EXHIBIT 2.1
PURCHASE AGREEMENT
THIS AGREEMENT is hereby made this 1st day of April, 1997, by and between
The McCarty Company ("McCarty") and BOWLIN Outdoor Advertising & Travel Centers
Incorporated ("Bowlin").
PURPOSE OF AGREEMENT
Bowlin desires to purchase and McCarty desires to sell all tangible and
intangible assets that comprise that portion of McCarty's business known as
"Pony Panels Outdoor Advertising." Therefore, in consideration of the premises
and of the mutual representations, warranties and covenants herein contained,
the parties hereby agree as follows:
TERMS AND CONDITIONS
PURCHASE PRICE
The purchase price shall be $4,200,000.00 Of that sum, $4,200,000.00
will be paid by wire transfer at closing by wire transfer to McCarty's
account at First Security Bank of New Mexico. Account No. XXXXXXXXX, and
the remainder, $0.00, will be placed in escrow to be paid to McCarty upon
the completion of all documents, assignments, non-competition agreements,
consents, and transfers contemplated by this agreement. The purchase price
shall be the sole consideration paid by Bowlin under this agreement.
DATE OF CLOSING
The parties contemplate that Closing shall take place on April 1,
1997. If Closing does not occur by that date, it will occur as soon
thereafter as Bowlin is able to complete its due diligence investigation.
The parties agree that Bowlin's obligation to complete this purchase is
contingent upon Bowlin being satisfied that all representations made to it
concerning McCarty's assets are true, that the financial condition, books,
and accounts of McCarty are sound, and that the value of the assets being
transferred is not less than the purchase price.
TRANSFER OF ASSETS
At closing, McCarty shall transfer to Bowlin, free of all debt,
encumbrances, and liens, all tangible and intangible assets that comprise
that portion of McCarty's business known as Pony Panels Outdoor
Advertising, including but not limited to all outdoor advertising sign
structures, lease agreements and leasehold rights, licenses, advertising
contracts, accounts receivable, outdoor advertising permits and licenses,
any and all poster displays and posting equipment, all shop and field
equipment used in the promulgation and maintenance of business, all office
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equipment used in the operation of Pony Panels business, all tradenames
(including all rights to the names "Pony Panels", "Pony Panel Outdoor
Advertising" and variants of those names), trademarks patents, copyrights,
trade secrets, proprietary information, and intellectual property rights.
The assets transferred include but are not limited to those contained in
Schedule "A" attached hereto.
Bowlin will assume up to $10,000 plus $9,970 payable to Vital Signs
and billed to Albuquerque Dukes for $13,818 in trade payables as a part of
the purchase assuming that receivables transferred are at least three times
the payables assumed by Bowlin. McCarty agrees to indemnify Bowlin against
payables of any greater amount. The payables Bowlin is assuming are only
those payables listed in Schedule B attached hereto.
McCarty agrees to satisfy and pay the outstanding note with First
Security Bank, and all amounts owed on the Mazada pickup listed on Schedule
A.
At closing Bowlin will assume and perform all site lease and contract
obligations identified on Schedule C attached hereto.
Under no circumstances will Bowlin assume any other obligations,
debts, or encumbrances of McCarty or of Pony Panels, including but not
limited to any obligation with regard to checking accounts or payroll or
other taxes.
DOCUMENTS TO BE EXECUTED
McCarty agrees to execute any and all bills of sale, assignments,
transfers, permits and any other documents deemed necessary by Bowlin to
effectuate the transfer of assets described herein, and to provide
reasonable assistance to Bowlin in transferring permits required for
Bowlin's use and enjoyment of the assets and properties transferred by this
agreement.
WARRANTIES
McCarty represents and warrants to Bowlin as of the date hereof and on
the closing date as follows (all representations and warranties being joint
and several):
(a) AUTHORITY. To the best of its knowledge, McCarty has the legal
authority to sell, transfer, and deliver to Bowlin the tangible and
intangible assets of the business know as "Pony Panels Outdoor
Advertising."
(b) TITLE. To the best of its knowledge McCarty has good and
marketable title to all properties, assets and leasehold estates, real
and personal, tangible and intangible, to be transferred pursuant to
this agreement subject to no mortgage, pledge, lien, conditional sales
agreement, encumbrance or charge.
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(c) INSURANCE. McCarty has delivered to Bowlin a list, complete in all
material respects as of the date of this agreement, all of insurance
policies carried by McCarty relating to the assets transferred under
this agreement. McCarty carries insurance, which it believes to be
adequate in character and amount, with reputable insurers in respect
of its properties, assets, and business and such insurance policies
are still in full force and effect.
(d) VIOLATIONS, SUITS, CLAIMS, ETC. To the best of its knowledge,
McCarty is not in default under any law or regulation, or under any
order of any court or federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality
wherever located, and there are (1) no claims, actions, suits or
proceedings instituted or filed and (2) no claims actions, suits or
proceedings threatened presently or which in the future may be
threatened against or affecting McCarty at law or in equity, or before
or by any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality whenever located,
and (3) there are no potential claims, demands, liens, encumbrances,
or debts with regard to the asses that are the subject of this sale or
that may create for Bowlin any environmental or regulatory liability.
(e) TAX RETURNS. To the best of its knowledge, McCarty has filed all
requisite federal, state and other tax returns due for all fiscal
periods ended on or before the date of this agreement. There are no
claims against McCarty for federal , state or other taxes for any
period or periods to and including the date of this agreement, the
amounts shown as provisions for taxes on the financial statements of
McCarty as of the date of this agreement delivered to Bowlin are
sufficient for the payment of all taxes of all kinds for all fiscal
periods ended on or before that date.
Bowlin represents and warrants to McCarty as of the date hereof and on
the closing date as follows (all representations and warranties being joint
and several):
Bowlin has made such examination of McCarty's books and records and
assets as Bowlin deemed appropriate before entering into this agreement and
has entered this agreement based on its own investigation of these
materials and the warranties made by McCarty.
COVENANTS
Between the date of this agreement and the closing date:
(a) McCarty's shareholders will cause McCarty to:
(1) Carry on its outdoor advertising business in substantially
the same manner as it has heretofore and not introduce any
material new method of management, operation or
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accounting;
(2) Maintain their properties and facilities in as good working
order and condition as at present, ordinary wear and tear
excepted;
(3) Perform all material obligations under agreements relating to
or affecting its assets, properties and rights;
(4) Keep in full force and effect present insurance policies or
other comparable insurance coverage; and
(5) Use its best efforts to maintain and preserve its assets
intact, retain its present employees and maintain its
relationships with suppliers, customers and others having
business relations with it.
(b) McCarty's shareholders will not permit McCarty without the prior
written consent of Bowlin to:
(1) Enter into any contract or commitment or incur or agree to
incur any liability or make any capital expenditures except in
the normal course of business;
(2) Create, assume or permit to exist any mortgage, pledge or
other lien or encumbrance upon any assets or properties
transferred under this agreement, whether now owned or hereafter
acquired; or
(3) Sell, assign, lease or otherwise transfer or dispose of any
property or equipment subject to this agreement except in the
normal course of business.
COMPETITION
To induce Bowlin to enter into this agreement the individual
signatories below, Messrs. McCarty and Mott further covenant that, for a
period of five years from the date of this agreement, or in the case of any
of them who become employed by Bowlin, for a period of five years from the
termination of that person's employment from Bowlin or any of its
affiliated companies, they will not, within a radius of 50 miles of
Albuquerque, New Mexico, as principal, agent, trustee or through the agency
of any corporation, partnership, association or agent or agency, engage in
any business in competition with Bowlin or any of its businesses, and shall
not be the owner of more than 1% of the outstanding capital stock of any
corporation (other than Bowlin or a corporation affiliated with Bowlin,) or
a member or employee of any partnership, or an owner or employee of any
other business in competition with Bowlin or any of its businesses. Messrs.
McCarty and Mott further agree that Bowlin shall be entitled to an order
from a court
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sitting in equity enforcing this noncompetition agreement in addition to
available remedies at law. Nothing in this agreement will prevent Brian
McCarty from the performance of his duties as a member of Bowlin's Board of
Directors. In the event that the provisions of this noncompetition
provision should ever be deemed to exceed the time or geographic
limitations permitted by the applicable laws, then such provisions shall be
reformed to the maximum time or geographic limitations permitted by the
applicable laws.
INDEMNIFICATION
McCarty agrees to defend, indemnify and hold Bowlin harmless from and
against any and all claims and demands of third parties relating to the
assets transferred by this agreement or relating to the business known as
Pony Panels Outdoor Advertising.
TAXES
Real Estate and personal property taxes, if any, assessed or to be
assessed for the current calendar or fiscal year, regardless of when
payable, shall be prorated between Bowlin and McCarty as of the closing
date. Bowlin assumes no responsibility for any other taxes.
TRANSFER TAX
Bowlin and McCarty shall pay any applicable taxes according to law.
RISK OF LOSS
The risk of loss or destruction of or damage t the assets transferred
hereunder, including inventory, fixtures, equipment and real property form
any cause whatsoever at all times on or subsequent to the execution of this
document but before closing shall be borne by McCarty.
BOWLIN'S REMEDIES
Bowlin shall be entitled, without limitation, to all foreseeable
incidental and consequential damages allowed by law resulting from a breach
of any warranty or representation or covenant of McCarty or its
shareholders made herein including, but not limited to, all costs of
litigation incurred, including reasonable attorney's fees.
No default shall occur, and Bowlin shall have no remedy against
McCarty, until Bowlin gives written notice of a breach, loss, or default to
McCarty and McCarty shall fail within 30 days to affect a complete remedy
or cure or to provide full indemnification.
ARBITRATION
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In the event of any dispute arising from this agreement. New Mexico
law shall apply. Any claims or controversy between McCarty or its
shareholders and Bowlin arising out of or relating to this agreement or the
sale and purchase of assets, shall be decided by arbitration at Albuquerque
in accordance with Commercial Arbitration Rules of the American Arbitration
Association by a single arbitrator appointed in accordance with the rules
in effect when arbitration is first demanded by any party. The award
tendered by the arbitrator shall be final and judgment may be entered into
any court having jurisdiction.
FORCE MAJEURE
At the time of closing, all assets agreed to be sold hereunder shall
be delivered to Bowlin in the same condition as at the close of business on
the date of this agreement, except for ordinary use and wear thereof,
changes, occurring in the ordinary course of business between the date of
this agreement and the date of closing, and damage or loss from causes
beyond the reasonable power and control of McCarty; provided however, that
if at the time of closing the buildings, machinery, equipment, and other
tangible assets to be sold hereunder shall have suffered loss or damage on
account of fire, flood, accident, act of war, civil commotion, or any other
cause or event beyond the reasonable power and control of McCarty (whether
or not similar to the foregoing), to an extent that substantially affects
the value of the property to be sold hereunder, Bowlin shall have the right
at its election to complete the purchase, in which event it shall be
entitled to all insurance proceeds (excluding use and occupancy insurance
proceeds) collectible by reason of such loss or damage or, if it does not
so elect, it shall have the right, which shall be in lieu of any other
right or remedy whatsoever, to terminate this contract. In the latter event
all parties shall be released from liability hereunder. If such loss or
damage does not substantially affect the value of such property, Bowlin
shall complete the sale but shall be entitled to all insurance proceeds
(excluding use and occupancy insurance proceeds) collectible by reason of
such loss or damage. In any case where Bowlin shall become entitled to
insurance proceeds by reason of loss or damage to assets agreed to be sole
hereunder as above provided, the purchase price of the assets so lost or
damaged shall not be reduced because of such loss or damage. Loss or damage
shall be considered to affect substantially the value or said property
within the meaning of this paragraph if the book value of the assets so
lost or damaged exceeds ten per cent (10%) in book value of all such
tangible assets.
Except as provided above, if for any cause beyond the reasonable power
and control of McCarty it shall be unable to complete the sale hereunder in
accordance with its terms. Bowlin may elect to accept as full performance
such partial performance by McCarty as shall not be so prevented, or if it
does not so elect, its sole and exclusive remedy shall be to terminate this
contract. In the latter event all parties shall be released from all
liability hereunder.
BINDING EFFECT
This agreement shall be binding upon the parties hereto, their heirs,
assigns or successors in
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interest.
ENTIRE AGREEMENT
This document contains the entire agreement between the parties and
supersedes all prior agreements between the parties, if any, written or
oral, with respect to the subject matter thereof.
SIGNATURES IN COUNTERPART
The signatories to this agreement are signing at different times and
in different places. The parties agree that this agreement is fully binding
even if each signatory signs a separate copy of this agreement.
AGREED:
BOWLIN OUTDOOR ADVERTISING & TRAVEL CENTERS INCORPORATED
By: /s/ Michael L. Bowlin
-------------------------------------
Michael L. Bowlin
President and Chief Executive Officer
THE McCARTY COMPANY
By: /s/ Brian McCarty
-------------------------------------
Brian McCarty
Chairman and Chief Executive Officer
/s/ Brian McCarty
- -------------------------------------
Brian McCarty
McCarty Shareholder
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/s/ T. Thomas Mott
- -------------------------------------
T. Thomas Mott
McCarty Shareholder
STATE OF NEW MEXICO )
)ss.
COUNTY OF BERNALILLO )
The foregoing instrument was acknowledged before me this day of April,
1997, by Michael L. Bowlin, President and Chief Executive Officer of BOWLIN
Outdoor Advertising & Travel Centers Incorporated, a Nevada Corporation, on
behalf of the corporation.
Notary Public
My commission expires:
STATE OF )
)ss.
COUNTY OF )
The foregoing instrument was acknowledge before me this day of April,
1997, by Brian McCarty, Chairman and Chief Executive Officer of The McCarty
Company, a New Mexico Corporation, on behalf of the corporation.
Notary Public
My commission expires:
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STATE OF )
)ss.
COUNTY OF )
The foregoing instrument was acknowledge before me this day of April, 1997,
by Brian McCarty.
Notary Public
My commission expires:
STATE OF )
)ss.
COUNTY OF )
The foregoing instrument was acknowledge before me this day of April, 1997,
by T. Thomas Mott.
Notary Public
My commission expires:
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EXHIBIT 2.1 Continued
SCHEDULE A/ Agreement Between
The McCarty Company and
Bowlin Inc.
PONY PANELS ASSETS
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Vehicles
1997 Mazda Pickup Truck Model # B2300 $12,777.63 balanced owed
1989 Isuzu Pickup Truck Model # Q16 No balance
1989 Mazda Pickup Truck Model # B33 No balance
1985 Chevrolet Pickup Truck Model # C10 No balance
1969 Chevrolet Truck Model # C50 No balance
Utility Trailer No balance
Office Machines
Computers* 3 No balance*
Printers 2 No balance
Fax Machines 1 No balance
Copiers 2 No balance
Postage Meter 1 Leased
Typewriters 2 No balance
Microwave Oven 1 No balance
Refrigerator 1 No balance
Slide Projector 1 No balance
Merlin Telephones 7 No balance
AT&T Control Unit 1 No balance
* and software
Office Furnishings
Sofa 1 No balance
Love Seat 1 No balance
End Tables 3 No balance
Lamps 3 No balance
Credenzas 2 No balance
Conference Table W/Chairs 1/7 No balance
Desks 8 No balance
Chairs 6 No balance
Filing Cabinets 10 No balance
Computer Stands 2 No balance
Printer Stands 1 No balance
Copier Stands 1 No balance
Flip Card File 1 No balance
Office Partitions 5 No balance
Typewriter Stands 1 No balance
Counter W/Shelves 8' 1 No balance
PONY PANELS ASSETS (CONT'D)
Equipment
Portable gas powered welder/generator No balance
Extension ladders (3) No balance
Hook ladder No balance
Beeline poster pasting machine No balance
Shop tables (4) No balance
7hp portable auger No balance
Shop cabinet No balance
Acetylene cutting torch Leased
Electric arc welder 220DC No balance
71/4" Craftsman circular saw-industrial No balance
1/2" Craftsman drill-industrial No balance
Jig saw-industrial No balance
Craftsman 3-ddrawer tool box and hand tools No balance
Miscellaneous
Slide show equipment (projector & tape player) No balance
Paper cutter-manual No balance
Sign materials (yard)
8 each back-back sign structures
2 each three-face structures
18 square corner Tiffin sign faces (6' x 12') 11 round corner Tiffin sign
faces (6' x 12')
30'-8" diameter schedule 40 pipe All no balance