AGREEMENT AND PLAN OF MERGER
By and Among
XXXXX ADVERTISING COMPANY,
LAMAR SOUTHWEST ACQUISITION CORPORATION,
on the one hand,
and
XXXXXX OUTDOOR ADVERTISING & TRAVEL CENTERS INCORPORATED,
on the other
Dated October 3, 2000
TABLE OF CONTENTS
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ARTICLE 1 THE CLOSING; THE MERGER; EFFECTS OF THE MERGER......................1
1.1 Closing.............................................................1
1.2 The Merger; Effective Date and Effective Time.......................2
1.3 Effects of Merger...................................................2
1.4 Articles of Incorporation and Bylaws of the Surviving
Corporation.........................................................2
1.5 Directors and Officers of the Surviving Corporation.................3
ARTICLE 2 EFFECT ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES............................................3
2.1 Effect on Capital Stock.............................................3
2.2 Exchange of Stock Certificates; Record Date.........................4
2.3 No Further Rights in Xxxxxx Common Stock............................4
2.4 Distributions with Respect to Unexchanged Shares....................5
2.5 Undelivered Merger Consideration....................................5
2.6 Escheat.............................................................5
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF XXXXXX............................5
3.1 Organization; Qualification; Subsidiaries...........................5
3.2 Xxxxxx Capital Stock................................................6
3.3 Authority; Enforceability...........................................6
3.4 No Conflicts or Consents............................................7
3.5 Advertising Revenues................................................7
3.6 Lease Expense.......................................................7
3.7 Xxxxxx Long-Term Debt...............................................7
3.8 Leases and Advertising Contracts....................................7
3.9 Faces...............................................................8
3.10 Permits; Compliance with Laws.......................................8
3.11 Owned Real Property.................................................8
3.12 Corporate Formalities; Corporate Documents and
Stockholder Agreements..............................................9
3.13 SEC Documents; Financial Statements; Liabilities....................9
3.14 Documents and Written Materials....................................10
3.15 Absence of Certain Changes or Events...............................10
3.16 Legal Proceedings..................................................12
3.17 Accounts Receivable................................................12
3.18 Contracts..........................................................12
3.19 Environmental Matters..............................................13
3.20 Employee Matters...................................................14
3.21 ERISA and Related Matters..........................................15
3.22 Taxes..............................................................16
3.23 Transactions with Related Parties..................................19
3.24 Voting Requirements................................................20
3.25 State Takeover Statutes; Rights Plan...............................20
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3.26 Intellectual Property..............................................20
3.27 Insurance..........................................................21
3.28 Bank Accounts; Power of Attorney...................................21
3.29 Registration Statement and Proxy Statement/Prospectus..............21
3.30 No Finder's Fee....................................................21
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF LAMAR AND NEWCO..................21
4.1 Organization.......................................................22
4.2 Lamar Capital Stock................................................22
4.3 Authority; Enforceability..........................................22
4.4 No Conflicts or Consents...........................................23
4.5 SEC Documents; Financial Statements; Liabilities...................23
4.6 Registration Statement and Proxy Statement/Prospectus..............24
4.7 No Finder's Fee....................................................25
4.8 Reorganization Representations.....................................25
ARTICLE 5 COVENANTS..........................................................25
5.1 Regulatory Approvals; Cooperation and Best Efforts.................25
5.2 Xxxxxx Special Meeting.............................................26
5.3 Preparation of the Proxy Statement/Prospectus and the
Registration Statement.............................................27
5.4 Conduct of Business Prior to the Closing Date......................27
5.5 No Solicitation....................................................28
5.6 Press Releases.....................................................29
5.7 Access to Information and Confidentiality..........................30
5.8 Consultation and Reporting.........................................30
5.9 Notification of Changes............................................31
5.10 Stock Option Plan..................................................31
5.11 Faces to Be Completed..............................................31
5.12 Fees and Expenses..................................................31
5.13 Affiliate Agreements...............................................31
5.14 Listing............................................................32
5.15 Xxxxxx 401(k) Plan.................................................32
5.16 Repair of Faces....................................................32
5.17 Management Agreement...............................................32
5.18 Contribution Agreement; Spin-Off...................................32
ARTICLE 6 CLOSING CONDITIONS.................................................33
6.1 Conditions Applicable to all Parties...............................33
6.2 Conditions to Lamar's and NewCo's Obligations......................34
6.3 Conditions to Obligations of Xxxxxx................................35
ARTICLE 7 TERMINATION AND AMENDMENT..........................................36
7.1 Termination........................................................36
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7.2 Effect of Termination..............................................37
7.3 Expenses; Termination Fees.........................................37
ARTICLE 8 DEFINED TERMS......................................................37
8.1 Definitions........................................................37
ARTICLE 9 MISCELLANEOUS......................................................41
9.1 Notices............................................................41
9.2 Headings; Gender...................................................42
9.3 Entire Agreement; No Third Party Beneficiaries.....................43
9.4 Governing Law......................................................43
9.5 Assignment.........................................................43
9.6 Severability.......................................................43
9.7 Counterparts.......................................................43
9.8 AMENDMENT..........................................................43
9.9 Effect of Spin-Off on Certain Xxxxxx Representations
and Warranties.....................................................43
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated October 3,
2000, is by and among Xxxxx Advertising Company, a Delaware corporation
("Lamar"), and Lamar Southwest Acquisition Corporation, a Nevada corporation
("NewCo"), on the one hand, and Xxxxxx Outdoor Advertising & Travel Centers
Incorporated, a Nevada corporation ("Xxxxxx"), on the other. Capitalized terms
not otherwise defined in this Agreement have the meanings ascribed to them in
Article 8.
BACKGROUND
A. The respective Boards of Directors of Lamar, NewCo and Xxxxxx have
approved the merger of NewCo with and into Xxxxxx (the "Merger") in accordance
with Nevada law, whereby, among other things, all outstanding shares of Xxxxxx
common stock, $.001 par value per share ("Xxxxxx Common Stock") will be
converted into the right to receive a certain number of shares of Class A Common
Stock, par value $.001 per share, of Lamar ("Lamar Common Stock") in the manner
set forth in Article 2 of this Agreement.
B. Prior to the Merger, Xxxxxx and its subsidiary, Xxxxxx Travel Centers, a
Nevada corporation ("Xxxxxx Travel"), will enter into a Contribution Agreement
in the form of Exhibit A (the "Contribution Agreement") pursuant to which Xxxxxx
will contribute to Xxxxxx Travel certain specified assets and liabilities used
or usable by, or incurred in connection with, its travel centers line of
business.
C. Immediately prior to the Merger, Xxxxxx will distribute the shares of
Xxxxxx Travel to the holders of Xxxxxx Common Stock (the "Spin-Off") in
accordance with their respective interests.
D. The respective Boards of Directors of Xxxxxx, Xxxxx and NewCo have
determined that the Merger is in furtherance of their respective long-term
business interests, and is fair to and in the best interests of their respective
stockholders.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth in this Agreement, Lamar, NewCo and Xxxxxx agree as
follows:
ARTICLE 1
THE CLOSING; THE MERGER; EFFECTS OF THE MERGER
1.1 CLOSING.
(a) The closing of the transactions contemplated by this Agreement
(the "Closing") will take place at 10:00 a.m. on the third business day
following the satisfaction or waiver of each of the closing conditions set forth
in Article 6 (other than those conditions that can only be satisfied on or as of
the Closing Date, which must be satisfied or waived at or as of the Closing) of
this Agreement at the offices of Jones, Walker, Waechter, Poitevent, Carrere &
Xxxxxxx, L.L.P., Fifth Floor, Four United Plaza, 0000 Xxxxxx Xxxxx Xxxxxxxxx,
Xxxxx Xxxxx, Xxxxxxxxx, 00000.
(b) At the Closing, each party to this Agreement will:
(i) deliver the documents and certificates required to be
delivered by it pursuant to Article 6;
(ii) provide proof or indication of the satisfaction or waiver of
each of the conditions to the other party's obligations set forth in Article 6;
(iii) cause its appropriate officers to execute and deliver
Articles of Merger in the form of Exhibit B (the "Articles of Merger") in
accordance with the Nevada Revised Statutes, Chapter 92A, Mergers and Exchanges
of Interest (the "Law"); and
(iv) consummate the Merger by causing to be filed properly
executed Articles of Merger with the Secretary of State of the State of Nevada
in accordance with Section 200 of the Law.
1.2 THE MERGER; EFFECTIVE DATE AND EFFECTIVE TIME. On the terms and subject
to the conditions of this Agreement, and in accordance with the applicable
provisions of the Law, NewCo will merge with and into Xxxxxx at the Effective
Time (as defined below). Following the Merger, the separate existence of NewCo
will cease and Xxxxxx will continue as the surviving corporation (the "Surviving
Corporation") and shall succeed to and assume all the rights and obligations of
NewCo in accordance with the Law. The Merger will be effective as of the date
and time specified in the Articles of Merger (the "Effective Date" and the
"Effective Time", respectively).
1.3 EFFECTS OF MERGER. The Merger will have the effects set forth under the
Law and as set forth in this Agreement, including, without limitation, those
specified in Section 250 of the Law.
1.4 ARTICLES OF INCORPORATION AND BYLAWS OF THE SURVIVING CORPORATION.
(a) The Articles of Incorporation of Xxxxxx, as amended and restated
and filed with the Articles of Merger with the Secretary of State of the State
of Nevada, shall be the Articles of Incorporation of the Surviving Corporation
thereafter unless and until amended in accordance with the terms of the Articles
of Incorporation and as provided by law.
(b) The Bylaws of NewCo, as in effect at the Effective Time, shall be
the Bylaws of the Surviving Corporation thereafter unless and until amended in
accordance with their terms, the terms of the Articles of Incorporation and as
provided by law.
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1.5 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The directors and
officers of NewCo immediately prior to the Effective Time will be the directors
and officers of the Surviving Corporation thereafter, each to hold a
directorship or office in accordance with the Articles of Incorporation and
Bylaws of the Surviving Corporation until the earlier of their resignation or
removal, or until their respective successors are duly elected or appointed and
qualified, as the case may be.
ARTICLE 2
EFFECT ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
2.1 EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of the Merger
and without any further action on the part of Lamar, NewCo, Xxxxxx or the
stockholders of such entities:
(a) CAPITAL STOCK OF NEWCO. Each issued and outstanding share of
capital stock of NewCo will be converted into and become one fully paid and
nonassessable share of common stock of the Surviving Corporation.
(b) CANCELLATION OF XXXXXX TREASURY STOCK. Each share of Xxxxxx
capital stock that is held in treasury by Xxxxxx (or by any Xxxxxx subsidiary)
shall be canceled and no Lamar Common Stock or other consideration will be
delivered in exchange therefor.
(c) CONVERSION OF XXXXXX COMMON STOCK.
(i) Subject to Sections 2.1(b) and 2.1(c)(ii), each share of
Xxxxxx Common Stock issued and outstanding immediately prior to the Effective
Time (including shares of Xxxxxx Common Stock issued upon the exercise of
options prior to the Effective Time but excluding treasury shares cancelled
pursuant to Section 2.1(b)) will be converted into the right to receive a number
of validly issued, fully paid and nonassessable shares of Lamar Common Stock
equal to the product of (A) one share of Lamar Common Stock and (B) the quotient
of (x) 725,000, divided by (y) a number equal to the total number of shares of
Xxxxxx Common Stock issued and outstanding at the Effective Time (including
shares of Xxxxxx Common Stock issued upon the exercise of options prior to the
Effective Time but excluding treasury shares cancelled pursuant to Section
2.1(b)). In no event will Lamar be required to issue in connection with the
Merger more than 725,000 shares of Lamar Common Stock (the "Merger Shares")
(except to reflect adjustment for any stock splits, combinations or
recapitalizations relating to Lamar Common Stock effected by Lamar after the
date of this Agreement).
(ii) No certificates or scrip representing fractional shares of
Lamar Common Stock will be issued upon conversion of the shares of Xxxxxx Common
Stock, and fractional share interests will not entitle the owners of the
fractional interests to vote or to any rights of a holder of Lamar Common Stock.
Any holder of Xxxxxx Common Stock who would otherwise be entitled to receive a
fraction of a share of Lamar Common Stock (after aggregating all fractional
shares issuable to such holder) shall, in lieu of such fraction of a share, be
entitled to receive an amount in cash, without interest and rounded to the
nearest cent, equal to the product of (A) such fraction and (B) the Average
Closing Share Price. Payments for fractional shares will be made at the time the
Merger Shares are delivered to the Xxxxxx stockholders pursuant to Section 2.2.
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2.2 EXCHANGE OF STOCK CERTIFICATES; RECORD DATE.
(a) Prior to the Effective Time, Lamar will appoint the American Stock
Transfer & Trust Company or another entity (the "Exchange Agent") to arrange for
the exchange of certificates that, immediately prior to the Effective Time,
represented issued and outstanding shares of Xxxxxx Common Stock (the "Xxxxxx
Certificates") for the Merger Shares. On or before the Closing Date, Lamar will
deliver to the Exchange Agent, in trust for the benefit of each holder of record
of Xxxxxx Common Stock, (x) stock certificates representing all of the shares of
Lamar Common Stock issuable pursuant to Section 2.1(c)(i), and (y) sufficient
funds to make cash payments in lieu of fractional Merger Shares pursuant to
Section 2.1(c)(ii). As soon as practicable after the Effective Time, Lamar will
cause the Exchange Agent to mail a notice and letter of transmittal to each
recordholder of Xxxxxx Common Stock advising such recordholder of the
effectiveness of the Merger and providing instructions for surrendering to the
Exchange Agent the Xxxxxx Certificates representing Xxxxxx Common Stock in
exchange for the Merger Shares and any cash payment in lieu of fractional Merger
Shares. Each holder of Xxxxxx Certificates, upon proper surrender thereof and a
duly completed letter of transmittal to the Exchange Agent, will be entitled to
receive from the Exchange Agent in exchange for the Xxxxxx Certificates (subject
to any taxes required to be withheld) the number of Merger Shares determined in
accordance with Section 2.1(c). Until properly surrendered, after the Effective
Time each Xxxxxx Certificate will be deemed for all purposes to evidence only
the right to receive Merger Shares and any cash payment in lieu of fractional
shares. Holders of Xxxxxx Certificates will not be entitled to receive
certificates representing Merger Shares or any cash payment in lieu of
fractional shares until their Xxxxxx Certificates are properly surrendered.
(b) If any Xxxxxx Certificate has been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the Person claiming the Xxxxxx
Certificate to be lost, stolen or destroyed (a "Missing Certificate"), Lamar
will direct the Exchange Agent to issue in exchange for the shares of Xxxxxx
Common Stock represented by the Missing Certificate, the Merger Shares issuable
pursuant to Section 2.1(c) and any cash payment in lieu of fractional shares.
The Board of Directors of Lamar may, in its discretion and as a condition to the
issuance of any Merger Shares or cash payment in lieu of fractional shares to
the owner of shares of Xxxxxx Common Stock represented by a Missing Certificate,
require the owner to provide Lamar with an affidavit and a bond in a sum as
Lamar may reasonably direct as an indemnity against any claim that may be made
against Lamar or the Exchange Agent with respect to the Missing Certificate.
2.3 NO FURTHER RIGHTS IN XXXXXX COMMON STOCK. As of the Effective Time, all
shares of Xxxxxx Common Stock will no longer be outstanding and will
automatically be canceled and retired and will cease to exist, and each holder
of a Xxxxxx Certificate representing shares of Xxxxxx Common Stock as of the
Effective Time will cease to have any rights with respect to the Xxxxxx Common
Stock, except the right to receive Merger Shares and any cash payment in lieu of
fractional shares as provided in this Agreement.
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2.4 DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No dividends or other
distributions declared on or after the Effective Time with respect to shares of
Lamar Common Stock will be paid to any Xxxxxx stockholder with respect to any
Merger Shares that such Xxxxxx stockholder has the right to receive in the
Merger until the stockholder has properly surrendered shares of Xxxxxx Common
Stock in exchange for Lamar Common Stock (and any fractional payment) in
accordance with this Article 2. Subject to Applicable Law, following the proper
surrender of any Xxxxxx Certificate by a Xxxxxx stockholder and delivery to such
stockholder of a certificate representing whole shares of Lamar Common Stock,
Lamar will pay to such stockholder, without interest, the amount of any
dividends or other distributions declared by Lamar on or after the Effective
Time.
2.5 UNDELIVERED MERGER CONSIDERATION. Any certificates representing shares
of Lamar Common Stock or cash that remain undistributed by the Exchange Agent to
former holders of Xxxxxx Common Stock as of the date that is one year after the
Effective Date shall be returned by the Exchange Agent to Lamar upon demand, and
any holder of Xxxxxx Certificates who has not theretofore surrendered his or her
shares of Xxxxxx Common Stock in accordance with Section 2.2 shall thereafter
look only to Lamar for satisfaction of his or her claims for Lamar Common Stock,
cash in lieu of fractional shares of Lamar Common Stock and any dividends or
distributions with respect to Lamar Common Stock.
2.6 ESCHEAT. Neither Lamar nor the Surviving Corporation shall be liable to
any holder or former holder of Xxxxxx Common Stock or to any other Person with
respect to any shares of Lamar Common Stock (or dividends or distributions with
respect thereto), or for any cash amounts, delivered to any public official
pursuant to any applicable abandoned property law, escheat law, or similar legal
requirement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF XXXXXX
Xxxxxx represents and warrants to Lamar and NewCo that as of the date of
this Agreement and as of the Closing Date:
3.1 ORGANIZATION; QUALIFICATION; SUBSIDIARIES. Schedule 3.1 lists the
jurisdiction of incorporation, the number of authorized and issued shares of
capital stock and the members of the Board of Directors of Xxxxxx. Xxxxxx is
duly organized, validly existing and in good standing under the laws of its
state of organization, having all requisite power and authority to own its
property and to carry on its business as it is now being conducted. Except as
disclosed in Schedule 3.1, Xxxxxx does not, directly or indirectly, own of
record or beneficially, or have the right or obligation to acquire, any direct
or indirect ownership interest, capital stock, membership interest, partnership
interest, joint venture interest or other equity interest in any Person. All
outstanding shares of capital stock of Xxxxxx have been validly issued and are
fully paid, nonassessable and free and clear of any Adverse Claim. No actions or
proceedings to dissolve Xxxxxx are pending. Xxxxxx is duly qualified or licensed
to do business and is in good standing in each jurisdiction in which the
property owned, leased or operated by it or the conduct of its business requires
qualification or licensing, except where the failure to be so licensed or
qualified would not have a Material Adverse Effect.
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3.2 XXXXXX CAPITAL STOCK. The authorized capital stock of Xxxxxx consists
exclusively of 100,000,000 shares of common stock, $.001 par value per share, of
which as of September 29, 2000, 4,390,098 shares were outstanding and no shares
were held in treasury. All of the issued and outstanding shares of Xxxxxx have
been validly issued, are fully paid and nonassessable and are free of preemptive
rights. As of September 29, 2000, (a) 429,750 shares of Xxxxxx Common Stock were
reserved for issuance pursuant to the exercise of stock options granted and
outstanding under the stock option plan designated Xxxxxx'x Incorporated 1996
Stock Option Plan (the "Option Plan"), which is the only stock option plan
adopted by Xxxxxx pursuant to which stock options have been or may be granted,
(b) 10,000 shares of Xxxxxx Common Stock were reserved for issuance to H.D.
Xxxxx & Co., Inc. pursuant to options granted on September 19, 2000 (the options
referred to under (a) and (b), are referred to individually as a "Xxxxxx Option,
and collectively, as the "Xxxxxx Options"). Schedule 3.2 sets forth the
following information with respect to the Xxxxxx Options outstanding as of
September 29, 2000: (i) the name of the optionee for each outstanding Xxxxxx
Option; (ii) the number of shares of Xxxxxx Common Stock subject to such Xxxxxx
Option; and (iii) the per share exercise price of such Xxxxxx Option. Except as
disclosed in Schedule 3.2, no share of capital stock of Xxxxxx will be, or may
be required to be, reacquired by Xxxxxx for any reason or is, or may be required
to be, issued by Xxxxxx for any reason, including, without limitation, by reason
of any option, warrant, security or right convertible into or exchangeable for
such shares, or any agreement to issue any of the foregoing.
3.3 AUTHORITY; ENFORCEABILITY.
(a) Xxxxxx has all requisite corporate power and authority to enter
into and carry out its obligations under this Agreement or any of the other
agreements referred to in this Agreement to which it is a party. The execution,
delivery and performance of this Agreement, the Contribution Agreement or any of
the other agreements referred to in this Agreement to which it is a party and
the consummation of the transactions contemplated hereby or thereby has been
duly authorized by all necessary corporate action on the part of Xxxxxx, except
for the approval of this Agreement by the stockholders of Xxxxxx.
(b) This Agreement, the Contribution Agreement and each other
agreement executed or to be executed by Xxxxxx in connection with the
transactions contemplated by this Agreement have been, or when executed will be,
duly executed and delivered by Xxxxxx and constitute, or when executed and
delivered will constitute, valid and binding obligations of Xxxxxx, enforceable
against Xxxxxx in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally and equitable principles which may limit the
availability of certain equitable remedies in certain instances.
3.4 NO CONFLICTS OR CONSENTS.
(a) Except as set forth on Schedule 3.4, neither the execution,
delivery or performance of this Agreement, the Contribution Agreement or any of
the other agreements referred to in this Agreement to which Xxxxxx is a party by
Xxxxxx nor the consummation of the transactions contemplated by this Agreement,
the Contribution Agreement or any of the other agreements referred to in this
Agreement to which Xxxxxx is a party:
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(i) will violate, conflict with, or result in a breach of any
provision of, constitute a default (or an event that, with notice or lapse of
time or both, would constitute a default) under, result in the termination of,
or accelerate the performance required by, or result in the creation of any
Adverse Claim against any of the material properties or material assets of
Xxxxxx under, (A) its articles of incorporation or bylaws, (B) any note, bond,
mortgage, indenture, deed of trust, or other debt obligation (other than
ordinary course trade credit) to which Xxxxxx is a party or by which any of its
assets are bound, or (C) any lease, agreement or other instrument or other
obligation that is material to the business or operations of Xxxxxx and to which
Xxxxxx is a party, or by which any of its assets are bound; or
(ii) violate any order, writ, injunction, decree, judgment,
statute, rule or regulation of any Governmental Entity to which Xxxxxx is
subject or by which any of its assets are bound.
(b) No filing or registration with, or authorization, consent or
approval of, any Governmental Entity is required by or with respect to Xxxxxx in
connection with the execution and delivery of this Agreement by Xxxxxx, or is
necessary for the consummation of the Merger and the other transactions
contemplated by this Agreement, except for: (i) the filing of a premerger
notification and report form (the "HSR Report") by each of Lamar and Xxxxxx
under the Xxxx-Xxxxx Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), (ii) the filing and recordation requirements of the Law with respect
to the Articles of Merger, (iii) the filing of the Registration Statement and
the Proxy Statement/Prospectus with the SEC and any other filings required by
the Securities Act or the Exchange Act, and (iv) the filing of appropriate
documents with the relevant authorities of other states in which Xxxxxx is
qualified to do business.
3.5 ADVERTISING REVENUES. The Advertising Revenues for the one-month period
ending April 30, 2000 exceeded $700,000.
3.6 LEASE EXPENSE. The Lease Expense did not exceed $108,000.
3.7 XXXXXX LONG-TERM DEBT. As of the date of this Agreement and as of the
Effective Date, the Xxxxxx Long-Term Debt does not and will not exceed
$14,500,000.
3.8 LEASES AND ADVERTISING CONTRACTS. Schedule 3.8 sets forth a complete
and accurate list of the Leases and Advertising Contracts in effect as of the
date of this Agreement, indicating any Leases that will expire on or before
December 31, 2000. Except as set forth on Schedule 3.8, or for deficiencies, not
material individually or in the aggregate, that are customary for the outdoor
advertising industry, each of the Leases and Advertising Contracts is in full
force and effect, and constitutes a valid and binding agreement that is
enforceable in accordance with its terms. Except as set forth on Schedule 3.8,
no member of the Xxxxxx Group or any other party is in default under any Lease
or Advertising Contract, and there is no condition or circumstance which with
the giving of notice or the passage of time could become such a default under
any Lease or Advertising Contract. Except as set forth on Schedule 3.8, all
Lease rental payments that are due by any member of the Xxxxxx Group have been
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made and are current. Except as set forth on Schedule 3.8, no member of the
Xxxxxx Group has been informed by a lessor or its representative that a lessor
does not intend to renew an existing Lease.
3.9 FACES. Schedule 3.9 sets forth a complete and correct list of the type
and location of each outdoor advertising face (a "Face") owned or leased by
Xxxxxx, designating those Faces that Xxxxxx owns and those Faces that Xxxxxx
leases from third parties (including Xxxxxx Travel). Except as set forth in
Schedule 3.9, Xxxxxx owns and operates at least 609 poster Faces, 2730 bulletin
panel Faces and 754 eight-sheet Faces, except as the number of Faces leased or
owned by Xxxxxx may be reduced by customary and usual attrition of Leases that
is consistent with the historical experience of Xxxxxx. Schedule 3.9 reflects
the Advertising Revenue attributable to each of the Faces for the one month
period ended September 30, 2000. Except as set forth in Schedule 3.9, each Face
(a) is legal and conforming or legal and non-conforming, (b) available for sale,
and (c) is standing and in good condition acceptable within the standards of the
outdoor advertising industry. Except as set forth on Schedule 3.9, each Face is
operated under a Lease or is located on Owned Real Property (as defined below).
3.10 PERMITS; COMPLIANCE WITH LAWS.
(a) Xxxxxx has (i) all permits, licenses and governmental
authorizations required for the ownership and operation of each Face and (ii)
all other material permits, licenses and governmental authorizations required
for the lease, ownership, occupancy or operation of its other properties and
assets and the carrying on of its business as presently conducted (subsections
(i) and (ii) collectively, the "Permits"). No suspension, cancellation or
termination of any Permits is threatened or imminent. Schedule 3.10 sets forth a
complete and accurate list of each of the Permits.
(b) Without limiting the scope of Section 3.10(a), each member of the
Xxxxxx Group, to its Knowledge, has conducted its business in compliance with
and is in compliance with all Applicable Laws, except where the failure to
comply would not have a Material Adverse Effect.
3.11 OWNED REAL PROPERTY.
(a) Schedule 3.11 sets forth a complete and correct list of all real
property owned in fee by Xxxxxx ("Owned Real Property"). Xxxxxx has good and
marketable fee simple title to all of its Owned Real Property, free and clear of
any Adverse Claims, subject in each case to Permitted Liens.
(b) Except as set forth on Schedule 3.11, there are no pending or
threatened condemnation proceedings with respect to any portion of Owned Real
Property, or litigation or administrative actions relating to any portion of
Owned Real Property.
(c) All Owned Real Property and related improvements are supplied with
utilities and other services necessary for the operation of the facilities
currently operated on the property.
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3.12 CORPORATE FORMALITIES; CORPORATE DOCUMENTS AND STOCKHOLDER AGREEMENTS.
(a) Each member of the Xxxxxx Group has maintained its separate
corporate existence and complied with all necessary corporate formalities such
as the holding of annual meetings of directors and stockholders.
(b) Xxxxxx has delivered to Xxxxx true and complete copies of its
articles of incorporation and bylaws, as amended or restated through the date of
this Agreement, as well as the articles of incorporation and bylaws governing
each other member of the Xxxxxx Group. The minute books of each member of the
Xxxxxx Group contain complete and accurate records of all corporate actions of
the equity owners of the various entities and of the boards of directors or
other governing bodies, including committees of such boards or governing bodies
of the various entities. The stock transfer records of Xxxxxx contain complete
and accurate records of all issuances, and redemptions of stock by Xxxxxx.
(c) There are no agreements among or between any of the Xxxxxx
stockholders with respect to the capital stock of Xxxxxx to which Xxxxxx is a
party or of which Xxxxxx has Knowledge.
3.13 SEC DOCUMENTS; FINANCIAL STATEMENTS; LIABILITIES.
(a) Xxxxxx has timely filed all required reports, schedules, forms,
statements and other documents with the SEC since February 1, 1997 (the "Xxxxxx
SEC Documents"). The Xxxxxx SEC Documents, and any such reports, forms and
documents filed by Xxxxxx with the SEC after the date of this Agreement,
complied, or will comply, at the time of filing as to form in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, and the rules and regulations of the SEC promulgated thereunder
applicable to the Xxxxxx SEC Documents, and except to the extent that
information contained in any Xxxxxx SEC Document has been superseded by a later
filed Xxxxxx SEC Document, none of the Xxxxxx SEC Documents at the time of
filing contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(b) The Xxxxxx Financial Statements included in the Xxxxxx SEC
Documents complied at the time of filing with the SEC as to form in all material
respects with the applicable accounting requirements and published rules and
regulations of the SEC with respect thereto, were prepared in accordance with
GAAP applied on a basis consistent with prior periods, and fairly present the
consolidated financial position of Bowlin and the other members of the Xxxxxx
Group at such dates and the consolidated results of operations and cash flow for
the respective periods then ended, subject, in the case of the Xxxxxx Interim
Financial Statements, to normal, recurring year-end audit adjustments that are
not, individually or in the aggregate, material in amount. The Xxxxxx Audited
Financial Statements have been audited by KPMG, LLP, independent auditors of
Bowlin, in accordance with generally accepted auditing standards. No member of
the Xxxxxx Group has, nor are any of their respective assets subject to, any
liability, commitment, debt or obligation (of any kind whatsoever whether
absolute or contingent, accrued, fixed, known, unknown, matured or unmatured) of
a type required by GAAP to be reflected in the Xxxxxx Financial Statements,
9
except, (i) as and to the extent reflected on the Xxxxxx Latest Balance Sheet or
the footnotes that are a part of the Xxxxxx Financial Statements, (ii) as may
have been incurred or may have arisen since the date of the Xxxxxx Latest
Balance Sheet in the ordinary course of business and that are not material
individually or in the aggregate or (iii) are permitted or contemplated by this
Agreement or the Contribution Agreement. Except as set forth in the Xxxxxx SEC
Documents, since February 1, 1997, Xxxxxx has not made any change in the
accounting policies or practices applied in the preparation of the Xxxxxx
Financial Statements. Xxxxxx'x independent auditors have not issued any audit
reports or other reports on internal controls which indicate that the internal
controls associated with or otherwise covering Xxxxxx have had any material
weaknesses or that the accounting records associated with or otherwise covering
Xxxxxx contained or could contain any material errors.
(c) The Xxxxxx Latest Balance Sheet includes appropriate reserves for
all Taxes and other known liabilities incurred as of such date but not yet
payable.
(d) The statements of income included in the Xxxxxx Financial
Statements do not contain any income or revenue realized from products or
services that the Surviving Corporation would be prohibited or restricted from
offering after the Effective Time pursuant to any covenant or provision in any
Material Contract to which any member of the Xxxxxx Group is a party.
3.14 DOCUMENTS AND WRITTEN MATERIALS. Originals or true and complete copies
of all documents or other written materials requested by Xxxxx have been
furnished or made available to Xxxxx in the form in which each of such documents
is in effect, and will not be modified in any material respect prior to the
Closing Date without Lamar's prior written consent (not to be unreasonably
withheld).
3.15 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the Bowlin
Latest Balance Sheet, each member of the Xxxxxx Group has conducted its business
only in the ordinary course, and, except as set forth on Schedule 3.15, has not:
(a) amended its certificate of incorporation, bylaws or similar
organizational documents;
(b) except for capital expenditures set forth on Schedule 3.15(e),
incurred any liability or obligation of any nature (whether absolute or
contingent, accrued, fixed, known, unknown, matured or unmatured), including,
without limitation, increasing indebtedness for borrowed money, except in the
ordinary course of business and not exceeding $50,000 individually or $100,000
in the aggregate;
(c) suffered or permitted any of its assets to be or remain subject to
any mortgage or other encumbrance, except for Permitted Liens;
(d) merged or consolidated with another entity or acquired or agreed
to acquire any business or any corporation, partnership or other business
organization, or sold, leased, transferred or otherwise disposed of any assets
except for assets sold for fair value in the ordinary course of business;
10
(e) made any capital expenditure or commitment therefor, except in the
ordinary course of business and, in the aggregate, not materially in excess of
those capital expenditures made or proposed to be made for the period after the
Xxxxxx Latest Balance Sheet that are set forth on Schedule 3.15(e);
(f) declared or paid any dividend or made any distribution with
respect to any of its equity interests, or redeemed, purchased or otherwise
acquired any of its equity interests, or issued, sold or granted any equity
interests or any option, warrant or other right to purchase or acquire any such
interest;
(g) adopted any employee benefit plan or made any change in any
existing employee benefit plans;
(h) made any bonus or profit sharing distribution or payment of any
kind, except bonuses and profit sharing distributions made to employees of
Xxxxxx who are not directors or officers of Xxxxxx, which payments or
distributions do not exceed $40,000 in the aggregate in any calender month;
(i) made any loan to any Person;
(j) made any change affecting any banking, safe deposit or power of
attorney arrangements;
(k) except for employment agreements entered into in the ordinary
course of business and consistent with past practices with employees of Xxxxxx
who are not directors or officers of Xxxxxx, entered into or amended any
employment, severance or similar agreement or arrangement with any director,
officer or employee, or granted any increase in the rate of wages, salaries,
bonuses or other compensation or benefits of any director, officer or employee;
(l) canceled, waived, released or otherwise compromised any debt,
claim or right, except in the ordinary course of business consistent with past
practices;
(m) made any change in any method of accounting or auditing practice;
(n) suffered the termination, suspension or revocation of any license
or permit necessary for the operation of its business;
(o) entered into any transaction other than on an arm's-length basis;
(p) suffered any damage, destruction or loss (whether or not covered
by insurance) which has had or could have a Material Adverse Effect on Xxxxxx;
(q) agreed, whether or not in writing, to do any of the foregoing;
11
(r) been the subject of, or incurred any liability under or with
respect to, any determination made by an arbitrator with respect to a grievance
filed under any collective bargaining or other labor agreement to which Xxxxxx
is a party.
3.16 LEGAL PROCEEDINGS. Except as set forth in Schedule 3.16, there is no
lawsuit, action, suit, claim or other proceeding at law or in equity, or
investigation, before or by any court or Governmental Entity or before any
arbitrator that is pending or, to the Knowledge of Bowlin, threatened against
any member of the Xxxxxx Group, or any unsatisfied judgment, order or decree or
any open injunction binding upon any member of the Xxxxxx Group. Except as
specifically set forth on Schedule 3.16, no lawsuits, actions, suits, claims,
proceedings, investigations, unsatisfied judgments, orders, decrees or open
injunctions will or is reasonably likely to have a Material Adverse Effect or
adversely effect the ability of Xxxxxx to enter into and perform its obligations
under this Agreement.
3.17 ACCOUNTS RECEIVABLE. All of the accounts receivable reflected on the
Xxxxxx Financial Statements or arising thereafter that have not been collected
have arisen only from BONA FIDE transactions in the ordinary course of business,
represent valid obligations owing to Xxxxxx and have been accrued in accordance
with GAAP. On the Closing Date, the allowance for doubtful receivables (the "AR
Allowance") reflected in the Pre-Closing Balance Sheet (as defined in Section
5.8(b)(i)) will be at least equal to the aggregate amount of Xxxxxx'x accounts
receivable that will have been outstanding for more than 90 days as of the
Closing Date. On the Closing Date, the accounts receivable of Xxxxxx will be, to
the Knowledge of Xxxxxx, collectible in full when due, without any counterclaim
or set-off (net of the AR Allowance).
3.18 CONTRACTS.
(a) Schedule 3.18 lists and describes all Material Contracts. A
complete and correct copy of each Material Contract has been furnished to or
made available to Xxxxx. To the Knowledge of Xxxxxx, each Material Contract is
valid, binding and enforceable, except to the extent that enforcement may be
limited by bankruptcy, reorganization, insolvency and other similar laws and
court decisions relating to or affecting the enforcement of creditors' rights
generally and by general equitable principles. Xxxxxx and, to the Knowledge of
Xxxxxx, each other party to each Material Contract are in compliance in all
material respects with the provisions of each Material Contract by which such
party is bound.
(b) Except as may be set forth in the Xxxxxx SEC Documents or
described on Schedule 3.18, Xxxxxx is not a party to:
(i) any collective bargaining agreement;
(ii) any written or oral employment or other agreement or
contract with or commitment to any employee;
(iii) any agreement, contract or commitment containing any
covenant limiting its freedom to engage in any line of business or to compete
with any Person;
12
(iv) any oral or written obligation of guaranty or
indemnification arising from any agreement, contract or commitment, except as
provided in its certificate of incorporation or bylaws;
(v) any joint venture, partnership or similar contract involving
a sharing of profits or expenses;
(vi) any non-disclosure agreement, non-competition agreement,
agreement with an officer, director or employee of Xxxxxx, tax indemnity, tax
sharing or tax allocation agreement, or any severance, bonus or commission
agreement;
(vii) any indenture, mortgage, loan, credit, sale-leaseback or
similar contract under which Xxxxxx has borrowed any money or issued any note,
bond or other evidence of indebtedness for borrowed money or guaranteed
indebtedness for money borrowed by others; or
(viii) any hedge, swap, exchange, futures or similar agreements
or contracts.
3.19 ENVIRONMENTAL MATTERS. Xxxxxx is not in violation in any material
respect of any Applicable Law relating to the environment or is a party to any
proposed removal, response or remedial action. Except as set forth on Schedule
3.19, Xxxxxx has not received any notice with respect to its business, its
leased or owned properties, or the use by third parties of its assets that:
(a) any investigation, administrative order, consent order and
agreement, removal or remedial action, litigation or settlement with respect to
any environmental permit, law or regulation is proposed, threatened, anticipated
or in existence;
(b) any release of any hazardous substances, pollutant or contaminant
into the environment by Xxxxxx has occurred; or
(c) any exposure of any person or property to any hazardous substance,
pollutant or contaminant has occurred.
Except as set forth on Schedule 3.19, the properties currently and previously
leased or owned by Xxxxxx are not and have never been on or associated with any
"national priorities" list or any equivalent state list or any federal or state
"superlien" list. Xxxxxx has made available to Xxxxx all internal and external
environmental audits and studies relating to the Leases or Owned Real Property,
and all correspondence on substantial environmental matters relating to the
Leases or the Owned Real Property is in the possession of Xxxxxx.
3.20 EMPLOYEE MATTERS.
(a) Schedule 3.20(a) sets forth:
13
(i) a list of the name, title, current annual compensation rate
(including bonus and commissions) of each employee of Xxxxxx;
(ii) organizational charts;
(iii) employment, consulting, employee confidentiality or similar
agreements;
(iv) any employee handbook(s); and
(v) any reports and/or plans prepared or adopted pursuant to the
Equal Employment Opportunity Act of 1972, as amended. Accruals with respect to
the bonus, sick leave and vacation benefits of the employees of Xxxxxx Group
have been made in accordance with the terms of the applicable Employee Plans and
GAAP.
(b) Each of the following is true:
(i) (A) each member of the Xxxxxx Group is in compliance with all
Applicable Laws respecting employment and employment practices, terms and
conditions of employment, wages and hours and occupational safety and health;
(B) no member of the Xxxxxx Group is engaged in any unfair labor practice within
the meaning of Section 8 of the National Labor Relations Act; and (C) there is
no proceeding pending or threatened, or any investigation pending or threatened,
against any member of the Xxxxxx Group, relating to subsections (A) or (B)
above, and no member of the Xxxxxx Group has any Knowledge of any basis for any
such proceeding or investigation;
(ii) none of the employees of any member of the Xxxxxx Group is a
member of, or represented by, any labor union and there are no efforts being
made to unionize any of such employees; and
(iii) there are no charges of, formal, informal or internal
complaints of, or proceedings involving, discrimination or harassment (including
but not limited to discrimination or harassment based upon sex, age, marital
status, race, religion, color, creed, national origin, sexual preference,
handicap or veteran status) pending or, to Xxxxxx'x Knowledge, threatened, nor
is there any investigation pending or threatened, including, but not limited to,
investigations before the Equal Employment Opportunity Commission or any
federal, state or local agency or court, with respect to any member of the
Xxxxxx Group.
3.21 ERISA AND RELATED MATTERS.
(a) Schedule 3.21(a) lists each Employee Plan that Bowlin or a member
of the Xxxxxx Group maintains, administers or contributes to. Bowlin has
provided Xxxxx a true and complete copy of each such Employee Plan, current
summary plan description, (and, if applicable, related trust documents) and all
amendments thereto together with (i) the most recent annual report, if any, that
has been prepared in connection with each Employee Plan; (ii) all material
communications received from or sent to the Internal Revenue Service or the
Department of Labor within the last two years; and (iii) the most recent
14
Internal Revenue Service determination letter with respect to each Employee
Plan, if any, and the most recent application for a determination letter, if
any.
(b) Schedule 3.21(b) identifies each Benefit Arrangement that Bowlin
or a member of the Xxxxxx Group maintains or administers. Bowlin has furnished
to Xxxxx copies or descriptions of each Benefit Arrangement. To the Knowledge of
Bowlin, each Benefit Arrangement has been maintained in substantial compliance
with its terms and with the requirements prescribed by any and all statutes,
orders, rules and regulations which are applicable to such Benefit Arrangement.
(c) Except as set forth on Schedule 3.21(c), no member of the Xxxxxx
Group maintains or has ever maintained an "employee benefit plan" (as defined in
Section 3(3) of ERISA) which is or was (i) a plan subject to Title IV of ERISA
or (ii) a "multiemployer plan" (as defined in Section 3(37) of ERISA).
(d) Benefits under any Employee Plan or Benefit Arrangement are as
represented in said documents and have not been increased or modified (whether
written or not written) subsequent to the dates of such documents. No member of
the Xxxxxx Group has communicated to any employee or former employee any
intention or commitment to modify any Employee Plan or Benefit Arrangement or to
establish or implement any other employee or retiree benefit or compensation
arrangement.
(e) Each Employee Plan which is intended to be qualified under Section
401(a) of the Code satisfies in form the requirements of that Section except to
the extent amendments are not required by law to be made until a date after the
Closing Date, has received a favorable determination letter from the Internal
Revenue Service regarding such qualified status, and no event has occurred
regarding the adoption of such plan that would adversely affect such
qualification. Each trust created in connection with each Employee Plan forming
a part thereof is exempt from tax pursuant to Section 501(a) of the Code. Each
Employee Plan has been maintained and administered in compliance with its terms
and with the requirements prescribed by any and all applicable statutes, orders,
rules and regulations, including but not limited to ERISA and the Code. Except
as set forth on Schedule 3.21(e), no Employee Plan has been operated in a manner
which could give rise to penalties, excise taxes or adverse tax consequences to
Xxxxxx or to its employees, and no Employee Plan has violated in a material
manner any provision of the Code or of ERISA.
(f) Full payment has been made of all amounts which each member of the
Xxxxxx Group has, or has been required to have, paid as contributions to any
Employee Plan or Benefit Arrangement under Applicable Law or under the terms of
any such plan or any arrangement. All amounts withheld by Xxxxxx from its
employees have been paid to the appropriate Employee Plan or Benefit Arrangement
by the due date prescribed by the Department of Labor to avoid penalties.
15
(g) No member of the Xxxxxx Group has any current or projected
liability in respect of post-retirement or post-employment health, life or other
welfare benefits for retired, current or former employees.
(h) Except as set forth on Schedule 3.21(h) or in this Agreement, no
employee or former employee of a member of the Xxxxxx Group will become entitled
to any bonus, retirement, severance, job security or similar benefit or enhanced
benefit (including acceleration of compensation, an award, vesting or exercise
of an incentive award) or any fee or payment of any kind solely as a result of
any of the transactions contemplated by this Agreement.
3.22 TAXES. For purposes of this Section 3.22, the "Xxxxxx Group" means,
individually and collectively, Bowlin and any individual, trust, corporation,
partnership or any other entity as to which Bowlin is liable for Taxes incurred
by such individual or entity either as transferee or pursuant Treasury
Regulation Section 1.1502-6 or pursuant to any other provision of federal,
territorial, state, local, or foreign law or regulations. Except as set forth on
Schedule 3.22:
(a) All Returns required to be filed by or on behalf of members of the
Xxxxxx Group have been duly filed on a timely basis and such Returns (including
all attached statements and schedules) are true, complete and correct. All Taxes
shown to be payable on the Returns or on subsequent assessments with respect
thereto have been paid in full on a timely basis, and no other Taxes are payable
by the Xxxxxx Group with respect to items or periods covered by such Returns
(whether or not shown on or reportable on such Returns) or with respect to any
period prior to the date of this Agreement. No member of the Xxxxxx Group is
currently the beneficiary of any extension of time within which to file any
Return.
(b) Each member of the Xxxxxx Group has withheld and paid over all
Taxes required to have been withheld and paid over (including any estimated
taxes), and has complied with all information reporting and backup withholding
requirements, including maintenance of required records with respect thereto, in
connection with amounts paid or owing to any employee, creditor, independent
contractor, or other third party.
(c) There are no Liens on any of the assets of Xxxxxx or its
subsidiaries with respect to Taxes other than Liens for Taxes not yet due and
payable, or for Taxes that are being contested in good faith through appropriate
proceedings and for which appropriate reserves have been established.
(d) Xxxxxx has furnished or made available to Xxxxx true and complete
copies of: (i) all federal and state income and franchise tax returns of the
Xxxxxx Group for all periods beginning on or after February 1, 1995 through the
date of this Agreement, and (ii) all tax audit reports, work papers, statements
of deficiencies, closing or other agreements received by any member of the
Xxxxxx Group, or on their behalf relating to Taxes. Neither Bowlin nor any
member of the Xxxxxx Group do business in or derive income from any state,
local, territorial or foreign taxing jurisdiction for which Returns must be
filed other than those for which all Returns have been furnished to Xxxxx. To
its Knowledge, no claim has ever been made by a taxing authority in a
jurisdiction in which Bowlin or any member of the Xxxxxx Group does not file a
tax return that it is or may be subject to taxation by that jurisdiction.
16
(e) The Returns of the Xxxxxx Group are not currently the subject of
any audit by a governmental or taxing authority.
(f) No deficiencies exist or are expected to be asserted with respect
to Taxes of the Xxxxxx Group, and there is no basis for the assertion of any
material deficiency of Taxes. No notice (either in writing or verbally, formally
or informally) has been received by any member of the Xxxxxx Group that it has
not filed a Return or paid Taxes required to be filed or paid by it.
(g) No member of the Xxxxxx Group is a party to any pending action or
proceeding for assessment or collection of Taxes, nor has such action or
proceeding been asserted or threatened (either in writing or verbally, formally
or informally) against any member of the Xxxxxx Group, or any of its assets.
(h) No waiver or extension of any statute of limitations is in effect
with respect to Taxes or Returns of any member of the Xxxxxx Group.
(i) Bowlin and each member of the Xxxxxx Group has disclosed on its
federal income tax returns all positions taken thereon that could give rise to a
substantial understatement penalty within the meaning of Section 6662 of the
Code.
(j) There are no requests for rulings, subpoenas or requests for
information pending with respect to any member of the Xxxxxx Group.
(k) No currently effective power of attorney has been granted by any
member of the Xxxxxx Group with respect to any matter relating to Taxes.
(l) The amount of Xxxxxx'x liability or the liability of any member of
the Xxxxxx Group for unpaid Taxes for all periods ending on or before the date
of this Agreement do not, in the aggregate exceed the amount of current
liability accruals for Taxes (excluding reserves for deferral of Taxes) as of
the date of this Agreement, and the amount of Xxxxxx'x liability or the
liability of any member of the Xxxxxx Group for unpaid Taxes for all periods
ending on or before the Closing Date will not, in the aggregate, exceed the
amount of the current liability accruals for Taxes (excluding reserves for
deferred Taxes), as such accruals are reflected on the balance sheets of Bowlin
or its subsidiaries, respectively, as of the Closing Date.
(m) Neither Bowlin nor any member of the Xxxxxx Group has made an
election, or is required to treat any asset as owned by another person for
federal income tax purposes or as tax-exempt bond financed property or
tax-exempt use property within the meaning of section 168 of the Code.
(n) Neither Xxxxxx nor its subsidiaries has issued or assumed any
indebtedness that is subject to Section 279(b) of the Code.
(o) No member of the Xxxxxx Group has entered into any compensatory
agreements with respect to the performance of services which payment thereunder
will result in a nondeductible expense pursuant to Section 280G of the Code or
an excise tax to the recipient of such payment pursuant to Section 4999 of the
Code.
17
(p) No consent under Section 341(f) of the Code has been filed with
respect to any member of the Xxxxxx Group.
(q) Neither Bowlin nor its subsidiaries has agreed, nor is required to
make, any adjustment under Code Section 481(a) by reason of change in accounting
method or otherwise.
(r) Neither Xxxxxx nor its subsidiaries has disposed of any property
that has been accounted for under the installment method.
(s) Neither Xxxxxx nor its subsidiaries is a party to any interest
rate swap, currency swap or similar transaction.
(t) No member of the Xxxxxx Group has been a United States real
property holding corporation within the meaning of Section 897(c)(2) of the Code
during the period specified in Section 897(c)(1)(A)(ii) of the Code, and Xxxxx
is not required to withhold tax on the acquisition of the stock of Bowlin by
reason of Section 1445 of the Code.
(u) No member of the Xxxxxx Group has participated in any
international boycott as defined in Code Section 999.
(v) Neither Bowlin nor its subsidiaries is subject to any joint
venture, partnership or other arrangement or contract that is treated as a
partnership for federal income tax purposes.
(w) No member of the Xxxxxx Group has made any of the foregoing
elections or is required to apply any of the foregoing rules under any
comparable state or local income tax provisions.
(x) No member of the Xxxxxx Group has or has ever had a permanent
establishment in any foreign country, as defined in any applicable tax treaty or
convention between the United States and such foreign country.
(y) Set forth in Schedule 3.22 or in documents furnished or made
available to Xxxxx is accurate and complete information with respect to each of
the following:
(i) Any tax elections made by any member of the Xxxxxx Group
currently in effect or that would otherwise affect Bowlin or any member of the
Xxxxxx Group;
(ii) Any tax carryovers of Bowlin or its subsidiaries;
(iii) Xxxxxx'x basis in its assets;
(iv) Xxxxxx'x current and accumulated earnings and profits;
18
(v) Excess loss accounts in the Xxxxxx Group; and
(vi) Deferred intercompany transactions in the Xxxxxx Group.
(z) Neither Bowlin nor its subsidiaries is a party to any Tax
allocation or sharing agreement or has any liability for the Taxes of any person
under Treasury Regulation Section 1. 1502-6 (or any similar provision of local,
state or federal law), as transferee or successor, by contract or otherwise.
(aa) No member of the Xxxxxx Group has prepared or filed any Return
inconsistent with past practice or, on any such Return, taken any position, made
any election or adopted any method that is inconsistent with positions taken,
elections made or methods used in preparing or filing similar Returns in prior
periods, or settled or compromised any material federal, state or local income
tax liability.
(bb) Xxxxxx operates at least one significant business line (other
than any business line that will be contributed to Xxxxxx Travel in the
Spin-Off), or owns at least a significant portion of its historic business
assets (considering the impact of the Spin-Off), in each case within the meaning
of Treasury Regulation Section 1.368-1(d).
3.23 TRANSACTIONS WITH RELATED PARTIES.
(a) Schedule 3.23(a) and the Xxxxxx SEC Documents list each
transaction between February 1, 1997 and the date of this Agreement involving or
for the benefit of Xxxxxx, on the one hand, and any director or officer of
Xxxxxx or any Affiliate of such director or officer, on the other hand,
including without limitation, (i) any debtor or creditor relationship, (ii) any
transfer or lease of real or personal property, (iii) wages, salaries,
commissions, bonuses and agreements relating to employment and (iv) purchases or
sales of products or services.
(b) Schedule 3.23(b) lists (i) all agreements and claims of any nature
that any officer or director of any member of the Xxxxxx Group or any Affiliate
of such officer or director has with or against any member of the Xxxxxx Group
as of the date of this Agreement that are not identified on the Bowlin Latest
Balance Sheet and (ii) all agreements and claims of any nature that any member
of the Xxxxxx Group has with or against any officer or director of any member of
the Xxxxxx Group or any Affiliate of such officer or director as of the date of
this Agreement that are not identified on the Xxxxxx Latest Balance Sheet.
3.24 VOTING REQUIREMENTS. The affirmative vote of the holders of a majority
of the outstanding shares of Xxxxxx Common Stock entitled to vote on the Merger
is the only vote of the holders of any class or series of Xxxxxx'x capital stock
necessary to approve this Agreement and the transactions described in this
Agreement.
19
3.25 STATE TAKEOVER STATUTES; RIGHTS PLAN.
(a) Except as set forth in Schedule 3.25, the Board of Directors of
Xxxxxx (at a meeting duly called and held) (i) has unanimously determined that
the Merger is advisable and fair and in the best interests of Xxxxxx and its
stockholders, and (ii) has unanimously approved the execution, delivery and
performance of this Agreement and the transactions described in this Agreement
and has unanimously approved the Merger. No state takeover statute or similar
statute or regulation applies or purports to apply to Xxxxxx in connection with
the Merger, this Agreement or any of the transactions described in this
Agreement.
(b) The Xxxxxx stockholders are not entitled to any rights to acquire
capital stock of Xxxxxx pursuant to a stockholder rights plan.
3.26 INTELLECTUAL PROPERTY. Xxxxxx either owns or has valid rights to use
all material patents, copyrights and trademarks used in its business as
presently conducted, subject to limitations contained in the agreements
governing the use of same, which limitations are customary for companies engaged
in businesses similar to Xxxxxx. There are no limitations contained in any such
agreements which will alter any such rights, breach any such agreement or any
third-party vendor, or require payments of additional sums thereunder. Xxxxxx is
in compliance with all such licenses and agreements and there are no pending or
threatened proceedings challenging or questioning the validity or effectiveness
of any license or agreement relating to such property or the right of Xxxxxx to
use, copy, modify, or distribute the same.
3.27 INSURANCE. Xxxxx has been provided copies of or access to all
insurance policies or binders that relate to the businesses of each member of
the Xxxxxx Group. All premiums due under the policies and binders have been paid
or accrued for and all policies and binders are in full force and effect. As of
the date of this Agreement, no notice of cancellation or non-renewal of any
policy or binder and no notice of disallowance of any claim under any insurance
policy or binder, has been received by any member of the Xxxxxx Group. Except as
provided in the applicable policy or binder, no member of the Xxxxxx Group has
any liability for or exposure to any premium expense for expired policies and
there are no current claims by any member of the Xxxxxx Group under any such
policy or binder as to which coverage has been denied or disputed by the
underwriters of such policies, nor are there any material insured losses for
which claims have not been made.
3.28 BANK ACCOUNTS; POWER OF ATTORNEY. Schedule 3.28 sets forth with
respect to each bank account or cash account maintained by Xxxxxx at any bank,
brokerage or other financial firm, the name of the institution at which such
account is maintained, the number of the account, and the names of the
individuals having authority to withdraw funds from such account.
3.29 REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS. None of the
information (other than information provided by Xxxxx or NewCo) included or
incorporated by reference in the Registration Statement will (a) in the case of
the Registration Statement, at the time it becomes effective, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein, in light of the circumstances under which they were made, or
necessary in order to make the statements therein not misleading, or (b) in the
case of the Proxy Statement/Prospectus, at the time of the mailing thereof, at
20
the time of the Xxxxxx Special Meeting, and at the Effective Time, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading. If at any
time prior to the Effective Time any event with respect to any member of the
Xxxxxx Group or its respective directors or officers shall occur which is
required to be described in the Proxy Statement/Prospectus or the Registration
Statement, such event shall be so described, and an appropriate amendment or
supplement will be promptly filed with the SEC and, to the extent required by
law, disseminated to the Xxxxxx stockholders. With respect to information
relating to Xxxxxx, the Registration Statement will comply as to form in all
material respects with the provisions of the Securities Act, and the Proxy
Statement/Prospectus will comply (with respect to Xxxxxx) as to form in all
material respects with the provisions of the Exchange Act.
3.30 NO FINDER'S FEE. Neither Bowlin nor any member of the Xxxxxx Group has
incurred or become liable for any broker's commission or finder's fee related to
the transactions contemplated by this Agreement, except fees to be paid pursuant
to Section 5.12.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF XXXXX AND NEWCO
Xxxxx and NewCo represent and warrant to Xxxxxx, as of the date of this
Agreement and as of the Closing Date, as follows:
4.1 ORGANIZATION. Each of Xxxxx and NewCo is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation and has all requisite corporate power and authority to own its
properties and carry on its business as now being conducted.
4.2 XXXXX CAPITAL STOCK.
(a) The authorized capital stock of Xxxxx consists exclusively of (i)
175,000,000 shares of Class A common stock, $.001 par value per share, (ii)
37,500,000 shares of Class B common stock, $.001 par value per share, (iii)
1,000,000 shares of Series AA Preferred Stock, $.001 par value per share, and
(iv) 10,000 shares of Class A Preferred Stock, $638 par value per share, and as
of September 29, 2000, the following shares are outstanding: (A) 75,260,974
shares of Class A common stock, (B) 17,000,000 shares of Class B common stock,
(C) 5,719.49 shares of Series AA Preferred Stock, and (D) no shares of Class A
Preferred Stock. No shares of any class are held in treasury. All of the issued
and outstanding shares of Xxxxx have been validly issued, are fully paid and
nonassessable and are free of preemptive rights. As of the date of this
Agreement, 2,715,223 shares of the Class A common stock of Xxxxx are reserved
for issuance pursuant to the exercise of stock options granted and outstanding
under the stock option plan designated the Xxxxx Advertising 1996 Equity
Incentive Plan.
(b) The authorized capital stock of NewCo consists exclusively of
1,000 shares of Class A common stock, par value $.01 per share, of which 1,000
shares of outstanding and no shares are held in treasury.
21
4.3 AUTHORITY; ENFORCEABILITY.
(a) Each of Xxxxx and NewCo has the requisite corporate power and
authority to enter into this Agreement and to carry out its obligations under
this Agreement and any of the other agreements referred to in this Agreement to
which it is a party. The execution, delivery and performance of this Agreement
and any of the other agreements referred to in this Agreement to which it is a
party and the consummation of the transactions contemplated hereby or thereby
have been (or, in the case of NewCo, will be prior to the Effective Time) duly
authorized by all necessary corporate action on the part of Xxxxx and NewCo.
(b) This Agreement and each other agreement executed or to be executed
by Xxxxx and NewCo in connection with the transactions contemplated by this
Agreement have been, or when executed will be, duly executed and delivered by
Xxxxx and NewCo and constitute, or when executed and delivered will constitute,
valid and binding obligations of Xxxxx and NewCo, enforceable against Xxxxx and
NewCo in accordance with their terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the enforcement of creditors' rights generally or by equitable principles which
may limit the availability of certain equitable remedies in certain instances.
4.4 NO CONFLICTS OR CONSENTS.
(a) Neither the execution, delivery or performance of this Agreement
or any of the other agreements referred to in this Agreement by Xxxxx and NewCo
nor the consummation of the transactions contemplated by this Agreement or any
of the other agreements referred to in this Agreement will violate, conflict
with, or result in a breach of any provision of, constitute a default (or an
event that, with notice or lapse of time or both, would constitute a default)
under, result in the termination of, or accelerate the performance required by,
or result in the creation of any Adverse Claim against any of the properties or
assets of Xxxxx or NewCo under the articles of incorporation, bylaws or any
other organizational documents of Xxxxx or NewCo; any note, bond, mortgage,
indenture, deed of trust, or other debt obligation (other than ordinary course
trade credit) to which Xxxxx or NewCo is a party, or by which Xxxxx or NewCo or
any of their respective assets are bound; or any lease, agreement or other
instrument or other obligation that is material to the business or operations of
Xxxxx or NewCo and to which Xxxxx or NewCo is a party, or by which Xxxxx or
NewCo or any of their respective assets are bound; or violate any order, writ,
injunction, decree, judgment, statute, rule or regulation of any Governmental
Entity to which either Xxxxx or NewCo is subject or by which Xxxxx or NewCo or
any of their respective assets are bound.
(b) No filing or registration with, or authorization, consent or
approval of, any Governmental Entity is required by or with respect to Xxxxx or
NewCo in connection with the execution and delivery of this Agreement by Xxxxx
and NewCo, or is necessary for the consummation of the Merger and the other
transactions contemplated by this Agreement, except for: (i) the filing of an
HSR Report by each of Xxxxx and Xxxxxx under the HSR Act, (ii) the filing and
recordation requirements of the Law with respect to the Articles of Merger, and
(iii) the filing of the Registration Statement with the SEC.
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4.5 SEC DOCUMENTS; FINANCIAL STATEMENTS; LIABILITIES.
(a) Except as set forth on Schedule 4.5(a), Xxxxx has timely filed all
required reports, schedules, forms, statements and other documents with the SEC
since February 1, 1997 (the "Xxxxx SEC Documents"). The Xxxxx SEC Documents, and
any such reports, forms and documents filed by Xxxxx with the SEC after the date
of this Agreement, complied, or will comply, at the time of filing as to form in
all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to the Xxxxx SEC Documents, and except to the
extent that information contained in any Xxxxx SEC Document has been superseded
by a later filed Xxxxx SEC Document, none of the Xxxxx SEC Documents at the time
of filing contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(b) The Xxxxx Financial Statements included in the Xxxxx SEC Documents
complied at the time of filing with the SEC as to form in all material respects
with the applicable accounting requirements and published rules and regulations
of the SEC with respect thereto, were prepared in accordance with GAAP applied
on a basis consistent with prior periods, and fairly present the financial
position of Xxxxx at such dates and the results of operations and cash flow for
the respective periods then ended, subject, in the case of the Xxxxx Interim
Financial Statements, to normal, recurring year-end adjustments that are not,
individually or in the aggregate, material in amount. The Xxxxx Audited
Financial Statements have been audited by KPMG, LLP, independent auditors of
Xxxxx, in accordance with generally accepted auditing standards. Xxxxx does not
have, nor are any of its assets subject to, any liability, commitment, debt or
obligation (of any kind whatsoever whether absolute or contingent, accrued,
fixed, known, unknown, matured or unmatured) of a type required by GAAP to be
reflected in the Xxxxx Financial Statements, except (i) as and to the extent
reflected on the Xxxxx Latest Balance Sheet or the footnotes that are a part of
the Xxxxx Financial Statements, (ii) as may have been incurred or may have
arisen since the date of the Xxxxx Latest Balance Sheet in the ordinary course
of business and that are not material individually or in the aggregate or (iii)
are permitted by this Agreement. Except as set forth in the Xxxxx SEC Documents,
since February 1997, Xxxxx has not made any change in the accounting policies or
practices applied in the preparation of the Xxxxx Financial Statements. Lamar's
independent auditors have not issued any audit reports or other reports on
internal controls which indicate that the internal controls associated with or
otherwise covering Xxxxx have had any material weaknesses or that the accounting
records associated with or otherwise covering Xxxxx contained or could contain
any material errors.
(c) The Xxxxx Latest Balance Sheet includes appropriate reserves for
all Taxes and other known liabilities incurred as of such date but not yet
payable.
4.6 REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS. None of the
information (other than information provided by Xxxxxx) included or incorporated
by reference in the Registration Statement will (a) in the case of the
Registration Statement, at the time it becomes effective, contain any untrue
statement of a material fact or omit to state any material fact required to be
23
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, or (b) in the case
of the Proxy Statement/Prospectus, at the time of the mailing thereof, at the
time of the Xxxxxx Special Meeting, and at the Effective Time contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. If at any time
prior to the Effective Time any event with respect to Xxxxx, its directors or
officers or any of its subsidiaries shall occur which is required to be
described in the Proxy Statement/Prospectus or the Registration Statement, such
event shall be so described, and an appropriate amendment or supplement shall be
promptly filed with the SEC and, to the extent required by law, disseminated to
the Xxxxxx stockholders. The Registration Statement shall comply as to form in
all material respects with the provisions of the Securities Act, and the Proxy
Statement/Prospectus shall comply as to form in all material respects with the
provisions of the Exchange Act, in each case other than as to information
provided for inclusion therein by Xxxxxx.
4.7 NO FINDER'S FEE. Neither Xxxxx nor NewCo has incurred or become liable
for any broker's commission or finder's fee related to the transactions
contemplated by this Agreement.
4.8 REORGANIZATION REPRESENTATIONS.
(a) Xxxxx has no plan or intention to cause Xxxxxx to issue additional
shares of its stock after the Closing that would result in Xxxxx losing control
of Xxxxxx within the meaning of Code Section 368(c).
(b) Xxxxx has no plan or intention to liquidate Xxxxxx; to merge
Xxxxxx into another corporation; to cause Xxxxxx to sell or otherwise dispose of
any of its assets, except for dispositions made in the ordinary course of
business; or to sell or otherwise dispose of any of Xxxxxx Common Stock acquired
pursuant to this Agreement, except for transfers described in Code Section
368(a)(2)(C).
(c) Xxxxx has no plan or intention to reacquire any Xxxxx Common Stock
issued pursuant to this Agreement.
(d) Xxxxx shall pay its own expenses incurred in connection with the
transactions contemplated by this Agreement.
(e) Xxxxx does not own, directly or indirectly, nor has it owned
during the past five years, directly or indirectly, any stock of Xxxxxx.
(f) Xxxxx will not pay Xxxxxx'x dissenting shareholders (if any) the
value of their stock out of its own funds and no funds will be supplied for that
purpose, directly or indirectly, by Xxxxx nor will Xxxxx directly or indirectly
reimburse Xxxxxx for any payments to dissenters. Nothing in the preceding
sentence will preclude Xxxxx from making capital contributions to Xxxxxx in the
ordinary course of business.
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(g) Following the Closing, Xxxxxx will continue its historic business
or use a significant portion of its historic business assets in a business.
ARTICLE 5
COVENANTS
5.1 REGULATORY APPROVALS; COOPERATION AND BEST EFFORTS.
(a) (i) Xxxxx and Xxxxxx shall use all reasonable efforts to file, as
soon as practicable after the date of this Agreement, all notices, reports and
other documents required to be filed with any Governmental Entity with respect
to the Merger and the other transactions contemplated by this Agreement, and to
submit promptly any additional information requested by any such Governmental
Entity. Without limiting the generality of the foregoing, Xxxxx and Xxxxxx
shall, within ten Business Days of the date of this Agreement, prepare and file
the notifications required to be filed under the HSR Act. Xxxxx and Xxxxxx shall
respond as promptly as practicable (A) to any inquiries or requests received
from the Federal Trade Commission or the Department of Justice for additional
information or documentation and (B) to any inquiries or requests received from
any state attorney general, foreign antitrust authority or other Governmental
Entity in connection with antitrust or related matters.
(ii) Each of Xxxxxx and Xxxxx shall (A) give the other party
prompt notice of the commencement or threat of commencement of any Proceedings
by or before any Governmental Entity with respect to the Merger or any of the
other transactions contemplated by this Agreement, (B) keep the other party
informed as to the status of any such Proceeding or threat, and (C) promptly
inform the other party of any communication to or from the Federal Trade
Commission, the Department of Justice or any other Governmental Entity regarding
the Merger. Except as may be prohibited by any Governmental Entity or by any
legal requirement, Xxxxxx and Xxxxx will consult and cooperate with one another,
and will consider in good faith the views of one another, in connection with any
analysis, appearance, presentation, memorandum, brief, argument, opinion or
proposal made or submitted in connection with any Legal Proceeding under or
relating to the HSR Act or any other foreign, federal or state antitrust or fair
trade law.
(iii) Notwithstanding the foregoing, neither party will be
required to accept any conditions that may be imposed by the FTC or the DOJ in
connection with such filings that would require the divestiture of any Xxxxx or
Xxxxxx assets or otherwise have a Material Adverse Effect on such party.
(b) Each party will cooperate with the other and use its reasonable
best efforts to (i) receive all necessary and appropriate consents of third
parties to the transactions contemplated by this Agreement, (ii) satisfy all
requirements prescribed by law for, and all conditions set forth in this
Agreement to, the consummation of the Merger, and (iii) effect the Merger in
accordance with this Agreement at the earliest practicable date.
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5.2 XXXXXX SPECIAL MEETING.
(a) Xxxxxx will take all action necessary under law to call, give
notice of and convene a meeting of its stockholders (the "Xxxxxx Stockholders
Meeting") to be held as promptly as practicable for the purpose of voting upon a
proposal to adopt this Agreement. The Xxxxxx Stockholders Meeting shall be held
(on a date selected by Xxxxxx in consultation with Xxxxx) as promptly as
practicable after the Registration Statement is declared effective under the
Securities Act.
(b) Subject to Section 5.2(c), (i) the Proxy Statement/Prospectus
shall include a recommendation (the "Board Recommendation") of the Board of
Directors of Xxxxxx that Xxxxxx'x stockholders vote to adopt this Agreement at
the Xxxxxx Special Meeting and (ii) the Xxxxxx Board Recommendation shall not be
withdrawn or modified in a manner adverse to Xxxxx, and no resolution by the
Board of Directors of Xxxxxx or any committee thereof to withdraw or modify the
Board Recommendation shall be adopted or proposed.
(c) Notwithstanding anything to the contrary contained in Section
5.2(b), at any time prior to the adoption of this Agreement by the Xxxxxx
stockholders, the Board Recommendation may be withdrawn or modified in a manner
adverse to Xxxxx if: (i) a proposal to acquire (by merger or otherwise) all of
the outstanding shares of Xxxxxx Common Stock is made to Xxxxxx and is not
withdrawn; (ii) Xxxxxx'x Board of Directors determines in good faith (based upon
a written opinion of an independent financial advisor of nationally recognized
reputation) that such offer constitutes a Superior Proposal; (iii) Xxxxxx'x
Board of Directors determines in good faith, after having taken into account the
written advice of Xxxxxx'x outside legal counsel, that, in light of such
Superior Proposal, the withdrawal or modification of the Board Recommendation is
required in order for Xxxxxx'x Board of Directors to comply with its fiduciary
obligations to Xxxxxx'x stockholders under applicable law; and (iv) neither
Xxxxxx nor any of its Representatives shall have violated any of the
restrictions set forth in Section 5.5.
(d) Xxxxxx shall comply with all provisions of the Exchange Act and
the Law in the solicitation of proxies from its stockholders to vote upon the
proposal to adopt this Agreement.
5.3 PREPARATION OF THE PROXY STATEMENT/PROSPECTUS AND THE REGISTRATION
STATEMENT.
(a) Xxxxx and Xxxxxx shall jointly prepare the Proxy
Statement/Prospectus, and Xxxxx shall file with the SEC the Registration
Statement, in which the Proxy Statement/Prospectus shall be included. Xxxxxx
will cooperate with Xxxxx to promptly respond to any SEC comments on the Proxy
Statement/Prospectus or Registration Statement and each of Xxxxx and Xxxxxx will
use its commercially reasonable efforts to resolve all SEC comments as promptly
as practicable to the satisfaction of the SEC and to have the Registration
Statement declared effective under the Securities Act as promptly as practicable
after its filing. Xxxxx will also take any action (other than qualifying to do
business in any jurisdiction in which it is now not so qualified) required to be
taken under any applicable state securities laws in connection with the issuance
of the Xxxxx Common Stock in connection with the Merger. Xxxxxx will furnish all
information concerning Xxxxxx and the Xxxxxx stockholders as may be reasonably
requested by Xxxxx in connection with any such action.
26
(b) Xxxxx and Xxxxxx will comply with the Exchange Act and the Law in
the preparation, filing and distribution of the Proxy Statement/Prospectus.
5.4 CONDUCT OF BUSINESS PRIOR TO THE CLOSING DATE.
(a) During the period from the date of this Agreement to the Effective
Time, Xxxxxx will, except as contemplated by the Contribution Agreement or as
necessary to effect the Spin-Off, (i) conduct its business only in the ordinary
course and (ii) use its best efforts to preserve the possession and control of
all of its assets other than those consumed or disposed of for value in the
ordinary course of business or pursuant to the terms of this Agreement, to
preserve the goodwill of suppliers, customers and others having business
relations with it and to do nothing to impair its ability to keep and preserve
its business as it exists on the date of this Agreement.
(b) Without the prior written consent of the other party, neither
Xxxxx nor Xxxxxx will commit or omit to do any act that (i) would cause a breach
of any of its agreements, commitments or covenants contained in this Agreement,
or (ii) would cause its representations and warranties contained in Article 3 or
Article 4, as the case may be, to become untrue.
5.5 NO SOLICITATION.
(a) No member of the Xxxxxx Group will directly or indirectly, through
any officer, director, representative, agent or affiliate (a "Bowlin
Representative") of any member of the Xxxxxx Group, (i) initiate, solicit,
encourage, induce or otherwise facilitate the initiation or submission of any
inquiries, proposals or offers that constitute or may reasonably be expected to
lead to an Acquisition Proposal (as defined below), (ii) furnish any information
regarding any member of the Xxxxxx Group to any Person in connection with or in
response to an Acquisition Proposal or an inquiry or indication of interest that
could reasonably be expected to lead to an Acquisition Proposal, unless required
by Applicable Law (iii) enter into or maintain or continue discussions or
negotiate with any Person in furtherance of such inquiries or to obtain an
Acquisition Proposal, (iv) agree to, approve, recommend or endorse any
Acquisition Proposal, or (v) enter into any letter of intent, contract or
similar agreement contemplating or otherwise relating to any Acquisition
Proposal; PROVIDED, HOWEVER, that prior to the adoption of this Agreement by the
Bowlin stockholders, this Section 5.5 (a) shall not prohibit Bowlin from
furnishing nonpublic information regarding any member of the Xxxxxx Group to, or
entering into discussions with, any Person in response to a Superior Proposal
that is submitted to Bowlin by such Person (and not withdrawn) if (w) neither
Xxxxxx nor any Xxxxxx Representative shall have violated any of the restrictions
set forth in this Section 5.5, (x) the Board of Directors of Xxxxxx concludes in
good faith, after having taken into account the written advise of its outside
legal counsel, that such action is required in order for the Board of Directors
of Xxxxxx to comply with its fiduciary obligations to Xxxxxx'x stockholders
under applicable law, (y) at or prior to furnishing any such nonpublic
information to, or entering into discussions with, such Person, Xxxxxx gives
Xxxxx written notice of the identify of such Person and of Xxxxxx'x intention to
furnish nonpublic information to, or enter into discussions with, such Person,
and Xxxxxx receives from such Person an executed confidentiality agreement
27
containing provisions no less favorable to Xxxxxx than those contained in the
Confidentiality Agreement (as defined below) between Xxxxxx and Xxxxx, and (z)
at or prior to furnishing any such nonpublic information to such Person, Xxxxxx
furnishes such nonpublic information to Xxxxx (to the extent such nonpublic
information has not been previously furnished by Xxxxxx to Xxxxx). Without
limiting the generality of the foregoing, Xxxxxx acknowledges and agrees that
any violation of or the taking of any action inconsistent with any of the
restrictions set forth in the preceding sentence by any Xxxxxx Representative,
whether or not such Xxxxxx Representative is purporting to act on behalf of
Xxxxxx, shall be deemed to constitute a breach of this Section 5.5 by Xxxxxx.
(b) For purposes of this Agreement, "Acquisition Proposal" means a
proposal for any of the following (other than the transactions contemplated by
this Agreement, including the Spin-Off) that involves (i) prior to the Spin-Off,
any member of the Xxxxxx Group, and (ii) after the Spin-Off, any member of the
Xxxxxx Group except Bowlin Travel: (A) any merger, reorganization,
consolidation, share exchange, recapitalization, business combination,
liquidation, dissolution, or other similar transaction involving, or, any sale,
lease, exchange, mortgage, pledge, transfer or other disposition of, all or any
significant portion of the assets or 10% or more of the equity securities of,
any member of the Xxxxxx Group; (B) any tender offer or exchange offer for 20%
or more of the outstanding shares of capital stock of Bowlin or the filing of a
registration statement under the Securities Act in connection therewith; or (C)
any public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing.
(c) For purposes of this Agreement, "Superior Proposal" means a bona
fide proposal made by a third party to acquire Xxxxxx pursuant to an Acquisition
Proposal that the Board of Directors of Xxxxxx determines in its good faith
judgment (after considering the written advice of Xxxxxx'x independent advisors)
to merit the withdrawal of the Board Recommendation because such third party
proposal has more favorable economic terms than the transactions contemplated by
this Agreement.
(d) Xxxxxx will immediately notify Xxxxx after receipt of any
Acquisition Proposal or any request for nonpublic information relating to any
member of the Xxxxxx Group in connection with an Acquisition Proposal or for
access to any of the premises, books or records of any member of the Xxxxxx
Group by any person or entity that informs Bowlin or its Board of Directors,
formally or informally, that it is considering making, or has made, an
Acquisition Proposal. Such notice to Xxxxx will be made orally and in writing
and will indicate in reasonable detail the identity of the offering party and
the terms and conditions of such proposal, inquiry or contact; except such
disclosure will be made to Xxxxx only to the extent such disclosure does not
violate the fiduciary responsibilities of the Board of Directors of Xxxxxx,
after being advised by its legal counsel, in which case Xxxxxx will provide
Xxxxx with a summary of the terms and conditions of such proposal, inquiry or
contact.
(e) Nothing contained in this Section 5.5 will prevent Xxxxxx from
complying with Rule 14e-2(a) or Rule 14d-9 promulgated under the Exchange Act,
if applicable, with regard to an Acquisition Proposal made in the form of a
tender offer by a third party.
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(f) Xxxxxx shall immediately cease and cause to be terminated any
pre-existing discussions with any Person that relates to any Acquisition
Proposal; PROVIDED, HOWEVER, that any such discussions may be recommenced so
long as Xxxxxx complies with the provisions of this Section 5.5.
5.6 PRESS RELEASES. Xxxxxx and Xxxxx will consult with each other before
issuing, and provide each other the opportunity to review and comment upon, any
press releases or other public statements with respect to any transactions
described in this Agreement, including the Merger, and will not issue any such
press releases or make any such public statement prior to such consultation,
except as may be required by Applicable Law, court process or by obligations
pursuant to a listing agreement with American Stock Exchange or Nasdaq.
5.7 ACCESS TO INFORMATION AND CONFIDENTIALITY.
(a) Prior to the Closing Date, Xxxxxx will afford to Xxxxx and its
officers, employees, accountants, counsel, financial advisors and other
representatives, reasonable access during normal business hours to its premises,
books and records and will furnish to Xxxxx (i) a copy of each report, schedule,
registration statement and other documents filed by it during such period
pursuant to the requirements of federal or state securities laws, and (ii) such
other information with respect to its business and properties as Xxxxx
reasonably requests.
(b) The confidentiality obligations of Xxxxxx and Xxxxx will continue
to be governed by the Confidentiality Agreement dated September 6, 2000 (the
"Confidentiality Agreement") by and between Xxxxxx and Xxxxx.
5.8 CONSULTATION AND REPORTING.
(a) During the period from the date of this Agreement to the Closing
Date, Xxxxxx will confer with Xxxxx on a regular and frequent basis to report
material operational matters with respect to its business and to report on the
general status of its ongoing operations. Xxxxxx will notify Xxxxx of any
unexpected emergency or other change in the normal course of its business or in
the operation of its properties and of any governmental complaints,
investigations, adjudicatory proceedings, or hearings (or communications
indicating that the same may be contemplated) and will keep Xxxxx fully informed
of such events and permit Lamar's representatives prompt access to all materials
prepared by Xxxxxx or on its behalf or served on Xxxxxx in connection therewith.
(b) At least two Business Days prior to Closing, Xxxxxx will provide
Xxxxx:
(i) a copy of Xxxxxx'x balance sheet dated the last day of the
month immediately preceding the month of the Closing, unless the Closing occurs
prior to the 15th day of any month, in which case the balance sheet will be
dated the last day of the month immediately preceding the month before Closing
(in either case, the "Pre-Closing Balance Sheet"), along with an aged accounts
receivable report, pre-paid lease amortization schedule, copies of notes payable
and notes receivable, accounts payable journals and any other detailed lists
supporting such balance sheet;
29
(ii) a written statement calculating the Working Capital of
Xxxxxx after the Spin-Off; and
(iii) a written statement calculating the Xxxxxx Long-Term Debt
after the Spin-Off.
5.9 NOTIFICATION OF CHANGES.
(a) Xxxxxx, on the one hand, and Xxxxx and NewCo, on the other hand,
will promptly notify the other parties of any event that causes any
representation or warranty given by the other parties, respectively, in Articles
3 and 4 to become untrue.
(b) Xxxxxx, on the one hand, and Xxxxx and NewCo, on the other hand,
will each have the right until the Closing to supplement or amend any of the
Schedules described in Articles 3 or 4 with respect to any matter arising or
discovered after the date of this Agreement which, if existing or known on the
date of this Agreement, would have been required to be set forth or described in
such Schedules. For all purposes of this Agreement, including for purposes of
determining whether the conditions set forth in Article 6 have been fulfilled,
the Schedules will be deemed to include only that information contained therein
on the date of this Agreement and will be deemed to exclude all information
contained in any supplement or amendment thereto, except to the extent that they
reflect an event or condition that would not have a Material Adverse Effect on
the party making the representation and warranty; PROVIDED, HOWEVER, that if the
Closing will occur, then all matters disclosed pursuant to any such supplement
or amendment will be deemed included in the Schedules at Closing (without
necessity of a written waiver or other action on the part of any party) and to
modify the applicable representations and warranties for all purposes.
5.10 STOCK OPTION PLAN. The Board of Directors of Xxxxxx will, in
connection with the Merger and the transactions contemplated by this Agreement,
notify in writing the holders of Xxxxxx Options issued under the Option Plan of
their right to exercise their options as to all shares that are subject to
Xxxxxx Options. Such notice will be given pursuant to Section 11 of the Option
Plan at least 30 days prior to the Closing Date.
5.11 FACES TO BE COMPLETED. Xxxxxx will use its best efforts to complete
the faces on Schedule 5.11 (the "Q3 Faces") prior to the Closing Date.
5.12 FEES AND EXPENSES. If the Merger is consummated, Xxxxx will pay or
will cause the Surviving Corporation to pay, up to $1,250,000 of Xxxxxx'x
aggregate costs and expenses associated with the consummation of the Merger and
the other transactions contemplated by this Agreement, including financial
advisory fees, a fairness opinion, legal fees and accounting fees (the "Closing
Costs"). Under the terms of the Contribution Agreement, Xxxxxx Travel will
expressly assume the obligation to pay any Closing Costs in excess of
$1,250,000.
5.13 AFFILIATE AGREEMENTS. Xxxxxx shall use all reasonable efforts to cause
each Person identified on Schedule 5.13 and each other Person who is or becomes
(or may be deemed to be) an affiliate (as that term is used in Rule 145 under
the Securities Act) of Xxxxxx to execute and deliver to Xxxxx, prior to the date
of mailing of the Proxy Statement/Prospectus to Xxxxxx'x stockholders, an
Affiliate Letter in the form of Exhibit C.
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5.14 LISTING. Xxxxx shall use its best efforts to cause the Merger Shares
to be approved for listing (subject to notice of issuance) on the Nasdaq
National Market System.
5.15 XXXXXX 401(K) PLAN.
(a) Within 30 days after the date of this Agreement, Xxxxxx will
deliver to Xxxxx for review and approval by Xxxxx, an amendment (the "401(k)
Amendment") to Xxxxxx'x 401(k) Plan (the "Plan") whereby, in addition to any
other provisions reasonably requested by Xxxxx, Xxxxxx Travel will (i) expressly
assume the obligation to maintain the Plan as successor employer, (ii) cause the
assets held in Plan accounts of employees who remain employed by the Surviving
Corporation to be transferred from the Plan to The Xxxxx Savings and Profit
Sharing Plan Trust, (iii) report the transfer of Plan assets to any employees
and regulatory authorities as required by Applicable Law.
(b) Xxxxxx Travel will execute any and all documents as needed for the
401(k) Amendment to comply with IRS requirements and will provide Xxxxx with
copies of any IRS filings.
(c) Xxxxxx Travel will provide a list of all participating employees
to Xxxxx at Closing.
5.16 REPAIR OF FACES. Xxxxxx will repair each of the Faces listed in
Schedule 3.9(5) to the extent repairs are commercially reasonable, so that, at
Closing, each Face will be (a) legal and conforming or legal and non-conforming,
(b) available for sale, and (c) standing and in good condition acceptable within
the standards of the outdoor advertising industry.
5.17 MANAGEMENT AGREEMENT. Xxxxxx will give Xxxxxx Travel written notice at
least 31 days prior to the Closing Date that the Agreement for Management
Services dated August 1, 2000 between Xxxxxx and Xxxxxx Travel will be
terminated effective as of the day prior to the Closing Date.
5.18 CONTRIBUTION AGREEMENT; SPIN-OFF.
(a) Xxxxxx will, and will cause Xxxxxx Travel to, (i) within 15 days
after the date of this Agreement, execute the Contribution Agreement in a form
reasonably satisfactory to Xxxxx, and (ii) within 45 days after the date of this
Agreement, complete and provide any schedules and exhibits to the Contribution
Agreement in forms reasonably satisfactory to Xxxxx.
(b) Xxxxxx will contribute to Xxxxxx Travel the assets and liabilities
related to Xxxxxx'x travel center business in accordance with the terms and
conditions of the Contribution Agreement; PROVIDED, HOWEVER, that Xxxxx will
have consented to the terms and conditions of the Contribution Agreement under
Section 5.18(a).
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(c) Xxxxxx will distribute all of the shares of Xxxxxx Travel to the
Xxxxxx stockholders in compliance with Section 78.288 of the Nevada Revised
Statutes.
ARTICLE 6
CLOSING CONDITIONS
6.1 CONDITIONS APPLICABLE TO ALL PARTIES. The respective obligations of
each party to consummate the transactions contemplated by this Agreement are
subject to the satisfaction or, where permissible, waiver by such party of the
following conditions at or prior to the Closing Date:
(a) XXXXXX STOCKHOLDER APPROVAL. The Merger will have been duly
approved by holders of at least a majority of the outstanding shares of Xxxxxx
Common Stock in accordance with the Law and the Articles of Incorporation of
Xxxxxx.
(b) REGISTRATION STATEMENT. The Registration Statement shall have
become effective in accordance with the provisions of the Securities Act. No
stop order suspending the effectiveness of the Registration Statement shall have
been issued by the SEC and no proceedings for that purpose shall have been
initiated, or to the Knowledge of Xxxxx or Xxxxxx, threatened by the SEC. All
necessary state securities authorizations (including filings, authorizations,
orders and approvals, if any, as may be required by state takeover laws) will
have been received and shall be in full force and effect.
(c) HSR ACT. The waiting periods (and any extensions thereof)
applicable to the Merger under the HSR Act shall have been terminated or shall
have expired and no condition will have been imposed on Xxxxxx or Xxxxx to
obtain such termination that would require the divestiture of any Xxxxxx or
Xxxxx assets or otherwise have a Material Adverse Effect on either party.
(d) NO INJUNCTIONS OR RESTRAINTS. No temporary restraining order,
preliminary or permanent injunction or other order, judgment or decree to
restrain or prohibit the consummation of the Merger or any of the other
transactions described in this Agreement shall have been issued and remain in
effect.
(e) LITIGATION. There shall not have been instituted or pending, or
threatened, any Proceeding by any Governmental Entity as a result of this
Agreement or any of the transactions contemplated hereby which, if such
Governmental Entity were to prevail, would reasonably be expected to have a
Material Adverse Effect on Xxxxx or the Surviving Corporation.
(f) LISTING OF MERGER SHARES. The Merger Shares shall have been
authorized for listing on the Nasdaq National Market System, subject to official
notice of issuance.
6.2 CONDITIONS TO LAMAR'S AND NEWCO'S OBLIGATIONS. The obligations of Xxxxx
and NewCo to consummate the transactions contemplated by this Agreement are
subject to the satisfaction of the following conditions, unless waived in
writing by Xxxxx:
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(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Xxxxxx set forth in this Agreement, disregarding all qualifications and
exceptions relating to materiality or Material Adverse Effect, will be true and
correct in all respects as of the date of this Agreement and as of the Closing
Date as though made on and as of the Closing Date, except as otherwise
contemplated by this Agreement, and except where the failure of any
representations and warranties, individually or in the aggregate, would not have
a Material Adverse Effect.
(b) COVENANTS. Xxxxxx will have performed or complied in all material
respects with the obligations and covenants required to be complied with or
performed by it under this Agreement at or prior to the Closing Date.
(c) NO MATERIAL ADVERSE EFFECT. Since the date of this Agreement,
there shall not have occurred any Material Adverse Effect with respect to
Xxxxxx, and no event shall have occurred or circumstance shall exist that, in
combination with any other events, could reasonably be expected to have a
Material Adverse Effect on the Xxxxxx Group.
(d) CONSENTS AND APPROVALS. All consents and approvals of third
parties necessary for the consummation of the transactions contemplated by this
Agreement shall have been obtained.
(e) WORKING CAPITAL. The Working Capital at Closing shall be not less
than $100,000.
(f) XXXXXX LONG-TERM DEBT. The Xxxxxx Long-Term Debt shall not exceed
$14,500,000.
(g) XXXXXX ASSETS. None of Xxxxxx'x assets will secure any debts or
other obligations of Xxxxxx Travel.
(h) CLOSING CERTIFICATE. Xxxxx will have received a certificate
executed by the Chief Executive Officer and Chief Financial Officer of Xxxxxx
dated the Closing Date, certifying that the conditions specified in Section
6.2(a) through (g) have been fulfilled.
(i) Q3 FACES. The Q3 Faces that have been completed prior to Closing
will be in suitable condition to enable Xxxxx to use those structures for
outdoor advertising purposes, and the advertising contracts, Leases and Permits
applicable to the completed Q3 Structures will be in effect.
(j) AFFILIATES LETTERS. Xxxxx shall have received the letters
described in Section 5.13.
(k) CONTRIBUTION AGREEMENT; SPIN-OFF. The contribution from Xxxxxx to
Xxxxxx Travel of the assets and liabilities related to Xxxxxx'x travel center
business will have been effected under the terms and conditions specified in the
Contribution Agreement, and Xxxxxx will have distributed all of the shares of
Xxxxxx Travel to the Xxxxxx stockholders.
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(l) DIRECTOR AND OFFICER RESIGNATIONS. Xxxxx shall have received
resignations from all of the directors and officers of Xxxxxx, such resignations
to be effective as of the Effective Time.
(m) XXXXXX TRAVEL AGREEMENTS. Xxxxxx will have terminated any leases
or other agreements between Xxxxxx and Xxxxxx Travel other than the Contribution
Agreement that Xxxxx requests Xxxxxx to terminate.
(n) SOLVENCY CERTIFICATE. Xxxxx will have received a certificate
executed by the Chief Executive Officer and Chief Financial Officer of Xxxxxx
dated the Closing Date, certifying that each of Xxxxxx and Xxxxxx Travel was
solvent immediately prior to the Spin-Off and remained solvent from the date of
the Spin-Off through the Closing Date.
(o) 401(K) AMENDMENT. Xxxxxx and Xxxxxx Travel will have executed the
401(k) Amendment.
6.3 CONDITIONS TO OBLIGATIONS OF XXXXXX. The obligations of Xxxxxx to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction of the following conditions, unless waived in writing by Xxxxxx:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Xxxxx and NewCo set forth in this Agreement, disregarding all qualifications
and exceptions relating to materiality or Material Adverse Effect, will be true
and correct in all respects as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date, except as otherwise
contemplated by this Agreement, and except where the failure of any
representations and warranties, individually or in the aggregate, would not have
Material Adverse Effect.
(b) COVENANTS. Each of Xxxxx and NewCo will have performed or complied
in all material respects with all obligations and covenants required to be
complied with or performed by it under this Agreement at or prior to the Closing
Date.
(c) NO MATERIAL ADVERSE EFFECT. Since the date of this Agreement,
there shall not have occurred any Material Adverse Effect with respect to Xxxxx
or NewCo, and no event shall have occurred or circumstance shall exist that, in
combination with any other events, could reasonably be expected to have a
Material Adverse Effect on Xxxxx or NewCo.
(d) CONSENTS AND APPROVALS. All consents and approvals of third
parties necessary for the consummation of the transactions contemplated by this
Agreement shall have been obtained.
(e) CLOSING CERTIFICATE. The receipt by Xxxxxx of a certificate
executed by the Chief Executive Officer and Chief Financial Officer of Xxxxx
dated the Closing Date, certifying that the conditions specified in Section
6.3(a) through (d) have been fulfilled.
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ARTICLE 7
TERMINATION AND AMENDMENT
7.1 TERMINATION. This Agreement may be terminated and the Merger
contemplated by this Agreement abandoned at any time before the Effective Time,
whether before or after approval by the Xxxxxx stockholders as follows:
(a) MUTUAL CONSENT. By the mutual consent of the Boards of Directors
of Xxxxxx and Xxxxx.
(b) MATERIAL BREACH. By the Board of Directors of either Xxxxxx or
Xxxxx if there has been a material breach by the other of any representation or
warranty contained in this Agreement or of any covenant contained in this
Agreement, which in either case cannot be, or has not been, cured within 15 days
after written notice of such breach is given to the party committing such
breach; provided that the right to effect such cure will not extend beyond the
date set forth in Section 7.1(c) below.
(c) ABANDONMENT. By the Board of Directors of either Xxxxxx or Xxxxx
if the Merger has not occurred by March 31, 2001, unless the failure to
consummate the Merger is attributable to a failure on the part of the party
seeking to terminate this Agreement to perform any material obligation required
under the terms and provisions of this Agreement to be performed by it.
(d) GOVERNMENT ACTION. By the Board of Directors of either Xxxxxx or
Xxxxx if any Governmental Entity shall have issued a final, non-appealable
order, decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the Merger.
(e) FAILURE TO OBTAIN REQUIRED VOTE OF XXXXXX STOCKHOLDERS. By either
Xxxxxx or Xxxxx if the Xxxxxx Special Meeting (including any adjournments and
postponements thereof) shall have been held and completed and this Agreement
shall not have been adopted by the required affirmative vote of the Xxxxxx
stockholders at such meeting; provided, however, that (i) a party shall not be
permitted to terminate this Agreement pursuant to this Section 7.1(e) if the
failure to obtain such stockholder approval is attributable to a failure on the
part of such party to perform any material obligation required to be performed
by it at or prior to the Effective Time, and (ii) Xxxxxx shall not be permitted
to terminate this Agreement pursuant to this Section 7.1(e) unless Xxxxxx shall
have made the payment(s) required to be made to Xxxxx pursuant to Section 7.3.
(f) AVERAGE CLOSING SHARE PRICE. By the Board of Directors of Xxxxxx,
if the Average Closing Share Price is below $40.00.
7.2 EFFECT OF TERMINATION. Upon termination of this Agreement pursuant to
this Article 7, this Agreement will be void and of no effect, other than the
obligation to pay the Termination Fee referred to in Section 7.3, if applicable,
and will result in no obligation of or liability to any party or their
respective directors, officers, employees, agents or stockholders, unless such
termination was the result of an intentional breach of any representation,
warranty or covenant in this Agreement in which case the party who breached the
representation, warranty or covenant will be liable to the other party for
damages.
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7.3 EXPENSES; TERMINATION FEES. Except as set forth in this Section 7.3 or
Section 5.12, all fees and expenses incurred in connection with this Agreement
and the transactions contemplated by this Agreement shall be paid by the party
incurring such expenses, whether or not the Merger is consummated; PROVIDED,
HOWEVER, that if this Agreement is terminated by Xxxxxx or Xxxxx pursuant to
Section 7.1(e), then Xxxxxx shall pay to Xxxxx, in cash at the time specified in
the next sentence, a nonrefundable fee in the amount equal to $580,000 (the
"Termination Fee"). In the case of termination of this Agreement by Xxxxxx
pursuant to Section 7.1(e), the Termination Fee shall be paid by Xxxxxx prior to
the time of such termination; and in the case of termination of this Agreement
by Xxxxx pursuant to Section 7.1(e), the fee referred to in the preceding
sentence shall be paid by Xxxxxx within two business days after such
termination.
ARTICLE 8
DEFINED TERMS
8.1 DEFINITIONS. In addition to the other defined terms used in this
Agreement, the following terms when capitalized have the meanings indicated.
"Adverse Claim" has the meaning assigned thereto in Section 8.102(a) of the
Uniform Commercial Code.
"Advertising Contracts" means advertising contracts associated with the
Faces.
"Advertising Revenues" means Xxxxxx'x outdoor advertising space revenue
(net of discounts, rebates, tradeouts, commercial sales, paper sales, production
revenue, agency commissions and revenue attributable to the advertising faces
(i) damaged or in need of repair that are listed in Schedule 3.9(5), and (ii)
that will be contributed to Xxxxxx Travel in the Contribution Agreement) under
the Advertising Contracts.
"Affiliate" will have the meaning ascribed by Rule 12b-2 promulgated under
the Exchange Act.
"Agreement" means this Agreement and Plan of Merger, including the exhibits
and schedules, as amended or otherwise modified from time to time.
"Applicable Law" means any statute, law, rule or any judgment, order, writ,
injunction or decree of any Governmental Entity to which a specified Person or
its property is subject.
"Average Closing Share Price" means the average of the closing sales prices
of a share of Xxxxx Common Stock as reported on the Nasdaq National Market
System for the 30 trading days ending on the last trading day immediately prior
to the Closing Date.
"Benefit Arrangement" means any employment, severance or similar contract,
or any other contract, plan, policy or arrangement (whether or not written)
providing for compensation, bonus, profit-sharing, stock option or other stock
36
related rights or other forms of incentive or deferred compensation, vacation
benefits, insurance coverage (including any self-insured arrangement), health or
medical benefits, disability benefits, severance benefits and post-employment or
retirement benefits (including compensation, pension, health, medical or life
insurance benefits), other than the Employee Plans, that is maintained,
administered or contributed to by the employer and covers any employee or former
employee of any member of the Xxxxxx Group.
"Bowlin Audited Financial Statements" means the audited consolidated
balance sheets and related consolidated statements of income, retained earnings
and cash flow, and the related notes thereto of Xxxxxx for the years ended
January 31, 1998, 1999 and 2000.
"Xxxxxx Financial Statements" means the Xxxxxx Audited Financial Statements
and the Xxxxxx Interim Financial Statements.
"Xxxxxx Group" means, collectively, Xxxxxx and its subsidiaries (if any).
"Xxxxxx Interim Financial Statements" means the unaudited balance sheet,
and the related unaudited statements of income, retained earnings and cash flows
of Xxxxxx for the six-month period ended July 31, 2000.
"Xxxxxx Latest Balance Sheet" means the latest balance sheet of Xxxxxx
included in the Xxxxxx Audited Financial Statements.
"Xxxxxx Long-Term Debt" means Xxxxxx'x long-term debt (excluding current
portions thereof) and any payments on employment contracts and non-competition
agreements to which Xxxxxx (or a predecessor in interest of Xxxxxx) is a party,
including, without limitation, contingent severance obligations.
"Xxxxxx Special Meeting" means the special meeting of the Xxxxxx
stockholders for the purpose of approving this Agreement.
"Business Day" means any day (other than Saturday or Sunday) on which
commercial banks in Baton Rouge, Louisiana and Albuquerque, New Mexico are open
for business.
"Closing" means the consummation of the Merger and the other transactions
contemplated by this Agreement.
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended.
"Employee Plan" means a plan or arrangement as defined in Section 3(3) of
ERISA, that (a) is subject to any provision of ERISA, (b) is maintained,
administered or contributed to by any member of the Xxxxxx Group and (c) covers
any employee or former employee of any member of the Xxxxxx Group.
37
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"Exchange Act" means the Securities and Exchange Act of 1934, as amended.
"GAAP" means accounting principles generally accepted in the United States.
"Governmental Entity" means any court or tribunal of competent jurisdiction
in any jurisdiction or any public, governmental or regulatory body, agency,
department, commission, board, bureau or other authority or instrumentality.
"Knowledge" means, when given to qualify or limit a representation or
warranty otherwise made by Xxxxxx or Xxxxx, respectively, the actual knowledge,
after reasonable inquiry, of the officers and directors of Xxxxxx or Xxxxx,
respectively.
"Xxxxx Audited Financial Statements" means the audited balance sheets and
related statements of income, retained earnings and cash flow, and the related
notes thereto of Lamar for the years ended December 31, 1997, 1998 and 1999.
"Lamar Financial Statements" means the Lamar Audited Financial Statements
and the Lamar Interim Financial Statements.
"Lamar Interim Financial Statements" means the unaudited balance sheet, and
the related unaudited statements of income, retained earnings and cash flows of
Lamar for the six-month period ended June 30, 2000.
"Lamar Latest Balance Sheet" means the latest balance sheet of Lamar
included in the Lamar Audited Financial Statements.
"Leases" means any (i) ground lease or (ii) office, warehouse or facility
lease (in each of (i) and (ii), whether or not reduced to writing), to which
Xxxxxx (or any predecessor in interest of Xxxxxx) is subject.
"Lease Expense" means Xxxxxx'x total lease expense for the real property
and structures upon which the Faces are located for the one-month period ended
December 31, 1999.
"Liens" means pledges, liens, defects, leases, licenses, equities,
conditional sales contracts, charges, claims, encumbrances, security interests,
easements, restrictions, chattel mortgages, mortgages or deeds of trust, of any
kind or nature whatsoever.
"Material Adverse Effect" means any change in, effect on, or circumstance
that, individually or in the aggregate, has had or would reasonably be likely to
have a material and adverse effect on the operations, business, prospects,
results of operations or financial condition of Lamar on a consolidated basis or
Xxxxxx.
38
"Material Contract" means any executory contract, agreement or other
understanding, whether or not reduced to writing, that is not cancellable within
30 days, to which Xxxxxx or its property is subject, which provides for future
payments to another Person by the relevant entity or entities of more than
$50,000 in the aggregate in any calendar year.
"Multiemployer Plan" means a plan or arrangement as defined in Section
4001(a)(3) and 3(37) of ERISA.
"Nasdaq" means the National Association of Securities Dealers Automated
Quotation System.
"Permitted Liens" means (i) Liens securing Xxxxxx'x credit facility, (ii)
Liens for Taxes not yet due and payable, and (iii) mechanics liens and similar
Liens incurred in the ordinary course of business that will not, in any case or
in the aggregate, materially detract from the value of the assets subject
thereto or cause a Material Adverse Effect with respect to Xxxxxx.
"Person" means an individual, firm, corporation, general or limited
partnership, limited liability company, limited liability partnership, joint
venture, trust, governmental authority or body, association, unincorporated
organization or other entity.
"Pre-Closing Periods" means all Tax periods ending at or before the Closing
Date and, with respect to any Tax period that includes but does not end at the
Closing Date, the portion of such period that ends at and includes the Closing
Date.
"Proceedings" means any suit, action, proceeding, dispute or claim before
or investigation by any Governmental Entity.
"Proxy Statement/Prospectus" means (a) the proxy statement of Xxxxxx to be
included in the Registration Statement for the purpose of soliciting proxies
from the Xxxxxx stockholders to vote in favor of the adoption of this Agreement
at the Xxxxxx Special Meeting, and (b) the prospectus of Lamar to be used for
the purpose of offering the Lamar Common Stock to be issued to the Xxxxxx
stockholders upon consummation of the Merger, together with any accompanying
letter to stockholders, notice of meeting and form of proxy.
"Registration Statement" means the registration statement on Form S-4,
including the Proxy Statement/Prospectus, to be filed by Lamar with the SEC for
the purpose, among other things, of registering the Lamar Common Stock which
will be issued to the Xxxxxx stockholders upon consummation of the Merger.
"Returns" means all returns, reports, estimates, declarations and
statements of any nature relating to, or required to be filed in connection
with, any Taxes, including information returns or reports with respect to backup
withholding and other payments to third parties.
"SEC" means the Securities and Exchange Commission.
39
"Securities Act" means the Securities Act of 1933, as amended, and all
rules and regulations promulgated thereunder.
"Spin-Off" means the series of transactions contemplated by Xxxxxx whereby
the assets and liabilities of Xxxxxx directly related to the operation of
Xxxxxx'x travel centers will be contributed to Xxxxxx Travel, and, upon
completion and satisfaction of all approvals and other requirements from the SEC
and all other necessary parties, Xxxxxx would declare and distribute as a
dividend to the stockholders of Xxxxxx, shares of Xxxxxx Travel proportionate to
each stockholder's current holdings of common stock in Xxxxxx.
"Spin-Off Date" means the date the shares of Xxxxxx Travel are distributed
to the shareholders of Xxxxxx.
"Taxes" means any federal, state, local or other taxes (including, without
limitation, income, alternative minimum, franchise, property, sales, use, lease,
excise, premium, payroll, wage, employment or withholding taxes), fees, duties,
assessments, withholdings or governmental charges of any kind whatsoever
(including interest, penalties and additions to tax).
"Working Capital" means the consolidated or combined current assets of the
relevant entity less the consolidated or combined current liabilities of Xxxxxx.
ARTICLE 9
MISCELLANEOUS
9.1 NOTICES. All notices under this Agreement must be in writing and will
be deemed to have been given upon receipt of delivery by: (a) personal delivery
to the designated individual; (b) certified or registered mail, postage prepaid,
return receipt requested; (c) a nationally recognized overnight courier service
(against a receipt therefor); or (d) facsimile transmission with confirmation of
receipt. All such notices must be addressed as follows or to such other address
as to which any party hereto may have notified the other in writing:
If to Lamar, to:
Xxxxx Advertising Company
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxx 00000
Attn: Xxxxx X. XxXxxxxx
Facsimile transmission no.: (000) 000-0000
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With a copy to:
Jones, Walker, Xxxxxxxx, Xxxxxxxxx Xxxxxxx & Xxxxxxx, L.L.P.
Xxxxx Xxxxx, Xxxx Xxxxxx Xxxxx
0000 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxx X. Xxxxxxx
Facsimile transmission no.: (000) 000-0000
If to Xxxxxx, to:
Xxxxxx Outdoor Advertising & Travel Centers Incorporated
000 Xxxxxxxxx X.X.
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxx Xxxxxx
Facsimile transmission no.: (000) 000-0000
With a copy to:
Squire, Xxxxxxx & Xxxxxxx L.L.P.
00 Xxxxx Xxxxxxx Xxx.,
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxxxxxxx X. Xxxxxxx
Facsimile transmission no.: (000) 000-0000
9.2 HEADINGS; GENDER. When a reference is made in this Agreement to a
section, exhibit or schedule, such reference will be to a section, exhibit or
schedule of this Agreement unless otherwise indicated. The table of contents and
headings contained in this Agreement are for reference purposes only and will
not affect in any way the meaning or interpretation of this Agreement. All
personal pronouns used in this Agreement will include the other genders, whether
used in the masculine, feminine or neuter gender, and the singular will include
the plural and vice versa, whenever and as often as may be appropriate.
9.3 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This Agreement
(including the documents, exhibits and instruments referred to herein) (a)
constitutes the entire agreement and supersedes all prior agreements, and
understandings and communications, both written and oral, among the parties with
respect to the subject matter hereof, and (b) is not intended to confer upon any
person other than the parties to this Agreement any rights or remedies under
this Agreement.
9.4 GOVERNING LAW. This Agreement will be governed and construed in
accordance with the laws of the State of Delaware without regard to any
applicable principles of conflicts of law.
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9.5 ASSIGNMENT. Neither this Agreement nor any of the rights, interests or
obligations under it will be assigned by any of the parties to this Agreement
(whether by operation of law or otherwise) without the prior written consent of
the other parties.
9.6 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by reason of any rule of law or
public policy, all other conditions and provisions of this Agreement will
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any adverse
manner to any party.
9.7 COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which will be deemed an original and all of which taken together will
constitute one and the same document.
9.8 AMENDMENT. This Agreement may only be amended by an instrument in
writing signed by each of the parties to this Agreement.
9.9 EFFECT OF SPIN-OFF ON CERTAIN XXXXXX REPRESENTATIONS AND WARRANTIES.
The parties acknowledge and agree that Xxxxxx has proposed, and Lamar has
accepted, that Xxxxxx will not be deemed to be in breach of this Agreement by
failing to disclose against the representations and warranties set forth in
Sections 3.11, 3.15, 3.17, 3.19, 3.20(a), 3.23(a) and 3.26 with respect to any
asset, liability, act, event or circumstance relating solely to (i) Xxxxxx'x
travel center line of business prior to the Spin-Off, and (ii) Xxxxxx Travel
after the Spin-Off; PROVIDED, HOWEVER, that to the extent that such
non-disclosure would cause a failure of the closing condition set forth in
Section 6.2(a), Lamar shall be entitled to assert such matter as a basis for not
closing the transactions contemplated herein.
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IN WITNESS WHEREOF, the parties to this Agreement have caused it to be
signed by their respective duly authorized officers as of the date first above
written.
XXXXX ADVERTISING COMPANY
By:
--------------------------------------
Name: Xxxxx X. Xxxxxx, Xx.
Title: President, Chief Executive Officer
LAMAR SOUTHWEST ACQUISITION CORPORATION
By:
--------------------------------------
Name: Xxxxx X. Xxxxxx, Xx.
Title: President, Chief Executive Officer
XXXXXX OUTDOOR ADVERTISING &
TRAVEL CENTERS INCORPORATED
By:
--------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Chairman of the Board, Chief
Executive Officer and President
43
