyer
shall deliver to Seller a certificate to that effect, dated the
Closing Date, and executed by an authorized officer of Buyer.
7.3 If required by law, Buyer shall have complied with all
requirements imposed by such agencies of the U. S. Government as may
be necessary for the valid and legal consummation of the transactions
contemplated hereby.
20
<PAGE>
7.4 No court of competent jurisdiction or governmental agency
shall have issued an order, binding on Seller, enjoining the closing
of the transactions contemplated herein, and no proceeding shall be
pending or threatened that could result in such order.
7.5 There shall be no existing or threatened suit, action,
arbitration or legal, administrative or other proceeding or
governmental investigation pending or, after due inquiry, to the best
of Buyer's knowledge, threatened against or affecting the business,
assets or financial conditions of Buyer within the Market which would
have any material adverse effect on Buyer's performance of this
Agreement and the transactions contemplated, including that listed in
Exhibit 2.10 or elsewhere in this Agreement.
7.6 Buyer shall deliver an Incumbency Certificate to Seller as
to Buyer.
8. Closing.
8.1 The transactions required under this Agreement to be
consummated at the Closing shall take place at such date ("Closing
Date"), and time as Seller and Buyer may agree, as close as possible
to the execution of this agreement, but in no event later than
September 30, 1996.
8.2 In addition to, and without limiting any other provision of
this Agreement, Seller agrees to do, perform and deliver at the date
of Closing the following:
8.2.1 The opinion of counsel of Seller as specified
in Section 6.1;
8.2.2 Execution by Seller of the requisite
instruments of conveyance, including, but not limited to, a
Bill of Sale and assignments;
8.2.3 Appropriate instruments of transfer to Buyer
all parcels of real estate or leaseholds covered by this
Agreement.
8.2.4 Evidence satisfactory to Buyer showing
compliance with provisions of any applicable requirement of
the U.S. Government or any state or local government.
8.2.5 Such other instruments as counsel for Buyer
may reasonably request.
21
<PAGE>
8.2.6 A certificate that there has been no material
adverse change in the Exhibits prepared for this Agreement,
between the date of the Exhibit and the Closing Date.
8.3 In addition to, and without limiting any other provisions of
this Agreement, Buyer agrees to do, perform and deliver at the Closing
the following:
8.3.1 The opinion of Buyer's counsel as specified
in Section 7.01;
8.3.2 The amount specified in Section 1.4 in the
form of an interbank transfer of immediately available
funds;
8.3.3 Deposit of the amount specified in
Section 1.4 in escrow pursuant to the Escrow Agreement.
8.3.4 Evidence satisfactory to Seller showing
compliance with provisions of any applicable requirement of
the U.S. Government or any state or local government.
8.3.5 Such other instruments as counsel for Seller
may reasonably request.
9. Post-Closing Covenants.
9.1 Buyer and Seller agree to retain and permit each other
access to relevant pre-closing accounting records and corporate books
of Seller regarding the Assets for a period of six (6) years following
the Closing Date for any proper purpose. "Proper purpose" means the
preparation and review of any federal, state or local tax filing or
governmental report, filing, or application and defending or enforcing
rights against third parties or defending or enforcing rights under
this Agreement.
9.2 Seller and Buyer agree to cooperate in the preparation of
any governmental reports and to furnish reasonably requested
information needed for the preparation of governmental reports.
9.3 Consents. To the extent that the assignment of any
contract, license, lease or other agreement to be assigned to Buyer
herein shall require the consent of any person other than Seller, this
Agreement shall not constitute an agreement to assign the same if an
attempted assignment would constitute a breach thereof.
22
<PAGE>
Of any such consent is not obtained before the Closing Date, Seller
agrees to cooperate with Buyer thereafter in any reasonable
arrangement (such as subcontracting, sublicensing or subleasing)
designed to provide for Buyer the benefits under the applicable
contract, license, lease or other agreement, as the case may be
including without limitation, enforcement, at the cost to and for the
benefit of Buyer, of any all rights of Seller againstthe other parties
thereto arising out of the breach or cancellation thereof by such
other parties or otherwise.
9.4 Waiver of Bulk Transfer Laws. The Buyer and Seller each
hereby agrees to waive compliance by the other with the provisions of
the bulk transfer law of any jurisdiction.
10. Indemnity.
10.1 Seller agrees to indemnify Buyer against all claims, losses,
expenses, obligations, damages and liabilities (including, without
limitation, costs and expenses of litigation and reasonable attorneys'
fees) occurring or arising from the following: (1) any breach of any
representation or warranty or failure to do and perform any covenant
or agreement of Seller contained in this Agreement; (2) any
obligation, debt or liability of Seller or any claim based upon any
other occurrence arising from the operation of the Assets anywhere, or
from the operation of Seller's entire business anywhere, prior to the
Closing, the obligation for which is not expressly assumed or agreed
to be assumed by Buyer; or (3) any claim of any finder or broker
engaged by Seller or owed compensation by Seller as a result of the
transactions contemplated in this Agreement.
10.2 Buyer hereby agrees to indemnify Seller against all claims,
losses, expenses, obligations, damages and liabilities (including,
without limitation, costs and expenses of litigation and reasonable
attorneys' fees) occurring or arising from the following: (1) any
breach of any representation or warranty or failure to do and perform
any covenant or agreement of Buyer contained in this Agreement; (2)
any obligation, debt or liability of Seller or any claim based upon
any other occurrence arising from the operation of the Assets
anywhere, or from the operation of Buyer's entire business anywhere,
after the Closing, the obligation for which is not expressly assumed
or agreed to be assumed by Seller; or (3) any claim of any finder or
broker engaged by Buyer or owed compensation by Buyer as a result of
this transaction.
23
<PAGE>
10.3 Within a reasonable time after receipt of notification of a
claim, the indemnified party shall notify the indemnifying party of
any claim or demand which the indemnified party has determined has
given rise to a right of indemnification. Such notice shall specify
the agreement, representation or warranty with respect to which the
claim is made, the facts giving rise to the claim, the alleged basis
for the claim, and the amount (to the extent then determinable) of
liability for which indemnity is asserted. Failure to give the
foregoing notice shall not be deemed a waiver of any claim or a bar to
the assertion of such claim unless and to the extent an indemnifying
party is able to establish damage or prejudice arising from the delay,
in which case such failure shall be a waiver and bar only to the
extent of such damage or prejudice. In the event any action, suit or
proceeding is brought against the indemnified party with respect to
which it may make a claim for indemnification, the indemnifying party
shall assume the defense of such action, suit or proceeding and shall
hire attorneys and other professionals reasonably acceptable to the
indemnified party. The defense shall include all settlement
negotiations and arbitration, trial, appeal or other proceedings which
indemnifying party's counsel shall deem appropriate, all of which
shall be at the discretion of and conducted by the indemnifying party.
The indemnified party shall have the right to be represented by
advisory counsel and accountants, at its expense, and shall be kept
informed of such action, suit or proceeding at reasonable times at all
stages thereof, whether or not so represented. The parties agree to
make available to each other, their counsel and accountants all
information and documents reasonably available to them which relate to
such proceedings or litigation, and the parties further agree to
render to each other such assistance as they may reasonably require of
each other in order to ensure the proper and adequate defense of any
such action, suit or proceeding. Each party shall promptly notify the
other party of any audit or examination of its books and records
undertaken by federal or state tax authorities and the results of any
such audit or examination, if such audit or examination is reasonably
expected to impact the other party.
10.4 In the event that any party does not provide
indemnification as required by the terms of this Article 10, and an
indemnified party shall pay or suffer a loss due to an indemnified
liability, the party or parties failing to provide indemnification
shall pay all expenses suffered by the indemnified party including
reasonable legal expenses of compelling the indemnifying party or
parties to provide indemnification to so provide.
24
<PAGE>
If any party brings a legal action to compel an indemnification
and loses, the losing party or parties shall pay all reasonable costs
of litigation and the legal expenses of the defendant in that action.
10.5 Limits on Indemnification. No claim for indemnification or
damages shall be made by Buyer hereunder unless the aggregate
cumulative amount of claims of Buyer (or any person or entity
claiming through Buyer) exceeds $7,500 and then only to the extent
such claims exceeds such amount. Notwithstanding anything in this
Agreement to the contrary, Seller shall not be liable to Buyer or any
person claiming through Buyer for an aggregate cumulative amount in
excess of $250,000.
10.6 Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof shall be settled by
final and binding arbitration in accordance with the then prevailing
rules of the American Arbitration Association, and judgment upon the
award rendered may be entered in any court having jurisdiction
thereof. The arbitration proceedings shall be held in Des Moines,
Iowa, before a single arbitrator.
11. Finders. Except with respect to Johnsen, Fretty & Co., which shall
be paid solely by Seller, Seller and Buyer each represent and warrant to
the other that they have not dealt with any finder or broker, they have
not had communications with any individual acting in such capacity with
regard to these transactions, and they are not in any way obligated to
compensate any such person.
12. Miscellaneous.
12.1 This Agreement may be amended or modified by, and only by, a
written document executed by all of the parties.
12.2 The titles of the sections of this Agreement are for
convenience of reference only and are not to be considered in
construing this Agreement.
12.3 This Agreement and any documents specifically referred to
constitute the entire understanding between the parties with respect
to the subject matter, superseding all negotiations, prior discussions
and preliminary agreements. This Agreement may be executed in any
number of counterparts.
25
<PAGE>
12.4 The representations and warranties by the parties shall
survive the Closing for a period of two (2) years, all covenants and
agreements shall also survive the Closing for a period of two (2)
years unless they expire by their terms on or before Closing. Except
as set forth in Section 2.13, no claim for indemnification shall be
allowed after such two year period.
12.5 It is expressly understood and agreed that Buyer and Seller
or their respective officers or agents have not made any warranty or
agreement, express or implied, except as are expressly provided, as to
the tax consequences of this transaction or the tax consequences of
any transaction pursuant to or arising out of this Agreement.
12.6 Other than to a subsidiary or affiliate of Buyer, this
Agreement may not be assigned without the prior written consent of the
other party. This Agreement will be binding upon and inure to the
benefit of the parties, their successors or permitted assigns, and the
parties agree for themselves, their successors or permitted assigns,
to execute any instrument and to perform any acts which may be
necessary or proper to carry out the purposes of this Agreement.
12.7 The Exhibits to this agreement shall be as of the date of
this Agreement unless otherwise stated, but Seller shall provide Buyer
with the certification provided for in Section 6.7.
12.8 All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly
given if delivered in person or by electronic facsimile with receipt
acknowledged and copies sent by mail as provided below to the
respective persons named below or if mailed by Express, certified or
registered mail, postage prepaid, return receipt requested:
If to Seller:
Robert H. Lambert
Iowa Outdoor Displays, Inc.
P.O.Box 66
105 W. Montgomery
Creston, IA 50801
(Phone: 515-782-4176)
(Fax: 515-782-4177)
With a copy to:
26
<PAGE>
David A. Swerdloff, Esq.
Day, Berry & Howard
One Canterbury Green
Stamford, CT 06901
(Phone: 203-977-7301)
(Fax: 203-977-7334)
If to Buyer:
Brian T. Clingen
Paul G. Simon
Universal Outdoor, Inc.
321 North Clark Street, Suite 1010
Chicago, Illinois 60610
12.9 After the execution of this Agreement, Buyer may issue such
press releases and prepare and file documents containing such
information regarding this Agreement and the transactions contemplated
as Buyer deems appropriate.
12.10 This Agreement may be executed in one or more counterparts,
each of which need not contain the signatures of all parties, and all
of such counterparts taken together shall constitute one Agreement.
Signatures on facsimile copies of this Agreement are acceptable.
IN WITNESS WHEREOF, all of the parties hereto have executed and
delivered this Agreement as of the day and year first above written.
BUYER:
UNIVERSAL OUTDOOR, INC.
By:
-----------------------------------
Its:
----------------------------------
SELLER:
MOUNTAIN MEDIA INC., D/B/A
IOWA OUTDOOR DISPLAYS
By:
-----------------------------------
Its
----------------------------------
--------------------------------------
ROBERT H. LAMBERT
27
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS FOUND IN
THE COMPANY'S 10-Q FOR THE YEAR TO DATE AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 848
<SECURITIES> 0
<RECEIVABLES> 11489
<ALLOWANCES> 500
<INVENTORY> 4722
<CURRENT-ASSETS> 16559
<PP&E> 198962
<DEPRECIATION> 39001
<TOTAL-ASSETS> 193514
<CURRENT-LIABILITIES> 63055
<BONDS> 106669
0
0
<COMMON> 0
<OTHER-SE> 23790
<TOTAL-LIABILITY-AND-EQUITY> 193514
<SALES> 50308
<TOTAL-REVENUES> 44882
<CGS> 0
<TOTAL-COSTS> 30024
<OTHER-EXPENSES> 1678
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8894
<INCOME-PRETAX> 4286
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4286
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
