EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
dated as of November 22, 1996
by and among
Revere Holding Corp.;
Xxxxxxx Xxxxx Capital Appreciation Partnership
No. B-XXVII, L.P.;
ML Offshore LBO Partnership No. B-XXVII;
ML IBK Positions, Inc.;
MLCP Associates L.P. No. IV;
Xxxxxxx Xxxxx KECALP L.P. 1994;
The Other Stockholders
Listed on
the Signature Pages Hereto;
and
Universal Outdoor, Inc.
TABLE OF CONTENTS
PAGE
ARTICLE I
Certain Definitions
-------------------
Section 1 Definitions 1
ARTICLE II
Sale of Securities; Closing
---------------------------
Section 1 Purchase and Sale 7
Section 2 Time and Place of Closing 7
ARTICLE III
Representations and Warranties of the Company
---------------------------------------------
Section 1 Incorporation; Authorization; etc. 8
Section 2 Capitalization; Structure 9
Section 3 Financial Statements 10
Section 4 Undisclosed Liabilities 11
Section 5 Absence of Certain Changes 11
Section 6 Properties 12
Section 7 Litigation; Orders 13
Section 8 Compliance with Laws; Permits 13
Section 9 Material Contracts 14
Section 10 Taxes.. 15
Section 11 ERISA........ 16
Section 12 Environmental Matters 18
Section 13 Transactions with Affiliates 20
Section 14 Brokers, Finders, etc. 20
Section 15 Patents, Trademarks and Copyrights 21
Section 16 Insurance 21
Section 17 Labor Agreements 21
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ARTICLE IV
Representations and Warranties of the Sellers
---------------------------------------------
Section 1 Authority and Related Matters . . . . . . . . . . . . . . . 22
Section 2 Brokers, Finders, etc. . . . . . . . . . . . . . . . . . . 24
ARTICLE V
Represenatatios and Warranties of Buyer
---------------------------------------
Section 1 Incorporation; Authorization; etc. 25
Section 2 Brokers, Finders, etc. 26
Section 3 Approvals, Other Authorizations,
Consents, Reports, etc. 26
Section 4 Acquisition of Securities for Investment. 26
Section 5 Litigation 26
Section 6 Financial Capability 27
ARTICLE VI
Covenants of the Company, Sellers and Buyer
-------------------------------------------
Section 1 Investigation of Business; Access to
Properties and Records 27
Section 2 Efforts; Obtaining Consents 28
Section 3 Further Assurances 29
Section 4 Conduct of Business 30
Section 5 Public Announcements 32
Section 6 Non-Solicitation of Employees 33
Section 7 Stockholders Agreement 33
Section 8 Management Notes 33
Section 9 Company Option Plan 33
Section 10 Repayment of Indebtedness 34
Section 11 Directors' and Officers'
Indemnification 34
Section 12 No Shop 35
Section 13 Schedule Delivery 35
Section 14 Working Capital 35
ARTICLE VII
Conditions of Buyer's Obligation to Close
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Section 1 Representations and Warranties;
Covenants 36
Section 2 Filings; Consents; Waiting Periods 37
Section 3 No Injunction 37
Section 4 Resignations of Directors 37
Section 5 Share Certificates 37
Section 6 Evidence of Indebtedness 37
Section 7 Working Capital 37
Section 8 Officer's Certificate 37
Section 9 Company Affidavit 38
ARTICLE VIII
Conditions to Sellers' Obligation to Close
------------------------------------------
Section 1 Representations and Warranties;
Covenants 38
Section 2 Filings; Consents; Waiting Periods 38
Section 3 No Injunction 38
Section 4 Purchase Price 39
ARTICLE IX
Termination
-----------
Section 1 Termination . . . . . . . . . . . . . . . . . . . 39
Section 2 Procedure and Effect of Termination . . . . . . . 39
ARTICLE X
Miscellaneous
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Section 1 Survival Periods . . . . . . . . . . . . . . . . . 40
Section 2 Counterparts . . . . . . . . . . . . . . . . . . . 40
Section 3 Governing Law . . . . . . . . . . . . . . . . . . 40
Section 4 Entire Agreement . . . . . . . . . . . . . . . . . 40
Section 5 Expenses . . . . . . . . . . . . . . . . . . . . . 41
Section 6 Notices . . . . . . . . . . . . . . . . . . . . . 41
Section 7 Successors and Assigns . . . . . . . . . . . . . . 42
Section 8 Amendments and Waivers . . . . . . . . . . . . . . 43
Section 9 No Implied Representation . . . . . . . . . . . . 43
Section 10 Construction of Certain Provisions . . . . . . . . 43
Section 11 Headings; Definitions . . . . . . . . . . . . . . 44
Section 12 Interpretation . . . . . . . . . . . . . . . . . . 44
Section 13 Reasonable Consent Required. . . . . . . . . . . . 44
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SCHEDULES
Schedule 2.1 Stock and Option Ownership of Revere Holding Corp.
Schedule 3.1 Conflicts; Company Filings
Schedule 3.2 Subsidiaries
Schedule 3.3 Financial Statements
Schedule 3.4 Liabilities
Schedule 3.5 Conduct of Business
Schedule 3.6 Encumbrances
Schedule 3.7 Litigation
Schedule 3.8 Permits
Schedule 3.9 Material Contracts
Schedule 3.10 Tax Matters
Schedule 3.11 Employee Matters
Schedule 3.12 Environmental Matters
Schedule 3.13 Transactions with Affiliates
Schedule 4.1 Seller Filings
Schedule 5.1 Conflicts
Schedule 5.3 Buyer Filings
Schedule 6.4(b) Conduct of Business
Schedule 7.2 Buyer's Filings; Consents
Schedule 8.2 Sellers' Filings; Consents
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "AGREEMENT"), dated as of
November 22, 1996, is by and among Revere Holding Corp., a Delaware
corporation (the "COMPANY"); Xxxxxxx Xxxxx Capital Appreciation Partnership
No. B-XXVII, L.P., ML Offshore LBO Partnership No. B-XXVII, ML IBK Positions,
Inc., MLCP Associates L.P. No. IV, Xxxxxxx Xxxxx KECALP L.P. 1994
(collectively, the "ML INVESTORS"); Xxxx Xxxx, Xxxxxx Xxxxx, Xxxxx Xxxxxx,
Xxxxxx Xxxxxx, Xxxxxx XxXxxxxxx, Xxxxxx Xxxxxxx, Xxxxxxxx XxXxxxxx, Xxxxxxx
Xxxxxx, Xxxxx Xxxxx, Xxxx Xxxxx, Xxxx Xxxxxx, Xxxxx Xxxxx, Jr., Xxxxxx
Xxxxxx, Xxxx Xxxxxxxxxxxx, Xxxxxxx Xxxxxx, Xxxxxxx Xxxxx and Xxxxx Xxxxxxxx
(collectively, the "MANAGEMENT INVESTORS" and, together with the ML
Investors, "SELLERS"); and Universal Outdoor, Inc., an Illinois corporation
("BUYER").
WHEREAS, Sellers, collectively, own all of the outstanding
Securities (as defined herein) of the Company and all of the outstanding
options to purchase Securities of the Company; and
WHEREAS, Buyer desires to purchase from Sellers, and Sellers desire
to sell to Buyer, 100% of the outstanding Securities upon the terms and
subject to the conditions set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1 DEFINITIONS. As used in this Agreement the following terms
shall have the following respective meanings:
"AFFILIATE" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or
indirect common control with such first Person. A Person shall be deemed to
control another Person if such first Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting
securities, by contract or otherwise.
"AFFILIATED GROUP" shall have the meaning set forth in Section
3.10(a) hereof.
"AGREEMENT" shall have the meaning set forth in the Preamble hereof.
"BALANCE SHEET" shall have the meaning set forth in Section 3.3
hereof.
"BUSINESS CONDITION" shall mean, with respect to any Person, the
business, properties, assets, results of operations or condition (financial
or otherwise) of such Person.
"BUYER" shall have the meaning set forth in the Preamble hereof.
"CLAIMS" shall have the meaning set forth in Section 3.12 hereof.
"CERCLA" shall have the meaning set forth in Section 3.12 hereof.
"CLOSING" shall mean the consummation of the transactions
contemplated by Section 2.1 of this Agreement.
"CLOSING DATE" shall mean the later of (i) the third business day
after expiration or termination of all waiting periods prescribed under the
HSR Act, and (ii) the date on which the conditions set forth in Articles VII
and VIII shall be satisfied or duly waived; or if Sellers and Buyer mutually
agree on a different date, the date upon which they have mutually agreed.
"CODE" shall have the meaning set forth in Section 3.10(a) hereof.
"COMMON STOCK" shall mean the Common Stock, par value $.01 per
share, of the Company.
"COMPANY" shall have the meaning set forth in the Preamble hereof.
"COMPANY PROPERTY" shall have the meaning set forth in Section 3.12
hereof.
"CREDIT AGREEMENT" shall mean the Credit Agreement, dated as of
December 20, 1994, by and among the Company, Revere Acquisition Corp., the
several lenders from time to time party thereto and Canadian Imperial Bank of
Commerce, New York Agency, as Agent, as amended.
"DECEMBER 31 FINANCIAL STATEMENTS" shall have the meaning set forth
in Section 3.3 hereof.
"ENCUMBRANCES" shall have the meaning set forth in
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Section 3.12 hereof.
"ENVIRONMENTAL CLAIMS" shall have the meaning set forth in Section
3.12 hereof.
"ENVIRONMENTAL LAW" shall have the meaning set forth in Section 3.12
hereof.
"ERISA" shall have the meaning set forth in Section 3.11(a) hereof.
"ERISA AFFILIATE" shall have the meaning set forth in Section
3.11(a) hereof.
"FINANCIAL STATEMENTS" shall have the meaning set forth in Section
3.3 hereof.
"GAAP" shall have the meaning set forth in Section 3.3 hereof.
"GOVERNMENT CONSENTS" shall have the meaning set forth in Section
6.2(a) hereof.
"GOVERNMENT FILINGS" shall have the meaning set forth in Section
6.2(a) hereof.
"HAZARDOUS MATERIALS" shall have the meaning set forth in Section
3.12 hereof.
"HSR ACT" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"INDEBTEDNESS" shall mean (i) all indebtedness of such Person for
borrowed money, (ii) the face amount of all letters of credit issued for the
account of the Company or its Subsidiaries and, without duplication, all
drafts thereunder, (iii) all net obligations of the Company or its
Subsidiaries under interest rate swap agreements, any interest rate cap
agreement, any interest rate collar agreement or other similar agreement or
arrangement designed to protect the Company or its Subsidiaries against
fluctuations in interest rates, and (iv) any guarantee by the Company or its
Subsidiaries of any Indebtedness, leases, dividends or other material payment
obligations of any other Person (other than the Company and its Subsidiaries).
"LIABILITIES" shall have the meaning set forth in
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Section 3.4 hereof.
"MAJORITY SELLERS" shall mean Sellers holding in excess of 50% of
the outstanding Securities.
"MANAGEMENT INVESTORS" shall have the meaning set forth in the
Preamble hereof.
"MANAGEMENT NOTE" shall mean each Non-Recourse Secured Promissory
Note, dated December 20, 1994, executed by a Management Investor indicated on
Schedule 2.1 in favor of the Company, as amended.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on
the Business Condition of the Company and its Subsidiaries considered as one
enterprise or a material impairment or delay of the Stock Purchase.
"MATERIAL LEASES" shall have the meaning set forth in Section 3.9(a)
hereof.
"XXXXXXX XXXXX" shall have the meaning set forth in Section 3.14
hereof.
"ML INVESTORS" shall have the meaning set forth in the Preamble
hereof.
"MLCP" shall mean Xxxxxxx Xxxxx Capital Partners, Inc., a Delaware
corporation.
"MULTIEMPLOYER PENSION PLAN" shall have the meaning set forth in
Section 3.11(a) hereof.
"NATIONAL" shall have the meaning set forth in Section 3.10(a)
hereof.
"NON-VOTING COMMON STOCK" shall mean the Non-Voting Common Stock,
par value $.01 per share, of the Company.
"OBLIGATIONS" shall have the meaning given in the Credit Agreement.
"OPTION" shall mean any outstanding option to purchase shares of
Common Stock granted under the Option Plan.
"OPTION PLAN" shall mean the Management Stock Option Plan of the
Company, dated December 20, 1994, as amended.
"PBGC" shall have the meaning set forth in Section
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3.11(a) hereof.
"PERMITS" shall have the meaning set forth in Section 3.8 hereof.
"PERSON" shall mean any individual, corporation, partnership,
limited liability company, joint venture, trust, unincorporated organization,
or other form of business or legal entity.
"PLANS" shall have the meaning set forth in Section 3.11(a) hereof.
"REAL PROPERTIES" shall have the meaning set forth in Section 3.6
hereof.
"RELEASE" shall have the meaning set forth in Section 3.12 hereof.
"REVOLVING CREDIT COMMITMENTS" shall have the meaning given in the
Credit Agreement.
"SECURITIES" shall mean the outstanding shares of Common Stock and
the Non-voting Common Stock, collectively.
"SELLERS" shall have the meaning set forth in the Preamble hereof.
"SEPTEMBER 30 FINANCIAL STATEMENTS" shall have the meaning set forth
in Section 3.3 hereof.
"SHARE PURCHASE PRICE" shall mean the amount obtained by dividing
(i) $130,000,000 (x) minus the sum of (A) the amount of principal (including
prepayment penalties, if any) outstanding immediately prior to the Closing
under the Credit Agreement, under the note to Xxxx Xxxxx dated March 27, 1996
in the original principal amount of $1,645,500, and under any additional
indebtedness for money borrowed outstanding as of the Closing incurred by the
Company and its Subsidiaries after the date hereof, (B) Accrued Interest (as
calculated in accordance with GAAP) outstanding as of the Closing in excess
of $331,000, (C) the amount of capitalized leases as of the Closing
calculated in accordance with GAAP, (D) bonus payments payable to the Chief
Executive Officer and the Chief Financial Officer of the Company in
connection with the consummation of the transactions contemplated hereby
pursuant to Section 4(b) of each of their employment agreements listed on
Schedule 3.11
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and the cash severance obligations payable to the Chief Executive Officer of
the Company pursuant to Section 7(b) of his employment agreement listed on
Schedule 3.11, in each case, that remain payable following the Closing, (E)
$4,000,000, (F) any unpaid cash amounts required as of the Closing to be paid
for the remainder of the term under the Revere Consulting Group Consulting
Agreement listed on Schedule 3.11 and (G) the fees of Xxxxxxx Xxxxx and
Wachtell, Lipton, Xxxxx & Xxxx payable in connection with the consummation of
the transactions contemplated hereby that remain payable following the
Closing, and (y) plus the sum of (1) the Company's and its Subsidiaries' cash
and cash equivalents (including such amounts held in escrow and bonds posted
relating to potential tax liabilities) as of the Closing and (2) any amounts
to be set-off pursuant to Section 6.8, by (ii) the total number of Securities
issued and outstanding as of the Closing (as set forth on the Updated
Capitalization Schedule after giving effect to any theretofore properly
exercised Options).
"STOCK PLEDGE AGREEMENT" shall mean each Stock Pledge Agreement,
dated December 20, 1994, by and between the Company and a Management Investor
who has executed a Management Note, as amended.
"STOCK PURCHASE" shall mean the acquisition by Buyer of all of the
outstanding Securities, and the payments contemplated by Section 6.9(a) in
respect of Options, as of the Closing Date, as contemplated by this Agreement.
"STOCKHOLDERS' AGREEMENT" shall mean the Stockholders' Agreement,
dated as of December 20, 1994, by and among the Company, the management
investors listed in Schedule 1 thereto and the stockholders listed in
Schedule 2 thereto, as amended.
"SUBSIDIARY" shall mean each subsidiary of the Company listed on
Schedule 3.2 hereto.
"TAX RETURN" shall have the meaning set forth in Section 3.10(c)
hereof.
"TAXES" shall have the meaning set forth in Section 3.10(b) hereof.
"TRANSACTION TAXES" shall have the meaning set forth in Section 10.5
hereof.
"UPDATED CAPITALIZATION SCHEDULE" shall have the
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meaning set forth in Section 6.13 hereof.
"WARN ACT" shall have the meaning set forth in Section 3.17(b)
hereof.
"WELFARE BENEFIT PLANS" shall have the meaning set forth in Section
3.11(a) hereof.
"WITHHOLDING TAX" shall have the meaning set forth in Section 6.9(b)
hereof.
"WORKING CAPITAL" shall have the meaning set forth in Section 6.14.
"WORKING CAPITAL SCHEDULE" shall have the meaning set forth in
Section 6.14.
ARTICLE II
SALE OF SECURITIES; CLOSING
Section 1 PURCHASE AND SALE. (a) On the basis of the
representations, warranties, covenants and agreements and subject to the
satisfaction or waiver of the conditions set forth herein, at the Closing the
Sellers shall sell, assign and transfer, and the Buyer shall purchase from
the Sellers, all of the Securities. In payment for the Securities,
simultaneously with the delivery by Sellers of certificates representing such
Securities, with appropriate stock powers attached, properly signed, Buyer
will pay to each Seller the Share Purchase Price per share of Common Stock
and per share of Non-voting Common Stock (as set forth on Schedule 2.1 hereto
and giving effect to the exercise of any Options after the date hereof and
prior to the Closing) held by each such Seller as of the Closing (net of any
amounts to be set-off pursuant to Section 6.8 hereof), in addition to making
the payment to the Sellers contemplated by Section 6.9(a) hereof. All
payments shall be made on the Closing Date by wire transfer of immediately
available funds to the accounts to be designated by each Seller in writing to
Buyer at least one day prior to the Closing Date. If the Closing does not
occur, all payments shall be repaid, all certificates shall be returned to
the Person possessing such certificates prior to the Closing, and the
transactions shall be deemed not to have occurred.
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Section 2 TIME AND PLACE OF CLOSING. The Closing shall take place
on the Closing Date at 10:00 A.M., New York City time, at the offices of
Wachtell, Lipton, Xxxxx & Xxxx, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As an inducement to Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, the Company hereby
represents and warrants to Buyer as follows:
Section 1 INCORPORATION; AUTHORIZATION; ETC. (a) Each of the
Company and its Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization. Each of the Company and its Subsidiaries has all requisite
corporate power and authority to own, lease and operate its properties and
assets and to carry on its business as it is now being conducted, and is in
good standing and is duly qualified to transact business in each jurisdiction
in which the nature of property owned or leased by it or the conduct of its
business requires it to be so qualified, except where the failure to have
such power or authority, to be in good standing or to be duly qualified to
transact business, would not, individually or in the aggregate, have a
Material Adverse Effect. The copies of the certificate of incorporation and
by-laws (in each case, together with all amendments thereto) of the Company
and each of its Subsidiaries which have been previously delivered or made
available to Buyer are true, correct and complete.
(b) The Company has all requisite corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement, the performance of the Company's obligations
hereunder and the consummation of the transactions contemplated hereby have
been duly and validly authorized by the Board of Directors of the Company and
no other corporate proceedings or actions on the part of the Company, its
Board of Directors or stockholders are necessary therefor. The execution,
delivery and performance
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of this Agreement and the consummation of the transactions contemplated
hereby will not (i) violate any provision of the certificate of incorporation
or by-laws of the Company or any of its Subsidiaries, (ii) except as
disclosed in Schedule 3.1 hereto, and except as provided in the Credit
Agreement, violate or conflict with any provision of, or be an event that is
(or with the passage of time will result in) a violation or conflict of, or
result in the termination or acceleration of or entitle any party to
terminate or accelerate (whether after the giving of notice or lapse of time
or both) any obligation under, or constitute a default (with or without
notice or lapse of time, or both), or result in (or with notice or the
passage of time would result in) the imposition of any lien upon or the
creation of a security interest in any of the Company's or any of its
Subsidiaries' assets or properties pursuant to, any mortgage, lien, lease,
agreement, instrument, order, arbitration award, judgment or decree to which
the Company or any of its Subsidiaries is a party or by which any of them or
their assets are bound, or (iii) except as described in Section 3.1(c) hereof
or as listed on Schedule 3.1 hereto, violate or conflict with any law, order,
judgment, injunction, decree, ordinance, regulation or ruling of any
governmental authority to which the Company or any of its Subsidiaries is
subject, except for those that, in the case of clauses (ii) and (iii) would
not, individually or in the aggregate, have a Material Adverse Effect. This
Agreement has been duly executed and delivered by the Company, and, assuming
the due execution hereof by Buyer, this Agreement constitutes the legal,
valid and binding obligation of the Company, enforceable against the Company
in accordance with its terms, except for (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws relating
to or affecting the rights of creditors generally and (ii) the effect of
equitable principles of general application.
(c) No registrations, filings, applications, notices, consents,
approvals, orders, qualifications, authorizations or waivers are required to
be made, filed, given or obtained by the Company or any of its Subsidiaries
(or, by reason of facts pertaining to the Company or its Subsidiaries, on the
part of Buyer) with, to or from any Persons (including governmental
authorities) in connection with the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby, except for (i)
those set forth on Schedule 3.1, (ii) filings under the HSR
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Act, (iii) those that become applicable solely as a result of the specific
regulatory status of Buyer or its Affiliates, or (iv) those that the failure
to make, file, give or obtain would not, individually or in the aggregate,
have a Material Adverse Effect.
Section 2 CAPITALIZATION; STRUCTURE. (a) The authorized capital
stock of the Company consists of (i) 5,000,000 shares of Common Stock of
which (v) 3,500,000 shares are issued and outstanding as of the date hereof,
(w) 150,000 shares are held in the Company's treasury, (x) 360,000 shares
have been reserved for issuance upon exercise of Options, (y) 331,964 shares
are subject to Options outstanding as of the date hereof and (z) 172,707.29
shares are issuable upon conversion of shares of Non-voting Common Stock; and
(ii) 173,459 shares of Non-voting Common Stock, of which (a) 172,707.29
shares are issued and outstanding as of the date hereof and (b) 750.86 shares
are held in the Company's treasury. All of the outstanding shares of Common
Stock and Non-voting Common Stock are validly issued, fully paid and
nonassessable and have not been issued in violation of any preemptive rights.
Schedule 3.2 contains a true and complete list of all entities in which more
than 50% of the voting stock or other voting equity interests are owned,
directly or indirectly, by the Company. Except as otherwise set forth on
Schedule 3.2 hereto, all of the outstanding shares of capital stock or other
equity interests of each of the Company's Subsidiaries have been validly
issued and are fully paid and nonassessable and have not been issued in
violation of any preemptive rights and are owned by the Company and/or one or
more of its Subsidiaries free and clear of all mortgages, pledges, liens,
claims, charges, security interests, options, hypothecations, easements,
restrictions (on transfer, voting or otherwise) or conditional sale or other
like restriction agreements, or other encumbrances ("ENCUMBRANCES"). Except
as set forth in this Section 3.2 and as set forth on Schedule 3.2 hereto,
there are no outstanding options, warrants, calls, commitments, securities,
agreements or other rights of any kind to acquire, or any securities which
upon conversion, exchange or exercise would require or give any Person the
right to require the issuance, sale or transfer of, or obligations to issue,
sell or transfer, shares of capital stock of any class of, or other debt
obligations of or equity interests in, the Company or of any of its
Subsidiaries which have been issued, granted or entered into by the Company
or any of its Subsidiaries. Except for the Subsidiaries or as set forth on
Schedule 3.2 hereto, none of the Company or any Subsidiary owns any capital
stock or eq-
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uity interest in any other entity.
(b) Schedule 2.1 sets forth the amount of each class of capital stock
of the Company held by each Seller and, with respect to the Options, the
exercise price and number of shares of capital stock of the Company issuable
upon exercise thereof. None of the Options listed on Schedule 2.1 have
expired as of the date hereof.
Section 3 FINANCIAL STATEMENTS. Set forth on Schedule 3.3 are true
and complete copies of (i) the audited consolidated balance sheet of the
Company and its Subsidiaries as of December 31, 1995, and the related
consolidated statements of operations, shareholders' equity and cash flows
for the year ended December 31, 1995 (including the notes thereto) (the
"DECEMBER 31 FINANCIAL STATEMENTS"), together with the Report of Independent
Accountants thereon; and (ii) the unaudited consolidated balance sheet of the
Company and its Subsidiaries as of September 30, 1996 (the "BALANCE SHEET")
and the unaudited consolidated statement of operations of the Company and its
Subsidiaries for the nine months ended September 30, 1996 (collectively, with
the Balance Sheet, the "SEPTEMBER 30 FINANCIAL STATEMENTS" and together with
the December 31 Financial Statements, the "FINANCIAL STATEMENTS"). The
Financial Statements are in accordance, in all material respects, with the
books and records of the Company and its Subsidiaries as of the dates and for
the periods indicated, have been prepared, in all material respects, in
conformity with the practices consistently applied by the Company and its
Subsidiaries in the immediately preceding fiscal periods and present fairly
the consolidated financial position, cash flows and results of operations of
the Company and its Subsidiaries, for the periods or as of the dates set
forth therein, in each case in conformity with United States generally
accepted accounting principles consistently applied ("GAAP"), subject, in the
case of the unaudited financial statements, to normal year-end audit
adjustments, the effect of which, in the aggregate, will not be material.
Section 4 UNDISCLOSED LIABILITIES. Except as set forth on Schedule
3.4, neither the Company nor any of its Subsidiaries has any outstanding
claims, liabilities or indebtedness (whether accrued, absolute, contingent or
otherwise, and whether due or to become due) ("LIABILITIES"), except (i)
Liabilities disclosed in the September 30 Financial Statements; (ii) amounts
of indebtedness outstanding under
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the Credit Agreement; (iii) Liabilities incurred after September 30, 1996 in
the ordinary course of business; and (iv) Liabilities that, individually or
in the aggregate, would not have a Material Adverse Effect.
Section 5 ABSENCE OF CERTAIN CHANGES. Except as disclosed in the
September 30 Financial Statements or on Schedule 3.5, since December 31,
1995: (a) the Company and its Subsidiaries have conducted their respective
businesses only in the ordinary course of business and there has been no
material adverse change in the Business Condition of the Company and its
Subsidiaries considered as one enterprise except for (i) any change resulting
from general economic, financial or market conditions and (ii) any change
resulting from conditions or circumstances generally affecting the businesses
in which the Company and/or its Subsidiaries operate, (b) there has been no
physical damage, destruction or loss that would, after taking into account
any insurance recoveries payable in respect thereof, have a Material Adverse
Effect, and (c) neither the Company nor any of its Subsidiaries has taken any
action of the type described in paragraphs (i), (iii), (iv), (vi), (vii),
(ix), (x), (xi), (xii), (xiii), (xv) or (xvi) of Section 6.4(b) or agreed,
committed or resolved to take any such actions.
Section 6 PROPERTIES. With the exception of properties disposed of
in the ordinary course consistent with past practice since the date of the
Balance Sheet, except as set forth on Schedule 3.6, the Company or one of its
Subsidiaries has good and marketable title to, or holds by valid and existing
lease or license, free and clear of all Encumbrances, each piece of real and
personal property capitalized on or included in the Balance Sheet and each
piece of real and personal property acquired by the Company or any of its
Subsidiaries since the date of the Balance Sheet that would, had it been
acquired prior to such date, be capitalized on or included in the Balance
Sheet, except in any of the foregoing cases for such imperfections of title
or Encumbrances as (i) are reflected or reserved against in the Balance
Sheet, (ii) arise out of taxes or general or special assessments not in
default and payable without penalty or interest or the validity of which are
being contested in good faith by appropriate proceedings, or (iii) would not,
individually or in the aggregate, have a Material Adverse Effect. The
Company and the Subsidiaries own or otherwise have the right to use all
property (real, personal or intangible) now used in the operation of their
business or the use of which is required for the operation of their business
as operated at the date of this Agreement,
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except for such property, the failure of which to own or have the right to
use would not, individually or in the aggregate, have a Material Adverse
Effect. The properties subject to Material Leases and the material owned
real properties of the Company and its Subsidiaries are collectively referred
to herein as the "REAL PROPERTIES." None of the Company or any Subsidiary
has received any written notice advising it of any material general or
special assessment relating to any of the Real Properties. There are no
material structural defects in any of the buildings, structures or other
improvements constituting part of the Real Properties nor any material
defects in any system supporting such building, structure or improvement,
which in any such case would have a Material Adverse Effect. Except as
disclosed in Schedule 3.6, to the knowledge of the Company, no condemnation
or eminent domain proceeding against any Real Property is pending or
threatened. Except as set forth in Schedule 3.6, to the knowledge of the
Company, no other party to any Material Lease has stated in writing that it
intends to terminate its relationship thereunder.
Section 7 LITIGATION; ORDERS. Except as set forth on Schedule 3.7,
there are no lawsuits, actions, administrative, arbitration or other
proceedings or governmental investigations pending or, to the knowledge of
the Company, threatened against the Company or any of its Subsidiaries, or to
the knowledge of the Company, the Sellers, that would, individually or in the
aggregate, have a Material Adverse Effect or which, as of the date hereof,
seeks to restrain or prohibit or otherwise challenge the consummation,
legality or validity of the transactions contemplated hereby. Except as set
forth on Schedule 3.7, there are no judgments or outstanding orders,
injunctions, decrees, stipulations or awards (whether rendered by a court or
administrative agency, or by arbitration) against the Company or any of its
Subsidiaries or any of their respective properties, assets or businesses, or
to the knowledge of the Company, the Sellers, that would, individually or in
the aggregate, have a Material Adverse Effect.
Section 8 COMPLIANCE WITH LAWS; PERMITS. Each of the Company and its
Subsidiaries is in compliance with, and, to the knowledge of the Company, is
not under governmental investigation with respect to and has not been
threatened in writing to be charged with or given notice in writing that
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the continued operation of any assets does or will violate, applicable laws,
rulings, injunctions, ordinances, regulations, orders, judgments and decrees
of any federal, state or local governmental authority, except for such
failures to comply or violations that would not, individually or in the
aggregate, have a Material Adverse Effect. Except as set forth on Schedule
3.8, (i) the Company and its Subsidiaries hold, own and possess all
governmental, regulatory and other filings, licenses, permits, approvals,
registrations, consents, franchises and concessions (collectively, "PERMITS")
as are necessary for the ownership or occupancy of the property and assets
and conduct of the business of the Company and its Subsidiaries as currently
conducted, except for such Permits which the failure to hold, own and possess
would not, individually or in the aggregate, have a Material Adverse Effect;
(ii) the Permits are valid, in full force and effect, except for any failures
to be valid or in full force and effect which would not, individually or in
the aggregate, have a Material Adverse Effect; (iii) there are no proceedings
pending or, to the knowledge of the Company, complaints or petitions by
others, or threatened proceedings, challenging or revoking such Permits, that
would, individually or in the aggregate, have a Material Adverse Effect; and
(iv) the Company and its Subsidiaries are in compliance with their respective
obligations under such Permits, except for such non-compliance which,
individually or in the aggregate, would not have a Material Adverse Effect.
Section 9 MATERIAL CONTRACTS. (a) Except as set forth on Schedule
3.9 hereto, none of the Company or any of its Subsidiaries is a party to any
oral or written contract, commitment or agreement (i) that, other than with
respect to Material Leases, obligates the Company or any Subsidiary to pay or
entitles the Company or any Subsidiary to receive an amount, from and after
the date hereof, of $250,000 or more annually; (ii) restricting the Company's
or any Subsidiary's ability to conduct the outdoor or mall advertising
business generally in any geographic location (including applicable
non-competes or similar agreements); (iii) that provides for the lease,
sublease, license or other similar rights of possession or occupancy of real
property (as tenant, occupier or possessor) used primarily for billboard
sites, pursuant to which the current net annual rent payable by the Company
or any Subsidiary currently exceeds $50,000 (the "MATERIAL LEASES"); or (iv)
evidences indebtedness of the Company or any Subsidiary for money borrowed
(whether incurred, assumed, guaranteed or secured by any asset) and, with
respect to all such contracts, commitments and agreements, except as set
forth on Schedule 3.9 hereto, neither
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the Company nor any of its Subsidiaries, nor, to the knowledge of the Company,
any other party to any such contract, commitments and agreements is, in breach
thereof or default thereunder and there does not exist under any provision
thereof, to the knowledge of the Company, any event that, with the giving of
notice or the lapse of time or both, would constitute such a breach or default,
except for such breaches, defaults and events as to which requisite waivers or
consents have been obtained or which would not, individually or in the
aggregate, have a Material Adverse Effect. Complete and correct copies of each
contract, commitment and agreement set forth on Schedule 3.9 have been furnished
or made available to Buyer, and, to the knowledge of the Company, all of such
contracts, commitments and agreements are valid, binding and in full force and
effect except for such failures to be so valid, binding and in full force and
effect which, individually or in the aggregate, would not a Material Adverse
Effect.
(b) Pursuant to the terms of the Credit Agreement and the Revolving
Credit Commitments or other applicable governing documents, the Obligations and
any other Indebtedness of the Company and its Subsidiaries thereunder may be
pre-paid by Buyer on the Closing Date pursuant to Section 6.10, subject to the
notice requirements contemplated thereby.
Section 10 TAXES. (a) The Company and the Subsidiaries have duly
filed with the appropriate taxing authorities all Tax Returns required to be
filed by or with respect to the Company, the Subsidiaries or any member of an
affiliated group of corporations within the meaning of Section 1504 of the
Internal Revenue Code of 1986, as amended (the "CODE"), filing consolidated
returns which include, or have included, the Company and its Subsidiaries (an
"AFFILIATED GROUP") other than those Tax Returns which the failure to file would
not have a Material Adverse Effect. Such Tax Returns are true, correct and
complete in all material respects. Except as set forth on Schedule 3.10, the
Company and the Subsidiaries (i) have paid in full and on time, or have made
adequate provision on the Balance Sheet for, all Taxes of the Company, the
Subsidiaries or any member of an Affiliated Group shown to be due on such Tax
Returns, (ii) have made adequate provision on the Balance Sheet for unpaid Taxes
as required by GAAP, and (iii) have not given or requested with respect to the
Company, its Subsidiaries or any member of an Affiliated Group any waivers of
statutes of
-15-
limitations in connection with any Taxes or Tax Returns. There are no
material liens for Taxes upon the assets of the Company or of the
Subsidiaries except for statutory liens for current taxes not yet due and
liens which, individually or in the aggregate, would not have a Material
Adverse Effect. Except as set forth on Schedule 3.10, neither the Company
nor any of the Subsidiaries has any unpaid deficiency or assessment from any
taxing authority with respect to Taxes or Tax Returns of the Company or any
of the Subsidiaries or any member of an Affiliated Group. Neither the
Company nor the Subsidiaries (i) except for the agreements, plan and
arrangements listed on Schedule 3.11, has made payments, is obligated to make
any payments, or is a party to any agreement that under certain circumstances
could obligate them to make any payments that will not be deductible under
Code Section 280G, (ii) (A) has been a member of any Affiliated Group other
than the Affiliated Group of which Company is the common parent corporation
and the Affiliated Group of which Revere National Corporation ("NATIONAL")
was the common parent corporation; or (B) is subject to liability for Taxes
of any other person (other than Taxes of the Company or the Subsidiaries),
including, without limitation, liability arising from the application of
Treasury Regulation Section 1.1502-6 (or any similar provision of Tax law),
(iii) is a party to any Tax allocation or sharing agreement, (iv) has filed a
consent under Code Section 341(f) concerning collapsible corporations, or
(v) except as set forth in Schedule 3.10, has any deferred intercompany
income or gains or excess loss accounts within the meaning of Treasury
Regulation Section 1.1502 ET SEQ. (or any similar provisions of state law).
Since the acquisition by an indirect subsidiary of the Company of National,
neither the Company, nor any of the Subsidiaries has undergone or will
undergo an "ownership change" within the meaning of Code Section 382(g)(1)
(excluding any ownership change which occurs as a result of the acquisition
of all of the capital stock of the Company by Buyer under this Agreement).
Except as set forth on Schedule 3.10, neither the Company nor any of its
Subsidiaries has engaged in any transaction that was intended to qualify
under Code Section 1031(a). Except as set forth on Schedule 3.10 (which
shall set forth the nature of the proceeding, the type of return, a detailed
explanation of each adverse adjustment or deficiency proposed, asserted or
assessed and the amount thereof, and the taxable year in question), no
adverse adjustment or deficiency for any Taxes has been proposed, asserted or
assessed against the Company or any of its Subsidiaries (or any member of the
Affiliated Group for which the Company or its Subsidiaries could be liable).
-16-
(b) For the purposes of this Agreement, "TAXES" shall mean all taxes,
charges, fees, imposts, levies or other assessments, including, without
limitation, all net income, gross income, sales, use, franchise, profits,
service, gross receipts, capital, ad valorem, value added, transfer, inventory,
capital stock, license, social security, unemployment, severance, stamp,
recording, occupation, withholding, payroll, employment, excise, or property
taxes and estimated taxes, water, rent and sewer service charge custom duties,
fees, assessments or charges of any kind whatsoever together with interest and
any penalties, fines, additions to tax or additional amounts with respect
thereto required to be paid prior to the Closing Date with respect to all
taxable periods or portions of taxable periods ending on or before the Closing
Date.
(c) For purposes of this Agreement, "TAX RETURN" shall mean any
return, declaration, report, estimate, schedule, information return or other
document (including any related or supporting information) with respect to
Taxes.
Section 11 ERISA. (a) Neither the Company nor any of its
Subsidiaries nor any trade or business, whether or not incorporated (an "ERISA
AFFILIATE") that together with the Company would be deemed a "single employer"
within the meaning of Section 4001(b) of ERISA maintains or contributes to any
"employee pension benefit plan" (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) covering
employees or former employees of the Company or its Subsidiaries ("PLANS"),
except for the Plans listed on Schedule 3.11. Neither the Company nor any of
the Subsidiaries has any formal plan or commitment to create any additional Plan
or modify or change any existing Plan that would affect any current or former
employee of the Company or any of its Subsidiaries. Except as set forth on
Schedule 3.11, to the knowledge of the Company and the Sellers: (i) with
respect to each Plan that is neither a "multiemployer plan," as such term is
defined in Section 3(37) of ERISA (a "MULTIEMPLOYER PENSION PLAN") nor an
"employee welfare benefit plan" (as defined in Section 3(1) of ERISA) (a
"WELFARE BENEFIT PLAN") that is identified as a multiemployer plan on Schedule
3.11, (A) such Plans are in material compliance with all applicable laws,
including the applicable provisions of ERISA and the Code, (B) neither the
Company nor any of its Subsidiaries nor any ERISA Affiliate has incurred any
liability to the Pension Benefit Guaranty
-17-
Corporation ("PBGC") nor any other liability under Title IV of ERISA with
respect to such Plans other than premiums due to the PBGC (which premiums
have been paid when due) and (C) such Plans are qualified under Section
401(a) of the Code; and (ii) with respect to any Multiemployer Pension Plan:
(A) neither the Company, any of its Subsidiaries nor any ERISA Affiliate has
made or suffered a "complete withdrawal" or a "partial withdrawal," as such
terms are respectively defined in Sections 4203 and 4205 of ERISA, (B) no
event has occurred that presents a material risk of a partial withdrawal, (C)
neither the Company, any of its Subsidiaries nor any ERISA Affiliate has any
contingent liability under Section 4204 of ERISA, and no circumstances exist
that present a material risk that any such plan will go into reorganization,
and (D) the aggregate withdrawal liability of the Company, its Subsidiaries
and the ERISA Affiliates, computed as if a complete withdrawal by the
Company, its Subsidiaries and the ERISA Affiliates had occurred under each
such Plan on the date hereof, would not have a Material Adverse Effect. No
Plan that is not a Multiemployer Pension Plan is subject to Title IV of ERISA
and neither the Company, any of its Subsidiaries nor any ERISA Affiliate has
maintained such a Plan during the past six years. Schedule 3.11 also lists
each Welfare Benefit Plan maintained by the Company or its Subsidiaries
covering employees of the Company or its Subsidiaries, and as to such
employee welfare benefit plans that are not identified as multiemployer plans
on Schedule 3.11, either the Company or one of the Subsidiaries has filed all
reports required to be filed by it with the Internal Revenue Service or with
the Department of Labor or the PBGC under applicable provisions of ERISA and
the Code. With respect to each of the Plans that is neither a Multiemployer
Pension Plan nor a Welfare Benefit Plan identified on Schedule 3.11 as a
multiemployer plan, the Company has heretofore delivered to Buyer true and
complete copies of each of the following documents: (i) a copy of the Plan
(including all amendments thereto); (ii) a copy of the most recent annual
report, if required under ERISA; (iii) a copy of the most recent Summary Plan
Description; and (iv) the most recent determination letter received from the
Internal Revenue Service with respect to each Plan that is intended to be
qualified under Section 401 of the Code.
(b) Neither the Company nor any of its Subsidiaries has any liability
for life, health, medical or other welfare benefits to former employees or
beneficiaries or dependents thereof, except for health continuation coverage as
required by Section 4980B of the Code or Part 6 of Title I of ERISA.
-18-
(c) Schedule 3.11 lists each: (i) agreement with any director,
executive officer or other key employee of the Company or any of its
Subsidiaries (A) the benefits of which are contingent, or the terms of which are
materially altered, upon the occurrence of a transaction involving the business
of the nature of any of the transactions contemplated by this Agreement, (B)
providing any remaining term of employment in excess of one year or (C)
providing severance benefits or other benefits after the termination of
employment of such director, executive officer or key employee and (ii)
agreement, plan or arrangement under which any person may receive payments from
the Company or any of its Subsidiaries that may be subject to the tax imposed by
Section 4999 of the Code or included in the determination of such person's
"parachute payment" under Section 280G of the Code.
(d) Except as set forth on Schedule 3.11, there are no pending,
anticipated or, to the knowledge of the Sellers, and the Company, threatened
claims by or on behalf of any Plan, by any employee or beneficiary covered under
any such Plan, or otherwise involving any such Plan (other than routine claims
for benefits).
Section 12 ENVIRONMENTAL MATTERS. Except as disclosed in Schedule
3.12 and except as would not have a Material Adverse Effect, (a) there have been
no Releases of Hazardous Materials at any time on any Company Property, or, to
the knowledge of the Company, any property adjoining or adjacent to any Company
Property, (b) the Company and each of its Subsidiaries are in compliance in all
respects with all Environmental Laws and the requirements of any permits issued
under such Environmental Laws with respect to any Company Property, (c) there
are no pending or, to the knowledge of the Company, threatened Environmental
Claims against the Company or any of its Subsidiaries or any Company Property,
(d) there are not any underground storage tanks located on any Company Property,
except in material compliance with Environmental Laws, (e) neither the Company
nor any of its Subsidiaries has caused or permitted its operations to be used to
generate, manufacture, transport, treat, store, handle, dispose or process
Hazardous Materials or other dangerous or toxic substances, or solid wastes
except in compliance with Environmental Laws, and (f) neither the Company nor
any Subsidiary has received any written notice or request for information from
any governmental authority or other Person alleging that it is a
-19-
potentially responsible party at any Superfund site or analogous site subject
to listing, investigation or remediation under another Environmental Law.
The Company has made available to Buyer any significant environmental study,
audit, or test relating to significant Company Properties prepared, to the
knowledge of the Chief Executive Officer and the Chief Financial Officer of
the Company, by the Company since December 22, 1994. The Company and its
Subsidiaries have complied (i) with their obligations under the Remediation
Agreement, dated December 22, 1994, between Revere National Corporation of
Pennsylvania and the New Jersey Department of Environmental Protection, as
amended by the Amendment to Remediation Agreement, dated April 13, 1995, and
(ii) with the requirements of the New Jersey Industrial Site Recovery Act
with respect to the matters set forth in the third paragraph of Item (a) on
Schedule 3.12, except as would not, individually or in the aggregate, have a
Material Adverse Effect.
For purposes of this Agreement, the following terms shall have the
following meanings: (A) "COMPANY PROPERTY" means any real property and
improvements owned, operated or leased by the Company or any of its
Subsidiaries; (B) "HAZARDOUS MATERIALS" means (i) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment
that contain dielectric fluid containing levels of polychlorinated biphenyls,
and radon gas and (ii) any chemicals, materials or substances defined as
"solid wastes," "hazardous wastes," "hazardous substances," "hazardous
materials," "extremely hazardous wastes," "restricted hazardous wastes,"
"toxic substances," "toxic pollutants," or words of similar import, under any
applicable Environmental Law; (C) "ENVIRONMENTAL LAW" means any federal,
state or local statute, law, rule, regulation, ordinance or code or judicial
or administrative order or consent decree, relating to the environment,
health, safety or Hazardous Materials, including without limitation the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, 42 U.S.C. Section 9601 ET SEQ. ("CERCLA"); the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901 ET SEQ.;
the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251
ET SEQ.; the Toxic Substances Control Act, 15 U.S.C. Section 2601 ET SEQ.;
the Clean Air Act, 42 U.S.C. Section 7401 ET SEQ.; the Safe Drinking Water
Act, 42 U.S.C. Section 3808 ET SEQ.; Occupational Safety and Health Act, 29
U.S.C. Section 651; (D) "ENVIRONMENTAL CLAIMS" means any and all
administrative, regulatory or judicial actions, suits, claims, liens,
-20-
written notices of noncompliance or violation, notice letters pursuant to
Section 104(e) of CERCLA or similar state laws, or proceedings relating to
any Environmental Law (for purposes of this subclause (D), "CLAIMS") or any
permit issued under any such Environmental Law, including, without
limitation, (i) any and all Claims by governmental or regulatory authorities
for enforcement, cleanup, removal, response or remedial actions or damages
pursuant to any applicable Environmental Law and (ii) any and all Claims by
any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from Hazardous
Materials or arising from alleged injury or threat of injury to health,
safety or the environment; and (E) "RELEASE" means disposing, discharging,
injecting, spilling, leaking, leaching, dumping, emitting, escaping,
emptying, seeping, placing and the like, into or upon any land or water or
air, or otherwise entering into the environment.
Section 13 TRANSACTIONS WITH AFFILIATES. Except with respect to
those agreements and arrangements listed in Schedule 3.13 or Schedule 3.11,
transactions between the Company and its Subsidiaries, and pursuant to
at-will employment arrangements, neither the Company nor any of its
Subsidiaries is a party to any material transaction or series of material
related transactions, whether or not in the ordinary course of business, with
any Affiliate of the Company or its Subsidiaries or with any Seller.
Section 14 BROKERS, FINDERS, ETC. Except for the services of
Xxxxxxx Xxxxx & Co. ("XXXXXXX XXXXX"), the Company has not employed, and is
not subject to any valid claim of, any broker, finder, consultant or other
intermediary in connection with the transactions contemplated by this
Agreement or the sale process undergone by the Company and its financial
advisors leading to this transaction who might be entitled to a fee or
commission in connection with such transactions. The Company is solely
responsible for any payment, fee or commission that may be due to Xxxxxxx
Xxxxx in connection with such transactions.
Section 15 PATENTS, TRADEMARKS AND COPYRIGHTS. The Company and the
Subsidiaries possess all patents, patent licenses, trade names, trademarks,
service marks, brand marks, brand names, copyrights, know-how, formulas and
other proprietary and trade rights necessary for the conduct of their respective
businesses as now conducted, except for
-21-
those the absence of which would not, individually or in the aggregate,
result in a Material Adverse Effect. The use by the Company or any
Subsidiary of such rights in the conduct of its respective business as now
conducted does not violate the rights of any third party, except for such
violations as would not, individually or in the aggregate, have a Material
Adverse Effect.
Section 16 INSURANCE. There is no claim pending for an amount in
excess of $100,000 nor has there been a claim made for an amount in excess of
$100,000 since January 1, 1995 under any policy of insurance or fidelity bond of
any kind or nature covering the Company or any Subsidiary as to which coverage
has been questioned, denied or disputed (in the case of pending claims), or
denied (in the case of past claims not currently pending), by the underwriters
of such policies or bonds or, in the case of pending claims, in respect of which
such underwriters have reserved their rights, and all such policies are in full
force and effect, except as would not have a Material Adverse Effect. The
Company and the Subsidiaries have complied with the terms and conditions of all
such policies and bonds, and such policies will remain in effect immediately
following Closing, in either case, except as would not have a Material Adverse
Effect.
Section 17 LABOR AGREEMENTS. (a) Except to the extent set forth in
Schedule 3.11, (i) there is no labor strike, material dispute, slowdown,
stoppage or lockout actually pending, or, to the knowledge of the Company,
threatened against or affecting the business of the Company or any of its
Subsidiaries and, since January 1, 1995, there has not been any such action;
(ii) to the knowledge of the Company, no union claims to represent the employees
of the Company or any of its Subsidiaries; (iii) none of the employees of the
Company or any of its Subsidiaries is represented by any labor organization and
the Company has no knowledge of any union organizing activities among the
employees of the Company or any of its Subsidiaries currently in progress or
occurring; (iv) there is no grievance arising out of any collective bargaining
agreement or other labor grievance procedure which, if adversely determined,
would have a Material Adverse Effect; and (v) to the knowledge of the Company,
neither the Company nor any of its Subsidiaries has received written notice of
the intent of any federal, state or local governmental agency responsible for
the enforcement of labor or employment laws or regulations to conduct an
investigation with respect to or relating to the Company or any of its
Subsidiaries.
-22-
(b) Since January 1, 1995, neither the Company nor any of its
Subsidiaries has effectuated (i) a "plant closing" (as defined in the Worker
Adjustment and Restraining Notification Act (the "WARN ACT")) affecting any site
of employment or one or more facilities or operating units within any site of
employment or facility of the Company or any of its Subsidiaries; or (ii) a
"mass layoff" (as defined in the WARN Act) affecting any site of employment or
facility of the Company or any of its Subsidiaries; nor has the Company or any
of its Subsidiaries been affected by any transaction or engaged in layoffs or
employment terminations sufficient in number to trigger application of any
similar state or local law or regulation.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE SELLERS
As an inducement to Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, each Seller severally (as to
himself, herself or itself and not as to any other Seller) represents and
warrants, as of the date hereof and as of the Closing Date, to Buyer as follows:
Section 1 AUTHORITY AND RELATED MATTERS. (a) Such Seller has all
requisite power to execute and deliver this Agreement and to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
With respect to any Seller that is a corporation or a partnership, the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, including without limitation the Stock
Purchase, by such Seller have been duly and validly authorized by the Board
of Directors or other governing body of such Seller and no other corporate
or similar proceedings on the part of such Seller, and, as the case may be,
its Board of Directors or other governing body or its stockholders or
partners are necessary therefor. This Agreement has been duly executed and
delivered by such Seller, and, assuming the due execution hereof by each of
the Company, Buyer and the other Sellers, this Agreement constitutes the
legal, valid and binding obligation of such Seller, enforceable against such
Seller in accordance with its terms, except for (i) the
-23-
effect of any applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws relating to or affecting the rights of creditors generally
and (ii) the effect of equitable principles of general application. With
respect to any Seller that is a corporation or a partnership, such Seller, to
the extent applicable, is duly organized, validly existing and in good
standing under the laws of its state of organization.
(b) Such Seller is the record and beneficial owner of the aggregate
number of shares of Common Stock or Non-voting Common Stock, as the case may be,
listed opposite its respective name on Schedule 2.1 hereto. In addition, if
such Seller is designated on Schedule 2.1 hereto as holding Options, such Seller
will, at the Closing, also be the record and beneficial owner of that number of
shares of Common Stock equal to that number of Options listed opposite such
Seller's name on such Schedule, other than with respect to any Options such
Seller does not exercise and which are terminated pursuant to Section 6.9
hereof. Except for this Agreement and the transactions contemplated hereby, and
except as disclosed on Schedules 3.2 and 2.1, there are no agreements,
arrangements, warrants, options, puts, calls, rights or other commitments or
understandings of any character to which such Seller is a party or by which any
of his, her or its respective assets is bound and relating to the issuance,
sale, purchase, redemption, conversion, exchange, registration, voting or
transfer of any shares of Common Stock, Non-voting Common Stock or other capital
stock of the Company or other securities convertible into capital stock of the
Company. Upon consummation of the Stock Purchase at the Closing, as
contemplated by this Agreement, good title to the Securities to be sold by such
Seller will be delivered to Buyer, free and clear of any Encumbrances.
(c) Except as described in Section 4.1(d) hereof, neither the
execution and delivery by such Seller of this Agreement nor the consummation by
such Seller of the transactions contemplated hereby will violate, conflict with,
result in (or with the passage of time would result in) a breach of the terms,
conditions or provisions of, or constitute a default (with or without notice or
lapse of time, or both), an event of default or an event creating rights of
acceleration, amendment, termination or cancellation or a loss of rights under,
or result in (or with the passage of time or notice would result in) the
creation or imposition of any Encumbrance upon any of such Seller's Securities
or any of the assets or properties of such Seller under any certificate of
incorporation, by-laws, trust
-24-
agreement, partnership agreement, the Stockholders Agreement or certificate
of partnership or other constitutive documents of such Seller, any note,
instrument, agreement, mortgage, lease, license, franchise, Permit or
judgment, order, award or decree to which such Seller is a party (other than
the Management Notes and Stock Pledge Agreements) or by which such Seller or
any Securities of such Seller are bound, or any statute, other law or
regulatory provision affecting such Seller or any Securities of such Seller.
(d) No registrations, filings, applications, notices, consents,
approvals, orders, qualifications, authorizations or waivers are required to
be made, filed, given or obtained by such Seller (or, by reason of facts
pertaining to such Seller, on the part of Buyer) with, to or from any Persons
(including governmental authorities) in connection with the execution and
delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for (i) those set forth on Schedule 4.1, (ii)
filings under the HSR Act, (iii) those that become applicable solely as a
result of the specific regulatory status of Buyer or its Affiliates, or (iv)
those that the failure to make, file, give or obtain would not, individually
or in the aggregate, impair or delay the consummation of the Stock Purchase
by such Seller.
Section 2 BROKERS, FINDERS, ETC. Except as set forth in Section
3.14, such Seller has not employed, and is not subject to any valid claim of,
any broker, finder, consultant or other intermediary in connection with the
transactions contemplated by this Agreement or the sale process undergone by
such Seller and its financial advisors leading to this transaction who might be
entitled to a fee or commission in connection with such transactions. The
Company is solely responsible for any payment, fee or commission that may be due
to Xxxxxxx Xxxxx in connection with the transactions contemplated hereby.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to the Company and each of the Sellers to enter into
this Agreement and to consummate the transactions contemplated hereby, Buyer
hereby represents
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and warrants to Sellers as follows:
Section 1 INCORPORATION; AUTHORIZATION; ETC. Buyer is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Illinois. Buyer has all requisite corporate power to
execute and deliver this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement, the performance of Buyer's obligations hereunder
and the consummation of the transactions contemplated hereby have been duly
and validly authorized by the Board of Directors of Buyer and no other
corporate proceedings or actions on the part of Buyer, its Board of Directors
or stockholders are necessary therefor. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby will not (i) violate any provision of the certificate of
incorporation or by-laws or similar organizational instrument of Buyer, (ii)
except as disclosed in Schedule 5.1 hereto, violate any provision of, or be
an event that is (or with the passage of time will result in) a violation of,
or result in the acceleration of or entitle any party to accelerate (whether
after the giving of notice or lapse of time or both) any obligation under, or
result in the imposition of any lien upon or the creation of a security
interest in any of Buyer's assets or properties pursuant to, any mortgage,
lien, lease, agreement, instrument, order, arbitration award, judgment or
decree to which Buyer is a party or by which any of its assets are bound, or
(iii) violate or conflict with any other law, order, judgment or ruling of
any governmental authority to which Buyer is subject, that, in the case of
clauses (ii) and (iii), would, individually or in the aggregate, have a
material adverse effect on the Business Condition of Buyer, or would impair
or delay consummation of the Stock Purchase. This Agreement has been duly
executed and delivered by Buyer, and, assuming the due execution hereof by
the Company and each of the Sellers, this Agreement constitutes the legal,
valid and binding obligation of Buyer, enforceable against Buyer in
accordance with its terms, except for (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws relating
to or affecting the rights of creditors generally and (ii) the effect of
equitable principles of general application.
Section 2 BROKERS, FINDERS, ETC. Buyer has not employed, and is not
subject to the valid claim of, any broker, finder, consultant or other
intermediary in connection with the transactions contemplated by this Agreement
who
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might be entitled to a fee or commission from any Seller or the Company in
connection with such transactions.
Section 3 APPROVALS, OTHER AUTHORIZATIONS, CONSENTS, REPORTS, ETC.
No registrations, filings, applications, notices, consents, approvals,
orders, qualifications or waivers are required to be made, filed, given or
obtained by Buyer (or, by reason of facts pertaining to the Buyer, on the
part of the Company or any Seller) with, to or from any Persons (including
governmental authorities) in connection with the consummation of the Stock
Purchase, except for (i) those set forth on Schedule 5.3, (ii) filings under
the HSR Act, or (iii) those that the failure to make, file, give or obtain
would not, individually or in the aggregate, either have a material adverse
effect on the Business Condition of Buyer or impair or delay consummation of
the Stock Purchase by Buyer.
Section 4 ACQUISITION OF SECURITIES FOR INVESTMENT. Buyer has such
knowledge and experience in financial and business matters that it is capable
of evaluating the merits and risks of its purchase of the Securities. Buyer
confirms that the Company and the Sellers have made available to Buyer the
opportunity to ask questions of the officers and management employees of the
Company and to acquire additional information about the business and
financial condition of the Company and its Subsidiaries. Buyer is acquiring
the Securities for investment and not with a view toward or for sale in
connection with any distribution thereof, or with any present intention of
distributing or selling the Securities. Buyer agrees that the Securities may
not be sold, transferred, offered for sale, pledged, hypothecated or
otherwise disposed of without registration under the Securities Act of 1933,
as amended, except pursuant to an exemption from such registration available
under such Act.
Section 5 LITIGATION. There are no pending or, to the knowledge of
Buyer, threatened actions, suits or proceedings, either at law or in equity,
which would have a material adverse impact on Buyer's Business Condition or
otherwise impair or delay consummation of the Stock Purchase.
Section 6 FINANCIAL CAPABILITY. Buyer will have on the Closing
Date and immediately prior to the Closing, funds sufficient to consummate the
transactions contemplated hereby.
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ARTICLE VI
COVENANTS OF THE COMPANY, SELLERS AND BUYER
Section 1 INVESTIGATION OF BUSINESS; ACCESS TO PROPERTIES AND
RECORDS. (a) After the date hereof, the Company and its Subsidiaries shall
afford to representatives of Buyer reasonable access to their respective
offices, properties, officers, employees, accountants, auditors and other
representatives, books and records during normal business hours in order that
Buyer may continue to have the opportunity to investigate the affairs of the
Company and its Subsidiaries, including access to the properties, plants and
facilities of the Company and its Subsidiaries to conduct environmental
studies to the extent reasonably requested by Buyer; PROVIDED, HOWEVER, that
such investigation shall not unreasonably disrupt the personnel and
operations of the Company or any of its Subsidiaries. If, at or prior to the
Closing, any party hereto discovers any fact or circumstance that would
constitute a breach of any representation, warranty, covenant or agreement
contained in this Agreement or any circumstance or condition that upon
Closing would constitute such a breach, the parties hereto covenant that they
will promptly so inform the other parties hereto in writing.
(b) Any information provided to Buyer or its representatives
pursuant to this Agreement shall be held by Buyer and its representatives in
accordance with, and shall be subject to the terms of, the Confidentiality
Agreement dated September 16, 1996 by and between the Company and Universal
Outdoor Holdings, Inc., which is hereby incorporated in this Agreement as
though fully set forth herein. Following the Closing each Seller shall hold
in confidence all knowledge and information of a secret or confidential
nature with respect to the business of the Company and the Subsidiaries and
shall not disclose or publish the same without the consent of the Buyer,
except to the extent that such information shall have become public knowledge
other than by breach of the Agreement by such Seller or except as otherwise
required by law.
(c) Buyer agrees to (i) hold all of the books and records of the
Company and its Subsidiaries existing on the Closing Date and not to destroy
or dispose of any thereof for a period of six (6) years from the Closing Date
or such longer time as may be required by law, and thereafter, if it
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desires to destroy or dispose of such books and records, to offer first in
writing at least 60 days prior to such destruction or disposition to
surrender them to MLCP (or MLCP's successors or assigns) and (ii) following
the Closing Date to afford MLCP (or MLCP's successors or assigns), its
accountants and counsel, during normal business hours, full access to such
books, records and other data and to the employees of Buyer and the Company
and any of its Subsidiaries to the extent that such access may be reasonably
required for any legitimate purpose at no cost to MLCP (other than for
reasonable out-of-pocket expenses); PROVIDED, HOWEVER, that nothing herein
shall limit any of MLCP's or any Seller's rights of discovery.
(d) The Company agrees to provide such financial and other relevant
information as Buyer may reasonably request with respect to the Company and
its Subsidiaries in connection with, among other things, capital market
transactions and any disclosure obligations of the Buyer or its Affiliates
under federal securities and other applicable law and that, upon reasonable
advance written notice to the Company, such financial and other relevant
information may be disclosed by Buyer and its Affiliates to the extent
reasonably appropriate, including in connection with capital market
transactions, filings required pursuant to federal securities and other
applicable law.
Section 2 EFFORTS; OBTAINING CONSENTS. (a) Subject to the terms
and conditions herein provided, the Company, each of the Sellers and Buyer
each agrees to use its reasonable best efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement and to cooperate with the other
in connection with the foregoing, including using its reasonable best efforts
(i) to obtain all necessary waivers, consents and approvals from other
parties to material loan agreements, leases and other contracts, (ii) to
obtain all consents, approvals and authorizations that are required to be
obtained under any applicable law or regulation (the "GOVERNMENT CONSENTS"),
(iii) to lift or rescind any injunction or restraining order or other order
adversely affecting the ability of the parties hereto to consummate the
transactions contemplated hereby, (iv) to effect all necessary registrations
and filings as promptly as practical including, but not limited to, filings
under the HSR Act and
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submissions of information requested by governmental authorities (the
"GOVERNMENT FILINGS"), and (v) to fulfill all conditions to this Agreement. The
Company, each of the Sellers and Buyer further covenant and agree, with respect
to a threatened or pending preliminary or permanent injunction or other order,
decree or ruling or statute, rule, regulation or executive order that would
adversely affect the ability of the parties hereto to consummate the
transactions contemplated hereby, to use their respective reasonable best
efforts to prevent the entry, enactment or promulgation thereof, as the case may
be.
(b) The Company and the Sellers, on the one hand, and Buyer, on the
other hand, shall promptly inform the other of any material communication from
the United States Federal Trade Commission, the Department of Justice or any
other domestic or foreign government or governmental or multinational authority
regarding any of the transactions contemplated hereby. If any such party or any
Affiliate thereof receives a request for additional information or documentary
material from any such government or authority with respect to the transactions
contemplated hereby, then such party will endeavor in good faith to make, or
cause to be made, as soon as reasonably practicable and after consultation with
the other parties, an appropriate response in compliance with such request.
Buyer will advise the Company and Sellers promptly in respect of any
understandings, undertakings or agreements (oral or written) which Buyer
proposes to make or enter into with the Federal Trade Commission, the Department
of Justice or any other domestic or foreign government or governmental or
multinational authority in connection with the transactions contemplated hereby.
(c) All filing fees required in connection with the application for or
prosecution of the Government Consents and the Government Filings shall be borne
by the Buyer. All other fees, expenses and disbursements (including the costs
of preparation of any such filings) incurred in connection with the Government
Consents and the Government Filings shall be borne by the Buyer if incurred by
or on behalf of the Buyer and by the Company if incurred by or on behalf of the
Company or the Sellers.
Section 3 FURTHER ASSURANCES. The Company, Sellers and Buyer agree
that, from time to time, whether before, at or after the Closing Date, each of
them will execute and deliver such further instruments of conveyance and
transfer and take such other action as may be necessary
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to carry out the purposes and intents of this Agreement.
Section 4 CONDUCT OF BUSINESS. (a) Subject to Section 6.4(b) hereof,
the Company shall, and shall cause each of its Subsidiaries to, operate and
carry on its business only in the ordinary course consistent with past practice,
except as otherwise contemplated by this Agreement or consented to in writing by
Buyer. In furtherance and not in limitation of the foregoing, the Company
shall, and shall cause each of its Subsidiaries to, use reasonable efforts
consistent with good business practice to (i) keep and maintain its respective
assets and properties in normal operating condition and repair, and (ii)
maintain the business organization of the Company and the Subsidiaries intact
and preserve the goodwill of the suppliers, contractors, licensors, employees,
customers, distributors and others having business relations with them.
(b) Except as contemplated by this Agreement or as set forth in
Schedule 6.4(b), the Company shall not, and shall not cause or allow any
Subsidiary to, without the prior approval in writing of Buyer:
(i) amend its certificate of incorporation or by-laws;
(ii) issue or agree to issue (by the issuance or granting of options,
warrants or rights to purchase Common Stock or Non-voting Common Stock or
other capital stock of the Company or otherwise) any shares of Common Stock
or Non-voting Common Stock or other capital stock of the Company, any
securities exchangeable for or convertible into Common Stock or Non-voting
Common Stock or other capital stock of the Company, or any other
securities, other than pursuant to the exercise of outstanding Options,
PROVIDED that each Seller who holds Options agrees that no Options may be
exercised in the 5 business days immediately preceding and including the
Closing Date;
(iii) split, combine or reclassify any shares of the Common Stock
or Non-voting Common Stock or other capital stock of the Company or
declare, set aside or pay any dividends or make any other distributions
(whether in cash, stock or other property) in respect of the Common Stock
or the Non-voting Common Stock or other capital stock of the Company;
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(iv) redeem, purchase or otherwise acquire for any consideration
(other than pursuant to the terms of the Stockholders' Agreement) (A) any
outstanding shares of its capital stock or securities carrying the right to
acquire, or which are convertible into or exchangeable or exercisable for,
with or without additional consideration, such stock, (B) any other
securities of the Company or any Subsidiary, or (C) any interest in any of
the foregoing;
(v) (A) incur any indebtedness for borrowed money which exceeds
$1,000,000 in the aggregate, except (1) Revolving Credit Loans (as such
term is defined in the Credit Agreement) consistent with past practice or
(2) pursuant to the terms of the Stockholders' Agreement or otherwise in
the ordinary course of business, or (B) amend, supplement or otherwise
modify any of the terms of the Credit Agreement, or any other instrument or
agreement evidencing indebtedness for borrowed money in excess of
$1,000,000 of the Company or its Subsidiaries;
(vi) make any acquisition or disposition (or series of related
acquisitions or dispositions) of stock or assets of any entity in excess of
$250,000;
(vii) merge or consolidate with any corporation or other entity,
or adopt a plan of complete or partial liquidation, dissolution,
bankruptcy, restructuring, recapitalization or other reorganization;
(viii) transfer, sell or dispose of any material assets other than
in the ordinary course of business;
(ix) make any investment in any entity that is not a Subsidiary,
except as required by non-waivable provisions of applicable law or pursuant
to any existing agreements set forth on Schedule 6.4(b);
(x) relinquish any material right or privilege of the Company or its
Subsidiaries without either adequate consideration or a reasonable business
purpose;
(xi) enter into, amend or supplement any employment, severance,
termination or other similar agreement or employee benefit plan, including
any of the Plans, or make any changes in the compensation, severance or
termination payable or to become payable to any of its
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officers, directors, employees, agents or consultants (other than planned
annual increases in the rates of compensation to employees who are not
officers or directors of the Company in the ordinary course of business);
(xii) mortgage, pledge, or otherwise voluntarily encumber any
material part of its assets, tangible or intangible, other than pursuant to
the Credit Agreement;
(xiii) make any material and adverse changes in its customary
method of operations, including marketing and pricing policies and
maintenance of business premises, fixtures, furniture and equipment and its
accounting policies;
(xiv) modify, amend or cancel any of its existing material leases
or enter into any material contracts, agreements, leases or understanding,
other than in the ordinary course of business;
(xv) enter into, amend or supplement any collective bargaining
agreement, except as required by law, in which case such entrance,
amendment or supplement shall be subject to the reasonable approval of
Buyer;
(xvi) pay, discharge or otherwise satisfy any material claim,
liability or obligation (including to the Sellers) except in the ordinary
course of business and consistent with past practice;
(xvii) make any Tax election or settle or compromise any income tax
liability, in the case of any of the foregoing, material to the business,
financial condition or results of operations of the Company or its
Subsidiaries, without the reasonable consent of Buyer, which will not be
unreasonably withheld;
(xviii) enter into any transaction, arrangement or agreement with
any Seller or any Affiliate of the Sellers, other than those entered into
in the ordinary course of business and on arms-length terms; or
(xix) agree, commit or resolve to do or authorize any of the
foregoing.
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Section 5 PUBLIC ANNOUNCEMENTS. No press release or announcement
concerning the transactions contemplated hereby shall be issued by the Company,
Buyer or any Seller without the prior consent of Buyer and the Company, except
as such release or announcement may be required by law, rule or regulation, in
which case the party required to issue the release or announcement shall allow
Buyer and the Company reasonable time to comment on such release or announcement
in advance of its issuance.
Section 6 NON-SOLICITATION OF EMPLOYEES. If this Agreement is
terminated, Buyer will not, and if the Closing occurs, the Sellers will not, for
a period of three years thereafter, without the prior written approval of the
Company, solicit any person who is an employee of the Company or any of its
Subsidiaries, at the date hereof or at any time hereafter that precedes such
termination or Closing (as the case may be), to terminate his or her employment
with the Company or any of its Subsidiaries. Buyer and each of the Sellers
agree that any remedy at law for any breach by it of this Section 6.6 would be
inadequate, and the Company would be entitled to injunctive relief in such a
case. If it is ever held that the restriction placed on Buyer or the Sellers by
this Section 6.6 is too onerous and is not necessary for the protection of the
Company, Buyer and each of the Sellers agree that any court of competent
jurisdiction may impose lesser restrictions which such court may consider to be
necessary or appropriate to properly protect the Company.
Section 7 STOCKHOLDERS AGREEMENT. In connection with the
transactions contemplated by this Agreement, the Company and the Sellers agree
that the Tag-Along Rights (as such term is defined in the Stockholders'
Agreement) and the rights of first refusal set forth in Section 2.3 of the
Stockholders' Agreement shall not apply to the consummation of the Stock
Purchase, and that, effective as of, and contingent upon, the consummation of
the Stock Purchase, the Stockholders' Agreement is hereby amended to provide
that it shall terminate as of the Closing.
Section 8 MANAGEMENT NOTES. A true and complete list of each
Management Investor that has executed a Management Note in favor of the Company,
and the principal amount outstanding under such Management Note as of the date
of this Agreement, are set forth in Schedule 2.1 under the column "Management
Notes Outstanding". Buyer, the Company and each such Management Investor agree
that at the Closing
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the following will occur simultaneously: (i) each Management
Note shall be cancelled, the indebtedness represented thereby shall be fully
discharged, and the related Stock Pledge Agreement shall be terminated, and (ii)
Buyer shall be entitled to set-off the amount of principal outstanding under,
and the amount of accrued and unpaid interest on, each such Management Note as
of the Closing Date against the purchase price for each such Management
Investor's Securities.
Section 9 COMPANY OPTION PLAN. (a) The number of shares of Common
Stock subject to outstanding Options held by each Seller as of the date hereof
is set forth in Schedule 2.1 under the column "Number of Shares Subject to
Options Owned." Buyer, the Company and each Seller that holds Options as of
the date hereof agree that (A) such Seller will not exercise any Options in the
5 business days immediately preceding and including the Closing Date, and (B) at
the Closing the following will occur simultaneously: (i) subject to the payment
of the amounts required pursuant to Section 6.9(b), Buyer shall pay to each
Seller the Share Purchase Price for each share of Common Stock subject to the
Options held by such Seller (to the extent not theretofore exercised, terminated
or cancelled), less the aggregate exercise price of such Options (to the extent
not theretofore exercised, terminated or cancelled) held by such Seller, and
(ii) the Option Plan and each Option and the related agreement pursuant to such
Option Plan held by such Seller shall be terminated.
(b) Buyer, the Company and each Seller that holds Options as of the
date hereof agree that (i) after the close of business on the day prior to the
date that is expected to be the Closing Date, the Company shall deliver to each
such Seller a notice setting forth the aggregate amount of any Federal, state or
local taxes required to be withheld from such Seller with respect to the
transactions contemplated by Section 6.9(a) at the Closing (the "WITHHOLDING
TAX"); (ii) each such Seller whose Options are terminated at the Closing
pursuant to Section 6.9(a) shall, at the Closing, deliver to the Company a
check, made payable to the order of the Company, in the amount of the
Withholding Tax (unless the Company and such Seller agree to offset such amounts
against amounts due hereunder); and (iii) as to each such Seller the Company
shall, and Buyer shall cause the Company to, pay the appropriate portion of the
Withholding Tax to the respective Federal, state or local tax authorities within
the period
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prescribed by law.
Section 10 REPAYMENT OF INDEBTEDNESS. On the Closing Date,
simultaneously with the Closing, Buyer shall cause all outstanding Obligations
to be paid in full, and the Company shall terminate the Revolving Credit
Commitments.
Section 11 DIRECTORS' AND OFFICERS' INDEMNIFICATION. The provisions
of the certificate of incorporation and by-laws of the Company and of each
Subsidiary concerning elimination of liability and indemnification of directors
and officers shall not be amended in any manner that would adversely affect the
rights thereunder of any person that is as of the date hereof an officer or
director of the Company or of any such Subsidiary. At the Closing, Buyer shall
assume and become liable for, jointly and severally with the Company and each
Subsidiary, any liability and all obligations of the Company and each Subsidiary
under such provisions.
Section 12 NO SHOP. Each Seller and the Company and its Subsidiaries
(and each of their respective directors, officers, employees, advisors,
representatives, agents or Affiliates) shall not, directly or indirectly,
encourage, engage in, solicit or initiate any discussions or negotiations with,
or provide any information to (except, that in the event Buyer shall be
obligated by law to publicly disclose (and does so disclose) that this Agreement
exists, the Sellers and the Company and its Subsidiaries may provide information
to other Persons for the sole purposes of advising them of the existence of this
Agreement), or negotiate or enter into any agreement or agreement in principle
with, any other Person with respect to a sale of the Company or any Subsidiary,
their assets (except as permitted by Section 6.4) or capital stock or any
similar transaction.
Section 13 SCHEDULE DELIVERY. The Company will prepare and deliver
to Buyer five days prior to the Closing Date a schedule showing a reasonable
estimate of the outstanding principal of and interest which will have accrued as
of the Closing Date with respect to the Obligations and the Management Notes,
and the other adjustments to the Share Purchase Price and such schedule shall be
updated as of the Closing Date and such update shall be true and correct as of
the Closing Date. Five days prior to the Closing Date, the Sellers shall
deliver to Buyer an updated Schedule 2.1 (the "UPDATED CAPITALIZATION
SCHEDULE"), revised to the extent
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necessary to confirm the information contained therein as of such date,
including reflecting any exercise of Options that has taken place, and such
schedules shall be true and correct in all respects as of such date and as of
the Closing Date. Sellers shall notify Buyer of the Closing Date ten days
prior to the Closing Date.
Section 14 WORKING CAPITAL. At the Closing Date, the Company and its
Subsidiaries will use its reasonable efforts to have Working Capital (as defined
below) of at least $3,700,000. The Company will prepare and deliver to Buyer
five days prior to the Closing Date a schedule estimating Working Capital as of
such date (the "WORKING CAPITAL SCHEDULE"). Buyer shall have the opportunity to
participate in the preparation of such schedule and to comment on and review
such schedule. The parties hereto shall use their best efforts to resolve any
disputes with respect to the Working Capital Schedule prior to the Closing Date.
"WORKING CAPITAL" shall mean the difference between (i) consolidated current
assets carried under the headings Accounts Receivable, Prepaid Leases and Other
Current Assets (and, if the Company elects to exclude such amount from the
calculation of Share Purchase Price, such amount of cash as the Company so
elects) on the Company's financial statements prepared in accordance with GAAP
and (ii) consolidated current liabilities carried under the headings Accounts
Payable and Other Current Liabilities on the Company's financial statements
prepared in accordance with GAAP. The Working Capital Schedule shall be
prepared in accordance with GAAP consistently applied based upon the books and
records of the Company.
ARTICLE VII
CONDITIONS OF BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to consummate the Stock Purchase shall be subject
to the satisfaction or waiver, on or prior to the Closing Date, of all of the
following conditions:
Section 1 REPRESENTATIONS AND WARRANTIES; COVENANTS. (a) The
representations and warranties of the Company contained herein shall be true in
all respects as of and at the time of the Closing, except (i) for changes
per-
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mitted or contemplated by this Agreement, (ii) to the extent that any
representation or warranty is made herein as of a specified date, in which
case such representation or warranty shall be true in all respects as of such
specified date and (iii) for the failure of such representations and
warranties to be true, when read without giving effect to any materiality
qualifiers contained therein, which would not, in the aggregate, have a
Material Adverse Effect; the Company shall have performed in all material
respects all obligations and complied in all material respects with all
covenants and other agreements required of it by this Agreement to be
performed or complied with by it at or prior to the Closing; and there shall
have been delivered to Buyer a certificate to such effect, dated the Closing
Date and signed by a senior executive officer of the Company.
(b) The representations and warranties of the Sellers contained herein
shall be true in all material respects as of and at the time of the Closing,
except for changes permitted or contemplated by this Agreement and except to the
extent that any representation or warranty is made herein as of a specified
date, in which case such representation or warranty shall be true in all
material respects as of such specified date; and each of the Sellers shall have
performed in all material respects all obligations and complied in all material
respects with all covenants and other agreements required of them by this
Agreement to be performed or complied with by them at or prior to the Closing.
Section 2 FILINGS; CONSENTS; WAITING PERIODS. All registrations,
filings, applications, notices, consents, approvals, orders, qualifications and
waivers listed in Schedule 7.2 hereto shall have been filed, made or obtained,
and all waiting periods applicable under the HSR Act shall have expired or been
terminated.
Section 3 NO INJUNCTION. At the Closing Date, there shall be no
injunction, restraining order or decree of any nature of any court or
governmental agency or body of competent jurisdiction that is in effect that
restrains or prohibits the consummation of the Stock Purchase.
Section 4 RESIGNATIONS OF DIRECTORS. Prior to the Closing Date,
Buyer shall notify the Company of those directors of the Company and the
Subsidiaries from whom it will require resignations. The Company shall have
furnished Buyer with such signed resignations, effective as of the Closing.
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Section 5 SHARE CERTIFICATES. The Sellers shall have delivered to
Buyer certificates representing all of the Securities in accordance with Section
2.1 hereof.
Section 6 EVIDENCE OF INDEBTEDNESS. (a) The Company shall have
delivered to Buyer evidence that the Management Notes have been cancelled and
each of the related Stock Pledge Agreements has been terminated, in each case,
in accordance with Section 6.8.
(b) Buyer shall have received evidence satisfactory to it, that all
liens on the Company's and the Subsidiaries' assets and pledges of the Company's
and the Subsidiaries' stock held by the several lenders pursuant to the Credit
Agreement, will be released upon payment of the Obligations.
Section 7 WORKING CAPITAL. As of the Closing Date, the Company shall
have Working Capital of at least $3,700,000 and Buyer shall have received a
certificate of the chief financial officer of the Company to the effect of the
foregoing.
Section 8 OFFICER'S CERTIFICATE. The Company shall have delivered to
Buyer a certificate signed by the chief financial officer of the Company dated
the Closing Date to the effect that the information contained in the updated
schedules delivered pursuant to Section 6.13 is true, complete and correct in
all respects.
Section 9 COMPANY AFFIDAVIT. The Company shall have delivered an
affidavit to the Buyer, dated as of the Closing Date, that is satisfactory to
the Buyer and which satisfies the requirements of Code Section 1445(b)(3) and
Treasury Regulation Section 1.1445-2(c)(3)(i).
ARTICLE VIII
CONDITIONS TO SELLERS' OBLIGATION TO CLOSE
Sellers' obligation to consummate the Stock Purchase is subject to
the satisfaction or waiver, on or prior to the Closing Date, of all of the
following conditions:
Section 1 REPRESENTATIONS AND WARRANTIES; COV-
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ENANTS. The representations and warranties of Buyer contained herein shall
be true in all material respects as of and at the time of the Closing, except
for changes permitted or contemplated by this Agreement and except to the
extent that any representation or warranty is made herein as of a specified
date, in which case such representation or warranty shall be true in all
material respects as of such specified date; Buyer shall have performed in
all material respects all obligations and complied in all material respects
with all covenants and other agreements required of it by this Agreement to
be performed or complied with by it at or prior to the Closing; and there
shall have been delivered to the Company a certificate to such effect, dated
the Closing Date and signed by a senior executive officer of Buyer.
Section 2 FILINGS; CONSENTS; WAITING PERIODS. All registrations,
filings, applications, notices, consents, approvals, orders, qualifications and
waivers listed in Schedule 8.2 hereto shall have been filed, made or obtained,
and all applicable waiting periods under the HSR Act shall have expired or been
terminated.
Section 3 NO INJUNCTION. At the Closing Date, there shall be no
injunction, restraining order or decree of any nature of any court or
governmental agency or body of competent jurisdiction that is in effect that
restrains or prohibits the consummation of the Stock Purchase.
Section 4 PURCHASE PRICE. The Sellers shall have received the
purchase price for the Securities in accordance with Section 2.1 hereof, and
each Seller that holds Options as of the Closing Date shall have received the
payments contemplated by Section 6.9 hereof.
ARTICLE IX
TERMINATION
Section 1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing by:
(i) The mutual consent of the Company, the Majority Sellers and
Buyer;
(ii) Buyer in the event that any condition set
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forth in Article VII hereof shall not be satisfied and shall not be
reasonably capable of being remedied by January 31, 1997;
(a) The Company or the Majority Sellers in the event that any
condition set forth in Article VIII hereof shall not be satisfied and shall not
be reasonably capable of being remedied by January 31, 1997; or
(b) Either the Majority Sellers or Buyer if the Closing has not
occurred by the close of business on January 31, 1997; provided, however, that
no party may terminate this Agreement pursuant to clause (b) or (c) above, or
pursuant to this clause (d), if the failure of the applicable condition in
Article VII or VIII (as the case may be) to be satisfied or the failure of the
Closing to occur on or before the date required in this Section 9.1(d) results
from the willful and material breach by the Sellers or the Company in the case
of a termination by the Company or the Majority Sellers, or by the Buyer in the
case of a termination of the Buyer, of any covenant in this Agreement.
Section 2 PROCEDURE AND EFFECT OF TERMINATION. In the event of
termination of this Agreement by a party hereto pursuant to Section 9.1, written
notice thereof shall forthwith be given by the terminating party to the other
parties hereto, and this Agreement shall thereupon terminate and become void and
have no effect, and the transactions contemplated hereby shall be abandoned
without further action by the parties hereto, except that the provisions of
Sections 6.1(b), 6.6 and 10.5 shall survive the termination of this Agreement;
PROVIDED, HOWEVER, that such termination shall not relieve any party hereto of
any liability for any breach of this Agreement (other than nonwillful breaches
of representations, warranties and covenants, as to which no party shall be
liable hereunder).
ARTICLE X
MISCELLANEOUS
Section 1 SURVIVAL PERIODS. All representations and warranties set
forth in Articles III, IV (other than Section 4.1(b)) and V hereof and (except
as provided by the following sentence) covenants of the parties contained in
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this Agreement or in any Schedule hereto, or any certificate, document or other
instrument delivered in connection herewith shall terminate and cease to be of
further force and effect as of the Closing. Only those covenants that
contemplate actions to be taken or obligations in effect after the Closing shall
survive in accordance with their terms and to the extent so contemplated. The
representations and warranties set forth in Section 4.1(b) hereof shall survive
indefinitely.
Section 2 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective against the parties that have executed and delivered
the Agreement when one or more counterparts have been signed by all of the
parties and delivered to Buyer and the Majority Sellers.
Section 3 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without reference
to the choice of law principles thereof.
Section 4 ENTIRE AGREEMENT. This Agreement and the Schedules hereto
contain the entire agreement between the parties with respect to the subject
matter hereof and there are no agreements, understandings, representations or
warranties between the parties other than those set forth or referred to herein.
Except for Section 6.11, which is intended to benefit, and to be enforceable by,
the Persons referred to therein whether or not parties hereto, this Agreement is
not intended to confer upon any person not a party hereto (or their successors
and assigns permitted by Section 10.7) any rights or remedies hereunder.
Section 5 EXPENSES. Except as otherwise set forth in this Agreement
(and except for all transfer, personal property, sales, stock transfer, gains
and stamp taxes incurred in connection with this Agreement and the transactions
contemplated hereby ("TRANSACTION TAXES"), which, if the Closing occurs, shall
be borne by the Company at or following the Closing), all legal and other costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs and
expenses, whether the Stock Purchase is or is not consummated. The Company
shall be responsible for filing all applicable tax returns and other
documentation with respect to all Transaction Taxes.
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Section 6 NOTICES. All notices hereunder shall be sufficiently given
for all purposes hereunder if in writing and delivered personally, sent by
documented overnight delivery service or, to the extent receipt is confirmed,
telecopy, telefax or other electronic transmission service to the appropriate
address or number as set forth below. Notices to the Management Investors shall
be addressed to each Management Investor at the address set forth below under
such Management Investor's signature, or at such other address and to the
attention of such other Person as such Management Investor may designate by
written notice to the ML Investors and Buyer. Notices to the ML Investors (and
the Company prior to the Closing) shall be addressed to:
Xxxxxxx Xxxxx Capital Partners, Inc.
c/o Stonington Partners, Inc.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn.: Xxxxxx X. Xxxxxx
Telecopy No: (000) 000-0000
and
Revere Holding Corp.
000 Xxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxxxxx XxXxxxxx
Telecopy No: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxxxx X. Xxxxxxx, Esq.
Telecopy No: (000) 000-0000
or at such other address and to the attention of such other Person as any ML
Investor may designate by written notice to Buyer and the Management Investors.
Notices to Buyer shall be addressed to:
Universal Outdoor Holdings, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
-00-
Xxxxxxx, Xxxxxxxx, 00000
Attention: Xxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
Xxxxx & Company
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
Telecopy: (000) 000-0000
With copies to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attenton: Xxxxxx X. Xxxxxxxxxx, Esq.
Telcopy: (000) 000-0000
or at such other address and to the attention of such other Person as Buyer may
designate by written notice to Sellers and the Company.
Section 7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns; PROVIDED, HOWEVER, that neither the Company nor any
Seller shall assign its rights or delegate its obligations under this Agreement
without the express prior written consent of Buyer, and PROVIDED FURTHER that
Buyer shall not assign its rights or delegate its obligations under this
Agreement without the express prior written consent of the Majority Sellers.
Section 8 AMENDMENTS AND WAIVERS. This Agreement, and the terms and
provisions hereof, may not be modified, waived or amended except by an
instrument or instruments in writing signed by the party against whom
enforcement of any such modification or amendment is sought (or, in the case of
a waiver, by the intended beneficiary of the waived term or provision);
provided, however, that the Sellers hereby agree that an amendment, waiver or
modification may be enforced against all Sellers if the
-44-
Majority Sellers have signed such amendment, waiver or modification and such
amendment, waiver or modification affects all Sellers in the same manner.
The waiver by any party hereto of a breach of any term or provision of this
Agreement shall not be construed as a waiver of any subsequent breach.
Section 9 NO IMPLIED REPRESENTATION. Notwithstanding anything
contained in Article III, IV or V or any other provision of this Agreement, it
is the explicit intent of each party hereto that the Company and the Sellers are
making no representation or warranty whatsoever, express or implied, beyond
those expressly given in this Agreement, including but not limited to any
implied warranty or representation as to condition, merchantability or
suitability as to any of the properties or assets of the business of the Company
and its Subsidiaries. It is understood that any estimates or other predictions
contained or referred to in the Schedules hereto or in the materials that have
been provided to Buyer are not and shall not be deemed to be representations or
warranties of Sellers.
Section 10 CONSTRUCTION OF CERTAIN PROVISIONS. It is understood and
agreed that the specification of any dollar amount in the representations and
warranties contained in this Agreement or the inclusion of any specific item in
the Schedules is not intended to imply that such amounts or higher or lower
amounts, or the items so included or other items, are or are not material, and
no party shall use the fact of the setting of such amounts or the fact of the
inclusion of any such item in the Schedules in any dispute or controversy
between the parties as to whether any obligation, item or matter not described
herein or included in a Schedule is or is not material for purposes of this
Agreement. All covenants and agreements made by the Sellers hereunder are made
severally and not jointly and no Seller is responsible for the compliance or
noncompliance by any other Seller with any covenant or agreement continued
herein.
Section 11 HEADINGS; DEFINITIONS. The section and article headings
contained in this Agreement are inserted for convenience of reference only and
will not affect the meaning or interpretation of this Agreement. All references
to Sections or Articles contained herein mean Sections or Articles of this
Agreement unless otherwise stated. All capitalized terms defined herein are
equally applicable to
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both the singular and plural forms of such terms.
Section 12 INTERPRETATION. For the purposes of this Agreement, (a)
"to the knowledge of the Company" shall mean the knowledge of the Company's
executive officers, and (b) "including" shall mean "including, without
limitation," unless otherwise specified.
Section 13 REASONABLE CONSENT REQUIRED. Where any provision of this
Agreement requires a party to obtain the consent, approval or other acquiescence
of any other party, such consent, approval or other acquiescence shall not be
unreasonably withheld or delayed by such other party.
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IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of
each of the parties as of the day first above written.
REVERE HOLDING CORP.
By: ___________________________________
Name:
Title:
UNIVERSAL OUTDOOR, INC.
By: ___________________________________
Name:
Title:
XXXXXXX XXXXX CAPITAL APPRECIATION
PARTNERSHIP NO. B-XXVII, L.P.
By: ___________________________________
Name:
Title:
ML IBK POSITIONS, INC.
By: ___________________________________
Name:
Title:
MLCP ASSOCIATES L.P. NO. IV
By: ___________________________________
Name:
Title:
XXXXXXX XXXXX KECALP L.P. 1994
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By: ___________________________________
Name:
Title:
ML OFFSHORE LBO PARTNERSHIP
NO. B-XXVII
By: ___________________________________
Name:
Title:
XXXX XXXX
_______________________________________
Address:
XXXXXX XXXXX
_______________________________________
Address:
XXXXX XXXXXX
_______________________________________
Address:
XXXXXX XXXXXX
_______________________________________
Address:
XXXXXX XXXXXXXXX
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_______________________________________
Address:
XXXXXX XXXXXXX
_______________________________________
Address:
XXXXXXXX XXXXXXXX
_______________________________________
Address:
XXXXXXX XXXXXX
_______________________________________
Address:
XXXXX XXXXX
_______________________________________
Address:
XXXX XXXXX
_______________________________________
Address:
-00-
XXXX XXXXXX
_______________________________________
Address:
XXXXX XXXXX, JR.
_______________________________________
Address:
XXXXXX XXXXXX
_______________________________________
Address:
XXXX XXXXXXXXXXXX
_______________________________________
Address:
XXXXXXX XXXXXX
_______________________________________
Address:
XXXXXXX XXXXX
_______________________________________
Address:
-00-
XXXXX XXXXXXXX
_______________________________________
Address:
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Schedule 3.2
Subsidiaries of Revere Holding Corp.
Percent
Ownership
---------
OWNED BY REVERE HOLDING CORP.
Revere Acquisition Corp. 100%
OWNED BY REVERE ACQUISITION CORP.
Revere National Corporation 100%
Revere Billboard, Inc. 100%
Mall Media Acquisition Corp. 100%
OWNED BY REVERE NATIONAL CORPORATION
Revere National Corporation of Philadelphia 88%
Revere National Corporation of Wilmington 100%
OWNED BY REVERE NATIONAL CORPORATION OF PHILADELPHIA
Revere National Corporation of Pennsylvania 100%
OWNED BY MALL MEDIA ACQUISITION CORP.
Vision Digital Communications, LLC 80%
OWNED BY REVERE NATIONAL CORPORATION OF PENNSYLVANIA
Revere National Corporation of Philadelphia 12%
The shares of Revere's Subsidiaries have been pledged to CIBC pursuant to the
Credit Agreement, dated as of December 20, 1994, by and among Revere Holding
Corp., Revere Acquisition Corp., the several lenders from time to time party
thereto and Canadian Imperial Bank of Commerce, New York Agency, As Agent, as
amended.
Stockholders Agreement, dated as of December 20, 1994, by and among Revere
Holding Corp., the management investors listed in Schedule 1 thereto and the
ML investors listed in Schedule 2 thereto, as amended
Stock Pledge Agreements, each dated December 20, 1994, by and between Revere
Holding Corp. and each of: Xxxx Xxxx, Xxxxxx
XxXxxxxxx, Xxxxxx Xxxxxxx, Xxxxxxxx XxXxxxxx, Xxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxx
Xxxxx, Xxxxx Xxxxx, Jr., Xxxxxx Xxxxxx and Xxxx Xxxxxxxxxxxx
