1
EXHIBIT 99.1
================================================================================
AGREEMENT AND PLAN OF MERGER
AMONG
INFINITY BROADCASTING CORPORATION,
BURMA ACQUISITION CORP.
AND
OUTDOOR SYSTEMS, INC.
================================================================================
2
TABLE OF CONTENTS
PAGE
Article 1 THE MERGER......................................................2
1.1 The Merger.........................................................2
1.2 Effective Time.....................................................2
1.3 Closing of the Merger..............................................2
1.4 Effects of the Merger..............................................2
1.5 Certificate of Incorporation and Bylaws of the Surviving
Corporation........................................................2
1.6 Directors of the Surviving Corporation.............................2
1.7 Officers of the Surviving Corporation..............................3
Article 2 CONVERSION OF SHARES; MERGER CONSIDERATION......................3
2.1 Conversion of Shares...............................................3
2.2 Exchange Fund......................................................4
2.3 Stock Options......................................................6
Article 3 REPRESENTATIONS AND WARRANTIES OF OSI...........................7
3.1 Organization and Qualification; Subsidiaries.......................7
3.2 Capitalization of OSI and Its Subsidiaries.........................8
3.3 Authority Relative to This Agreement...............................9
3.4 SEC Reports; Financial Statements; No Undisclosed
Liabilities........................................................9
3.5 Information Supplied..............................................10
3.6 Consents and Approvals; No Violations.............................11
3.7 No Default........................................................12
3.8 Absence of Changes................................................12
3.9 Litigation........................................................14
3.10 Compliance with Applicable Law....................................14
3.11 Employee Plans....................................................15
3.12 Labor and Employment Matters......................................16
3.13 Environmental Matters.............................................17
3.14 Taxes.............................................................20
3.15 Material Contracts................................................21
3.16 Insurance.........................................................23
3.17 Real Property.....................................................23
i
3
TABLE OF CONTENTS
(CONTINUED)
PAGE
3.18 Tangible Property.................................................24
3.19 Intellectual Property.............................................24
3.20 Year 2000.........................................................24
3.21 Absence of Questionable Payments..................................25
3.22 Opinion of Financial Advisor......................................25
3.23 Brokers...........................................................25
3.24 Takeover Statutes; Dissenters' Rights.............................25
Article 4 REPRESENTATIONS AND WARRANTIES OF INFINITY AND BURMA
ACQUISITION....................................................26
4.1 Organization and Qualification....................................26
4.2 Capitalization of Infinity and Its Subsidiaries...................26
4.3 Authority Relative to This Agreement..............................27
4.4 SEC Reports; Financial Statements; No Undisclosed
Liabilities.......................................................28
4.5 Information Supplied..............................................28
4.6 Consents and Approvals; No Violations.............................29
4.7 No Default........................................................29
4.8 Absence of Changes................................................30
4.9 Litigation........................................................30
4.10 Compliance with Applicable Law....................................31
4.11 Employee Plans....................................................31
4.12 Taxes.............................................................32
4.13 No Prior Activities...............................................33
4.14 Absence of Questionable Payments..................................33
4.15 Brokers...........................................................33
4.16 Contracts.........................................................33
Article 5 COVENANTS......................................................34
5.1 Conduct of Business of OSI........................................34
5.2 Conduct of Business of Infinity...................................37
5.3 Preparation of S-4 and the Proxy Statement........................38
5.4 Stockholder Meetings..............................................38
5.5 No Solicitation...................................................39
ii
4
TABLE OF CONTENTS
(CONTINUED)
PAGE
5.6 Letters of Accountants............................................41
5.7 Access to Information.............................................41
5.8 Additional Agreements; Reasonable Best Efforts....................42
5.9 Regulatory Reviews................................................43
5.10 Public Announcements..............................................43
5.11 Indemnification; Directors' and Officers' Insurance...............43
5.12 Notification of Certain Matters...................................45
5.13 Tax-Free Reorganization Treatment.................................46
5.14 OSI Affiliates....................................................46
5.15 SEC Filings.......................................................46
5.16 Employee Benefits.................................................46
5.17 Registration Rights...............................................47
5.18 Infinity Board of Directors.......................................47
5.19 Fees and Expenses.................................................47
5.20 Antitakeover Statutes.............................................47
5.21 OSI Board of Directors............................................47
5.22 FIRPTA Certificate................................................48
Article 6 CONDITIONS TO CONSUMMATION OF THE MERGER.......................48
6.1 Conditions to Each Party's Obligations to Effect the Merger.......48
6.2 Conditions to the Obligations of OSI..............................49
6.3 Conditions to the Obligations of Infinity and Burma
Acquisition.......................................................50
Article 7 TERMINATION; AMENDMENT; WAIVER.................................51
7.1 Termination by Mutual Agreement...................................51
7.2 Termination by Either Infinity or OSI.............................51
7.3 Termination by OSI................................................52
7.4 Termination by Infinity...........................................53
7.5 Effect of Termination and Abandonment.............................53
7.6 Amendment.........................................................55
7.7 Extension; Waiver.................................................55
iii
5
TABLE OF CONTENTS
(CONTINUED)
PAGE
Article 8 MISCELLANEOUS..................................................55
8.1 Nonsurvival of Representations and Warranties.....................55
8.2 Entire Agreement; Assignment......................................56
8.3 Notices...........................................................56
8.4 Governing Law.....................................................57
8.5 Descriptive Headings..............................................57
8.6 Parties in Interest...............................................57
8.7 Severability......................................................57
8.8 Specific Performance..............................................57
8.9 Brokers...........................................................57
8.10 Counterparts......................................................57
8.11 Interpretation....................................................58
Exhibits
Exhibit A Stockholders Agreement
Exhibit B Infinity Voting Agreement
Exhibit C Form of Registration Rights Agreement
iv
6
GLOSSARY OF DEFINED TERMS
Defined Terms Page(s)
------------- -------
Acquisition Proposal..........................................................41
Agreement......................................................................1
Burma Acquisition..............................................................1
Canada Act....................................................................11
CERCLA........................................................................18
Certificate....................................................................3
Change of Control Transaction.................................................55
CIBC Credit Documents.........................................................11
Class B Common Stock..........................................................26
Closing........................................................................2
Closing Date...................................................................2
Code...........................................................................1
Computer Programs.............................................................24
Confidentiality Agreement.....................................................42
Covered Transactions..........................................................25
Current Premium...............................................................44
DGCL...........................................................................2
Effective Time.................................................................2
Environmental Costs and Liabilities...........................................17
Environmental Law.............................................................18
ERISA.........................................................................15
Exchange Act..................................................................10
Exchange Agent.................................................................4
Exchange Fund..................................................................4
Exchange Ratio.................................................................3
Expenses......................................................................47
Fee...........................................................................54
Filed OSI SEC Reports.........................................................10
GAAP..........................................................................10
Government Entity.............................................................11
Hazardous Material............................................................18
HSR Act.......................................................................11
Indemnified Parties...........................................................44
Infinity.......................................................................1
Infinity Affiliate............................................................54
Infinity Affiliates...........................................................54
Infinity Closing Certificate..................................................49
Infinity Common Stock..........................................................1
Infinity Disclosure Schedule...................................................3
Infinity Employee Benefit Plan................................................31
Infinity Permits..............................................................31
i
7
Infinity Preferred Stock......................................................26
Infinity Required Approvals...................................................29
Infinity Requisite Vote.......................................................27
Infinity SEC Reports..........................................................28
Infinity Securities...........................................................27
Infinity Voting Agreement......................................................1
Information Statement.........................................................29
know..........................................................................58
knowledge.....................................................................58
Law...........................................................................11
Letter of Transmittal..........................................................4
Lien...........................................................................9
Material Adverse Effect.......................................................58
Material Contracts............................................................22
Merger.........................................................................2
Merger Consideration...........................................................3
Notice........................................................................52
NYSE..........................................................................29
OSHA..........................................................................18
OSI............................................................................1
OSI Affiliate.................................................................46
OSI Board......................................................................9
OSI Closing Certificate.......................................................50
OSI Common Stock...............................................................1
OSI Disclosure Schedule........................................................7
OSI Employee Benefit Plan.....................................................15
OSI Employee Benefit Plans................................................15, 31
OSI Financial Advisor.........................................................25
OSI Indentures................................................................12
OSI Option Plans...............................................................8
OSI Permits...................................................................14
OSI Required Approvals........................................................11
OSI Requisite Vote.............................................................9
OSI SEC Reports...............................................................10
OSI Securities.................................................................8
OSI Stock Options..............................................................8
OSI Stockholders Meeting......................................................38
Permitted Liens...............................................................23
Proxy Statement...............................................................11
Real Property Leases..........................................................23
Real Property Rights..................................................3.15(b) 22
Release.......................................................................18
Remedial Action...............................................................18
S-4...........................................................................10
SEC............................................................................9
ii
8
Securities Act................................................................10
Share..........................................................................3
Share Issuance................................................................27
Sign Partnerships..............................................................7
Standstill Period.............................................................54
Stockholders Agreement.........................................................1
subsidiary.....................................................................7
Superior Proposal.............................................................40
Surviving Corporation..........................................................2
Takeover Statutes.............................................................25
Tax Returns...................................................................21
Taxes.........................................................................21
Termination Date..............................................................51
iii
9
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of May 27, 1999 (the
"Agreement"), is among INFINITY BROADCASTING CORPORATION, a Delaware corporation
("Infinity"), BURMA ACQUISITION CORP. ("Burma Acquisition"), a Delaware
corporation and a direct wholly owned subsidiary of Infinity, and OUTDOOR
SYSTEMS, INC., a Delaware corporation ("OSI").
WHEREAS, the Boards of Directors of OSI, Infinity and Burma
Acquisition each have determined that the Merger (as defined in Section 1.1) is
advisable and fair to, and in the best interests of, their respective
stockholders and have approved the Merger in accordance with this Agreement;
WHEREAS, for federal income Tax (as defined in Section 3.14)
purposes, it is intended that the Merger shall qualify as a Tax-free
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code");
WHEREAS, concurrently with the execution hereof, certain holders of
shares of Common Stock, par value $.01 per share, of OSI ("OSI Common Stock")
are entering into an agreement providing for certain matters with respect to
their shares of OSI Common Stock (the "Stockholders Agreement"), a copy of which
is attached hereto as Exhibit A;
WHEREAS, the Board of Directors of OSI has approved the terms of
the Stockholders Agreement; and
WHEREAS, concurrently with the execution hereof, the controlling
stockholder of Infinity, CBS Broadcasting, Inc., is entering into an agreement
to vote in favor of the issuance of shares of Class A Common Stock, par value
$.01 per share, of Infinity ("Infinity Common Stock") in connection with the
Merger (the "Infinity Voting Agreement"), a copy of which is attached hereto as
Exhibit B.
WHEREAS, Infinity, Burma Acquisition and OSI desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements herein contained,
Infinity, Burma Acquisition and OSI hereby agree as follows:
10
ARTICLE 1
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.2), upon
the terms and subject to the conditions of this Agreement and in accordance with
the Delaware General Corporation Law (the "DGCL"), Burma Acquisition shall be
merged with and into OSI (the "Merger"). Following the Merger, OSI shall
continue as the surviving corporation (the "Surviving Corporation") and shall
continue its corporate existence under the DGCL, and the separate corporate
existence of Burma Acquisition shall cease.
1.2 Effective Time. Subject to the provisions of this Agreement, Infinity,
Burma Acquisition and OSI shall cause the Merger to be consummated by filing a
certificate of merger complying with the DGCL with the Secretary of State of the
State of Delaware as soon as practicable on or after the Closing Date (as
defined in Section 1.3). The Merger shall become effective upon the later of
such filing or at such time thereafter as is provided in such certificate of
merger (the "Effective Time").
1.3 Closing of the Merger. The closing of the Merger (the "Closing") will
take place at a time and on a date (the "Closing Date") to be specified by the
parties, which shall be no later than the second business day after satisfaction
or waiver of the conditions set forth in Article 6 (other than those conditions
that by their nature are to be satisfied at the Closing, but subject to the
fulfillment or waiver of those conditions), at the offices of Weil, Gotshal &
Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another time,
date or place is agreed to in writing by the parties hereto.
1.4 Effects of the Merger. The Merger shall have the effects set forth in
the DGCL. Without limiting the generality of the foregoing, and subject thereto,
at the Effective Time, all the properties, rights, privileges, immunities,
powers and franchises of Burma Acquisition and OSI shall vest in the Surviving
Corporation, and all debts, liabilities, obligations and duties of Burma
Acquisition and OSI shall become the debts, liabilities, obligations and duties
of the Surviving Corporation.
1.5 Certificate of Incorporation and Bylaws of the Surviving Corporation.
The Certificate of Incorporation of Burma Acquisition in effect immediately
prior to the Effective Time shall be the Certificate of Incorporation of the
Surviving Corporation, until amended in accordance with such Certificate of
Incorporation and the DGCL. The Bylaws of Burma Acquisition in effect
immediately prior to the Effective Time shall be the Bylaws of the Surviving
Corporation, until amended in accordance with such Bylaws and the DGCL.
1.6 Directors of the Surviving Corporation. The directors of Burma
Acquisition immediately prior to the Effective Time, who are identified on
Section 1.6 of the Disclosure Schedule previously delivered by Infinity to OSI
(the "Infinity Disclosure
2
11
Schedule"), shall be the initial directors of the Surviving Corporation, each to
hold office in accordance with the Certificate of Incorporation and Bylaws of
the Surviving Corporation until such director's successor is duly elected or
appointed and qualified or until their earlier death, resignation or removal.
1.7 Officers of the Surviving Corporation. The officers of Burma
Acquisition immediately prior to the Effective Time, who are identified on
Section 1.7 of the Infinity Disclosure Schedule, shall be the initial officers
of the Surviving Corporation, each to hold office in accordance with the
Certificate of Incorporation and Bylaws of the Surviving Corporation until such
officer's successor is duly elected or appointed and qualified or until their
earlier death, resignation or removal.
ARTICLE 2
CONVERSION OF SHARES; MERGER CONSIDERATION
2.1 Conversion of Shares. At the Effective Time, by virtue of the Merger
and without any action on the part of any of the parties hereto or their
respective stockholders:
(a) Common Stock of Burma Acquisition. Each share of common stock,
par value $.01 per share, of Burma Acquisition issued and outstanding
immediately prior to the Effective Time shall be converted into one fully paid
and non-assessable share of common stock, par value $.01 per share, of the
Surviving Corporation.
(b) Common Stock of OSI. Each share of OSI Common Stock issued and
outstanding immediately prior to the Effective Time (each, a "Share"), other
than Shares to be cancelled in accordance with Section 2.1(c), shall be
converted into the right to receive 1.25 fully paid and non-assessable shares
(the "Exchange Ratio") of Infinity Common Stock (all such shares of Infinity
Common Stock issued, together with any cash in lieu of fractional shares of
Infinity Common Stock to be paid pursuant to Section 2.2(f), being referred to
as the "Merger Consideration"), and shall cease to be outstanding and shall
automatically be canceled and shall cease to exist, and each holder of a
certificate previously evidencing any such Shares (each, a "Certificate") shall
cease to have any rights with respect thereto, except the right to receive, upon
the surrender of such Certificate in accordance with the provisions of Section
2.2, the Merger Consideration with respect to the Shares previously evidenced by
such Certificate.
(c) Cancellation of Treasury Shares and Infinity-Owned Shares. Each
Share that is owned by OSI, Infinity or Burma Acquisition shall automatically be
cancelled and shall cease to exist, and no consideration shall be delivered or
deliverable in exchange therefor.
3
12
2.2 Exchange Fund.
(a) Letter of Transmittal . As soon as reasonably practicable after
the Effective Time, a bank or trust company to be designated by Infinity (the
"Exchange Agent") shall mail to each holder of record of Shares immediately
prior to the Effective Time (excluding any Shares to be cancelled pursuant to
Section 2.1(c)) (i) a letter of transmittal (the "Letter of Transmittal") which
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of such Certificates to the Exchange
Agent and shall be in such form and have such other provisions as Infinity shall
reasonably specify and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for the Merger Consideration with respect to the
Shares formerly represented thereby.
(b) Deposit of Merger Consideration. Promptly after the Effective
Time, Infinity shall deposit with the Exchange Agent, for the benefit of the
holders of Shares for exchange in accordance with this Article 2, certificates
or other evidence representing the shares of Infinity Common Stock issuable
pursuant to Section 2.1(b). Infinity agrees to make available to the Exchange
Agent from time to time as needed, cash sufficient to pay cash in lieu of
fractional shares pursuant to Section 2.2(f) and any dividends or other
distributions pursuant to Section 2.2(e). Any cash and certificates or other
evidence representing shares of Infinity Common Stock deposited with the
Exchange Agent shall hereinafter be referred to as the "Exchange Fund."
(c) Surrender of Certificates. Upon surrender of a Certificate to
the Exchange Agent, together with the Letter of Transmittal, duly executed, and
such other documents as Infinity or the Exchange Agent shall reasonably request,
the holder of such Certificate shall be entitled to receive in exchange
therefor, (i) certificates or other evidence representing the number of whole
shares of Infinity Common Stock which such Holder has the right to receive
pursuant to Section 2.1(b), (ii) any cash in lieu of fractional shares of
Infinity Common Stock pursuant to Section 2.2(f) and (iii) any dividends or
other distributions pursuant to Section 2.2(e) (in each case without interest
and less the amount of any required withholding Taxes, if any, in accordance
with Section 2.2(i)).
(d) Rules Governing Exchange. Infinity, in consultation with OSI
prior to the Effective Time, shall have the right to make reasonable rules, not
inconsistent with the terms of this Agreement, governing the issuance and
delivery of certificates for, or other evidence of, shares of Infinity Common
Stock.
(e) Distributions With Respect to Unexchanged Shares of Infinity
Common Stock. The shares of Infinity Common Stock issuable pursuant to Section
2.1(b) shall be deemed to have been issued at the Effective Time for purposes of
entitlement to dividends or other distributions declared, if any, after the
Effective Time. No dividends or other distributions with respect to shares of
Infinity Common Stock with a record date after the Effective Time shall be paid
to the holder of any unsurrendered
4
13
Certificate with respect to the shares of Infinity Common Stock such holder is
entitled to receive until such Certificate is surrendered by such holder.
(f) Fractional Shares. No scrip or fractional share certificate for
Infinity Common Stock will be issued upon the surrender of Certificates, and an
outstanding fractional share interest will not entitle the owner thereof to
vote, to receive dividends or to any rights of a stockholder of Infinity with
respect to such fractional share interest. In lieu of the issuance of fractional
shares, Infinity shall pay to the Exchange Agent an amount sufficient for the
Exchange Agent to pay each holder of Shares an amount in cash equal to the
product obtained by multiplying (i) the fractional share interest to which such
holder would otherwise be entitled (after taking into account all Shares held at
the Effective Time by such holder) by (ii) the closing price for a share of
Infinity Common Stock on the NYSE Composite Transaction Tape on the first
trading day immediately following the Effective Time.
(g) Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the former holders of Shares for six (6) months
after the Effective Time shall be delivered to Infinity, upon demand, and any
former holders of Shares who have not theretofore complied with this Article 2
shall thereafter look only to Infinity for the Merger Consideration to which
they are entitled pursuant to this Article 2.
(h) No Liability. None of Infinity, Burma Acquisition, OSI or the
Surviving Corporation shall be liable to any former holder of Shares for any
Merger Consideration from the Exchange Fund delivered to a public official
pursuant to any applicable abandoned property, escheat or similar Law (as
defined in Section 3.6).
(i) Withholding Rights. Infinity, the Surviving Corporation and the
Exchange Agent shall be entitled to deduct and withhold, from the consideration
otherwise payable pursuant to this Agreement to any former holder of Shares,
such amounts as Infinity, the Surviving Corporation, OSI (or any subsidiary
thereof) or the Exchange Agent is required to deduct and withhold with respect
to the making of such payment under the Code or any provision of state, local or
foreign Tax Law. To the extent that amounts are so withheld by Infinity, the
Surviving Corporation or the Exchange Agent, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the former
holder of the Shares in respect of which such deduction and withholding was made
by Infinity, the Surviving Corporation or the Exchange Agent.
(j) Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such person of a bond in such
reasonable amount as the Surviving Corporation may direct as indemnity against
any claim that may be made against it with respect to such Certificate, the
Exchange Agent will deliver in exchange for such lost, stolen or destroyed
Certificate the applicable Merger Consideration with respect to the
5
14
Shares formerly represented thereby and any unpaid dividends and distributions
on shares of Infinity Common Stock deliverable in respect thereof pursuant to
Section 2.2(e).
(k) Stock Transfer Books. The stock transfer books of OSI shall be
closed immediately upon the Effective Time and there shall be no further
registration of transfers of Shares thereafter on the records of OSI.
(l) Affiliates. Notwithstanding anything to the contrary herein, no
shares of Infinity Common Stock or cash shall be delivered to a person who may
be deemed an OSI Affiliate in accordance with Section 5.14, until such person
has executed and delivered to Infinity the written agreement contemplated by
Section 5.14.
2.3 Stock Options.
(a) Infinity and OSI shall take such actions as are necessary to
provide that at the Effective Time each outstanding OSI Stock Option (as defined
in Section 3.2(a)) shall be adjusted in accordance with the terms thereof to be
exercisable to purchase or, with respect to incentive stock awards, payable in,
shares of Infinity Common Stock, as provided below. Following the Effective
Time, each OSI Stock Option shall continue to have, and shall be subject to, the
same terms and conditions (including transfer restrictions) set forth in the OSI
Option Plans (as defined in Section 3.2(a)) or any other agreement pursuant to
which such OSI Stock Option was subject immediately prior to the Effective Time,
except that (i) each OSI Stock Option shall be exercisable or payable for that
number of shares of Infinity Common Stock equal to the product of (x) the
aggregate number of shares of OSI Common Stock for which such OSI Stock Option
was exercisable or payable and (y) the Exchange Ratio, rounded up to the nearest
whole share, if necessary, and (ii) except with respect to incentive stock
awards, which have no exercise price, the per share exercise price of such OSI
Stock Option shall be the exercise price immediately prior to the Effective Time
divided by the Exchange Ratio (rounded up to the nearest whole cent). The
adjustments provided herein to any options which are incentive stock options (as
defined in Section 422 of the Code) shall be effected in a manner consistent
with Section 424(a) of the Code.
(b) As soon as practicable after the Effective Time, Infinity shall
deliver to the holders of OSI Stock Options appropriate notices setting forth
such holders' rights pursuant to the respective OSI Option Plans and the
agreements evidencing the grants of such OSI Stock Options and that such OSI
Stock Options and agreements shall continue in effect on the same terms and
conditions (subject to the adjustments required by this Section 2.3) after
giving effect to the Merger and the provisions set forth above. Infinity shall
comply with the terms of the OSI Option Plans.
(c) Infinity shall take all corporate action necessary to reserve
for issuance a sufficient number of shares of Infinity Common Stock for delivery
upon exercise of OSI Stock Options. Infinity shall file a registration statement
on Form S-8 as of or prior to the Effective Time with respect to the shares of
Infinity Common Stock subject to OSI Stock Options and shall use commercially
reasonable efforts to maintain the effectiveness
6
15
of such registration statement (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as such options remain
outstanding.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF OSI
OSI hereby represents and warrants to each of Infinity and Burma
Acquisition as follows:
3.1 Organization and Qualification; Subsidiaries.
(a) OSI and each of its subsidiaries (as defined in Section 3.1(b))
is a corporation or legal entity duly organized, validly existing and in good
standing under the Laws of the jurisdiction of its incorporation or organization
and has all requisite corporate, partnership or similar power and authority to
own, lease and operate its properties and to carry on its businesses as now
conducted and proposed by OSI to be conducted, except in such jurisdictions,
where the failure to be so duly qualified and in good standing has not had and
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect (as defined in Section 8.11(d)) on OSI.
(b) Except as set forth in Section 3.1(b) of the Disclosure Schedule
previously delivered by OSI to Infinity (the "OSI Disclosure Schedule"), OSI has
no subsidiaries and does not own, directly or indirectly, beneficially or of
record, any shares of capital stock or other security of any other entity or any
other material investment in any other entity (excluding interests in
partnerships or joint ventures owning five (5) or fewer outdoor advertising
displays ("Sign Partnerships")). The term "subsidiary" means, when used with
reference to any entity, any corporation or other organization, whether
incorporated or unincorporated, (i) of which such party or any other subsidiary
of such party is a general or managing partner or managing member, (ii) the
outstanding voting securities or interests of which, having by their terms
ordinary voting power to elect a majority of the Board of Directors or others
performing similar functions with respect to such corporation or other
organization, are directly or indirectly owned or controlled by such party or by
any one or more of its subsidiaries, or (iii) more than fifty percent (50%) of
the value of the outstanding equity securities or interests (including
membership interests) of which are owned directly or indirectly by such party,
but excluding Sign Partnerships.
(c) OSI and each of its subsidiaries is duly qualified and in good
standing to do business in each jurisdiction in which the property owned, leased
or operated by it or the nature of the business conducted by it makes such
qualification necessary, except in such jurisdictions where the failure to be so
duly qualified and in good standing has not had and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
XXX.
0
00
(x) XXX has heretofore delivered or made available to Infinity
accurate and complete copies of the articles or certificate of incorporation and
by-laws, or other similar organizational documents, as currently in effect, of
OSI and each of its subsidiaries.
3.2 Capitalization of OSI and Its Subsidiaries.
(a) The authorized capital stock of OSI consists of: (i) 600,000,000
shares of OSI Common Stock, of which, as of May 24, 1999, 184,701,675 shares
were issued and outstanding and 36,235,206 shares were held in treasury and (ii)
12,000,000 shares of Preferred Stock, par value $1.00 per share, no shares of
which are issued and outstanding. All of the issued and outstanding shares of
OSI Common Stock have been validly issued, and are fully paid, nonassessable and
free of preemptive rights. As of May 24, 1999, 23,810,486 shares of OSI Common
Stock were reserved for issuance and issuable upon or otherwise deliverable in
connection with the exercise of outstanding options and incentive stock awards
granted by OSI to purchase shares of OSI Common Stock (such options and awards
being referred to collectively as the "OSI Stock Options") issued pursuant to
the OSI stock option plans and agreements listed in Section 3.2(a) of the OSI
Disclosure Schedule (the "OSI Option Plans"). Since March 31, 1999, no shares of
OSI's capital stock have been issued other than pursuant to the exercise of OSI
Stock Options already in existence on such date and, since March 31, 1999, no
OSI Stock Options have been granted. Section 3.2(a) of the OSI Disclosure
Schedule sets forth a complete and correct list of all holders of OSI Stock
Options, including such person's name, the number of OSI Stock Options held by
such person and the exercise price for each such OSI Stock Option. Except as set
forth above in this Section 3.2(a), as of the date hereof, there are outstanding
(i) no shares of capital stock or other voting securities of OSI, (ii) no
securities of OSI or its subsidiaries convertible into or exchangeable for
shares of capital stock or voting securities of OSI, (iii) no options or other
rights to acquire from OSI or its subsidiaries, and no obligations of OSI or its
subsidiaries to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of OSI,
and (iv) no equity equivalents, or interests in the ownership or earnings, of
OSI or its subsidiaries or other similar rights (including stock appreciation
rights but excluding interests in Sign Partnerships) (collectively, "OSI
Securities"). There are no outstanding obligations of OSI or its subsidiaries to
repurchase, redeem or otherwise acquire any OSI Securities. All OSI Stock
Options, except incentive stock awards, had an exercise price equal to the fair
market value of the underlying shares of OSI Common Stock as of the date of
grant. Except as set forth in Section 3.2(a) of the OSI Disclosure Schedule,
there are no shareholder agreements, voting trusts or other agreements or
understandings to which OSI is a party or to which it is bound relating to the
voting or disposition of any shares of capital stock of OSI.
(b) Except as set forth in Section 3.2(b) of the OSI Disclosure
Schedule, all of the outstanding capital stock of OSI's subsidiaries is owned by
OSI, directly or indirectly, free and clear of any Lien (as defined below) or
any other limitation or restriction (including any restriction on the right to
vote or sell the same, except as may be provided as a matter of Law). There are
no securities of OSI or its subsidiaries convertible into or exchangeable for,
no options or other rights to acquire from OSI or its
8
17
subsidiaries, and no other contract, understanding, arrangement or obligation
(whether or not contingent) providing for the issuance or sale, directly or
indirectly of, any capital stock or other ownership interests in, or any other
securities of, any subsidiary of OSI. There are no outstanding contractual
obligations of OSI or its subsidiaries to repurchase, redeem or otherwise
acquire any outstanding shares of capital stock or other ownership interests in
any subsidiary of OSI. For purposes of this Agreement, "Lien" means, with
respect to any asset (including, without limitation, any security), any
mortgage, lien, pledge, charge, security interest or encumbrance of any kind in
respect of such asset.
3.3 Authority Relative to This Agreement.
(a) OSI has all necessary corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and by the Stockholders' Agreement have been
duly and validly authorized and approved by the Board of Directors of OSI (the
"OSI Board") and no other corporate proceedings on the part of OSI are necessary
to authorize this Agreement or to consummate the transactions contemplated
hereby (other than, with respect to the Merger, the approval and adoption of
this Agreement by the holders of a majority of the then outstanding shares of
OSI Common Stock). This Agreement has been duly and validly executed and
delivered by OSI and constitutes a valid, legal and binding agreement of OSI,
enforceable against OSI in accordance with its terms.
(b) The OSI Board has, by unanimous vote of those present (who
constituted 100% of the directors then in office), duly and validly approved,
and taken all corporate actions required to be taken by the OSI Board for, the
consummation of the transactions, including the Merger, contemplated hereby and
has resolved (i) to deem this Agreement and the transactions contemplated
hereby, including the Merger, taken together, advisable and fair to, and in the
best interests of, OSI and its stockholders, (ii) to recommend that the
stockholders of OSI approve and adopt this Agreement and (iii) to approve the
Stockholders Agreement.
(c) The OSI Board has directed that this Agreement be submitted to
the stockholders of OSI for their approval at a meeting to be held for that
purpose. The affirmative vote of the holders of a majority of the voting stock
of OSI (which is comprised solely of OSI Common Stock) is the only vote of the
holders of any class or series of capital stock of OSI necessary to adopt this
Agreement and approve the transactions contemplated hereby, including the Merger
(the "OSI Requisite Vote"). No other vote of the stockholders of OSI is required
by Law, the certificate of incorporation or bylaws of OSI or otherwise in order
for OSI to approve and adopt this Agreement or to consummate the transactions
contemplated hereby.
3.4 SEC Reports; Financial Statements; No Undisclosed Liabilities.
(a) OSI has filed all required forms, reports and documents with the
Securities and Exchange Commission (the "SEC") since January 1, 1997 (the "OSI
SEC
9
18
Reports"), each of which has complied in all material respects with all
applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), each as in effect on the dates such forms, reports and
documents were filed. None of the OSI SEC Reports, including, without
limitation, any financial statements or schedules included or incorporated by
reference therein, contained, when filed, any untrue statement of a material
fact or omitted to state a material fact required to be stated or incorporated
by reference therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
consolidated financial statements of OSI included in the OSI SEC Reports
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto as in effect on the dates such OSI SEC Reports were filed, and fairly
present, in all material respects and in conformity with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis (except as
may be indicated in the notes thereto), the consolidated financial position of
OSI and its consolidated subsidiaries as of the dates thereof and their
consolidated results of operations and changes in financial position for the
periods then ended (subject, in the case of the unaudited interim financial
statements, to normal year-end adjustments which are not expected to be
material).
(b) Except as and to the extent disclosed or reflected in the OSI
SEC Reports filed prior to the date hereof (the "Filed OSI SEC Reports"),
neither OSI nor any of its subsidiaries has any liabilities or obligations of
any nature, whether or not accrued, contingent or otherwise, whether due or to
become due or asserted or unasserted, which would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on OSI.
(c) OSI has made available to Infinity a complete and correct copy
of any material amendments or modifications, which have not yet been filed with
the SEC, to agreements, documents or other instruments which previously had been
filed by OSI with the SEC pursuant to the Exchange Act.
3.5 Information Supplied.
(a) None of the information supplied or to be supplied by OSI for
inclusion or incorporation by reference in the registration statement on Form
S-4 to be filed with the SEC by Infinity in connection with the issuance of
shares of Infinity Common Stock in the Merger, including the prospectus
contained therein and any amendment thereof or supplement thereto (the "S-4"),
will, at the time the S-4 is filed with the SEC and at the time it becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. If, at any time prior to the Effective
Time, any event with respect to OSI, its officers and directors or any of its
subsidiaries should occur which is required to be described in the S-4 (or an
amendment or supplement thereto), OSI shall promptly so advise Infinity.
10
19
(b) The proxy statement relating to the meeting of OSI's
stockholders to be held in connection with the Merger, including any amendment
thereof or supplement thereto (the "Proxy Statement"), will not, at the date
mailed to stockholders of OSI and at the time of the meeting of stockholders of
OSI to be held in connection with the Merger, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Proxy Statement
will comply as to form in all material respects with the applicable provisions
of the Exchange Act and the rules and regulations thereunder.
3.6 Consents and Approvals; No Violations. Except for filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the Securities Act, the Exchange Act, state
securities or blue sky Laws, the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act"), the Investment Canada Act (the "Canada Act"),
the Comision Federal de Competencia of Mexico, the filing and recordation of a
certificate of merger as required by the DGCL, and as otherwise set forth in
Section 3.6 of the OSI Disclosure Schedule (collectively, the "OSI Required
Approvals"), no filing with or notice to, and no permit, authorization, consent
or approval of, any court or tribunal or administrative, governmental or
regulatory body, agency or authority (a "Governmental Entity") is necessary for
the execution and delivery by OSI of this Agreement or the consummation by OSI
of the transactions contemplated hereby, except where the failure to obtain such
permits, authorizations, consents or approvals or to make such filings or give
such notice would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on OSI. Subject to obtaining the OSI
Required Approvals, neither the execution, delivery and performance of this
Agreement by OSI nor the consummation by OSI of the transactions contemplated
hereby will (i) conflict with or result in any breach of any provision of the
respective certificate or articles of incorporation or bylaws (or similar
governing documents) of OSI or any of its subsidiaries, (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration or Lien) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which OSI or any of its
subsidiaries is a party or by which any of them or any of their respective
properties or assets may be bound except the CIBC Credit Documents and the OSI
Indentures (as hereinafter defined), or (iii) violate any order, writ,
injunction, decree, Law, statute, rule or regulation (a "Law") applicable to OSI
or any of its subsidiaries or any of their respective properties or assets,
except in the case of (ii) or (iii) for violations, breaches or defaults which
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on OSI. No rights of first refusal or first offer,
preemptive rights or similar rights of participation are applicable to the
transactions contemplated by this Agreement or the Stockholders Agreement.
For the purposes of this Agreement, (i) "CIBC Credit Documents"
means the Fifth Amended and Restated Credit Agreement dated as of August 15,
1997, among
11
20
OSI, Mediacom, Inc., the several banks and other financial institutions thereto
and CIBC, as subsequently amended from time to time, and the notes, agreements
and other instruments referenced therein and (ii) "OSI Indentures" means the
Indentures dated October 15, 1996 and June 23, 1997, respectively, each among
OSI, its United States subsidiaries and the Bank of New York as trustee,
relating to the 9 3/8% Senior Subordinated Notes due 2006 and the 8 7/8% Senior
Subordinated Notes due 2007, including all supplements thereto.
3.7 No Default. None of OSI or its subsidiaries is in default or violation
(and no event has occurred which with or without due notice or the lapse of time
or both would constitute a default or violation) of any term, condition or
provision of (i) its certificate or articles of incorporation or bylaws (or
similar governing documents), (ii) any note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which OSI or
any of its subsidiaries is now a party or by which any of them or any of their
respective properties or assets may be bound or (iii) any order, writ,
injunction, decree, Law, statute, rule or regulation applicable to OSI, its
subsidiaries or any of their respective properties or assets, except in the case
of (ii) or (iii) for violations, breaches or defaults (x) arising under the CIBC
Credit Documents or under the OSI Indentures, absent the consent of CIBC and
other lenders under the CIBC Credit Documents, from the consummation of the
transactions contemplated herein and from the obligations arising under the OSI
Indentures resulting from such consummation or (y) which do not or would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on OSI.
3.8 Absence of Changes. Except as and to the extent disclosed by OSI in
the Filed OSI SEC Reports or as disclosed in Section 3.8 of the OSI Disclosure
Schedule, from January 1, 1999 through the date of this Agreement, OSI and its
subsidiaries have conducted their business in the ordinary and usual course
consistent with past practice and there has not been:
(a) any event, change, occurrence, development or state of
circumstances or facts which does or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on OSI;
(b) any issuance, sale or delivery, or commitment to issue, sell or
deliver (whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise) any stock of any
class or any other securities or equity equivalents (including, without
limitation, any stock options or stock appreciation rights), except for the
issuance or sale of shares of OSI Common Stock pursuant to outstanding options
granted prior to January 1, 1999 under the OSI Option Plans;
(c) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of OSI, or any
repurchase redemption or other acquisition by OSI or any subsidiary of any OSI
Securities;
12
21
(d) any amendment of any term of any outstanding security of OSI or
any subsidiary;
(e) (i) any incurrence or assumption by OSI or any subsidiary of any
indebtedness for borrowed money other than in the ordinary course of business
consistent with past practice or (ii) any guarantee, endorsement or other
incurrence or assumption of liability (whether directly, contingently or
otherwise) by OSI or any subsidiary for the obligations of any other person
(other than any wholly owned subsidiary of OSI, or OSI, with respect to its
subsidiaries), other than in the ordinary course of business consistent with
past practice;
(f) any creation or assumption by OSI or any subsidiary of any Lien
of any kind or nature whatsoever on any asset of OSI or any subsidiary other
than (i) in the ordinary course of business consistent with past practice and
(ii) Liens which have not and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on OSI;
(g) any making of any loan, advance or capital contribution to or
investment in any person by OSI or any subsidiary other than (i) loans, advances
or capital contributions to or investments in wholly owned subsidiaries of OSI
or (ii) loans or advances to employees of OSI or any subsidiary made in the
ordinary course of business consistent with past practice;
(h) (i) any contract or agreement entered into by OSI or any
subsidiary relating to any material acquisition or disposition of any assets or
business or (ii) any modification, amendment, assignment, termination or
relinquishment by OSI or any subsidiary of any contract, license or other right
(including any insurance policy naming it as a beneficiary or a loss payee) that
does or would reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect on OSI, other than, in the case of (i) and (ii),
transactions, commitments, contracts or agreements (A) in the ordinary course of
business consistent with past practice, or (B) which have not had and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on OSI;
(i) any material change in any method of accounting or accounting
principles or practice (for financial accounting or tax purposes) by OSI or any
subsidiary, except for any such change required by reason of a change in GAAP;
(j) any (i) grant of any severance or termination pay to any
director, officer or employee of OSI or any of its subsidiaries, other than
grants of severance or termination pay to employees (but not officers or
directors) in the ordinary course of business consistent with past practice;
(ii) entering into of any employment, deferred compensation or other similar
agreement (or any amendment to any such existing agreement) with any director,
officer or employee of OSI or any of its subsidiaries; (iii) increase in
benefits payable under any existing severance or termination pay policies or
employment agreements; or (iv) increase in compensation, bonus or other benefits
13
22
payable to directors, officers or employees of OSI or any of its subsidiaries
other than, in the case of clause (iv) only, increases in compensation, bonus or
other benefits payable to employees of OSI or any of its subsidiaries in the
ordinary and usual course of business consistent with past practice or merit
increases in salaries of employees at regularly scheduled times in customary
amounts consistent with past practices;
(k) any action or proceeding commenced, threatened or proposed, to
condemn or take by eminent domain or other governmental action any real or
personal property owned or used by OSI and its subsidiaries, other than such
actions or proceedings that have not had and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on OSI; or
(l) any permanent removal (or any written demand or request for
permanent removal) of any outdoor advertising display owned or used by OSI and
its subsidiaries, other than such removals that have not had and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on OSI.
3.9 Litigation. Except as disclosed by OSI in the Filed OSI SEC Reports or
as disclosed in Section 3.9 of the OSI Disclosure Schedule, (i) there is no
material suit, claim, action, proceeding or investigation pending or, to the
knowledge of OSI, threatened against OSI or any of its subsidiaries or any of
their respective properties or assets and (ii) none of OSI or its subsidiaries
is subject to any outstanding material judgment, order, writ, injunction or
decree.
3.10 Compliance with Applicable Law. Except as disclosed by OSI in the
Filed OSI SEC Reports and for failures which do not or would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
OSI, (i) OSI and its subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals of all Governmental Entities necessary for the
lawful conduct of their respective businesses, including, without limitation,
for the installation, maintenance and operation of advertising displays (the
"OSI Permits"), (ii) OSI and its subsidiaries are in compliance with the terms
of the OSI Permits, (iii) the businesses of OSI and its subsidiaries are not
being conducted in violation of any Law, including, without limitation, all such
Laws, ordinances and regulations relating to zoning, land use and billboard
operations and content, and (iv) no investigation or review by any Governmental
Entity with respect to OSI or its subsidiaries is pending or, to the knowledge
of OSI, threatened, nor, to the knowledge of OSI, has any Governmental Entity
indicated in writing an intention to conduct the same. No representation or
warranty is made in this Section 3.10 with respect to Environmental Laws (as
defined in Section 3.13(a)).
3.11 Employee Plans.
(a) Section 3.11(a) of the OSI Disclosure Schedule lists all
"employee benefit plans," as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and lists by country (whether
or not covered by
14
23
ERISA) all other employee benefit plans or other benefit arrangements, including
but not limited to all bonus and other incentive compensation, deferred
compensation, disability, retention, salary continuation, stock and
stock-related award, stock option, stock purchase, or workers' compensation
agreements, plans, policies and arrangements which OSI or any of its
subsidiaries maintains, is a party to, contributed to or has any obligation to
or liability for in respect of current or former employees and directors,
whether domestic or international (each, a "OSI Employee Benefit Plan" and
collectively, the "OSI Employee Benefit Plans"). None of OSI Employee Benefit
Plans other than a "multiemployer plan" (within the meaning of Section 3(37) of
ERISA) is subject to Title IV of ERISA. OSI has no severance plans.
(b) True, correct and complete copies of the following documents,
which are correct and complete in all material respects, with respect to each of
the OSI Employee Benefit Plans (other than a multiemployer plan), have been made
available to Infinity for review prior to the date hereof, to the extent
applicable: (i) any plans, all material amendments thereto and related trust
documents, and amendments thereto, (ii) the most recent Forms 5500 and all
schedules thereto and the most recent actuarial report, if any, (iii) the most
recent IRS determination letter, (iv) summary plan descriptions, (v) material
written communications to employees relating to the OSI Employee Benefit Plans,
(vi) written descriptions of all material non-written agreements relating to the
OSI Employee Benefit Plans and (vii) sample loan documents for the 401(k) plan.
(c) Except as would not, individually or in the aggregate, have a
Material Adverse Effect on OSI, (i) all payments required to be made by or under
any OSI Employee Benefit Plan, any related trusts, insurance policies or
ancillary agreements, or any collective bargaining agreement have been timely
made, (ii) OSI and its subsidiaries have performed all obligations required to
be performed by them under any OSI Employee Benefit Plan, (iii) the OSI Employee
Benefit Plans have been administered and are in compliance in all respects with
their terms and the requirements of ERISA, the Code and other applicable Laws,
(iv) there are no actions, suits, arbitrations or claims (other than routine
claims for benefits) pending or, to the knowledge of OSI, threatened with
respect to any OSI Employee Benefit Plan and (v) there are no audits,
investigations or other inquiries pending or threatened by the IRS or the
Department of Labor with respect to any OSI Employee Benefit Plan.
(d) Except as set forth in Section 3.11(d) of the OSI Disclosure
Schedule, each OSI Employee Benefit Plan and its related trust which are
intended to be "qualified" within the meaning of Sections 401(a) and 501(a) of
the Code, respectively, have been determined by the Internal Revenue Service to
be so "qualified" under such Sections, as amended by the Tax Reform Act of 1986,
and OSI knows of no fact which would adversely affect the qualified status of
any such OSI Employee Benefit Plan and its related trust.
(e) Except as set forth in Section 3.11(e) of the OSI Disclosure
Schedule, neither the execution and delivery of this Agreement nor the
consummation of the
15
24
transactions contemplated hereby will solely, or in connection with any other
event, (i) increase any benefits otherwise payable under any OSI Employee
Benefit Plan, or (ii) result in the acceleration of the time of payment or
vesting of any such benefits. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
result in any payment becoming due, or increase the compensation due, to any
current or former employee or director of OSI or any of its subsidiaries.
(f) Except as set forth in Section 3.11(f) of the OSI Disclosure
Schedule, none of the OSI Employee Benefit Plans provides for post-employment
life or health insurance, benefits or coverage for any participant or any
beneficiary of a participant, except as may be required under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended, or as may be offered as
individual conversion rights.
(g) There is no litigation or administrative or other proceeding
involving any OSI Employee Benefit Plan nor has OSI or any of its subsidiaries
received notice that any such proceeding is threatened, in each case that would
have or reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on OSI. Neither OSI nor any of its subsidiaries has
incurred, nor, to OSI's knowledge, assuming a withdrawal as of the Effective
Time, would be likely to incur any withdrawal liability with respect to any
"multiemployer plan" (within the meaning of section 3(37) of ERISA) which
remains unsatisfied in an amount which would have a Material Adverse Effect on
OSI. The termination of, or withdrawal from, any multiemployer plan to which OSI
or any of its subsidiaries contributes, on or prior to the Effective Time, will
not subject OSI or any of its subsidiaries to any liability under Title IV of
ERISA that would have a Material Adverse Effect on OSI.
3.12 Labor and Employment Matters.
(a) Section 3.12(a) of the OSI Disclosure Schedule sets forth a list
of all labor or collective bargaining agreements to which OSI or any subsidiary
of OSI is party and all employment or severance compensation agreements with
respect to employees receiving annual compensation in excess of $100,000. Except
as set forth in Section 3.12(a) of the OSI Disclosure Schedule, (i) there are no
labor or collective bargaining agreements which pertain to employees of OSI or
its subsidiaries, there are no employment or severance agreements with respect
to employees of OSI or its subsidiaries receiving annual compensation in excess
of $100,000 and (ii) neither OSI nor any of its subsidiaries is a party to or
bound by any agreement with any employee or consultant pursuant to which such
person would be entitled to receive any additional compensation or an
accelerated payment of compensation as a result of the (x) consummation of the
transactions contemplated hereby or (y) the termination of such employment or
consulting following such consummation. OSI has heretofore made available to
Infinity true and complete copies of the agreements listed on Section 3.12(a) of
the OSI Disclosure Schedule, together with all amendments, modifications,
supplements and side letters affecting the duties, rights and obligations of any
party thereunder.
16
25
(b) Except as set forth in Section 3.12(b) of the OSI Disclosure
Schedule, no employees of OSI or any of its subsidiaries are represented by any
labor organization. No labor organization or group of employees of OSI or any of
its subsidiaries has made a pending demand for recognition or certification;
and, to OSI's knowledge, there are no representation or certification
proceedings or petitions seeking a representation proceeding presently pending
or threatened in writing to be brought or filed with the National Labor
Relations Board or any other labor relations tribunal or authority. To OSI's
knowledge, there are no organizing activities involving OSI or its subsidiaries
pending with any labor organization or group of employees of OSI or any of its
subsidiaries.
(c) Except as has not had and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on OSI,
(i) there are no unfair labor practice charges, grievances or
complaints pending or threatened in writing by or on behalf of any
employee or group of employees of OSI or its subsidiaries;
(ii) there are no complaints, charges or claims against OSI or
its subsidiaries pending, or threatened in writing to be brought or filed,
with any Governmental Entity or arbitrator based on, arising out of, in
connection with, or otherwise relating to the employment or termination of
employment of any individual by OSI or its subsidiaries; and
(iii) OSI and each of its subsidiaries is in compliance with
all Laws relating to the employment of labor, including all such Laws and
orders relating to wages, hours, collective bargaining, discrimination,
civil rights, safety and health workers' compensation and the collection
and payment of withholding and/or Social Security Taxes and similar Taxes.
OSI and each of its subsidiaries has complied with the Workers Adjustment
and Retraining Notification Act (or any similar state or local law) and
has not incurred any liabilities or obligations in connection therewith
which remain outstanding.
3.13 Environmental Matters.
(a) As used in this Agreement:
(i) "Environmental Costs and Liabilities" means any and all
losses, liabilities, obligations, damages (including compensatory,
punitive and consequential damages), fines, penalties, judgments, actions,
claims, costs and expenses (including, without limitation, fees,
disbursements and expenses of legal counsel, experts, engineers and
consultants and the costs of investigation and feasibility studies and
clean up, remove, treat, or in any other way address any Hazardous
Materials (as hereinafter defined)) arising from, under or pursuant to any
Environmental Law (as hereinafter defined);
17
26
(ii) "Environmental Law" means any applicable federal, state,
local or foreign Law (including common Law), statute, rule, regulation,
ordinance, decree or other legal requirement relating to the protection of
natural resources, the environment and public and employee health and
safety or pollution or the release or exposure to Hazardous Materials (as
hereinafter defined) and shall include, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act
("CERCLA") (42 U.S.C. Section 9601 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the Clean
Water Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (33 U.S.C.
Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. Section
7401 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7
U.S.C. Section 136 et seq.), and the Occupational Safety and Health Act
(29 U.S.C. Section 651 et seq.) ("OSHA") and the regulations promulgated
pursuant thereto, and any such applicable state or local statutes, and the
regulations promulgated pursuant thereto, as such Laws have been and may
be amended or supplemented through the Closing Date;
(iii) "Hazardous Material" means any substance, material or
waste which is regulated, classified or otherwise characterized as
hazardous, toxic, pollutant, contaminant or words of similar meaning or
regulatory effect by any Governmental Entity or the United States, and
includes, without limitation, petroleum, petroleum by-products and wastes,
asbestos and polychlorinated biphenyls;
(iv) "Release" means any release, spill, effluent, emission,
leaking pumping, injection, deposit, disposal, discharge, dispersal,
leaching, or migration into the indoor or outdoor environment, or into or
out of any property owned, operated or leased by the applicable party or
its subsidiaries; and
(v) "Remedial Action" means all actions, including, without
limitation, any capital expenditures, required by a Governmental Entity or
required under or taken pursuant to any Environmental Law, or voluntarily
undertaken to (A) clean up, remove, treat, or in any other way, ameliorate
or address any Hazardous Materials or other substance in the indoor or
outdoor environment; (B) prevent the Release or threat of Release, or
minimize the further Release of any Hazardous Material so it does not
endanger or threaten to endanger the public health or welfare of the
indoor or outdoor environment; (C) perform pre-remedial studies and
investigations or post-remedial monitoring and care pertaining or relating
to a Release; or (D) bring the applicable party into compliance with any
Environmental Law.
18
27
(b) Except as has not had and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on OSI, or as
set forth in Section 3.13 of the OSI Disclosure Schedule:
(i) The operations of OSI and its subsidiaries have been and,
as of the Closing Date, will be, in compliance with all Environmental
Laws, except for noncompliance that does not and would not reasonably be
expected to result in OSI and its subsidiaries incurring Environmental
Costs and Liabilities, and OSI is not aware of any facts, circumstances or
conditions, which without significant capital expenditures, would prevent
compliance in the future;
(ii) OSI and its subsidiaries have obtained and will, as of
the Closing Date, maintain all permits, authorizations, licenses or
similar approvals required under applicable Environmental Laws for the
continued operations of their respective businesses;
(iii) OSI and its subsidiaries are not subject to any
outstanding written orders or contracts with any Governmental Entity or
other person respecting (A) Environmental Laws, (B) Remedial Action or (C)
any Release or threatened Release of a Hazardous Material;
(iv) OSI and its subsidiaries have not received any written
communication alleging, with respect to any such party, the violation of
or liabilities (real or potential), under any Environmental Law;
(v) Neither OSI nor any of its subsidiaries has any contingent
liability in connection with the Release of any Hazardous Material
(whether on-site or off-site);
(vi) Except in compliance with Environmental Law, the
operations of OSI or its subsidiaries do not involve the generation,
transportation, treatment, storage or disposal of hazardous waste, as
defined and regulated under 40 C.F.R. Parts 260-270 (in effect as of the
date of this Agreement) or any state equivalent;
(vii) Except in compliance with Environmental Law, there is
not now, nor to OSI's knowledge, has there been in the past, on or in any
property of the Company or its subsidiaries any of the following: (A) any
underground storage tanks (except those which have completed or are
presently undergoing remediation) or surface impoundments, (B) any
asbestos-containing materials, or (C) any polychlorinated biphenyls; and
(viii) No judicial or administrative proceedings are pending
or, to OSI's knowledge, threatened against OSI and its subsidiaries
alleging the violation of or seeking to impose liability pursuant to any
Environmental Law and
19
28
there are no investigations pending or, to OSI's knowledge, threatened
against OSI or any of its subsidiaries under Environmental Laws.
(c) None of the exceptions set forth in Section 3.13 of the OSI
Disclosure Schedule are reasonably likely to result in OSI and its subsidiaries
incurring Environmental Costs and Liabilities which would reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on OSI.
(d) OSI has made available to Infinity copies of all environmentally
related assessments, audits, investigations, sampling or similar reports
relating to OSI or its subsidiaries or any real property currently or formerly
owned, operated or leased by or for OSI and its subsidiaries.
3.14 Taxes. Except as disclosed in Section 3.14 of the OSI Disclosure
Schedule:
(a) Each of OSI and its subsidiaries has timely filed, or has caused
to be timely filed on its behalf (taking into account any extension of time
within which to file), all Tax Returns (as hereinafter defined) required to be
filed by it, and all such filed Tax Returns are true, complete and accurate,
except for any failure to file any Tax Return or for any inaccuracy with respect
to any Tax Return that has been filed which would not have, individually or in
the aggregate, a Material Adverse Effect on OSI. All Taxes shown to be due on
such Tax Returns have been timely paid.
(b) The most recent financial statements contained in the OSI SEC
Reports reflect an adequate reserve for all Taxes payable by OSI and its
subsidiaries for all Taxable periods and portions thereof through the date of
such financial statements. To the best knowledge of OSI, no deficiency in excess
of $100,000 with respect to Taxes has been proposed, asserted or assessed
against OSI or any subsidiary of OSI. No material liens for Taxes exist with
respect to any asset of OSI or any subsidiary of OSI, except for statutory liens
for Taxes not yet due.
(c) The Federal income Tax Returns of OSI and each subsidiary of OSI
have been examined by and settled with the United States Internal Revenue
Service (or the applicable statute of limitations has expired) for all years
through 1994, and the material state income and franchise Tax Returns and the
foreign Tax Returns of OSI and each subsidiary have been examined by and settled
with the applicable Tax authorities for the years specified in Section 3.14(c)
of the OSI Disclosure Schedule. All assessments for Taxes due with respect to
such completed and settled examinations or any concluded litigation have been
fully paid.
(d) Neither OSI nor any subsidiary of OSI has any obligation under
any agreement (either with any person or any Tax authority) with respect to
Taxes, except for any agreements which would not have, individually or in the
aggregate, a Material Adverse Effect on OSI.
20
29
(e) Neither OSI nor any subsidiary of OSI has constituted either a
"distributing corporation" or a "controlled corporation" (within the meaning of
Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for
Tax-free treatment under Section 355 of the Code.
(f) No audit or other administrative or court proceedings in which
the total proposed adjustments to net income exceed $300,000 are pending with
respect to Federal, state or foreign income or franchise Taxes of OSI or any
subsidiary of OSI and no written notice thereof has been received.
(g) No claim in writing has been made by a Tax authority in a
jurisdiction where neither OSI nor any subsidiary of OSI files Tax Returns that
OSI or any subsidiary is or may be subject to taxation in that jurisdiction.
(h) Neither OSI nor any subsidiary of OSI is a party to any
contract, agreement or other arrangement which provides for the payment of any
amount which would not be deductible by reason of Section 162(m) or Section 280G
of the Code.
(i) OSI has made available to Infinity true and complete copies of
(i) all Federal, state and foreign income and franchise Tax Returns of OSI and
its subsidiaries for the preceding three Taxable years and (ii) any audit report
issued within the last three years (or otherwise with respect to any audit or
proceeding in progress) relating to Taxes of OSI or any subsidiary.
(j) No subsidiary of OSI owns any Shares.
(k) None of OSI or any of its subsidiaries has taken, agreed to take
or will take any action that would prevent the Merger from constituting a
reorganization qualifying under the provisions of Section 368(a) of the Code.
(l) For purposes of this Agreement:
"Taxes" includes all taxes, whenever created or imposed, and whether
of the United States or elsewhere, and whether imposed by a local, municipal,
governmental, state, foreign, Federal or other Governmental Entity, or in
connection with any agreement with respect to Taxes including all interest,
penalties and additions imposed with respect to such amounts.
"Tax Returns" means all Federal, state, local, provincial and
foreign Tax returns, declarations, statements, reports, schedules, forms and
information returns and any amended Tax return relating to Taxes.
3.15 Material Contracts.
(a) Section 3.15(a) of the OSI Disclosure Schedule (together with
Section 3.12 of the OSI Disclosure Schedule) lists all contracts and agreements
(and all material amendments, modifications and supplements thereto and all side
letters to which OSI or
21
30
any of its subsidiaries is a party materially affecting the obligations of any
party thereunder) to which OSI or any of its subsidiaries or any of its
subsidiaries is a party or by which any of its properties or assets are bound of
the following types: (i) contracts and agreements for the sale of advertising or
advertising services, or with advertising agencies or representatives, that
contain exclusivity or "most favored nation" provisions or account, individually
or in the aggregate for a series of related contracts, for net revenues per
annum of OSI and its subsidiaries in excess of $2 million; (ii) contracts and
agreements providing for a right of first refusal, first negotiation, "tag
along" or "drag along" rights applicable to any capital stock of OSI or assets
of OSI with an aggregate fair market value in excess of $500,000; (iii)
partnership, joint venture or cooperative development agreements, involving an
investment in excess of $500,000 or additional mandatory capital contributions
in excess of $500,000; (iv) contracts and agreements providing for the
acquisition, sale, or other disposition of material properties or assets of OSI
or its subsidiaries or predecessors (by merger, purchase or sale of assets or
stock or otherwise) entered into since January 1, 1995 and involving a purchase
price in excess of $5 million; (v) contracts and agreements with any transit,
transportation or similar authority or agreements with any Governmental Entity
that account, individually or in the aggregate for a series of related
contracts, for gross revenues per annum of OSI and its subsidiaries in excess of
$5 million; (vi) promotion, marketing, sponsorship or similar arrangements
involving annual payments in excess of $250,000; (vii) loan or credit
agreements, mortgages, indentures, or other agreements or instruments evidencing
indebtedness for borrowed money by OSI or any of its subsidiaries or any such
agreement or instrument pursuant to which indebtedness for borrowed money may be
incurred, including guaranties; (viii) contracts and agreements providing for
the provision of any services, products or payments to or from any officer,
director, or other affiliate of OSI or such officer, director or affiliate, and
such contracts and agreements involving employees or their affiliates if
payments in excess of $100,000 per annum are made to such employee or his
affiliate under such contract; (ix) agreements that purport to limit, curtail or
restrict the ability of OSI or any of its subsidiaries, or would restrict the
ability of Infinity or any of its subsidiaries, to compete in any geographic
area or line of business; and (x) all commitments and agreements to enter into
any contracts or agreements relating to any of the foregoing (collectively,
together with any such contracts entered into in accordance with Section 5.1
hereof, the "Material Contracts"). OSI has heretofore delivered or made
available to Infinity true, correct and complete copies of all Material
Contracts, except with respect to contracts listed in Section 3.15(a)(i); where
standard forms of OSI or advertising agency contracts are used.
(b) Except as set forth in Section 3.15(b) of the OSI Disclosure
Schedule and except as have not had would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on OSI, (A) each of
the Material Contracts, and (B) each lease of real property for outdoor
structures, licenses, easements and other agreements for the placement, use, or
construction of advertising displays including, without limitation, rights to
locations on which structures have not yet been built (the matters described in
this clause (B) being referred to herein as "Real Property Rights"), is valid
and enforceable in accordance with its terms, and (i) there is no default under
any
22
31
contract or agreement to which OSI or any of its subsidiaries is a party or by
which any of its properties or assets are bound, either by OSI or any of its
subsidiaries or, to the knowledge of OSI, by any other party thereto, (ii) no
event has occurred that with the lapse of time or the giving of notice or both
would constitute a default thereunder by OSI or any of its subsidiaries
(including the consummation of the Merger) or, to the knowledge of OSI, any
other party, and (iii) no party to any such contract or agreement has given
notice to OSI or any of its subsidiaries or made a claim against OSI or any of
its subsidiaries with respect to any breach or default thereunder.
3.16 Insurance. OSI and its subsidiaries maintain adequate insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by corporations of established reputations engaged
in the same or similar business and similarly situated, of such types and in
such amounts as are customarily carried under similar circumstances by such
other corporations.
3.17 Real Property.
(a) Section 3.17(a) of the OSI Disclosure Schedule sets forth all of
the real property owned in fee by OSI and its subsidiaries that is used for
operating facilities or office space or, to the knowledge of OSI, is material to
the conduct of the business of OSI and its subsidiaries, taken as a whole. Each
of OSI and its subsidiaries has good and marketable title to each parcel of
material real property owned by it and owns such real property free and clear of
all Liens, except (i) Liens for Taxes and general and special assessments not in
default and payable without penalty and interest, (ii) Liens created under the
CIBC Credit Documents and (iii) other Liens which do not and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on OSI (collectively, "Permitted Liens").
(b) Section 3.17(b) of the OSI Disclosure Schedule sets forth all
leases, subleases and other agreements under which OSI or any of its
subsidiaries uses or occupies or has the right to use or occupy, now or in the
future, any real property used for operating facilities or office space or, to
the knowledge of OSI, that is material to the conduct of the business of OSI and
its subsidiaries, taken as a whole, except leases of real property used for
advertising displays, which is covered by Section 3.15 (the "Real Property
Leases"). Each of OSI and its subsidiaries has a good and valid leasehold
interest in each parcel of real property leased by it free and clear of all
Liens, except Permitted Liens.
(c) Except as have not and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, each of the Real
Property Leases is valid and enforceable in accordance with its terms, and (i)
there is no default under any Real Property Leases either by OSI or any of its
subsidiaries or, to the knowledge of OSI, by any other party thereto, (ii) no
event has occurred that with the lapse of time or the giving of notice or both
would constitute a default thereunder by OSI or any of its subsidiaries
(including the consummation of the Merger) or, to the knowledge of OSI, any
other party, and (iii) no party to any such contract or agreement
23
32
has given notice to OSI or any of its subsidiaries of or made any claim against
OSI or any of its subsidiaries with respect to any breach or default thereunder.
3.18 Tangible Property. With respect to the tangible properties and assets
of OSI and its subsidiaries (excluding real property) that are material to the
conduct of the business of OSI and its subsidiaries, OSI and its subsidiaries
have good title to, or hold pursuant to valid and enforceable leases or
licenses, all such properties and assets. With such exceptions as have not had
and would not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect on OSI, (i) all of the assets of OSI and its
subsidiaries, including without limitation all advertising displays, have been
maintained and repaired for their continued operation and are in good repair and
condition and (ii) all advertising displays of OSI and its subsidiaries are
located entirely on real property leased or owned by, or subject to a valid
easement held by, OSI or its subsidiaries.
3.19 Intellectual Property. Subject to such exceptions which, individually
or in the aggregate, have not had and would not reasonably be expected to have a
Material Adverse Effect on OSI, OSI and its subsidiaries own or possess adequate
licenses or other valid rights to use all patents, patent rights, trademarks,
trademark rights, trade names, trade name rights copyrights service marks, trade
secrets, applications for trademarks and for service marks, know-how and other
proprietary rights and information used or held for use in connection with the
business of OSI and its subsidiaries as currently conducted or as contemplated
to be conducted and OSI is not aware of any assertion or claim challenging the
validity or enforceability of any of the foregoing which, individually or in the
aggregate, has had or would reasonably be expected to have a Material Adverse
Effect on OSI. Subject to such exceptions as have not and would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect, there have been no claims made or notices that the conduct of OSI's
business has infringed the intellectual property rights of any third party.
3.20 Year 2000. The latest Filed OSI SEC Report accurately describes OSI's
year 2000 compliance program and the state of year 2000 readiness of OSI's
Computer Programs (as hereinafter defined). To OSI's knowledge, there are no
facts or circumstances that would reasonably be expected to render OSI unable to
complete its Year 2000 compliance program as outlined in the latest Filed OSI
SEC Report. OSI has not received written notice from any customer, supplier or
financial institution that such party expects its operations to be disrupted as
a result of Computer Programs failures due to Year 2000 problems, which
disruption, individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect on OSI.
For the purposes of this Agreement, "Computer Programs" means (i)
any and all computer software programs, including all source and object code;
(ii) databases and compilations, including any and all data and collections of
data, whether machine readable or otherwise; (iii) billing, reporting, and other
management information systems; (iv) all descriptions, flow-charts and other
work product used to design, plan, organize and develop any of the foregoing;
(v) all content contained on any Internet site(s); and
24
33
(vi) all documentation, including user manuals and training materials, relating
to any of the foregoing.
3.21 Absence of Questionable Payments. Neither OSI nor any of its
subsidiaries nor, to OSI's knowledge, any director, officer, agent, employee or
other person acting on behalf of OSI or any of its subsidiaries, has used any
corporate or other funds for unlawful contributions, payments, gifts, or
entertainment, or made any unlawful expenditures relating to political activity
to government officials or others or established or maintained any unlawful or
unrecorded funds in violation of Section 30A of the Exchange Act. Neither OSI
nor any of its subsidiaries nor, to OSI's knowledge, any director, officer,
agent, employee or other person acting on behalf of OSI or any of its
subsidiaries, has accepted or received any unlawful contributions, payments,
gifts, or expenditures. To OSI's knowledge, OSI and each of its subsidiaries
which is required to file reports pursuant to Section 12 or 15(d) of the
Exchange Act is in compliance with the provisions of Section 13(b) of the
Exchange Act.
3.22 Opinion of Financial Advisor. BT Xxxx Xxxxx & Sons, Inc. (the "OSI
Financial Advisor") has delivered to the OSI Board its opinion, dated the date
of this Agreement, to the effect that, as of such date, the Merger Consideration
is fair to the holders of Shares from a financial point of view, and such
opinion has not been withdrawn or adversely modified.
3.23 Brokers. No broker, finder or investment banker (other than the OSI
Financial Advisor, a true and correct copy of whose engagement agreement has
been provided to Infinity) is entitled to any brokerage, finder's or other fee
or commission or expense reimbursement in connection with the transactions
contemplated by this Agreement based upon arrangements made by and on behalf of
OSI or any of its affiliates.
3.24 Takeover Statutes; Dissenters' Rights. OSI has taken all action
required to be taken by it in order to exempt this Agreement, the Stockholders
Agreement and the transactions contemplated hereby and thereby from, and this
Agreement, the Stockholders' Agreement and the transactions contemplate hereby
and thereby (the "Covered Transactions") are exempt from, (i) the requirements
of Section 203 of the DGCL, (ii) to the knowledge of OSI, any "moratorium",
"control share", "fair price", "affiliate transaction", "business combination",
or other anti-takeover Laws of any state (collectively, "Takeover Statutes") or
(iii) any anti-takeover provision in OSI's certificate of incorporation. Holders
of Shares do not have dissenters' rights in connection with the Merger.
25
34
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF INFINITY AND BURMA ACQUISITION
Infinity and Burma Acquisition hereby represent and warrant to the
Company as follows:
4.1 Organization and Qualification.
(a) Each of Infinity and its subsidiaries is a corporation duly
organized, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation or organization and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its businesses as now being conducted. Each of Infinity and its
subsidiaries is duly qualified and in good standing to do business in each
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification necessary, except in
such jurisdictions where the failure to be so duly qualified and in good
standing has not had and would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on Infinity.
(b) Except as set forth in Section 4.1(b) of the Infinity Disclosure
Schedule, Infinity has no subsidiaries and does not own, directly or indirectly,
beneficially or of record, any shares of capital stock or other security of any
other material investment in any other entity.
4.2 Capitalization of Infinity and Its Subsidiaries.
(a) The authorized capital stock of Infinity consists of (i)
2,000,000,000 shares of Infinity Common Stock, (ii) 2,000,000,000 shares of
Class B Common Stock, par value $.01 per share (the "Class B Common Stock", and
(iii) 50,000,000 shares of Preferred Stock, par value $.01 per share (the
"Infinity Preferred Stock"). As of May 25, 1999, 155,250,000 shares of Infinity
Common Stock, 700,000,000 shares of Class B Common Stock and no shares of
Infinity Preferred Stock were issued and outstanding. As of May 25, 1999,
options to acquire 5,424,028 shares of Infinity Common Stock were outstanding.
As of March 31, 1999, 22,500,000 shares of Infinity Common Stock were reserved
for issuance under Infinity's employee and director stock plans and 700,000,000
shares of Infinity Common Stock were reserved for issuance upon conversion of
shares of Class B Common Stock. All the outstanding shares of Infinity Common
Stock are, and all shares to be issued as part of the Merger Consideration will
be, when issued in accordance with the terms hereof, duly authorized, validly
issued, fully paid and non-assessable. Except as set forth above in this Section
4.2(a), as of the date hereof, there are outstanding (i) no shares of capital
stock or other voting securities of Infinity, (ii) no securities of Infinity or
its subsidiaries convertible into or exchangeable for shares of capital stock or
voting securities of Infinity, (iii) no options or other rights to acquire from
Infinity or its subsidiaries, and no obligations of Infinity or its subsidiaries
to issue,
26
35
any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of Infinity, and (iv) no
equity equivalents, or interests in the ownership or earnings, of Infinity or
other similar rights (including stock appreciation rights) (collectively,
"Infinity Securities"). Except as set forth in Article Twelfth of Infinity's
Certificate of Incorporation, there are no outstanding obligations of Infinity
or its subsidiaries to repurchase, redeem or otherwise acquire any Infinity
Securities. Except as set forth in Section 4.2(a) of the Infinity Disclosure
Schedule, there are no shareholder agreements, voting trusts or other agreements
or understandings to which Infinity is a party or to which it is bound relating
to the voting of any shares of capital stock of Infinity.
(b) Except as set forth in Section 4.2(b) of the Infinity Disclosure
Schedule, all of the outstanding capital stock of Infinity's subsidiaries is
owned by Infinity, directly or indirectly, free and clear of any Lien or any
other limitation or restriction (including any restriction on the right to vote
or sell the same, except as may be provided as a matter of Law). Except as set
forth in Section 4.2(b) of the Infinity Disclosure Schedule, there are no
securities of Infinity or its subsidiaries convertible into or exchangeable for,
no options or other rights to acquire from Infinity or its subsidiaries, and no
other contract, understanding, arrangement or obligation (whether or not
contingent) providing for the issuance or sale, directly or indirectly, of any
capital stock or other ownership interests in, or any other securities of, any
subsidiary of Infinity. Except as set forth in Section 4.2(b) of the Infinity
Disclosure Schedule, there are no outstanding contractual obligations of
Infinity or its subsidiaries to repurchase, redeem or otherwise acquire any
outstanding shares of capital stock or other ownership interests in any
subsidiary of Infinity, except for redemption provisions contained in the
certificate of incorporation of certain subsidiaries similar to Article Twelfth
of Infinity's Certificate of Incorporation.
4.3 Authority Relative to This Agreement. Infinity and Burma Acquisition
have all necessary corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the Boards of
Directors of Infinity and Burma Acquisition, and by Infinity as the sole
stockholder of Burma Acquisition, and no other corporate proceedings on the part
of Infinity or Burma Acquisition are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby (other than, with respect to the
issuance of the Infinity Common Stock in the Merger (the "Share Issuance"), the
approval of such issuance by the holders of a majority of the voting power of
the Infinity Common Stock and the Class B Common Stock, voting as one class (the
"Infinity Requisite Vote")). This Agreement has been duly and validly executed
and delivered by each of Infinity and Burma Acquisition and constitutes a valid,
legal and binding agreement each of Infinity and Burma Acquisition, enforceable
against Infinity and Burma Acquisition, respectively, in accordance with its
terms.
27
36
4.4 SEC Reports; Financial Statements; No Undisclosed Liabilities.
(a) Infinity has filed all required forms, reports and documents
with the SEC since January 1, 1999 and the final prospectus dated December 9,
1998 (the "Infinity SEC Reports"), each of which has complied in all material
respects with all applicable requirements of the Securities Act and the Exchange
Act, each as in effect on the dates such Infinity SEC Reports were filed. None
of the Infinity SEC Reports, including, without limitation, any financial
statements or schedules included or incorporated by reference therein,
contained, when filed, any untrue statement of a material fact or omitted to
state a material fact required to be stated or incorporated by reference therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of Infinity included in the Infinity SEC Reports complied
as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto as in effect
on the dates such Infinity SEC Reports were filed, and fairly present, in all
material respects and in conformity with GAAP applied on a consistent basis
(except as may be indicated in the notes thereto), the consolidated financial
position of Infinity and its consolidated subsidiaries as of the dates thereof
and their consolidated results of operations and changes in financial position
for the periods then ended (subject, in the case of the unaudited interim
financial statements, to normal year-end adjustments which are not expected to
be material).
(b) Except as and to the extent disclosed or reflected in the
Infinity SEC Reports filed prior to the date of this Agreement (the "Filed
Infinity SEC Reports"), neither Infinity nor any of its subsidiaries has any
liabilities or obligations of any nature, whether or not accrued, contingent or
otherwise, whether due or to become due or asserted or unasserted which would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Infinity.
4.5 Information Supplied.
(a) None of the information supplied or to be supplied by Infinity
for inclusion in the Proxy Statement will, at the date mailed to stockholders of
OSI and at the time of the meeting of stockholder of OSI to be held in
connection with the Merger, contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. If, at any time prior to the Effective Time, any
event with respect to Infinity, its officers and directors or any of its
subsidiaries should occur which is required to be described in the Proxy
Statement (or an amendment or supplement thereto), Infinity shall promptly so
advise OSI.
(b) Neither the S-4 nor any amendment thereto will at the time it
becomes effective under the Securities Act or at the Effective Time contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they are made, not misleading. The information
statement relating to the meeting of Infinity's
28
37
stockholders to be held in connection with the Share Issuance, including any
amendment thereof or supplement thereto (the "Information Statement"), will not,
at the date mailed to stockholders of Infinity and at the time of the meeting of
stockholders of Infinity to be held in connection with the Share Issuance,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. No
representation or warranty is made by Infinity in this Section 4.5 with respect
to statements made or incorporated by reference therein based on information
supplied by OSI or any of its subsidiaries for inclusion or incorporation by
reference in the S-4 or the Information Statement. The S-4 will comply as to
form in all material respects with the applicable provisions of the Securities
Act and the rules and regulations thereunder and the Information Statement will
comply as to form in all material respects with the applicable provisions, of
the Exchange Act and the rules and regulations thereunder.
4.6 Consents and Approvals; No Violations. Except for filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the Securities Act, the Exchange Act, state
securities or blue sky Laws, the New York Stock Exchange, Inc. (the "NYSE"), the
HSR Act, the Canada Act, the Comision Federal de Competencia of Mexico and the
filing and recordation of a certificate of merger as required by the DGCL (the
"Infinity Required Approvals"), no filing with or notice to, and no permit,
authorization, consent or approval of, any Governmental Entity is necessary for
the execution and delivery by Infinity and Burma Acquisition of this Agreement
or the consummation by Infinity and Burma Acquisition of the transactions
contemplated hereby, except where the failure to obtain such permits,
authorizations, consents or approvals or to make such filings or give such
notice would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Infinity. Subject to obtaining the of
the Infinity Required Approvals, neither the execution, delivery and performance
of this Agreement by Infinity and Burma Acquisition nor the consummation by
Infinity and Burma Acquisition of the transactions contemplated hereby will (i)
conflict with or result in any breach of any provision of the respective
certificate or articles of incorporation or bylaws (or similar governing
documents) of Infinity or any of Infinity's subsidiaries, (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration or Lien) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which Infinity or any of
Infinity's subsidiaries is a party or by which any of them or any of their
respective properties or assets may be bound or (iii) violate any Law,
applicable to Infinity or any of Infinity's subsidiaries or any of their
respective properties or assets, except in the case of (ii) or (iii) for
violations, breaches or defaults which would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on Infinity.
4.7 No Default. None of Infinity or its subsidiaries is in default or
violation (and no event has occurred which with or without due notice or the
lapse of time or both
29
38
would constitute a default or violation) of any term, condition or provision of
(i) its certificate or articles of incorporation or bylaws (or similar governing
documents), (ii) any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which Infinity or any of its
subsidiaries is now a party or by which any of them or any of their respective
properties or assets may be bound or (iii) any, Law, applicable to Infinity, its
subsidiaries or any of their respective properties or assets, except in the case
of (ii) or (iii) for violations, breaches or defaults which do not or would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Infinity.
4.8 Absence of Changes. Except as and to the extent disclosed by Infinity
in the Filed Infinity SEC Reports, from January 1, 1999 through the date of this
Agreement, Infinity and its subsidiaries have conducted their business in all
material respects in the ordinary and usual course consistent with past
practices and there has not been:
(a) any event, change, occurrence, development or state of
circumstances or facts which does or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on Infinity;
(b) except as set forth in Section 4.8(b) of the Infinity Disclosure
Schedule, any issuance, sale or delivery, or commitment to issue, sell or
deliver (whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise) any stock of any
class or any other securities or equity equivalents (including, without
limitation, any stock options or stock appreciation rights), except for the
issuance or sale of shares of Infinity Common Stock pursuant to outstanding
options granted prior to January 1, 1999;
(c) except as set forth in Section 4.8(c) of the Infinity Disclosure
Schedule, any amendment of any term of any outstanding security of Infinity or
any subsidiary;
(d) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of Infinity, or
any repurchase, redemption or other acquisition by Infinity or any subsidiary of
any Infinity securities;
(e) any material change in any method of accounting or accounting
principles or practice (for financial accounting or tax purposes) by Infinity or
any subsidiary, except for any such change required by reason of a change in
GAAP.
4.9 Litigation. Except as disclosed by Infinity in the Filed Infinity SEC
Reports, and as set forth in Section 4.9 of the Infinity Disclosure Schedule,
(i) there is no suit, claim, action, proceeding or investigation pending or, to
the knowledge of Infinity, threatened against Infinity or any of its
subsidiaries or any of their respective properties or assets and (ii) none of
Infinity or its subsidiaries is subject to any outstanding judgment, order,
writ, injunction or decree which (in the case of (i) or (ii) would
30
39
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect on Infinity.
4.10 Compliance with Applicable Law. Except as disclosed by Infinity in
the Filed Infinity SEC Reports or as set forth in Section 4.10 of the Infinity
Disclosure Schedule and for failures which do not or would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
Infinity, (i) Infinity and its subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals of all Governmental Entities
necessary for the lawful conduct of their respective businesses (the "Infinity
Permits"), (ii) Infinity and its subsidiaries are in compliance with the terms
of Infinity Permits, (iii) the businesses of Infinity and its subsidiaries are
not being conducted in violation of any Law of any Governmental Entity and (iv)
no investigation or review by any Governmental Entity with respect to Infinity
or its subsidiaries is pending or, to the knowledge of Infinity, threatened,
nor, to the knowledge of Infinity, has any Governmental Entity indicated an
intention to conduct the same.
4.11 Employee Plans.
(a) Section 4.11(a) of the Infinity Disclosure Schedule lists all
"employee benefit plans," as defined in Section 3(3) of ERISA and lists by
country (whether or not covered by ERISA) all other employee benefit plans or
other benefit arrangements, including but not limited to all bonus and other
incentive compensation, deferred compensation, disability, retention, salary
continuation, severance, stock and stock-related award, stock option, stock
purchase, or other plans which Infinity or any of its subsidiaries maintains, is
a party to, contributed to or has any obligation to or liability for in respect
of current or former employees and directors whether domestic or international
(each, an "Infinity Employee Benefit Plan" and collectively, the "Infinity
Employee Benefit Plans"). None of the Infinity Employee Benefit Plans other than
a "multiemployer plan" (within the meaning of section 3(37) of ERISA) is subject
to Title IV of ERISA.
(b) Except as would not, individually or in the aggregate, have a
Material Adverse Effect on Infinity, (i) all payments required to be made by or
under any Infinity Employee Benefit Plan, any related trusts, insurance policies
or ancillary agreements, or any collective bargaining agreement have been timely
made, (ii) Infinity and its subsidiaries have performed all obligations required
to be performed by them under any Infinity Employee Benefit Plan, (iii) the
Infinity Employee Benefit Plans have been administered and are in compliance in
all respects with their terms and the requirements of ERISA, the Code and other
applicable Laws, (iv) except as set forth in Section 4.11(b) of the Infinity
Disclosure Schedule, there are no actions, suits, arbitrations or claims (other
than routine claims for benefits) pending or, to the knowledge of Infinity,
threatened with respect to any Infinity Employee Benefit Plan and (v) there are
no audits, investigations or other inquiries pending or threatened by the IRS or
the Department of Labor with respect to any Infinity Employee Benefit Plan.
31
40
(c) Each Infinity Employee Benefit Plan and its related trust which
are intended to be "qualified" within the meaning of Sections 401(a) and 501(a)
of the Code, respectively, have been determined by the Internal Revenue Service
to be so "qualified" under such Sections, as amended by the Tax Reform Act of
1986, and Infinity knows of no fact which would adversely affect the qualified
status of any such Infinity Employee Benefit Plan and its related trust.
(d) Except as set forth in Section 4.11(d) of the Infinity
Disclosure Schedule, none of the Infinity Employee Benefit Plans provides for
post-employment life or health insurance, benefits or coverage for any
participant or any beneficiary of a participant, except as may be required under
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or as
may be offered as individual conversion rights.
(e) There is no litigation or administrative or other proceedings
involving an Infinity Employee Benefit Plan nor has Infinity or any of its
subsidiaries received notice that any such proceeding is threatened, in each
case that would have or reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Infinity. Neither Infinity nor any of
its subsidiaries has incurred, nor, to Infinity's knowledge, assuming a
withdrawal as of the Effective Time, would be likely to incur any withdrawal
liability with respect to any "multiemployer plan" (within the meaning of
section 3(37) of ERISA) which remains unsatisfied in an amount which would have
a Material Adverse Effect on Infinity. The termination of, or withdrawal from,
any multiemployer plan to which Infinity or any of its subsidiaries contributes,
on or prior to the Effective Time, will not subject Infinity or any of its
subsidiaries to any liability under Title IV of ERISA that would have a Material
Adverse Effect on Infinity.
4.12 Taxes. Except as disclosed in Section 4.12 of the Infinity Disclosure
Schedule:
(a) Each of Infinity and its subsidiaries has timely filed, or has
caused to be timely filed on its behalf (taking into account any extension of
time within which to file), all Tax Returns (as hereinafter defined) required to
be filed by it, and all such filed Tax Return are true, complete and accurate,
except for any failure to file any Tax Return or for any inaccuracy with respect
to any Tax Return that has been filed which would not have, individually or in
the aggregate, a Material Adverse Effect on Infinity . All Taxes shown to be due
on such Tax Returns have been timely paid.
(b) The most recent financial statements contained in the Infinity
SEC Reports reflect an adequate reserve for all Taxes payable by Infinity and
its subsidiaries for all Taxable periods and portions thereof through the date
of such financial statements. To the best knowledge of Infinity, no deficiency
in excess of $100,000 with respect to Taxes has been proposed, asserted or
assessed against Infinity or any subsidiary of Infinity. No material liens for
Taxes exist with respect to any asset of Infinity or any subsidiary of Infinity,
except for statutory liens for Taxes not yet due.
(c) The Federal and state income Tax Returns and state franchise tax
returns of Infinity and each subsidiary of Infinity have not been examined by
the applicable Tax authorities (or the applicable statute of limitations has
expired). All assessments for Taxes due with respect to such completed and
settled examinations or any concluded litigation have been fully paid.
32
41
(d) Neither Infinity nor any subsidiary of Infinity has any
obligation under any agreement (either with any person or any Tax authority)
with respect to Taxes, except for any such agreements which would not have,
individually or in the aggregate, a Material Adverse Effect on Infinity.
(e) No audit or other administrative or court proceedings in which
the total proposed adjustments to net income exceed $300,000 are pending with
respect to Federal or state income or franchise Taxes of Infinity or any
subsidiary of Infinity and no notice thereof has been received.
(f) No claim has been made by a Tax authority in a jurisdiction
where neither Infinity nor any subsidiary of Infinity files Tax Returns that
Infinity or any subsidiary is or may be subject to taxation in that
jurisdiction.
(g) None of Infinity or any of its subsidiaries has taken, agreed to
take or will take any action that would prevent the Merger from constituting a
reorganization qualifying under the provisions of Section 368(a) of the Code.
4.13 No Prior Activities. Except for obligations incurred in connection
with its incorporation or organization or the negotiation and consummation of
this Agreement and the transactions contemplated hereby, Burma Acquisition has
neither incurred any obligation or liability nor engaged in any business or
activity of any time or kind whatsoever or entered into any agreement or
arrangement with any person.
4.14 Absence of Questionable Payments. Neither Infinity nor any of its
subsidiaries nor, to Infinity's knowledge, any director, officer, agent,
employee or other person acting on behalf of Infinity or any of its
subsidiaries, has used any corporate or other funds for unlawful contributions,
payments, gifts, or entertainment, or made any unlawful expenditures relating to
political activity to government officials or others or established or
maintained any unlawful or unrecorded funds in violation of Section 30A of the
Exchange Act. Neither Infinity nor any of its subsidiaries nor, to Infinity's
knowledge, any director, officer, agent, employee or other person acting on
behalf of Infinity or any of its subsidiaries, has accepted or received any
unlawful contributions, payments, gifts, or expenditures. To Infinity's
knowledge, Infinity and each of its subsidiaries which is required to file
reports pursuant to Section 12 or 15(d) of the Exchange Act is in compliance
with the provisions of Section 13(b) of the Exchange Act.
4.15 Brokers. No broker, finder or investment banker (other than Chase
Securities Inc.) is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by and on behalf of Infinity or any of its
affiliates.
4.16 Contracts. Except as set forth in Section 4.16 of the Infinity
Disclosure Schedule, each of the material contracts and agreements to which
Infinity or any of its subsidiaries is a party or by which any of its properties
or assets are bound, is valid and enforceable in accordance with its terms, and
(i) there is no default under any contract or
33
42
agreement to which Infinity or any of its subsidiaries is a party or by which
any of its properties or assets are bound, either by Infinity or any of its
subsidiaries or, to the knowledge of Infinity, by any other party thereto, (ii)
no event has occurred that with the lapse of time or the giving of notice or
both would constitute a default thereunder by Infinity or any of its
subsidiaries (including the consummation of the Merger) or, to the knowledge of
Infinity, any other party, and (iii) no party to any such contract or agreement
has given notice to Infinity or any of its subsidiaries or made a claim against
Infinity or any of its subsidiaries with respect to any breach or default
thereunder, in any such case in which such default or event has had, or would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Infinity.
ARTICLE 5
COVENANTS
5.1 Conduct of Business of OSI. Except as contemplated by this Agreement,
during the period from the date hereof to the Effective Time, OSI will, and will
cause each of its subsidiaries to, conduct its operations in the ordinary course
of business consistent with past practice and, to the extent consistent
therewith, with no less diligence and effort than would be applied in the
absence of this Agreement, seek to preserve intact its current business
organizations, seek to keep available the service of its current officers and
employees and seek to preserve its relationships with customers, suppliers and
others having business dealings with it to the end that goodwill and ongoing
businesses shall be unimpaired at the Effective Time. Without limiting the
generality of the foregoing, and except as otherwise expressly provided in this
Agreement, prior to the Effective Time, OSI shall not, and shall not permit any
of its subsidiaries to, without the prior written consent of Infinity:
(a) amend its certificate or articles of incorporation or bylaws (or
other similar governing instrument);
(b) authorize for issuance, issue, sell, deliver or agree or commit
to issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any stock
of any class or any other securities or equity equivalents (including, without
limitation, any stock options or stock appreciation rights), except for the
issuance or sale of shares of OSI Common Stock pursuant to outstanding options
or other equity rights granted prior to the date hereof under the OSI Option
Plans;
(c) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock
(except that any wholly owned subsidiary of OSI may pay a dividend or other
distribution to OSI or any wholly owned subsidiary of OSI), make any other
actual, constructive or deemed distribution in respect of any shares of its
capital stock or otherwise make any payments to shareholders in their
34
43
capacity as such, or redeem or otherwise acquire any of its securities or any
securities of any of its subsidiaries;
(d) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other reorganization
of OSI or any of its subsidiaries (except that OSI and/or any subsidiary of OSI
may adopt a plan of merger in connection with a merger of any subsidiary of OSI
into OSI or other subsidiary of OSI);
(e) alter through merger, liquidation, reorganization, restructuring
or in any other fashion the corporate structure or ownership of OSI or any of
its subsidiaries, except for any such alteration with respect to any subsidiary
of OSI which would not decrease the ownership interest of OSI in such subsidiary
and which would not reasonably be expected to have a Material Adverse Effect on
OSI;
(f) except as may be required by Law, (i) enter into, adopt or amend
(other than immaterial amendments in the ordinary course of business) or
terminate any bonus, profit sharing, compensation, severance, termination, stock
option, stock appreciation right, restricted stock, performance unit, stock
equivalent, stock purchase, pension, retirement, deferred compensation,
employment or other employee benefit agreement, trust, plan, fund, award or
other arrangement for the benefit or welfare of any director, officer or
employee in any manner, except for grants of severance or termination pay to
employees (but not officers or directors) in the ordinary course of business
consistent with past practice; or (ii) except for normal increases in the
ordinary course of business consistent with past practice that, in the
aggregate, do not result in a material increase in benefits or compensation
expense to OSI, increase in any manner the compensation or fringe benefits of
any director, officer or employee or pay any benefit not required by any plan
and arrangement as in effect as of the date hereof;
(g) except in the ordinary course of business consistent with past
practice, hire or retain any individual as an employee of or consultant to OSI
or any subsidiary of OSI;
(h) except in the ordinary course of business consistent with past
practice, enter into, renew or modify any agreement which, if in effect on the
date hereof, would have been required to be disclosed in Section 3.15 of the OSI
Disclosure Schedule or any Real Property Rights; provided, that notwithstanding
the foregoing, Infinity shall have the right to consent to any amendment to the
CIBC Credit Documents or the OSI Indentures;
(i) except as may be required as a result of a change in Law or in
GAAP, change any of the accounting principles or practices (whether for
financial accounting or tax purposes) used by it;
(j) revalue any of its assets, including, without limitation,
writing up or down the value of inventory or writing-off notes or accounts
receivable other than in the ordinary course of business consistent with past
practice;
35
44
(k) make or revoke any Tax election or settle or compromise any Tax
liability material to OSI and its subsidiaries taken as a whole, or change (or
make a request to any Taxing authority to change) any material aspect of its
method of accounting for Tax purposes;
(l) pay, discharge or satisfy any material claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the ordinary
course of business of liabilities reflected or reserved against in, or
contemplated by, the consolidated financial statements as of March 31, 1999 (or
the notes thereto) of OSI and its subsidiaries or incurred in the ordinary
course of business consistent with past practice;
(m) settle or compromise any pending or threatened suit, action or
claim, which settlement involves equitable relief or a payment in excess of
$500,000 individually or $500,000 in the aggregate, which is not covered by
insurance or is covered by insurance which contains a retroactive premium
adjustment, or initiate or join any material suit, action or claim;
(n) (i) incur or assume any long-term or short-term debt or issue
any debt securities except for borrowings under existing lines of credit in the
ordinary course of business; (ii) assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, contingently or otherwise) for the
obligations of any other person except in the ordinary course of business
consistent with past practice and in amounts not material to OSI and its
subsidiaries, taken as a whole, and except for obligations of wholly owned
subsidiaries of OSI; (iii) except as set forth in Section 5.1(n) of the OSI
Disclosure Schedule, make any loans, advances or capital contributions to, or,
except for immaterial investments in the ordinary course of business consistent
with past practice, investments in, any other person (other than to wholly owned
subsidiaries of OSI or OSI, with respect to its subsidiaries, or customary loans
or advances to employees in the ordinary course of business consistent with past
practice and in amounts not material to the maker of such loan or advance); (iv)
pledge or otherwise encumber shares of capital stock of OSI or its subsidiaries;
or (v) mortgage or pledge any of its assets, tangible or intangible, or create
or, except pursuant to the CIBC Credit Documents and except for Permitted Liens,
suffer to exist any Lien thereupon;
(o) (i) sell, lease or dispose of any assets outside the ordinary
course of business or any assets which in the aggregate are material to OSI and
its subsidiaries, taken as a whole; or (ii) enter into any commitment or
transaction outside the ordinary course of business;
(p) (i) except as set forth in Section 5.1(p) of the OSI Disclosure
Schedule or otherwise disclosed by OSI in writing to Infinity on or prior to the
date hereof, acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or division
thereof or any equity interest therein, or any assets, for consideration in
excess of $10 million individually or in the aggregate; (ii) authorize any
capital expenditure or expenditures which, in the aggregate, are in
36
45
excess of the amounts therefor set forth in the OSI 1999 capital expenditure
budget delivered to Infinity prior to the date hereof (which provides for
aggregate capital expenditures of up to $40 million for 1999); or (iii) enter
into any contract, agreement, commitment or arrangement providing for the taking
of any action that would be prohibited hereunder or amend any contract,
commitment or arrangement in a way that could reasonably be expected to hinder
the transactions contemplated by this Agreement;
(q) take any action that would prevent or impede the Merger from
qualifying as a reorganization under Section 368(a) of the Code; or
(r) take, propose to take, or agree in writing or otherwise to take,
any of the actions described in Sections 5.1(a) through 5.1(q) or any action
which would make any of the representations or warranties of OSI contained in
this Agreement untrue or incorrect.
5.2 Conduct of Business of Infinity. Except as contemplated by this
Agreement, during the period from the date hereof to the Effective Time,
Infinity and its subsidiaries shall conduct their respective operations in the
ordinary course of business consistent with past practice and, to the extent
consistent therewith, with no less diligence and effort than would be applied in
the absence of this Agreement. Without limiting the generality of the foregoing,
and except as otherwise expressly provided in this Agreement, prior to the
Effective Time, Infinity shall not, and shall not permit its subsidiaries to,
without the prior written consent of OSI:
(a) amend its certificate or articles of incorporation or bylaws (or
other similar governing instrument) in a manner which adversely affects the
rights, powers and preferences of the Infinity Common Stock;
(b) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other reorganization
of Infinity or any of its subsidiaries (except that Infinity and/or any
subsidiary of Infinity may adopt a plan of merger in connection with (i) a
merger of any subsidiary of Infinity into Infinity or another subsidiary of
Infinity or (ii) an acquisition or disposition of a business or assets, except
for any such acquisition or disposition which would have a Material Adverse
Effect on Infinity);
(c) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock
(except that any wholly owned subsidiary of Infinity may pay a dividend or other
distribution to Infinity or any wholly owned subsidiary of Infinity), make any
other actual, constructive or deemed distribution in respect of any shares of
its capital stock or otherwise make any payments to shareholders in their
capacity as such, or redeem or otherwise acquire any of its securities or any
securities of any of its subsidiaries;
37
46
(d) alter through merger, liquidation, reorganization, restructuring
or in any other fashion the corporate structure or ownership of Infinity or any
of its subsidiaries, except for any such alteration which would not reasonably
be expected to have a Material Adverse Effect on Infinity;
(e) take any action that would prevent or impede the Merger from
qualifying as a reorganization under Section 368(a) of the Code; or
(f) take, propose to take, or agree in writing or otherwise to take,
any of the actions described in Sections 5.2(a) through 5.2(e) or any action
which would make any of the representations or warranties of Infinity contained
in this Agreement untrue or incorrect.
5.3 Preparation of S-4 and the Proxy Statement.
(a) OSI and Infinity will, as promptly as practicable, prepare and
file with the SEC the Proxy Statement in connection with the vote of the
stockholders of OSI with respect to the Merger and the Information Statement in
connection with the vote of the stockholders of Infinity with respect to the
Share Issuance.
(b) Infinity will, as promptly as practicable, prepare and,
following receipt of notification from the SEC that it has no further comments
on the Proxy Statement or Information Statement, file with the SEC the S-4 in
connection with the registration under the Securities Act of the shares of
Infinity Common Stock issuable upon conversion of the Shares and the other
transactions contemplated hereby. OSI will have a reasonable opportunity to
review the S-4 and any amendments thereto prior to the filing thereof with the
SEC.
(c) Infinity and OSI will, and will cause their accountants and
lawyers to, use all reasonable best efforts to have or cause the S-4 declared
effective as promptly as practicable after it is filed, and will take any other
action required or necessary to be taken under federal or state securities Laws
or otherwise in connection with the registration process. OSI will use its
reasonable best efforts to cause the Proxy Statement to be mailed and Infinity
will use its reasonable best efforts to cause the Information Statement to be
mailed, each to its respective shareholders at the earliest practicable date
after the S-4 shall become effective.
5.4 Stockholder Meetings.
(a) OSI shall call a meeting of its stockholders (the "OSI
Stockholders Meeting") to be held as promptly as practicable for the purpose of
voting upon this Agreement and the Merger, and shall use its reasonable best
efforts to cause such stockholders' meeting to be held within forty-five (45)
days after the date on which the S-4 is declared effective by the SEC. OSI
agrees that its obligations pursuant to the first sentence of this Section
5.4(a) shall not be affected by the commencement, public proposal, public
disclosure or communication to OSI of any Acquisition Proposal (as
38
47
defined in Section 5.5). The OSI Board will recommend to its stockholders
approval of this Agreement and the Merger and, except as permitted by Section
5.5(b), the OSI Board shall not withdraw, amend or modify in a manner adverse to
Infinity such recommendation (or announce publicly its intention to do so).
Notwithstanding the foregoing, regardless of whether the OSI Board has
withdrawn, amended or modified its recommendation that its stockholders approve
and adopt this Agreement and the Merger, unless this Agreement has been
terminated pursuant to the provisions of Article 7, OSI shall be required to
hold the OSI Stockholders Meeting.
(b) Infinity shall call a meeting of its stockholders to be held as
promptly as practicable for the purpose of voting upon the Share Issuance, and
shall use its reasonable best efforts to cause such stockholders' meeting to be
held within forty-five (45) days after the date on which the S-4 is declared
effective by the SEC. The Board of Directors of Infinity will recommend to its
stockholders approval of the Share Issuance.
(c) OSI and Infinity shall coordinate and cooperate with respect to
the timing of such stockholders' meetings and shall use their reasonable efforts
to hold such meetings on the same day.
5.5 No Solicitation.
(a) From the date hereof until the termination hereof and except as
expressly permitted by the following provisions of this Section 5.5, OSI will
not, nor will it permit any of its subsidiaries to, nor will it authorize or
permit any officer, director or employee of or any investment banker, attorney,
accountant or other advisor or representative of, OSI or any of its subsidiaries
to, directly or indirectly, (i) solicit, initiate or encourage the submission of
any Acquisition Proposal (as defined in Section 5.5(c)), (ii) participate in any
discussions or negotiations regarding, or furnish to any person any non-public
information with respect to OSI or any of its subsidiaries, or take any other
action to facilitate, any Acquisition Proposal or any inquiries or the making of
any proposal that constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal, (iii) amend or grant any waiver or release under any
standstill or similar agreement with respect to any class of equity securities
of OSI, or (iv) enter into any agreement with respect to an Acquisition Proposal
(other than a confidentiality agreement as described below); provided, however,
that nothing contained in this Section 5.5(a) shall prohibit the OSI Board from
furnishing information to, or entering into discussions or negotiations with,
any person that makes an unsolicited bona fide written offer or proposal that
constitutes an Acquisition Proposal if, and only to the extent that (A) such
action is taken prior to the date on which the OSI Requisite Vote is obtained,
(B) the OSI Board, after consultation with and based upon the advice of outside
legal counsel, determines in good faith that such action is necessary for the
OSI Board to comply with its fiduciary duties to OSI stockholders under
applicable Law, (C) the OSI Board determines in good faith, after consultation
with an independent, nationally recognized financial advisor, that such
Acquisition Proposal, if accepted, constitutes, or is reasonably likely to lead
to, a Superior Proposal (as hereinafter defined), and (D) prior to taking such
action, OSI (x) provides reasonable notice to Infinity to the effect that it is
taking such
39
48
action and (y) receives from such person an executed confidentiality/ standstill
agreement in reasonably customary form and in any event containing terms at
least as stringent as those contained in the Confidentiality Agreement (as
defined in Section 5.7(d)) as of the date of its execution (it being understood
that such person shall not be released from the standstill obligations set forth
therein solely due to the existence of this Agreement or any modification of
this Agreement proposed by Infinity). For purposes of this Agreement, "Superior
Proposal" means a bona fide written Acquisition Proposal on terms which a
majority of the members of the OSI Board determine in their good faith judgment
(after consultation with an independent, nationally-recognized financial
advisor) and after taking into account all legal, financial, regulatory and
other aspects of the Acquisition Proposal, the person making the proposal, the
strategic benefits to be derived from the Merger and the long-term prospects of
Infinity and its subsidiaries, to be more favorable from a financial point of
view to the Company's stockholders than the Merger, and for which the members of
the OSI Board determine in their good faith judgment (after such consultation)
that financing, to the extent required, is then committed or reasonably
available. Prior to providing any information to or entering into discussions or
negotiations with any person in connection with an Acquisition Proposal by such
person, OSI shall notify Infinity of any Acquisition Proposal (including,
without limitation, the material terms and conditions thereof and the identity
of the person making it) as promptly as practicable after its receipt thereof,
and shall thereafter inform Infinity on a prompt basis of the status of any
discussions or negotiations with such a third party, and any material changes to
the terms and conditions of such Acquisition Proposal. Immediately after the
execution and delivery of this Agreement, OSI will, and will cause its
subsidiaries and affiliates, and their respective officers, directors,
employees, investment bankers, attorneys, accountants and other agents to, cease
and terminate any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any possible Acquisition Proposal
and shall promptly inform the individuals or entities referred to in the first
sentence hereof of the obligations undertaken in this Section 5.5(a).
(b) The OSI Board will not withdraw or modify or propose to withdraw
or modify, in a manner adverse to Infinity, its approval or recommendation of
this Agreement or the Merger unless (i) OSI has complied with the terms of
Section 5.5(a), (ii) a Superior Proposal is pending at the time the OSI Board
determines to take any such action, and (iii) the OSI Board, after consultation
with and based upon the advice of outside legal counsel, determines in good
faith that such action is necessary for OSI to comply with the fiduciary duties
to OSI stockholders under applicable Law; provided, however, the OSI Board may
not approve or recommend an Acquisition Proposal (and in connection therewith,
withdraw or modify its approval or recommendation of this Agreement or the
Merger) unless such an Acquisition Proposal is a Superior Proposal (and OSI
shall have first complied with its obligations set forth in Section 7.3(a) and
the time period referred to in the last sentence of Section 7.3(a) has expired)
and unless it shall have first consulted with outside legal counsel and have
determined, based upon such advice, that such action is necessary for the OSI
Board to comply with its fiduciary duties to OSI stockholders. Nothing contained
in this Section 5.5(b) shall prohibit OSI
40
49
from taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or from making any disclosure to
OSI's stockholders which, in the good faith reasonable judgment of the OSI
Board, based on the advice of outside legal counsel, is required under
applicable Law; provided, that (i) the OSI Board shall not recommend that the
stockholders of OSI tender their shares in connection with a tender offer except
to the extent the OSI Board by a majority vote determines in its good faith that
such a recommendation is required to comply with the fiduciary duties of the OSI
Board to OSI's stockholders under applicable Law, after receiving the advice of
outside legal counsel and (ii) except as otherwise permitted in this Section
5.5(b), OSI does not withdraw or modify, or propose to withdraw or modify, its
position with respect to the Merger or approve or recommend, or propose to
approve or recommend, an Acquisition Proposal. Nothing in this Section 5.5(b)
shall (i) permit OSI to terminate this Agreement (except as provided in Article
7 hereof) or (ii) affect any other obligations of OSI under this Agreement.
(c) "Acquisition Proposal" means an inquiry, offer or proposal
regarding any of the following (other than the transactions contemplated by this
Agreement) involving OSI or any of its subsidiaries: (i) any merger,
consolidation, share exchange, recapitalization, business combination or other
similar transaction; (ii) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition of all or substantially all the assets of OSI and its
subsidiaries, taken as a whole, in a single transaction or series of related
transactions; (iii) any tender offer or exchange offer for 20 percent or more of
the outstanding Shares or the filing of a registration statement under the
Securities Act in connection therewith; or (iv) any public announcement of a
proposal, plan or intention to do any of the foregoing or any agreement to
engage in any of the foregoing.
5.6 Letters of Accountants.
(a) OSI shall use all reasonable best efforts to cause to be
delivered to Infinity a letter of Deloitte & Touche LLP (or its successor firm),
OSI's independent auditors, dated a date within two (2) business days before the
date on which the S-4 shall become effective and addressed to Infinity, in form
and substance reasonably satisfactory to Infinity and customary in scope and
substance for letters delivered by independent public accountants in connection
with registration statements similar to the S-4.
(b) Infinity shall use all reasonable best efforts to cause to be
delivered to OSI a letter of KPMG Peat Marwick LLP, Infinity's independent
auditors, dated a date within two (2) business days before the date on which the
S-4 shall become effective and addressed to OSI, in form and substance
reasonably satisfactory to OSI and customary in scope and substance for letters
delivered by independent public accountants in connection with registration
statements similar to the S-4.
5.7 Access to Information.
(a) Between the date hereof and the Effective Time, OSI will give to
Infinity and its authorized representatives reasonable access to all employees
(which
41
50
access shall be coordinated with such party's executive management), plants,
offices, warehouses and other facilities and to all books and records of OSI and
its subsidiaries and will permit Infinity to make such inspections as it may
reasonably require. Each of OSI and Infinity will cause its officers and those
of its subsidiaries to furnish the other with such financial and operating data
and other information with respect to the business, properties and personnel of
itself and its subsidiaries as the other may from time to time reasonably
request; provided, that in no event shall Infinity be obligated to provide
information in violation of Law. No investigation made pursuant to this Section
5.7(a) shall affect or be deemed to modify any of the representations or
warranties made by OSI or Infinity in this Agreement.
(b) Between the date hereof and the Effective Time, each of OSI and
Infinity shall furnish to the other (i) within two business days after the
delivery thereof to management, such monthly financial statements and data as
are regularly prepared for distribution to its Chief Executive Officer and (ii)
at the earliest time at which they are available and prior to filing thereof
with the SEC, such quarterly and annual financial statements as are prepared for
its SEC filings, which shall be in accordance with its books and records, and
drafts of all such SEC filings.
(c) Each of OSI, Infinity and Burma Acquisition will hold and will
cause its consultants and advisors to hold in confidence all documents and
information concerning the other and the other's subsidiaries furnished to it in
connection with the transactions contemplated by this Agreement to the extent
required by that certain confidentiality agreement entered into between OSI, CBS
Corporation and Infinity dated May 12, 1999 (the "Confidentiality Agreement").
5.8 Additional Agreements; Reasonable Best Efforts. Subject to the terms
and conditions herein provided, each of the parties hereto agrees to use its
reasonable best efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things reasonably necessary, proper or advisable under
applicable Laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation, (i)
cooperation in the preparation and filing of the Proxy Statement and the S-4,
any filings that may be required under the HSR Act, and any amendments to any
thereof, (ii) cooperation in obtaining, prior to the Effective Time, the
approval for listing on the NYSE, effective upon the official notice of
issuance, of the shares of Infinity Common Stock into which the Shares will be
converted pursuant to Article 2 hereof, (iii) the taking of all action
reasonably necessary, proper or advisable to secure any necessary consents of
all third parties and Governmental Entities, including those relating to
existing debt obligations of OSI and its subsidiaries, (iv) the transfer of
existing Company Permits to the Surviving Corporation, (v) contesting any legal
proceeding relating to the Merger and the Share Issuance and (vi) the execution
of any additional instruments necessary to consummate the transactions
contemplated hereby. Subject to the terms and conditions of this Agreement,
Infinity, Burma Acquisition and OSI agree to use all reasonable efforts to cause
the Effective Time to occur as soon as practicable after the stockholder votes
with respect to the Merger and the Share Issuance. None of the parties hereto
will take any action which could reasonably be expected to
42
51
hinder, delay or impede the Merger or the Share Issuance. In case at any time
after the Effective Time any further action is necessary to carry out the
purposes of this Agreement, the proper officers and directors of each party
hereto shall take all such necessary action.
5.9 Regulatory Reviews. Each party hereto will use its reasonable best
efforts (a) to file with the U.S. Department of Justice and U.S. Federal Trade
Commission, as soon as practicable and in no event later than ten (10) days
after the date hereof, the Notification and Report Form under the HSR Act and
any supplemental information or material requested pursuant to the HSR Act, and
(b) to comply as soon as practicable after the date hereof with any other Laws
of any country under which any consent, authorization, registration, declaration
or other action with respect to the transactions contemplated herein may be
required. Each party hereto shall furnish to the other such information and
assistance as the other may reasonably request in connection with any filing or
other act undertaken in compliance with the HSR Act or other such Laws, and
shall keep each other timely apprised of the status of any communications with,
and any inquiries or requests for additional information from, any Governmental
Entity under the HSR Act or other such Laws. Infinity, Burma Acquisition and OSI
will each use its reasonable best efforts to cause termination of the HSR
waiting period(s) in connection with any review of the transactions contemplated
by this Agreement under the HSR Act. In connection with any litigation or
administrative proceeding instituted to prevent the consummation of the Merger,
Infinity, Burma Acquisition and OSI shall take any and all action reasonably
necessary in connection with such litigation or administrative proceeding (i) to
prevent the entry of any order, preliminary or permanent injunction, or other
legal restraint or prohibition preventing consummation of the Merger or any
related transactions contemplated by this Agreement and (ii) to vacate any
order, injunction or legal restraint or prohibition which would prevent the
consummation of the transactions contemplated by this Agreement.
5.10 Public Announcements. Each of Infinity, Burma Acquisition and OSI
will agree on the text of any press release before issuing any press release or
otherwise making any public statements with respect to the transactions
contemplated by this Agreement, including, without limitation, the Merger. None
of Infinity, Burma Acquisition or OSI shall issue any such press release or make
any such public statement prior to such agreement, except as may be required by
applicable Law or by obligations pursuant to any agreement with the NYSE or
NASDAQ, as determined by Infinity or OSI, as the case may be, in which case such
release or statement shall be limited to a factual summary of the material
provisions of this Agreement and the transactions contemplated hereby.
5.11 Indemnification; Directors' and Officers' Insurance.
(a) Infinity, Burma Acquisition and OSI agree that all rights to
exculpation and indemnification for acts or omissions occurring prior to the
Effective Time and advancement of expenses existing on the date of this
Agreement in favor of the current or former directors, officers, employees or
agents of OSI or any of its subsidiaries
43
52
(the "Indemnified Parties") of OSI as provided in its certificate of
incorporation or bylaws or in any agreement between OSI and any of the
Indemnified Parties shall survive the Merger and shall continue in full force
and effect in accordance with their terms for a period of six (6) years
following the Effective Time, and accordingly during such period, the Surviving
Corporation shall indemnify and advance expenses to the Indemnified Parties to
the same extent as such Indemnified Parties are entitled to indemnification and
advancement of expenses pursuant to the preceding sentence.
(b) For a period of six (6) years after the Effective Time, Infinity
shall cause to be maintained in effect the policies of directors' and officers'
liability insurance maintained by OSI for the benefit of those persons who are
covered by such policies at the Effective Time (or Infinity may substitute
therefor policies of at least the same coverage with respect to matters
occurring prior to the Effective Time), to the extent that such liability
insurance can be maintained annually at a cost to Infinity not greater than 300
percent of the annual premium (the "Current Premium") for the current OSI
directors' and officers' liability insurance; provided, that if such insurance
cannot be so maintained or obtained at such costs, Infinity shall maintain or
obtain as much of such insurance as can be so maintained or obtained at a cost
equal to 300 percent of the current annual premiums of OSI for such insurance.
OSI represents and warrants to Infinity that the Current Premium is $297,500.
(c) In addition to the other rights provided for in this Section
5.11 and not in limitation thereof, for six (6) years from and after the
Effective Time, the Surviving Corporation shall, and Infinity shall cause the
Surviving Corporation to, (i) indemnify and hold harmless the Indemnified
Parties against all losses, Expenses (as hereinafter defined), claims, damages,
liabilities, judgments, or, subject to the proviso of the next succeeding
sentence, amounts paid in settlement in respect to any threatened, pending or
completed claim, action, suit or proceeding, whether criminal, civil,
administrative or investigative based on, or arising out of or relating to this
Agreement and the transactions contemplated hereby (an "Indemnifiable Claim")
and (ii) advance to such Indemnified Parties all Expenses incurred in connection
with any Indemnifiable Claim promptly after receipt of reasonably detailed
statements therefor; provided, however, that the Indemnified Party to whom
Expenses are to be advanced provides any affirmation required by the DGCL and an
undertaking to repay such advances if it is ultimately determined by a court of
competent jurisdiction or by independent counsel mutually acceptable to Infinity
and the Indemnified Party, that such Indemnified Party's conduct does not comply
with the standards set forth under the DGCL or is otherwise not entitled to
indemnification from Lightyear or the Surviving Corporation. In the event any
Indemnifiable Claim is asserted or made within such six (6) year period, all
rights to indemnification and advancement of Expenses in respect of any such
Indemnifiable Claim shall continue until such Indemnifiable Claim is disposed of
or all judgments, orders, decrees or other rulings in connection with such
Indemnifiable Claim are fully satisfied; provided, however, that neither
Infinity nor the Surviving Corporation shall be liable for any settlement
effected without its written consent (which consent shall not be unreasonably
withheld or delayed). The Indemnified Parties as a group may retain only
44
53
one law firm with respect to each related matter except to the extent there is,
in the opinion of counsel to an Indemnified Party, under applicable standards of
professional conduct, a conflict on any significant issue between positions of
any two or more Indemnified Parties. For the purposes of this Section 5.11,
"Expenses" shall include reasonable attorneys' fees and all other costs, charges
and expenses paid or incurred in connection with investigating, defending, being
a witness in or participating in (including on appeal), or preparing to defend,
be a witness in or participate in any Indemnifiable Claim.
(d) The Surviving Corporation shall, and Infinity shall cause the
Surviving Corporation to, advance all Expenses to any Indemnified Parties
incurred enforcing the indemnity or other obligations provided for in this
Section 5.11.
(e) The rights of each Indemnified Party under this Section 5.11 are
intended to benefit, and shall be enforceable by, each Indemnified Party and the
heirs, executors, trustees, fiduciaries and administrators of such Indemnified
Party.
(f) If the Surviving Corporation is financially incapable of
satisfying its obligations under Section 5.11(a) or 5.11(c), Infinity shall
satisfy such obligations.
5.12 Notification of Certain Matters. OSI, on the one hand, and Infinity
and Burma Acquisition, on the other, shall give prompt notice to each other of
(i) the occurrence or nonoccurrence of any event the occurrence or nonoccurrence
of which would be likely to cause any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect at or prior to
the Effective Time, (ii) any material failure of a party to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder, (iii) any notice of, or other communication relating to, a default
or event which, with notice or lapse of time or both, would become a default,
received by a party or any of its subsidiaries subsequent to the date of this
Agreement and prior to the Effective Time, under any contract or agreement
material to the financial condition, properties, businesses or results of
operations of a party and its subsidiaries taken as a whole to which it or any
of its subsidiaries is a party or is subject, (iv) any notice or other
communication from any third party alleging that the consent of such third party
is or may be required in connection with the transactions contemplated by this
Agreement, where the failure to obtain the consent, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect on the
party receiving such notice of other communication, (v) the occurrence or
non-occurrence of any event the occurrence or non-occurrence of which would be
likely to cause any condition to the obligations of any party to the effect of
the transactions contemplated hereby not to be satisfied, (vi) any notice or
other communication from any Governmental Entity in connection with the Merger
or (vii) any Material Adverse Effect on a party; provided, that the delivery of
any notice pursuant to this Section 5.12 shall not cure such breach or
non-compliance or limit or otherwise affect the remedies available hereunder to
the party receiving such notice.
45
54
5.13 Tax-Free Reorganization Treatment. OSI, certain stockholders of OSI,
and Infinity shall execute and deliver to Powell, Goldstein, Xxxxxx & Xxxxxx
LLP, counsel to OSI, and Weil, Gotshal & Xxxxxx LLP, counsel to Infinity and
Burma Acquisition, certificates substantially in the forms agreed to prior to
the date hereof at such time or times as may be reasonably requested by such law
firms in connection with their respective deliveries of opinions, pursuant to
Sections 6.2(c) and 6.3(h) hereof, with respect to the Tax-free reorganization
treatment of the Merger. Prior to the Effective Time, none of OSI, Infinity, or
Burma Acquisition shall take or cause to be taken any action which would cause
to be untrue (or fail to take or cause not to be taken any action which would
cause to be untrue) any of the representations in such certificates.
5.14 OSI Affiliates. Prior to the Closing Date, OSI shall deliver to
Infinity a letter identifying each affiliate (as such term is defined in Rule
12b-2 under the Exchange Act) of OSI at the time the Merger is submitted for
approval to the stockholders of OSI (each a "OSI Affiliate") and OSI shall use
its reasonable best efforts to cause each OSI Affiliate to deliver to Infinity
on or prior to the Closing Date, a written agreement that such OSI Affiliate
will not sell, pledge, transfer or otherwise dispose of any shares of Infinity
Common Stock issued to such OSI Affiliate pursuant to the Merger, except in
compliance with Rule 145 promulgated under the Securities Act, pursuant to an
effective registration statement under the Securities Act or an exemption from
the registration requirements of the Securities Act.
5.15 SEC Filings. Each of Infinity and OSI shall promptly provide the
other party (or its counsel) with copies of all filings made by the other party
or any of its subsidiaries with the SEC or any other state or federal
Governmental Entity in connection with this Agreement and the transactions
contemplated hereby.
5.16 Employee Benefits. For a period of one year after the Effective Time,
Infinity will provide each employee (and, to the extent applicable, former
employees) of the Surviving Corporation and its subsidiaries with benefits that,
with respect to such employee (or former employee), are at least substantially
equivalent on an aggregate basis to the benefits received by such employees
immediately prior to the Effective Time (other than any stock option plans).
Without limiting the generality of the foregoing, all vacation, holiday,
sickness and personal days accrued by the employees of OSI and of its
subsidiaries shall be honored. In the event that any employee of the Surviving
Corporation or one of its subsidiaries is at any time after the Effective Time
transferred to Infinity or any affiliate of Infinity or becomes a participant in
an employee benefit plan, program or arrangement maintained by or contributed by
Infinity or any affiliate of Infinity, Infinity shall cause such plan, program
or arrangement to treat the prior service of such employee with OSI or its
subsidiaries as service rendered to Infinity or such affiliates for purposes of
eligibility, vesting, vacation time or severance benefits under such plans.
Infinity shall cause to be waived any pre-existing condition limitation under
their welfare plans that might otherwise apply to such employee or, to the
extent applicable, a former employee. Infinity agrees to recognize (or cause to
be recognized) the dollar amount of all expenses incurred by such employees or,
to the extent applicable, former employees, during the calendar year in which
the Effective Time occurs for
46
55
purposes of satisfying the calendar year deductibles, co-payment limitations and
lifetime maximums for such year under the relevant benefit plans of Infinity and
its respective subsidiaries. Nothing contained in this Section 5.16 shall be
construed as requiring Infinity to continue any specific OSI Employee Benefit
Plan or to continue the employment of any employee, provided, however, that any
changes that Infinity may make to any such OSI Employee Benefit Plan are
consistent with the prior parts of this Section 5.16, and are permitted by the
terms of the OSI Employee Benefit Plan and under the applicable Law.
5.17 Registration Rights. Infinity shall enter into a registration rights
agreement substantially in the form attached hereto as Exhibit C with the OSI
stockholders named on the signature pages thereto.
5.18 Infinity Board of Directors. Infinity shall take all necessary action
to cause Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx to be appointed to the Board of
Directors of Infinity as of the Effective Time; one of such individuals shall be
appointed to the class of directors whose term expires in 2001 and the other to
the class of directors whose term expires in 2002 (as such individuals shall
designate prior to the filing of the Proxy Statement with the SEC).
5.19 Fees and Expenses. Whether or not the Merger is consummated, all
Expenses (as hereinafter defined) incurred in connection with this Agreement,
and the transactions contemplated hereby shall be paid by the party incurring
such Expenses, except (a) Expenses incurred in connection with the filing,
printing and mailing of the Proxy Statement and the S-4, which shall be shared
equally by OSI and Infinity, and (b), if applicable, as provided in Section 7.5.
As used in this Agreement, "Expenses" includes all out-of-pocket expenses
(including, without limitation, all fees and expenses of counsel, accountants,
investment bankers, experts and consultants to a party hereto and its
affiliates) incurred by a party or on its behalf in connection with, or related
to, the authorization, preparation, negotiation, execution and performance of
this Agreement and the transactions contemplated hereby, including the
preparation, filing, printing and mailing of the Proxy Statement and the S-4 and
the solicitation of stockholder approvals and all other matters related to the
transactions contemplated hereby.
5.20 Antitakeover Statutes. If any Takeover Statute is or may become
applicable to the Merger, each of OSI and Infinity shall take such actions as
are necessary so that the transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated hereby and
otherwise act to eliminate or minimize the effects of any Takeover Statute on
the Merger.
5.21 OSI Board of Directors. From and after the Effective Time, Infinity
shall take all necessary action to cause the Board of Directors to forego any
exercise of the cash-out rights described in Section 7.7(b) of the Outdoor
Systems, Inc. 1996 Omnibus Plan.
47
56
5.22 FIRPTA Certificate. At the Closing, OSI shall deliver a certificate
to Infinity, certified by an officer of OSI, that OSI has no nonresident alien
individual or foreign corporation that either held or holds more than 5% of the
OSI Common Stock during the shorter of the periods described in Section
897(c)(1)(A)(ii) of the Code.
ARTICLE 6
CONDITIONS TO CONSUMMATION OF THE MERGER
6.1 Conditions to Each Party's Obligations to Effect the Merger. The
respective obligations of each party hereto to effect the Merger are subject to
the satisfaction at or prior to the Effective Time of the following conditions:
(a) this Agreement shall have been approved and adopted by the OSI
Requisite Vote;
(b) the Share Issuance shall have been approved by the Infinity
Requisite Vote;
(c) no statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or enforced by any
United States court or United States governmental authority and continued in
effect which prohibits, restrains, enjoins or restricts the consummation of the
Merger;
(d) any waiting period (including any extension thereof) applicable
to the Merger under the HSR Act shall have terminated or expired;
(e) there shall not be pending or threatened by any Governmental
Entity any suit, action or proceeding, in each case (i) seeking to restrain or
prohibit the consummation of the Merger or any of the other transactions
contemplated by this Agreement or seeking to obtain from OSI or Infinity any
damages that are material in relation to OSI and its subsidiaries taken as a
whole or Infinity and its subsidiaries taken as a whole, as applicable, or (ii)
which otherwise could reasonably be expected to have a Material Adverse Effect
on OSI or a Material Adverse Effect on Infinity; and
(f) if required for the consummation of the Merger under applicable
Law, Infinity shall have either received a receipt issued under subsection 13(1)
of the Canada Act certifying that a complete notice in prescribed form in
respect of the Merger has been received and advising that the Merger is not
reviewable; or a notice from the Minister, designated by the Governor in Council
as the Minister for the purposes of the Investment Canada Act, issued under Part
IV of the Canada Act, indicating that such Minister is, or is deemed to be,
satisfied that the Merger is likely to be of net benefit to Canada.
(g) the S-4 shall have become effective under the Securities Act and
shall not be the subject of any stop order or proceedings seeking a stop order
and Infinity shall
48
57
have received all state securities Laws or "blue sky" permits and authorizations
necessary to issue shares of Infinity Common Stock in exchange for the Shares in
the Merger;
(h) the Infinity Common Stock issuable in the Merger shall have been
authorized for listing on the NYSE, subject to official notice of issuance; and
(i) if required for the consummation of the Merger under applicable
Law, the parties shall have obtained the favorable opinion of the Comision
Federal de Competencia.
6.2 Conditions to the Obligations of OSI. The obligation of OSI to effect
the Merger is subject to the satisfaction at or prior to the Effective Time of
the following conditions:
(a) the representations and warranties of Infinity and Burma
Acquisition contained in this Agreement shall have been and shall be true and
correct, in each case when made and on and as of the Closing Date as though made
on and as of the Closing Date (except for representations and warranties made as
of a specified date, which need be true and correct, or true and correct only as
of the specified date), without giving effect to any "materiality" or "Material
Adverse Effect" qualifiers contained in such representations and warranties,
with such exceptions as have not had and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on Infinity,
and at the Closing, Infinity and Burma Acquisition shall have delivered to OSI a
certificate executed by a senior executive officer of Infinity (the "Infinity
Closing Certificate") to that effect;
(b) each of the obligations of Infinity and Burma Acquisition to be
performed at or before the Effective Time pursuant to the terms of this
Agreement shall have been duly performed in all material respects at or before
the Effective Time, and the Infinity Closing Certificate shall certify the
foregoing;
(c) OSI shall have received an opinion of Powell, Goldstein, Xxxxxx
& Xxxxxx LLP, dated the Closing Date, to the effect that the Merger will be
treated for federal income Tax purposes as a reorganization within the meaning
of Section 368(a) of the Code. In rendering such opinion, Powell, Goldstein,
Xxxxxx & Xxxxxx LLP shall have received and may rely upon the representations
contained in the certificates referred to in Section 5.13; and
(d) there shall not be any Material Adverse Effect on Infinity, and
the Infinity Closing Certificate shall certify the foregoing; provided, that for
purposes of this Section 6.2(d), any event, change, occurrence, development,
circumstance or effect resulting from or relating to (x) compliance with the
Confidentiality Agreement (as defined in Section 5.7(c)) with respect to the
public announcement or disclosure of the negotiations leading to the execution
of this Agreement, (y) the execution and delivery of this Agreement or (z) any
action taken or omitted by Infinity at the direction of OSI in
49
58
compliance with the terms and conditions of this Agreement, shall not constitute
a Material Adverse Effect on Infinity.
6.3 Conditions to the Obligations of Infinity and Burma Acquisition. The
respective obligations of Infinity and Burma Acquisition to effect the Merger
are subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) the representations and warranties of OSI contained in this
Agreement shall have been and shall be true and correct in all material
respects, in each case when made and on and as of the Closing Date as though
made on and as of the Closing Date (except for representations and warranties
made as of a specified date, which need be true and correct, or true and correct
only as of the specified date), without giving effect to any "materiality" or
"Material Adverse Effect" qualifiers contained in such representations and
warranties, with such exceptions as have not and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
OSI, and at the Closing, OSI shall have delivered to Infinity and Burma
Acquisition a certificate executed by a senior executive officer of OSI (the
"OSI Closing Certificate") to that effect;
(b) the representation and warranty of OSI contained in Section 3.9
of this Agreement shall have been and shall be true and correct when made and on
and as of the Closing Date as though made on and as of the Closing Date, and the
OSI Closing Certificate shall certify the foregoing (it being understood that a
suit, claim, action, proceeding or investigation (excluding any matter set forth
in Section 3.9 of the OSI Disclosure Schedule, each, a "Litigation Matter")
shall not be deemed "material" for purposes of Section 3.9 of this Agreement
unless Infinity's outside counsel has (or have) advised Infinity that such
Litigation Matter, taken individually or in the aggregate with all other
Litigation Matters is reasonably likely to result in judgments (or equitable
remedies) against OSI or any of its subsidiaries (or reasonably likely to have
an adverse economic effect on OSI or any of its subsidiaries) in excess of $30
million (net of third party insurance reasonably expected to be recovered in
respect thereof);
(c) the representations and warranties of OSI contained in Sections
3.8(k) and (l), 3.10 (solely insofar as the matters set forth therein relate to
or affect Real Property Rights) and 3.15 (solely insofar as the matters set
forth therein relate to or affect Real Property Rights) of this Agreement shall
have been and shall be true and correct when made and on and as of the Closing
Date, without giving effect to any "materiality" or "Material Adverse Effect"
qualifiers contained in such representations and warranties, with such
exceptions as have not and would not reasonably be expected to, individually or
in the aggregate, reduce, prior to the second anniversary of the Effective Time,
the EBITDA of OSI and its subsidiaries, taken as a whole, by $15 million or more
on an annualized basis giving reasonable pro forma effect to new builds, and the
OSI Closing Certificate shall certify the foregoing (it being understood that
the matters set forth in Section 6.3(c) of the OSI disclosure Schedule shall not
be taken into account in determining whether this condition has been satisfied);
50
59
(d) each of the obligations of OSI to be performed at or before the
Effective Time pursuant to the terms of this Agreement shall have been duly
performed in all material respects at or before the Effective Time, and the OSI
Closing Certificate shall certify the foregoing;
(e) the Stockholders Agreement shall be in full force and effect;
(f) Xxxxxx X. Xxxxxx shall have entered into an employment and
non-competition agreement substantially on the terms set forth in the term sheet
with respect thereto dated the date hereof, such agreement shall be in full
force and effect and Infinity shall not be aware of any basis that would
reasonably be expected to cause such agreement to no longer be in full force and
effect;
(g) [Intentionally Omitted];
(h) Infinity shall have received an opinion of Weil, Gotshal &
Xxxxxx LLP, dated the Closing Date to the effect that the Merger will be treated
for federal income Tax purposes as a reorganization within the meaning of
Section 368(a) of the Code. In rendering such opinion, Weil, Gotshal & Xxxxxx
LLP shall have received and may rely upon the representations contained in the
certificates referred to in Section 5.13; and
(i) There shall not be any Material Adverse Effect on OSI, and the
OSI Closing Certificate shall certify the foregoing; provided, that for purposes
of this Section 6.3(i), any event, change, occurrence, development, circumstance
or effect resulting from or relating to (x) compliance with the Confidentiality
Agreement with respect to the public announcement or disclosure of the
negotiations leading to the execution of this Agreement, (y) the execution and
delivery of this Agreement or (z) any action taken or omitted by OSI at the
direction of Infinity in compliance with the terms and conditions of this
Agreement, shall not constitute a Material Adverse Effect on OSI.
ARTICLE 7
TERMINATION; AMENDMENT; WAIVER
7.1 Termination by Mutual Agreement. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time by the
mutual written consent of Infinity and OSI by action of their respective Board
of Directors.
7.2 Termination by Either Infinity or OSI. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time by action of the Board of Directors of either Infinity or OSI if:
(a) the Merger shall not have been consummated by December 31, 1999
(the "Termination Date"); provided, however, that if either Infinity or OSI
determines that additional time is necessary in connection with obtaining any
consent, registration,
51
60
approval, permit or authorization required to be obtained from any Governmental
Entity, the Termination Date may be extended by Infinity or OSI from time to
time by written notice to the other party to a date not beyond February 28,
2000;
(b) the OSI Requisite Vote shall not have been obtained at the OSI
Stockholders Meeting or at any adjournment or postponement thereof;
(c) the Share Issuance shall not have been approved by the Infinity
Requisite Vote; or
(d) any injunction, order, decree or ruling permanently restraining,
enjoining or otherwise prohibiting consummation of the Merger shall become final
and non-appealable, or any statute, law, regulation or ordinance permanently
restraining, enjoining or otherwise prohibiting consummation of the Merger shall
be adopted;
provided, that the right to terminate this Agreement pursuant to this Section
7.2 shall not be available to any party that has breached in any material
respect its obligations under this Agreement in any manner that shall have
proximately contributed to the occurrence of the failure of the Merger to be
consummated.
7.3 Termination by OSI. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time by action of the OSI
Board if:
(a) (i) OSI is not in breach of Section 5.5, (ii) the Merger shall
not have been approved by the OSI Requisite Vote, (iii) the OSI Board shall have
determined in good faith, based on the advice of outside legal counsel, that it
is necessary, in order to comply with its fiduciary duties to OSI's stockholders
under applicable Law, to terminate this Agreement to enter into an agreement
with a third party with respect to or to consummate a transaction constituting a
Superior Proposal, (iv) the OSI Board authorizes OSI, subject to complying with
the terms of this Agreement, to enter into a binding written agreement with a
third party concerning a transaction that constitutes a Superior Proposal and
OSI notifies Infinity in writing (the "Notice") that it intends to enter into
such an agreement (it being understood that OSI shall be required to deliver a
new Notice in respect of any revised Superior Proposal from such third party or
its affiliates that OSI proposes to accept), attaching the most current version
(or draft) of such agreement to such Notice (which version (or draft) shall be
updated on a current basis), and (v) during the five business day (or, in the
case of any Notice with respect to a particular third party other than the
initial Notice with respect to such third party's Acquisition Proposal, three
business day) period after delivery of the Notice, OSI shall have negotiated
with, and shall have caused its respective financial and legal advisors to,
negotiate with Infinity to attempt to make such commercially reasonable
adjustments in the terms and conditions of this Agreement as would enable OSI to
proceed with the transactions contemplated herein and (vi) the OSI Board shall
have concluded, after considering the results of such negotiations, that any
Superior Proposal giving rise to OSI's Notice continues to be a Superior
Proposal. OSI may not effect any termination pursuant to this Section 7.3(a)
unless (i) prior thereto or concurrently therewith OSI pays to Infinity in
immediately
52
61
available funds the fees required to be paid pursuant to Section 7.5 and (ii)
such termination is within two business days after the termination of the five
(or, if applicable, three) business day period referred to in clause (v) above.
OSI agrees (x) that it will not enter into a binding agreement referred to in
clause (iii) above until at least the first business day after the five (or, if
applicable, three) business day period referred to in clause (v) above, and (y)
to notify Infinity promptly if its intention to enter into a written agreement
referred to in its Notice shall change at any time after giving such
notification; or
(b) there is a breach by Infinity or Burma Acquisition of any
representation, warranty, covenant or agreement contained in this Agreement that
would give rise to a failure of a condition set forth in Section 6.2(a) or
6.2(b), which has not been cured within 15 business days following receipt by
Infinity and Burma Acquisition of written notice of such breach; or
(c) the Board of Directors of Infinity shall have failed to call the
meeting of Infinity stockholders in accordance with Section 5.4(b), other than
if the calling thereof is subject to an existing injunction or restraining order
or if the S-4 has not been declared effective (other than as a result of a
breach of this Agreement by Infinity (and Infinity's stockholders shall not have
otherwise consented to the Share Issuance in accordance with Section 228 of the
DGCL).
7.4 Termination by Infinity. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time by action of the
Infinity Board if:
(a) (i) OSI enters into a binding agreement for a Superior Proposal,
or (ii) the OSI Board, whether or not permitted to do so by this Agreement, (A)
shall have withdrawn or adversely modified its approval, or recommendation of
this Agreement or the Merger, or (B) shall have failed to call the meeting of
OSI stockholders in accordance with Section 5.4(a), other than, in the case of
Clause (B), if the calling thereof is subject to an existing injunction or
restraining order or if the S-4 has not been declared effective (other than as a
result of the breach of this Agreement by OSI); or
(b) there is a breach by OSI of any representation, warranty,
covenant or agreement contained in this Agreement would give rise to a failure
of a condition set forth in Section 6.3(a), 6.3(b), 6.3(c) or 6.3(d), which has
not been cured within 15 business days following receipt by OSI of written
notice of such breach.
7.5 Effect of Termination and Abandonment.
(a) In the event of termination of this Agreement and the
abandonment of the Merger pursuant to this Article 7, this Agreement (other than
this Section 7.5 and Sections 5.7(c), 5.19 and Article 8) shall become void and
of no effect with no liability on the part of any party hereto (or of any of its
directors, officers, employees, agents, legal and financial advisors or other
representatives); provided, however, except as
53
62
otherwise provided herein, neither such termination nor the existence of any
rights provided for in Section 7.5(b) shall relieve any party hereto of any
liability or eliminate or reduce any damages resulting from (i) any willful
breach of any representations or warranties contained in this Agreement or (ii)
any breach of any covenant or agreement contained in this Agreement.
(b) (i) In the event that (A) this Agreement is terminated by OSI
pursuant to Section 7.3(a), or by Infinity pursuant to Section 7.4(a), or
(B) OSI gives a Notice pursuant to Section 7.3(a) and this Agreement is
thereafter terminated by Infinity or OSI pursuant to Section 7.2(b), then
OSI shall pay Infinity a termination fee of $300 million in same-day funds
(the "Fee"), on the date of such termination.
(ii) In the event that this Agreement is terminated by (A) by either
Infinity or OSI pursuant to Section 7.2(b) (other than in the
circumstances described in Section 7.5(b)(i)(B)) or (B) by Infinity
pursuant to Section 7.4(b) and, within 18 months of any such termination,
any Acquisition Proposal (whether received prior to or after such
termination) is entered into, agreed to or consummated by OSI, then OSI
shall pay to Infinity the Fee, on the earlier of the date an agreement is
entered into with respect to an Acquisition Proposal or an Acquisition
Proposal is consummated.
(c) OSI acknowledges that the agreements contained in Section 7.5(b)
are an integral part of the transactions contemplated by this Agreement, and
that, without these agreements, Infinity and Burma Acquisition would not have
entered into this Agreement; accordingly, if OSI fails to promptly pay the
amount due pursuant to Section 7.5(b), and, in order to obtain such payment,
Infinity commences a suit which results in a judgment against OSI for the fee
set forth in this Section 7.5, OSI shall pay to Infinity its costs and expenses
(including attorney's fees) in connection with such suit, together with interest
from the date of termination of this Agreement on the amounts owed at the prime
rate of Citibank, N.A. in effect from time to time during such period plus two
percent.
(d) In the event of termination of this Agreement and abandonment of
the Merger pursuant to and in compliance with this Article 7 (other than
pursuant to Section 7.4(b)), Infinity and Burma Acquisition each agree that from
the date of such termination until the first anniversary of the date of such
termination (the "Standstill Period") they will not, collectively or
individually, and will cause their respective affiliates (as such term is
defined in Rule 12b-2 under the Exchange Act (each an "Infinity Affiliate" and
collectively the "Infinity Affiliates") not to, collectively or individually, in
any manner, directly or indirectly, unless such shall have been specifically
approved or requested by OSI, (a) effect or seek, offer or propose (whether
publicly or otherwise) to effect, or cause or participate in or in any way
assist or participate in, (i) any acquisition of any securities (or beneficial
ownership thereof) or assets of OSI or any of its subsidiaries, (ii) any tender
or exchange offer, merger or other business combination involving OSI or any of
its subsidiaries; (iii) any recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with respect to OSI or any of its
subsidiaries; or (iv) any
54
63
"solicitation" of "proxies" (as such terms are used in the proxy rules of the
SEC) or consent to vote any voting securities of OSI; or (b) otherwise act,
alone or in concert with others, to seek to control or influence OSI's
management, the OSI Board or policies of OSI (any of the foregoing transactions
hereinafter being referred to as a "Change of Control Transaction").
Notwithstanding the foregoing, the provisions of this paragraph shall cease to
be effective with respect to OSI and any of its subsidiaries upon (A) the
commencement by OSI or any of its subsidiaries, whether voluntarily or
involuntarily, of any proceeding under 11 U.S.C. Section 101 et seq., (B) the
initiation (or public announcement of an intent to initiate) by any person or
group other than or involving Infinity, Burma Acquisition or any Infinity
Affiliate of any action, proceeding or undertaking with respect to OSI or any of
its subsidiaries that would have the effect of a Change of Control Transaction
or any other transaction that, if consummated, would have the effect of a Change
of Control Transaction with respect to such entity. Infinity hereby specifically
acknowledges and agrees that it shall be responsible for any breach of this
Section 7.5(d) by any Infinity Affiliate.
7.6 Amendment. This Agreement may be amended by action taken by OSI,
Infinity and Burma Acquisition at any time before or after approval of the
Merger by the shareholders of OSI but, after any such approval, no amendment
shall be made which requires the approval of such shareholders under applicable
Law without such approval. This Agreement may not be amended except by an
instrument in writing signed on behalf of the parties hereto.
7.7 Extension; Waiver. At any time prior to the Effective Time, each party
hereto (for these purposes, Infinity and Burma Acquisition shall together be
deemed one party and OSI shall be deemed the other party) may (i) extend the
time for the performance of any of the obligations or other acts of the other
party, (ii) waive any inaccuracies in the representations and warranties of the
other party contained herein or in any document, certificate or writing
delivered pursuant hereto or (iii) waive compliance by the other party with any
of the agreements or conditions contained herein. Any agreement on the part of
either party hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party. The failure of
either party hereto to assert any of its rights hereunder shall not constitute a
waiver of such rights.
ARTICLE 8
MISCELLANEOUS
8.1 Nonsurvival of Representations and Warranties. The representations and
warranties made herein shall not survive beyond the Effective Time or a
termination of this Agreement.
55
64
8.2 Entire Agreement; Assignment. This Agreement:
(a) constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all other prior agreements
and understandings, both written and oral, between the parties with respect to
the subject matter hereof; and
(b) shall not be assigned by operation of Law or otherwise.
8.3 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by cable,
telegram, confirmed facsimile or telex, or by first class mail (postage prepaid,
return receipt requested), to the other party as follows:
if to Infinity or Burma Acquisition to: Infinity Broadcasting
Corporation
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Facsimile: (000) 000-0000
With copies to: CBS Corporation
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
and
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
if to OSI to: Outdoor Systems, Inc.
0000 X. Xxxxx Xxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
With a copy to: Powell, Goldstein, Xxxxxx &
Xxxxxx LLP
Sixteenth Floor
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx,
Xx., Esq.
Facsimile: (000) 000-0000
56
65
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above.
8.4 Governing Law. Except to the extent that Delaware Law is mandatorily
applicable to the Merger and the rights of the shareholders of OSI, this
Agreement shall be governed by and construed in accordance with the Laws of the
State of New York, without regard to the principles of conflicts of Law thereof.
8.5 Descriptive Headings. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.
8.6 Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto and its successors and permitted
assigns, and except as provided in Section 5.11, nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
8.7 Severability. If any term or other provision of this Agreement is
invalid, illegal or unenforceable, all other provisions of this Agreement shall
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party.
8.8 Specific Performance. The parties hereto acknowledge that irreparable
damage would result if this Agreement were not specifically enforced, and they
therefore consent that the rights and obligations of the parties under this
Agreement may be enforced by a decree of specific performance issued by a court
of competent jurisdiction. Such remedy shall, however, not be exclusive and
shall be in addition to any other remedies which any party may have under this
Agreement or otherwise.
8.9 Brokers. In the event the Merger is not consummated, OSI agrees to
indemnify and hold harmless Infinity and Burma Acquisition, and Burma
Acquisition agrees to indemnify and hold harmless OSI, from and against any and
all liability to which Infinity and Burma Acquisition, on the one hand, or OSI,
on the other hand, may be subjected by reason of any broker's, finder's or
similar fees or expenses with respect to the transactions contemplated by this
Agreement to the extent such similar fees and expenses are attributable to any
action undertaken by or on behalf of OSI, or Infinity or Burma Acquisition, as
the case may be.
8.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
57
66
8.11 Interpretation.
(a) The words "hereof," "herein" and "herewith" and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement, and article,
section, paragraph, exhibit and schedule references are to the articles,
sections, paragraphs, exhibits and schedules of this Agreement unless otherwise
specified. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." All terms defined in this Agreement shall have the defined meanings
contained herein when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such terms. Any agreement, instrument or statute defined or referred
to herein or in any agreement or instrument that is referred to herein means
such agreement, instrument or statute as from time to time, amended, qualified
or supplemented, including (in the case of agreements and instruments) by waiver
or consent and (in the case of statutes) by succession of comparable successor
statutes and all attachments thereto and instruments incorporated therein.
References to a person are also to its permitted successors and assigns.
(b) The phrases "the date of this Agreement," "the date hereof" and
terms of similar import, unless the context otherwise requires, shall be deemed
to refer to May 27, 1999.
(c) "know" or "knowledge" means, with respect to Infinity, the
actual knowledge of the persons listed on Section 8.11(c) of the Infinity
Disclosure Schedule and, with respect to OSI, the actual acknowledge of the
persons listed on Section 8.11(c) of the OSI Disclosure Schedule.
(d) The term "Material Adverse Effect" means, with respect to any
entity, any event, change, occurrence, development, circumstance or effect that,
individually or in the aggregate with all other events, changes, occurrences,
developments, circumstances and effects, is or would reasonably be expected to
be materially adverse to (i) the assets, properties, condition (financial or
otherwise), business or results of operations of such entity and its
subsidiaries taken as a whole or (ii) the ability of such party to consummate
the transactions contemplated by this Agreement.
(e) The parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
58
67
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be duly executed on its behalf as of the day and year first above written.
INFINITY BROADCASTING CORPORATION
By: /s/ Xxxxx Xxxxxxx
____________________________________
Name: Xxxxx Xxxxxxx
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
BURMA ACQUISITION CORP.
By: /s/ Xxxxx Xxxxxxx
____________________________________
Name: Xxxxx Xxxxxxx
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
OUTDOOR SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Chairman of the Board
59
