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EXHIBIT 99.3
ASSET PURCHASE AND ASSIGNMENT AGREEMENT
Asset Purchase and Assignment Agreement entered into among:
Multimedios Estrellas de Oro, S.A. de C.V. (hereinafter referred to as
"SELLER"), as seller and assignor, represented by its attorney-in-fact Mr.
Francisco A. Gonzalez Sanchez;
MM Billboard, S.A. de C.V. (hereinafter referred to as "ASSIGNOR"), as assignor,
represented by its attorney-in-fact Mr. Francisco A. Gonzalez Sanchez;
Outdoor Systems Mexico, S.A. de C.V. (hereinafter referred to as "BUYER"), as
buyer, represented by its attorney-in-fact Mr. Jorge Cervantes Trejo;
Outdoor Systems, Inc. (hereinafter referred to as "OUTDOOR"), as Buyer's joint
obligor, represented by its Chief Executive Officer Arturo Moreno; and
Mr. Francisco A. Gonzalez Sanchez, on his own behalf, for the purpose of Clause
Sixteenth of this Agreement,
pursuant to the following Declarations and Clauses:
DECLARATIONS
I. Seller and Assignor, as regards, declare through their
representative that:
a. Seller is a corporation duly incorporated pursuant to the
laws of the United Mexican States (hereinafter referred to as "MEXICO"), as
evidenced in notarial instrument number 1,695, dated October 7, 1967, granted
before Mr. Luis Manatou Gonzalez, Notary Public number 35 of Monterrey, Nuevo
Leon, which first notarial instrument was recorded in the Public Registry of
Commerce of said city, under number 1,388, page 242, volume 184 of the Third
Book, dated November 9, 1967.
b. Assignor is a corporation duly incorporated pursuant to the
laws of Mexico, as evidenced in notarial instrument number 3,663, dated October
6, 1965, granted before Mr. Jose G. Guzman, Notary Public number 28 of
Monterrey, Nuevo Leon, which first notarial instrument was recorded in the
Public Registry of Commerce of said city, under number 1,196, page 257, volume
181 of the Third Book, dated November 19, 1965.
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c. Seller is the legitimate and sole owner of the movable
goods listed in the document attached to this Agreement as EXHIBIT "I.C."
including office furniture, computers, stationary and other assets that Seller
uses and are necessary for the development of its business in the same manner
that it has been performing it as of the date of this Agreement (hereinafter
collectively referred to as the "ASSETS").
d. Except as described in the document attached to this
agreement as EXHIBIT "I.D.", the Assets are free of all kinds of liens, pledges,
mortgages or encumbrances, therefore, same are not guaranteeing the payment of
any kind of mercantile, civil, labor or tax obligations.
e. Seller and/or Assignor have no knowledge of any kind of
litigation, lawsuit, claim, procedure, action, dispute or investigation in
process or to be filed in connection with the Assets, except as described in the
document attached to this Agreement as EXHIBIT "I.E.".
f. Seller and Assignor, as regards, have timely paid all kind
of taxes, rights and contributions in connection with the Assets, except for
certain rights and contribution in connection with the permits, authorizations
and licenses needed for the installation, operation and exploitation of
structures used for outdoor advertisement.
g. Such Assets consisting of structures and related materials
forming billboards for outdoor advertisement (hereinafter referred to as
"STRUCTURES") are located in real estate which is owned or leased by Assignor,
except for the Structures listed in the document attached to this Agreement as
EXHIBIT "I.G.", which are located in real property owned by third parties in
which there is no lease agreement but nonetheless such third parties allow the
free use of same to Assignor for the sole purpose of the installation of such
Structures.
h. The Assets are insured pursuant to the insurance policies
in force which are listed in the document attached to this Agreement as EXHIBIT
"I.H.", (hereinafter referred to as the "INSURANCE POLICIES"), in which Assignor
is the beneficiary.
i. Seller is the holder of each and every one of the rights
set forth in the Outdoor Advertisement agreements (hereinafter referred to as
the "PUBLICITY AGREEMENTS"), which are listed in the document attached to this
Agreement as EXHIBIT "I.I".
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j. Assignor is the holder of each and all rights under the
Lease Agreements (hereinafter referred to as the "LEASE AGREEMENTS") that it has
entered into as lessee for the installation and exploitation of the Structures
which are listed in the document attached to this Agreement as EXHIBIT "I.J.",
as well as the agreements entered into with Servicios Administrativos Pegaso,
S.C. (hereinafter referred to as the "PEGASO AGREEMENT") and with Mr. Jesus D.
Gonzalez Gonzalez of XHAW Channel 12 of Monterrey, Nuevo Leon (hereinafter
referred to as the "XHAW AGREEMENT"), attached to this Agreements as EXHIBIT
"I.J.(B)" and EXHIBIT "I.J.(C)" respectively.
k. The Publicity Agreements and the Lease Agreements are in
full force and are binding pursuant to the applicable laws, and Seller and
Assignor, as regards, have no knowledge of any default by any of the parties or
any other event thereto that may cause termination of such Publicity Agreements
and Lease Agreements, except as described in EXHIBIT "I.K.".
l. Except as described in the document attached to this
Agreement as EXHIBIT "I.L.(A)", and except for what is provided in Seller's and
Assignor's Declaration S. herein below, Seller and Assignor have not entered
into any agreement with any shareholder or subsidiary or with any individual or
entity related to Seller or Assignor. Also the document attached to this
Agreement as EXHIBIT "I.L.(B)" lists such Structures owned by Seller in which
there is publicity of affiliated companies of Seller and/or Assignor, without
any publicity agreement nor consideration agreed for such publicity.
m. Seller is the owner of the trademark "BILLBOARD", which is
duly registered before the Mexican Institute of Industrial Property (Instituto
Mexicano de la Propiedad Industrial), and has applied for the registration of
the trademark "MM BILLBOARD", as both trademarks are described in the document
attached to this Agreement as EXHIBIT "I.M.(A)", (hereinafter collectively
referred to as the "TRADEMARKS"). Assignor is the holder of the copyright of the
software (hereinafter referred to as the "SOFTWARE") listed in the document
attached to this Agreement as EXHIBIT "I.M.(B)".
n. The legal provisions in connection with the installation,
operation and maintenance of outdoor advertisements are local and are enforced
by local, municipal or state authorities in which said advertisements are
located, and said provisions are constantly amended; therefore, no guarantee is
granted by Seller and Assignor in connection with
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the duration of the legal provisions in force or as regards the future
establishment of new regulations in any of the locations in which the Structures
are located, containing more strict or expensive regulations in connection with
same.
o. Because of the number of locations in which the Structures
are located, Seller and Assignor do not grant any guarantee in connection with
the existence and effectiveness of any permits, licenses and authorizations
which are required for the installation and operation of certain Structures.
p. The document attached to this Agreement as EXHIBIT
"I.P.(A)" contains a list of the Structures exclusively owned by Seller used by
Seller and Assignor in their corresponding business. The document attached to
this Agreement as EXHIBIT "I.P.(B)" contains a list of Structures owned by third
parties, in which Assignor has entered into lease agreements as lessee, which
are used by Assignor for its business. "EXHIBIT "I.P.(A)" and EXHIBIT "I.P.(B)"
also allow the identification of such Structures that have the permits, licenses
and authorizations needed for their installation and operation, notwithstanding
what is described in Declaration I.O. herein. To the best of their knowledge,
Seller and Assignor have not received any written notice that any governmental
authority intends to cancel or modify any of such permits licenses and
authorizations.
q. Assignor wishes to assign to Buyer, by means of this
Agreement and that in the way same may be assigned pursuant to legal and
administrative provisions in force, the rights set forth in the permits,
licenses and authorizations described in EXHIBIT "I.P.(A)". Assignor does not
grant any guarantee in connection with the validity of such permits, licenses or
authorizations and their assignability, as well as regarding the possibility
that such permits, licenses and authorizations will be in force or extinguished
at the time of their assignment.
r. It is Seller's main interest and it wishes and is willing
to sell to Buyer the Assets "as is" and to assign the rights and obligations to
the Publicity Agreements; and the rights to the Trademarks; is Assignor's main
interest and it wishes and is willing to assign to Buyer (i) the rights and
obligations arising from the Lease Agreements, the Pegaso Agreement and the XHAW
Agreement and in general any other agreement in which Assignor is part and that
are related to its business as it has been conducting same as of the date
hereof;, (ii) the rights to use the Trademarks and the Software, (iii) the
rights deriving from the Insurance Policies, and (iv) the rights and obligations
of the permits,
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licenses and authorizations that may be legally assigned, precisely in the terms
and under the conditions set forth herein (the rights described in items (i),
(ii), (iii) and (iv) will be collectively referred to as the "RIGHTS", and the
obligations described in items (i) and (iv) will be collectively referred to as
the "OBLIGATIONS").
s. There are certain real property described in the document
attached to this Agreement as EXHIBIT "I.S.(A)", property of Assignor or
Assignor's related parties in which Structures property of Seller are located,
and which Assignor wishes to grant and cause the corresponding owners to grant
the free use (comodato) of such parts of the real estate to Buyer for a term of
10 (ten) years as from the date this agreement becomes enforceable, under the
terms and conditions substantially in the form of the free use (comodato)
agreement attached to this Agreement as EXHIBIT "I.S(B)", (hereinafter the free
use (comodato) agreements to be entered into as set forth herein will be
collectively referred to as the "COMODATO AGREEMENTS").
t. Assignor wishes to enter into an employer substitution
agreement with Buyer or the individual or entity same designates, causing Buyer
or the individual or entity same designates to become substitute employer of all
of Assignor's employees, under the terms and conditions substantially in the
form of the Employer Substitution Agreement attached to this Agreement as
EXHIBIT "I.T." (hereinafter the employer substitution agreement to be entered
into as set forth herein will be referred to as the "EMPLOYER SUBSTITUTION
AGREEMENT").
u. Assignor's financial statements as of December 31, 1997
attached to this Agreement as EXHIBIT "I.U.", reasonably reflects Assignor's
operation balances exclusively in connection with its installation, operation
and exploitation of outdoor advertisement.
v. The entering into this Agreement does not constitute any
violation of Seller's or Assignor's charter and by-laws, nor any other agreement
or obligation assumed by Seller or Assignor, and the entering into of this
Agreement and the sale of the Assets and the assignment of the rights to the
Publicity Agreements and the Trademarks by Seller and the assignment of the
rights by Assignor will not cause the breach or early termination of any
obligation of Seller or Assignor or its subsidiaries, or will give right to
third parties to claim the breach or early termination of said agreements and
obligations, notwithstanding the provisions set forth in Declarations I.G. and
I.R. herein.
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w. Seller representatives have sufficient authority to bind it
pursuant to this Agreement as evidenced in notarial instrument number 18,855,
dated December 5, 1977, granted before Mr. Jose G. Guzman, Notary Public number
28 of Monterrey, Nuevo Leon which first notarial copy was recorded in the Public
Registry of Commerce of said city, under number 2,324, volume 97 of the Fourth
Book Third Section, dated December 13, 1977, and that same authority has not
been revoked, limited or modified in any manner whatsoever.
x. Assignor representatives have sufficient authority to bind
it pursuant to this Agreement as evidenced in notarial instrument number 4,075,
dated April 14, 1989, granted before Mr. Jesus Salazar Venegas, Notary Public
number 63 of Monterrey, Nuevo Leon which first notarial copy was recorded in the
Public Registry of Commerce of said city, under number 693, page 111, volume 316
of the Third Book, on May 18, 1998, and that same authority have not been
revoked, limited or modified in any manner whatsoever.
y. Seller and Assignor have obtained the corporate
authorizations needed to enter into this Agreement, which authorization have not
been revoked nor restricted in any manner whatsoever.
II. Buyer declares through its representative that:
a. It is a corporation duly incorporated pursuant to the laws
of the Mexico, as evidenced in notarial instrument number 48,476, dated May 28,
1998, granted before Mr. F. Javier Gutierrez Silva, Notary Public number 147 of
the Federal District, which first notarial copy is pending registration in the
Public Registry of Commerce of said city by reasons of its recent incorporation.
b. It is a subsidiary of Outdoor Systems, Inc., a U.S.
Corporation whose main corporate purpose is the installation, operation and
exploitation of outdoor advertisement in private properties, thus, it is an
expert in such industry.
c. It has obtained the corporate authorizations needed to
enter into this Agreement, which authorization have not been revoked nor
restricted in any manner whatsoever.
d. It acknowledges the provisions, conditions and terms of
duration of the Publicity Agreements and the Lease Agreements.
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e. It acknowledges and agrees with Seller's and Assignor's
Declarations I.N., I.O. and I.R. herein.
f. It is in its main interest and it wishes and is willing to
purchase from Seller the Assets and become the assignee of the rights and
obligations to the Publicity Agreements and the rights to the Trademarks and
become the assignee of Assignor's Rights and Obligations, pursuant to the terms
and conditions described herein.
g. Its representative has sufficient authority to bind it
pursuant to this Agreement as evidenced in the public instrument referred to in
Buyer's Declaration II.A., which authority has not been revoked or limited in
any manner whatsoever.
III. Outdoor declares through its representative that:
a. It is a corporation duly incorporated pursuant to the laws
of the State of Delaware, United States of America.
b. Its main corporate purpose is the installation, operation
and exploitation of outdoor advertisement in private properties, thus, it is an
expert in such industry.
c. It has the corporate authorizations needed to enter into
this Agreement, which authorization have not been revoked nor restricted in any
manner whatsoever.
d. The entering into this Agreement does not constitute any
violation of Outdoor's charter and by-laws nor any other agreement or
obligations assumed by Outdoor and its subsidiaries, and that the entering into
of this Agreement and the purchase of the Assets and the payment of the price
will not cause the breach or early termination of any obligation of Outdoor or
its subsidiaries, or will give right to third parties to claim a breach or early
termination of said agreements and obligations.
e. It acknowledges and agrees with Seller's and Assignor's
Declarations I.N. and I.O. herein.
f. Its representative has sufficient authority to bind it
pursuant to this Agreement, which authority has not been revoked or limited in
any manner whatsoever.
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g. It agrees to become Buyer's joint obligor in the compliance
of each and every of Buyer's obligations set forth herein.
In view of the foregoing Declarations, the parties agree on
the following:
CLAUSES
FIRST. PURCHASE AND SALE OF ASSETS. Subject to the terms and
conditions described herein, Seller sells the Assets to Buyer, and Buyer
purchases the Assets, in the understanding that the Assets are transferred to
Buyer with everything that by fact and by right corresponds, free of all kinds
of liens and encumbrances.
Inasmuch as the Assets constitute an ongoing business, the
parties agree that the amount and quality of the Assets may differ as of the
date hereof to the Closing Date (as defined herein below), and that such
differences will not affect the covenants described in this Agreement nor the
price agreed to in Clause Fourth herein, provided said differences occur as a
result of Seller and Assignor carrying out their business in the ordinary form,
pursuant to past practices and notwithstanding the provision set forth in Clause
Third, paragraph 3. hereof.
SECOND. ASSIGNMENT OF RIGHTS AND OBLIGATIONS. Subject to the
terms and conditions described herein, Seller assigns to Buyer the rights and
obligations to the Publicity Agreements and the rights to the Trademarks, and
Assignor assigns to Buyer each and every one of the Rights and Obligations;
Buyer accepts the assignment on the understanding that: (i) the rights described
herein are assigned by Seller and Assignor, respectively, free of all kinds of
liens and encumbrances, and (ii) Buyer assumes only the obligations arising out
of or to be performed by same from and after the Closing Date (as defined herein
below).
THIRD. CONDITIONS PRECEDENT. The parties agree that the
validity and enforceability of the obligations described herein are subject to
the following conditions precedent:
1. The obtaining of a resolution by the Federal Competition
Commission in which said authority approves and agrees not to condition the
transactions described herein. For said purpose, the parties agree to notify
this transaction to such Commission within the next 2 (two) working days
following
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the date of execution of this Agreement, and not to file any other unrelated
notification until such resolution is issued.
2. That as of the date in which the resolution of the Federal
Competition Commission referred to in paragraph 1. herein above is obtained, the
Asset Purchase and Assignment Agreement entered between Buyer and Vendor, S.A.
de C.V. becomes fully valid and enforceable.
3. That on the date the conditions precedent described in
paragraphs 1. and 2. herein above are met, no act has occurred that has reduced
the number of Structures by more than 10% (ten per cent) or that may reduce the
value in said percentage of the Assets or the Rights as allocated in EXHIBIT
"4.(B)".
The parties also agree that if by August 31, 1998 the
conditions precedent set forth above have not been met, this Agreement will be
extinguished with no liability for any of them.
The date in which the following conditions are met will be
hereinafter referred to as the "CLOSING DATE".
FOURTH. PRICE. Subject to the adjustments if any, performed as
set forth in Clause Sixth herein, the total price in which Seller sells and
Buyer purchases the Assets and in which Seller assigns the rights and
obligations to the Publicity Agreements and the rights to the Trademarks and the
Rights and Assignor assigns and Buyer becomes the assignee of such rights and
obligations, is the amount of US$21'875,000 (Twenty One Million Eight Hundred
and Seventy Five Thousand Dollars 00/100 Currency of the U.S.A.) (hereinafter
referred to as the "PRICE"), plus the corresponding value added tax.
Seller, Assignor and Buyer will agree before the Payment Date,
on a document containing Seller's corresponding Price and Assignor's
corresponding Price, that will be attached to this Agreement as EXHIBIT
"4.(A).". The Price allocation for the Assets, the rights of the Publicity
Agreements and the Trademarks and the Rights will be described in EXHIBIT
"4.(B)." of this Agreement. Such Price allocation must reflect the book value of
the Assets.
FIFTH. FORM OF PAYMENT. The Price will be paid by Buyer to
Seller and Assignor, respectively, pursuant to the terms of EXHIBIT "4.(A).",
within the next 5 (five) banking days in the city of New York following the
Closing Date, in dollars, currency of the United Sates of America, in one
installment, by means of a wire transfer for the total amount,
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in immediately available funds to Seller's and Assignor's account previously
notified to Buyer either in the city of New York, U.S.A. or in Mexico.
SIXTH. PRICE ADJUSTMENT. Assignor and Buyer, agree that on the
date in which Seller and Assignor receive the payment of the Price (hereinafter
referred to as the "PAYMENT DATE"), or, for the purposes set forth in paragraph
2.b herein, within the 60 (sixty) calendar days following the Payment Date, the
Price will be adjusted, as follows:
1. The Price will be increased in an amount equal to any
advanced payments made by Assignor covering periods after the Payment Date
regarding: (i) rents, guarantees and bonds paid by Assignor in connection with
such Lease Agreements in force or which may be entered into after the execution
of this Agreement in the ordinary course of business, as long as said advance
payments cover periods after the Payment Date not exceeding 12 (twelve) months
counted as from the Payment Date; (ii) payments to suppliers; and (iii) premiums
in connection with the Insurance Policies.
2. The Price will reduced in the following amounts:
a) the amounts received by Seller and/or Assignor before the
Payment Date in connection with any agreement regarding the installation,
operation and exploitation of outdoor advertisement under which Seller and/or
Assignor receives payments, including the Publicity Agreements in force or which
may be entered into after the execution hereof, as long as said amounts
constitute advance payments for periods after the Payment Date; and
b) the amounts payable for electricity, telephone and
applicable services pending payment, covering periods prior to the Payment Date,
in the understanding that the calculation of such amounts will be based on the
amounts reflected on the past receipts corresponding to said term, in proportion
to the number of days which are not covered by such receipts up to the Payment
Date.
SEVENTH. ORDINARY COURSE OF BUSINESS; NOTICE OF CHANGE. During
the term between the date hereof and the Payment Date, Seller and Assignor agree
to safeguard, protect and manage the Assets, the rights to the Publicity
Agreements, the rights to the Trademarks and the Rights and operate, exploit and
keep its business in the ordinary course pursuant to past general practices.
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Seller and Assignor agree to immediately notify in writing
Buyer of any change in the ordinary business course and of the existence of any
event constituting or which may constitute a risk of loss or detriment of the
Assets, the rights to the Publicity Agreements, the rights to the Trademarks or
the Rights, as set forth in Clause Third paragraph 3.
EIGHTH. DELIVERY OF ASSETS, ELECTRIC ENERGY AGREEMENTS. Seller
will deliver and transfer the Assets at the Payment Date.
In connection with Assignor's offices located at Paricutin 316
Sur, Colonia Roma, Monterrey, Nuevo Leon, and the offices located at Eugenio
Garza Sada 2135 Second floor, Monterrey, Nuevo Leon, Assignor agrees to grant
the free use of such offices to Buyer for a term of 30 (thirty) calendar days as
from the Payment Date allowing Buyer to move the Assets and employees there
located; and in connection with the workshops of Assignor located at: (i)
Quintana Roo 1800, corner with 2 de abril, Colonia Nuevo Repueblo, Monterrey,
Nuevo Leon, and (ii) 5 de febrero 1713, Colonia Nuevo Repueblo, Monterrey, Nuevo
Leon, Assignor agrees to grant free use of said workshops to Buyer for a term of
60 (sixty) calendar days as from the Closing Date allowing Buyer to move the
Assets located there.
In the event Buyer fails to move from the offices or workshops
above-mentioned, within the terms set forth therein, Buyer shall pay Assignor a
contractual penalty in the amount of Ps$50,000 (Fifty Thousand Pesos 00/100
Mexican Currency) per month.
Seller and Assignor, as appropriate, shall deliver to Buyer on
the Payment Date, one or more invoices covering with the Assets, the rights to
the Publicity Agreements, the rights to the Trademarks and the Rights,
describing the corresponding price allocation for each according to EXHIBIT
"4.(B).", which invoices shall be duly issued in Buyer's name pursuant to
applicable tax laws, together with any other transfer documents necessary to
grant Buyer valid title to said Assets and Rights. Seller and Assignor shall
also deliver to Buyer on the Payment Date a legal opinion from Sesma, Sesma &
McNeese, S.C., substantially in the form of EXHIBIT "8" hereof.
Seller and Assignor shall also deliver to Buyer on the Closing
Date all books, records and documents related to the Assets, the rights to the
Publicity Agreements, the rights to the Trademarks and the Rights, including (i)
all
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computerized records and other computerized media storage and the software used
in connection therewith; (ii) all technical documentation relating to the
Assets; and (iii) all documents and records relating to sales, purchase of
materials, supplies and services, dealings with suppliers, customers and
distributors, and all other existing documents and records related to Seller's
and Assignor's business.
Buyer agrees before Seller or Assignor, as appropriate, to
substitute the electric energy agreements ("Electricity Agreements") in
connection with the Assets.
Finally, the parties agree that Seller shall bear any expense
incurred for the delivery of the Assets.
NINTH. TERMINATION. In the event Buyer fails to pay the Price
to Seller and Assignor within the 10 (ten) working days following the Closing
Date, the parties agree that Seller and Assignor may terminate this Agreement;
on the understanding that such termination will be automatic upon the lack of
payment of the Price, without the need of a court order or resolution, by means
of a written notice given to Buyer pursuant to the terms set forth in Clause
Twenty-Fourth of this Agreement.
In the event that the termination set forth above occurs,
Buyer agrees to pay Seller and Assignor as contractual penalty, the amount of
US$1,125,000 (One Million One Hundred and Twenty Five Thousand Dollars 00/100
Currency of the U.S.A.), within the 5 (five) calendar days following the date in
which the termination occurs.
TENTH. NOTICES OF ASSIGNMENT. Buyer agrees to give notice, in
writing and at its own expense to each of the lessors under the Lease
Agreements, in connection with Assignor's assignment to Buyer of the Rights and
Obligations under this Agreement. Buyer agrees to deliver Assignor copy of the
notices delivered pursuant to this Clause.
Any claim, demand, or litigation in connection with the Lease
Agreements, the Publicity Agreements, the Electricity Agreements and any other
Agreement assigned to Buyer as set forth in this Agreements (hereinafter for the
purposes of this Clause, collectively referred to as the "AGREEMENTS") as from
the Payment Date will be the exclusive responsibility of Buyer. Therefore, Buyer
agrees to comply with each and all obligations provided for in the Agreements as
from the Payment Date. Buyer agrees to indemnify and hold harmless Seller and/or
Assignor of any loss or damage that may occur as a result of Buyer's default of
its obligations under
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the Agreements after the Payment Date, as well as from the assignment of the
rights and obligations pursuant to said Agreements as provided herein, or due to
the fact that the notices described herein above do not comply with the
corresponding requisites and formalities.
Seller and Assignor agree to indemnify and hold harmless Buyer
of any loss or damage that may occur as a result of Seller's or Assignor's
default of its obligations under the Agreements before the Payment Date; on the
understanding that Seller and/or Assignor will only be responsible for such
losses and damages that: (i) occur to Buyer between the date hereof and June 4,
2000, and (ii) exceed the amount of US$250,000 (Two Hundred and Fifty Thousand
Dollars 00/100 Currency of the U.S.A.). For such purposes Buyer will notify
Seller and/or Assignor of any lawsuit in connection thereof and will cooperate
with Assignor in the defense of same.
ELEVENTH. INDEMNITY FOR EVICTION, HIDDEN DEFECTS. Seller
agrees to indemnify Buyer in case of eviction (saneamianto para el caso de
eviccion) pursuant to the applicable laws.
The parties agree that the Assets are purchased by Buyer "as
is", therefore, Seller will not be liable for the quality of the Assets nor for
any hidden defects.
TWELFTH. THIRD PARTY CLAIMS. The parties agree to notify each
other of any act or event affecting the provisions of this Agreement, including
any act or claim by a third party in connection with Seller, Assignor or Buyer
or otherwise, as well as any lawsuit or procedure filed in connection with this
Agreement, the Assets or the Rights, or any other act or agreement related with
same. The corresponding notice shall be made in writing by the party which first
has knowledge of the acts above-mentioned, precisely within the next 3 (three)
working days following the date in which said party had knowledge of any of such
acts.
THIRTEENTH. ASSIGNMENT. The parties agree that they shall not
assign by any means the rights and obligations provided for herein, without the
previous and written consent of the other party.
FOURTEENTH. NON COMPETITION COVENANT. During a term of 5
(five) year term counted as from the Closing Date, each of Seller and Assignor,
not to compete in Mexico directly or indirectly with Buyer in the installation,
operation and exploitation of outdoor advertisement billboards, including
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billboards located in structures or walls in private properties, in public
transportation (including buses, taxi cabs, the subway system and trains) and
freight vehicles, in urban furniture including bus stop structures, benches and
mail boxes, or in any other kind of structures and urban furniture on streets
(hereinafter referred to as the "BUSINESS"). Furthermore, Seller and Assignor
agree that during such term they will abstain from performing or having an
equity interest in or in any other way having a commercial relationship with any
company or business which purpose is the Business, nor will they become tenders,
directly or indirectly, of any company or business in connection with the
Business, if the corresponding debts may be capitalized or substituted for
shares or equity.
The obligations set forth herein above exclude (i) publicity
in stadiums, sports arenas, theaters and related areas for the performance of
shows owned, leased or operated by Seller or Assignor or their respective
subsidiaries; (ii) the installation in locations owned, leased or operated by
Seller or Assignor or their respective subsidiaries, of signs containing the
trade names or trademarks of the businesses located therein; (iii) the use of 3
(three) structures located in the property in which the newspaper "El Diario de
Monterrey" is, located in Eugenio Garza Sada 2245 Sur, Colonia Roma, Monterrey,
Nuevo Leon, as long as such structures are used only to advertise products and
services related to Seller's, Assignor's or their respective subsidiaries'
business; and (iv) the performance by Seller or Assignor as regards, as agents
of third parties in the rendering of services during the normal course of their
operations.
In the event that Seller or Assignor directly or indirectly
breach the obligations set forth herein, the breaching party shall pay Buyer a
penalty in the amount of US$5,000,000 (Five Million Dollars 00/100 Currency of
the U.S.A.).
In the event of a default to the non-competition obligations,
Buyer shall notify in writing any such default to the defaulting party and will
grant such party a 5 (five) day term to cure such default and to stop competing
immediately; on the understanding that if said default is not cured in the term
set forth herein, the party in default will immediately pay Buyer the penalty
above-mentioned.
FIFTEENTH. JOINT OBLIGOR. Outdoor will act as Buyer's joint
obligor for each and every one of Buyer's obligations hereunder.
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SIXTEENTH. CONFIDENTIALITY. Seller, Assignor and Mr. Francisco
Antonio Gonzalez Sanchez agree that for a term of 18 (eighteen) months counted
as of the date hereof, agree to keep confidential and in strict secret and cause
their shareholders, consultants, advisors, officers and employees to keep
confidential and in strict secret, all the documents, materials and information
directly or indirectly related to the Lease Agreements and the Publicity
Agreements, including lessors and clients names and the amount of rents and
prices, and agrees not to use them for its own benefit or for the benefit of a
third party, publish, reveal or copy or allow any individual or entity to use,
publish, reveal or copy said documents, materials and information without
Buyer's previous written consent. The documents, materials and information
described herein will be considered as trade and industrial secrets for the
purposes of the applicable provision of the Mexican Industrial Property Law. The
provision set forth herein above will not apply to those documents, materials
and information that are or may turn out to be of public domain not caused by
Buyer, Seller, Assignor or Mr. Francisco A. Gonzalez Sanchez or that may be
revealed by means of a court order.
SEVENTEENTH. PARTIES' ADDITIONAL OBLIGATIONS. (A) Seller and
Assignor agree to use their best efforts to cause their subsidiaries having
publicity in the Structures described in EXHIBIT "I.L.(B)" to execute arms
length publicity agreements as appropriate.
(B) Seller and Assignor agree to use their best efforts to
cause third parties in which properties Structures are located as describe in
EXHIBIT "I.G." to execute arms length lease agreements as appropriate. In the
event Seller and Assignor can not cause such third parties to enter into said
lease agreements with Buyer within a term of 60 (sixty) calendar days as from
the Closing Date, Buyer agrees to remove from said properties the corresponding
Structures, within a term of 30 (thirty) calendar days from the date Buyer
receives written notification of said third parties' decision.
(C) Buyer agrees to enter into as beneficiary, the Comodato
Agreements, and Assignor agrees to enter into or cause the third parties owners
of the real estate described in EXHIBIT "L.S.(A)." enter into as assignors, the
Comodato Agreements before or at the Closing Date. Furthermore, Buyer or the
individual or entity same designates as substitute employer, and Assignor as
substituted employer, agree to enter into before or at the Closing Date, the
Employer Substitution Agreement.
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(D) Between the date of execution of this Agreement and the
Payment Date, Seller, Assignor and Buyer agree to cooperate in good faith so
that if the conditions precedent described in Clause Third herein are met, the
transmission of the Assets, Rights and Obligations is performed in orderly and
timely manner, without a negative impact to Seller's and Assignor's and
therefore Buyer's ordinary course of business, and specifically not to impact
Seller's , Assignor's and Buyer's relationships with clients, suppliers and
lessors. For this purposes and during such term, Buyer will send to Mexico, at
its own expense, several of its officers and employees with the purpose of
continuing the review of the documents relating to Seller's and Assignor's
Business and to keep working jointly with Seller's and Assignor's officers and
employees to accomplish said transition, causing such officers and employees to
keep strict confidentiality in connection with the information and documents
delivered by Seller and Assignor as set forth herein.
EIGHTEENTH. INDEMNIFICATION. The parties agree to indemnify
each other and hold each other harmless of any kind of claim, lawsuit, costs,
expenses (including reasonable attorneys' fees), damages and/or losses arising
from any misrepresentation hereof that may cause a substantial negative impact
or default to their obligations as set forth in this Agreement.
NINETEENTH. EXPENSES. Except for anything to the contrary
herein, the parties agree that they will each bear their own expenses incurred
in connection with this Agreement and the transactions described herein.
TWENTIETH. TAXES. The parties agree than any tax levied over
the transactions described herein will be paid by the corresponding party
pursuant to applicable law.
TWENTY-FIRST. AMENDMENTS. Any amendment to the terms and
conditions herein, will be made in writing signed by the parties hereto.
TWENTY-SECOND. EXHIBITS. The Exhibits described in this
Agreement are integral part of same. Such Exhibits are the following:
Exhibit "I.c." List of Movable Goods
Exhibit "I.d." Liens and encumbrances in connection with the
Assets
Exhibit "I.e." Lawsuits, claims or investigations in
connection with the Assets
Exhibit "I.g." List of Structures located in third
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parties' properties with no lease
agreement nor consideration
Exhibit "I.h." List of Insurance Policies
Exhibit "I.i" List of Publicity Agreements
Exhibit "I.j." List of Lease Agreements
Exhibit "I.j.(b)" Copy of the Pegaso Agreement
Exhibit "I.j.(c)" Copy of the XHAW Agreement
Exhibit "I.k. Default to the Lease Agreements and the
Publicity Agreements
Exhibit "I.l.(a)" List of agreements with related parties
Exhibit "I.l.(b)" List of Structures with related parties'
publicity without Publicity Agreements nor
consideration
Exhibit "I.m.(a)" Description of Trademarks
Exhibit "I.m.(b)" Description of Software
Exhibit "I.p.(a)" List of Structures describing permits,
licenses and authorizations.
Exhibit "I.P.(b)" List of leased Structures owned by third
parties
Exhibit "I.s.(a)" Lease Agreements in which real estate are
owned by related parties and in which a free
use will be granted
Exhibit "I.s.(b)" Format of Comodato Agreement
Exhibit "I.t." Format of Employer Substitution Agreement
Exhibit "I.u." Assignor's financial statements dated December
31, 1997
Exhibit "4.(a)." Price corresponding to Seller and Price
corresponding to Assignor
Exhibit "4" Assets and Rights Price allocation
Exhibit "8" Form of legal opinion from Sesma, Sesma &
McNeese, S.C.
TWENTY-THIRD. NOTICES. All notices that the parties wish to
make or which must be made in connection with this Agreement, must be in writing
and each party should obtain evidence that the notice was received by the other
party. For that purpose and until further a notice of a new address is made, the
parties state as their addresses the following:
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"SELLER"
Multimedios Estrella de Oro, S.A. de C.V.
Paricutin 316, Sur
Colonia Roma
Monterrey, Nuevo Leon
Attention: Mr. Francisco A. Gonzalez Sanchez
Phone No.: (8) 358-7086
Facsimile: (8) 358-4448
ASSIGNOR
MM Billboard, S.A. de C.V.
Paricutin 316, Sur
Colonia Roma
Monterrey, Nuevo Leon
Attention: Mr. Francisco A. Gonzalez Sanchez
Phone No.: (8) 358-7086
Facsimile: (8) 358-4448
FRANCISCO ANTONIO GONZALEZ SANCHEZ
Paricutin 316, Sur
Colonia Roma
Monterrey, Nuevo Leon
Attention: Mr. Francisco A. Gonzalez Sanchez
Phone No.: (8) 358-7086
Facsimile: (8) 358-4448
WITH A COPY TO:
Sesma, Sesma & McNeese
Idaho No. 14
Col. Napoles
03810 Mexico, D.F.
Attention: Mr. Carlos Sesma
Phone No.: (525) 687-0909
Facsimile: (525) 687-0563
"BUYER"
Outdoor Systems Mexico, S.A. de C.V.
Paseo de los Tamarindos 400
Torre B, Piso 8
Bosques de las Lomas
Mexico, D.F. 05120
Attention: Mr. Jorge Cervantes Trejo
Phone No.: (525) 267-4500
Facsimile: (525) 267-5498
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WITH A COPY TO:
Outdoor Systems, Inc.
2502 Black Canyon Highway
Phoenix, Arizona 85009
Attention: Mr. Arturo Moreno
Phone No.: (602) 248-8181
Facsimile: (602) 433-2482
Jauregui, Navarrete, Nader y Rojas, S.C.
Paseo de los Tamarindos 400
Torre B, Piso 8
Bosques de las Lomas
Mexico, D.F. 05120
Attention: Mr. Miguel Jauregui Rojas
Phone No.: (525) 267-4500
Facsimile: (525) 267-5498
TWENTY-FOURTH. APPLICABLE LAW. The parties agree that this
Agreement will be governed by the laws of the State of Nuevo Leon, Mexico.
TWENTY-FIFTH. JURISDICTION. For the performance and
enforcement of this Agreement the parties expressly submit to the jurisdiction
of the competent courts located in Monterrey, Nuevo Leon, Mexico expressly
waiving their rights to any other jurisdiction that may apply to them by reason
of their present or future domiciles or for any other reason.
The parties, acknowledging the terms and legal conditions of
each and every Declaration and Clause of this Asset Purchase and Assignment
Agreement, have caused its execution in four copies in the city of Mexico,
Federal District, on June 4, 1998.
"SELLER" "ASSIGNOR"
Multimedios Estrella de MM Billboard, S.A. de C.V.
Oro, S.A. de C.V.
By: (Signed) By: (Signed)
-------------------------- --------------------------------
Name: Francisco A. Gonzalez Name: Francisco A. Gonzalez
Title: Attorney-in-fact Title: Attorney-in-fact
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"BUYER" "OUTDOOR"
Outdoor Systems Mexico Outdoor Systems, Inc.
S.A. de C.V. As Buyer's Joint Obligor
By: (Signed) By: (Signed)
-------------------------- --------------------------------
Name: Jorge Cervantes Name: Arturo Moreno
Title: Attorney-in-fact Title: CEO
"FRANCISCO A. GONZALEZ"
For the purposes of Clause
Sixteenth
(Signed)
- -----------------------------
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CERTIFICATE OF SECRETARY
OF
OUTDOOR SYSTEMS, INC.
I hereby certify that Outdoor Systems, Inc. has taken reasonable
measures to ensure that the English translation of the Asset Purchase and
Assignment Agreement, dated June 4, 1998, to which this Certificate is attached,
is a fair and accurate English translation of the original Spanish language
document.
Dated: July 16, 1998
/s/ Bill M. Beverage
----------------------------------------
Bill M. Beverage
Secretary of Outdoor Systems, Inc.
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