Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
AMONG
OUTDOOR ADVERTISING HOLDINGS, INC.
( THE "SELLER")
AND
UNIVERSAL OUTDOOR, INC.
( THE "PARENT")
AND
UNIVERSAL ACQUISITION CORP.
( THE "ACQUIROR")
DATED AUGUST 27, 1996
TABLE OF CONTENTS
Page
I. THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Merger; Effective Time of the Merger. . . . . . . . . . . . . 1
1.2 Effects of the Merger . . . . . . . . . . . . . . . . . . . . 1
II. CONVERSION OF ACQUIROR'S AND SELLER'S STOCK; MERGER
CONSIDERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Conversion. . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Dissenters' Rights. . . . . . . . . . . . . . . . . . . . . . 3
2.3 Schedules of Indebtedness, Reserve Amount, Stockholder
Notes, Merger Consideration and Working Capital . . . . . . . 5
2.4 Working Capital . . . . . . . . . . . . . . . . . . . . . . . 6
2.5 Payments at Closing . . . . . . . . . . . . . . . . . . . . . 6
III. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
IV. REPRESENTATIONS AND WARRANTIES OF THE SELLER AS TO ITSELF . . . . . . 15
4.1 Organization and Authority of The Seller. . . . . . . . . . . 15
4.2 Due Execution and Absence of Breach . . . . . . . . . . . . . 15
4.3 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . 15
4.4 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . 16
4.5 Business of the Seller. . . . . . . . . . . . . . . . . . . . 16
4.6 Stockholder Vote. . . . . . . . . . . . . . . . . . . . . . . 16
V. REPRESENTATIONS AND WARRANTIES OF THE SELLER AS TO THE
COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.1 Organization and Good Standing. . . . . . . . . . . . . . . . 17
5.2 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . 17
5.3 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . 17
5.4 Financial Statements. . . . . . . . . . . . . . . . . . . . . 18
5.5 No Undisclosed Liabilities. . . . . . . . . . . . . . . . . . 18
5.6 No Material Adverse Change; No Dividends. . . . . . . . . . . 18
5.7 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.8 Patents, Trademarks and Copyrights. . . . . . . . . . . . . . 19
5.9 Real Property; Leases of Real Property. . . . . . . . . . . . 19
5.10 Sign Location Leases. . . . . . . . . . . . . . . . . . . . . 21
5.11 Permits; Compliance with Laws . . . . . . . . . . . . . . . . 21
5.12 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.13 Material Contracts. . . . . . . . . . . . . . . . . . . . . . 22
5.14 Title to Properties; Absence of Encumbrances. . . . . . . . . .22
5.15 Restrictions. . . . . . . . . . . . . . . . . . . . . . . . . 23
5.16 Litigation; Consents. . . . . . . . . . . . . . . . . . . . . 23
5.17 Environmental Matters . . . . . . . . . . . . . . . . . . . . 24
5.18 Labor Agreements. . . . . . . . . . . . . . . . . . . . . . . 24
5.19 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.20 Affiliate Transactions. . . . . . . . . . . . . . . . . . . . 27
5.22 Materiality . . . . . . . . . . . . . . . . . . . . . . . . . 27
VI. REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE ACQUIROR . . . . 27
6.1 Organization and Good Standing. . . . . . . . . . . . . . . . 27
6.2 Restrictions. . . . . . . . . . . . . . . . . . . . . . . . . 27
6.3 Litigation; Consents. . . . . . . . . . . . . . . . . . . . . 28
6.4 Execution and Effect of Agreement . . . . . . . . . . . . . . 28
6.5 Financing . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.6 Materiality . . . . . . . . . . . . . . . . . . . . . . . . . 28
VII. COVENANTS OF THE SELLER . . . . . . . . . . . . . . . . . . . . . . . 28
7.1 Access to Documents; Opportunity to Ask Questions. . . . . . 28
7.2 Maintenance of Insurance. . . . . . . . . . . . . . . . . . . 29
7.3 Conduct of Business . . . . . . . . . . . . . . . . . . . . . 29
7.4 Consents; Conditions Precedent. . . . . . . . . . . . . . . . 31
7.5 Xxxx-Xxxxx-Xxxxxx Filings . . . . . . . . . . . . . . . . . . 31
7.6 Supplemental Disclosure . . . . . . . . . . . . . . . . . . . 31
7.7 No Solicitation of Transactions . . . . . . . . . . . . . . . 31
7.8 Resignations. . . . . . . . . . . . . . . . . . . . . . . . . 32
7.9 Environmental Studies . . . . . . . . . . . . . . . . . . . . 32
7.10 Title Insurance . . . . . . . . . . . . . . . . . . . . . . . 32
7.11 Disclosure of Financial Information . . . . . . . . . . . . . 32
7.12 Non-Competition Agreements. . . . . . . . . . . . . . . . . . 32
7.13 Employment Contract . . . . . . . . . . . . . . . . . . . . . 32
7.14 Discharge of Indebtedness . . . . . . . . . . . . . . . . . . 33
7.15 Approval of Stockholders. . . . . . . . . . . . . . . . . . . 33
VIII. COVENANTS OF THE PARENT AND THE ACQUIROR. . . . . . . . . . . . . . . 33
8.1 Representations and Warranties. . . . . . . . . . . . . . . . 33
8.2 Consents; Conditions Precedent. . . . . . . . . . . . . . . . 33
8.3 Xxxx-Xxxxx-Xxxxxx Filings . . . . . . . . . . . . . . . . . . 33
8.4 Employee and Employee Plans . . . . . . . . . . . . . . . . . 34
8.5 Supplemental Disclosure . . . . . . . . . . . . . . . . . . . 34
IX. CONDITIONS PRECEDENT TO THE ACQUIROR'S OBLIGATION . . . . . . . . . . 34
9.1 Representations and Warranties True . . . . . . . . . . . . . 34
(ii)
9.2 Covenants Performed . . . . . . . . . . . . . . . . . . . . . 34
9.3 No Legal Proceedings. . . . . . . . . . . . . . . . . . . . . 35
9.4 Compliance Certificate. . . . . . . . . . . . . . . . . . . . 35
9.5 Corporate Authority . . . . . . . . . . . . . . . . . . . . . 35
9.6 Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.7 Xxxx-Xxxxx-Xxxxxx . . . . . . . . . . . . . . . . . . . . . . 35
9.8 Indebtedness, Reserve Amount and Stockholder Note Schedules . 35
9.9 Stockholder Approval. . . . . . . . . . . . . . . . . . . . . 35
9.10 No Material Adverse Effect. . . . . . . . . . . . . . . . . . 35
9.11 Seller Affidavit. . . . . . . . . . . . . . . . . . . . . . . 35
9.12 Non-Competition Agreements. . . . . . . . . . . . . . . . . . 36
9.13 Employment Contract . . . . . . . . . . . . . . . . . . . . . 36
9.15 Environmental Matters . . . . . . . . . . . . . . . . . . . . 36
9.16 Working Capital and Cash. . . . . . . . . . . . . . . . . . . 36
9.17 Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . 36
9.18 Releases of Liens and Pledges . . . . . . . . . . . . . . . . 36
X. CONDITIONS PRECEDENT TO THE SELLER'S OBLIGATION . . . . . . . . . . . 36
10.1 Representations and Warranties True . . . . . . . . . . . . . 36
10.2 Covenants Performed . . . . . . . . . . . . . . . . . . . . . 36
10.3 No Legal Proceedings. . . . . . . . . . . . . . . . . . . . . 37
10.4 Compliance Certificate. . . . . . . . . . . . . . . . . . . . 37
10.5 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.6 Xxxx-Xxxxx-Xxxxxx . . . . . . . . . . . . . . . . . . . . . . 37
10.7 Stockholder Approval. . . . . . . . . . . . . . . . . . . . . 37
10.8 Evidence of Financing . . . . . . . . . . . . . . . . . . . . 37
10.9 Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . 37
XI. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.1 The Closing . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.2 Closing Proceedings . . . . . . . . . . . . . . . . . . . . . 38
11.3 Deliveries at Closing . . . . . . . . . . . . . . . . . . . . 38
XII. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . 39
12.1 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . 39
XIII. NO BROKERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
XIV. SPECIFIC PERFORMANCE. . . . . . . . . . . . . . . . . . . . . . . . . 39
XV. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
XVI. FURTHER ASSURANCES. . . . . . . . . . . . . . . . . . . . . . . . . . 40
XVII. CONFIDENTIALITY; PRESS RELEASES . . . . . . . . . . . . . . . . . . . 40
17.1 Confidentiality Obligation of the Acquiror. . . . . . . . . . 40
(iii)
17.2 Confidentiality Obligation of the Seller. . . . . . . . . . . 41
17.3 Disclosure Required by Law. . . . . . . . . . . . . . . . . . 41
17.4 Press Releases. . . . . . . . . . . . . . . . . . . . . . . . 41
XVIII. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
XIX. ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 43
XX. SUCCESSORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
XXI. SECTION HEADINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . 43
XXII. APPLICABLE LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
XXIII. EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
XXIV. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
XXV. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
XXVI. SCHEDULE DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . 44
XXVII. PARTIES IN INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . 44
(iv)
LIST OF SCHEDULES
SCHEDULES
---------
Schedule 4.2 - Due Execution and Absence of Breach
Schedule 4.3 - Capitalization
Schedule 4.4 - Ownership of Interests in Other Companies
Schedule 4.5 - Liabilities of Seller
Schedule 5.5 - Undisclosed Liabilities
Schedule 5.6 - Exceptions to Material Adverse Change Provision
Schedule 5.7 - Taxes
Schedule 5.8 - Patents, Trademarks and Copyrights
Schedule 5.9 - Real Property; Leases of Real Property
Schedule 5.11 - Permits, Compliance with Law
Schedule 5.12 - Insurance
Schedule 5.13 - Material Contracts
Schedule 5.14 - Title to Properties; Absence of Encumbrances
Schedule 5.15 - Restrictions
Schedule 5.16 - Litigation; Consents
Schedule 5.17 - Environmental Matters
Schedule 5.18 - Labor Agreements
Schedule 5.19 - ERISA
Schedule 5.20 - Affiliate Transactions
Schedule 5.21 - Transfer of Assets
Schedule 6.3 - Litigation; Consents (Parent and/or Acquiror)
Schedule 7.3 - Committed Capital Expenditures
(v)
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger is entered into as of August 27, 1996
by and among Universal Outdoor, Inc., a corporation organized under the laws of
Illinois (the "Parent"), Universal Acquisition Corp., a corporation organized
under the laws of Delaware and a wholly owned subsidiary of the Parent (the
"Acquiror"), Outdoor Advertising Holdings, Inc., a Delaware corporation
("Seller") and Boston Ventures Management, Inc., a Massachusetts corporation.
INTRODUCTION
The Seller is the owner of all of the issued and outstanding shares of
common stock of POA Acquisition Corporation, a Delaware corporation (the
"Company").
The Company is in the business of owning and operating outdoor
advertising businesses.
The respective Boards of Directors of the Parent, the Acquiror and the
Seller have approved the acquisition of the Seller by the Parent by means of the
merger of the Acquiror with and into the Seller with the Seller continuing as
the surviving corporation of the merger as provided herein (the "Merger").
The Board of Directors of the Seller has (i) determined that the terms of
the Merger are fair to and in the best interests of the stockholders of the
Seller; (ii) approved this Agreement and the transactions contemplated hereby;
and (iii) resolved to recommend approval of the Merger and adoption of this
Agreement by such stockholders.
NOW, THEREFORE, in order to prescribe the terms and conditions of the
Merger, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
I. THE MERGER.
1.1 MERGER; EFFECTIVE TIME OF THE MERGER. Subject to the terms and
conditions of this Agreement, the Acquiror will be merged with and into the
Seller in accordance with the General Corporation Law of the State of Delaware
(the "Delaware Statute"). A Certificate of Merger (the "Delaware Merger
Certificate") shall be filed in accordance with the Delaware Statute and the
provisions of this Agreement on the Closing Date. The Merger shall become
effective upon acceptance of such filing by the Delaware Secretary of State (the
time of acceptance of such filing is referred to as the "Effective Time").
1.2 EFFECTS OF THE MERGER. At the Effective Time, (a) the separate
existence of the Acquiror shall cease and the
Acquiror shall be merged with and into the Seller with the Seller continuing as
the surviving corporation of the Merger (the "Surviving Corporation"), (b) the
Certificate of Incorporation of the Seller as amended and restated by the
Delaware Merger Certificate shall be the Certificate of Incorporation of the
Surviving Corporation, (c) the Bylaws of the Acquiror as in effect immediately
prior to the Effective Time shall be the Bylaws of the Surviving Corporation,
(d) the directors of the Acquiror immediately prior to the Effective Time 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, and, the officers of the Acquiror immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation, in
each case until their respective successors are duly elected or appointed (as
the case may be) and qualified, (e) the name of the Surviving Corporation shall
be Outdoor Advertising Holdings, Inc., and (f) the Merger shall, from and after
the Effective Time, have all the effects provided by applicable law.
II. CONVERSION OF ACQUIROR'S AND SELLER'S STOCK; MERGER
CONSIDERATION.
2.1 CONVERSION.
(a) As of the Effective Time, by virtue of the Merger and
without any additional action on the part of any holder of shares of the
Seller's Series B Preferred Stock, each share of Series B Preferred Stock of the
Seller issued and outstanding immediately prior to the Effective Time (other
than any Dissenters' Shares) and any accrued and unpaid dividends in respect
thereof shall be converted into the right to receive its pro rata portion (based
on the number of shares of Series B Preferred Stock including Dissenters' Shares
which are shares of Series B Preferred Stock) of the Series B Preferred Stock
Merger Consideration, payable upon surrender of the certificate representing
such shares to the Disbursing Agent as set forth in Section 2.6 hereof and as
otherwise set forth herein.
(b) As of the Effective Time, by virtue of the Merger and
without any additional action on the part of any holder of shares of the 15%
Preferred Stock of the Seller, each share of 15% Preferred Stock of the Seller
issued and outstanding immediately prior to the Effective Time (other than any
Dissenters' Shares) and any accrued and unpaid dividends in respect thereof
shall be converted into the right to receive its pro rata portion (based on the
number of shares of 15% Preferred Stock including Dissenters' Shares which are
shares of 15% Preferred Stock) of the 15% Preferred Stock Merger Consideration,
payable upon surrender of the certificate representing such shares to the
Disbursing Agent as set forth in Section 2.6 hereof and as otherwise set forth
herein.
2
(c) As of the Effective Time, by virtue of the Merger and
without any additional action on the part of any holder of shares of 8%
Preferred Stock of the Seller, each share of 8% Preferred Stock of the Seller
issued and outstanding immediately prior to the Effective Time (other than any
Dissenters' Shares) and any accrued and unpaid dividends in respect thereof
shall be converted into the right to receive its pro rata portion (based on the
number of shares of 8% Preferred Stock including Dissenters' Shares which are
shares of 8% Preferred Stock) of the 8% Preferred Stock Merger Consideration,
payable upon surrender of the certificate representing such shares to the
Disbursing Agent as set forth in Section 2.6 hereof and as otherwise set forth
herein.
(d) As of the Effective Time, by virtue of the Merger and
without any additional action on the part of any holder of shares of Common
Stock of the Seller, each share of Common Stock of the Seller issued and
outstanding immediately prior to the Effective Time (other than any Dissenters'
Shares) shall be converted into the right to receive its pro rata portion (based
on the number of shares of Common Stock including Dissenters' Shares which are
shares of Common Stock) of the Common Stock Merger Consideration, payable upon
surrender of the certificate representing such shares to the Disbursing Agent as
set forth in Section 2.6 hereof and as otherwise set forth herein.
(e) As of the Effective Time, by virtue of the Merger and
without any additional action on the part of any holder of shares of common
stock of the Acquiror, each share of common stock of the Acquiror issued and
outstanding immediately prior to the Effective Time shall be converted into one
validly issued, fully paid and nonassessable share of common stock of the
Surviving Corporation.
(f) Notwithstanding the foregoing, the amount of Series B
Preferred Stock Merger Consideration, 15% Preferred Stock Merger Consideration,
8% Preferred Stock Merger Consideration or Common Stock Merger Consideration
payable to any holder of Series B Preferred Stock, 15% Preferred Stock, 8%
Preferred Stock or Common Stock, as the case may be, who has issued a promissory
note to the Seller in consideration or partial consideration for his, her or its
shares of such stock, shall be reduced by the principal of and interest on such
note outstanding as of the Effective Time, all such notes shall be cancelled as
of the Effective Time, and the Aggregate Merger Consideration payable by the
Acquiror shall be reduced by the aggregate amount of the principal of and
interest on such notes as provided in Section 2.2(c).
2.2 DISSENTERS' RIGHTS.
(a) Notwithstanding the provisions of Section 2.1,
3
shares of Series B Preferred Stock, 15% Preferred Stock, 8% Preferred Stock and
Common Stock which are issued and outstanding immediately prior to the Effective
Time and which are held by holders of such shares who have not voted in favor of
the Merger and with respect to which appraisal rights shall have been properly
demanded in accordance with Section 262 of the Delaware Statute ("Dissenters'
Shares") shall not be converted as provided above in Section 2.1 but shall be
converted into the right to receive from the Surviving Corporation such
consideration as is determined to be due with respect to such Dissenters' Shares
pursuant to the provisions of the Delaware Statute, except that any Dissenters'
Shares held by holders of shares who shall have failed to perfect or shall have
effectively withdrawn or lost their rights to appraisal of such shares under the
Delaware Statute shall be treated as set forth in Section 2.1 and thereupon
deemed to have been converted into and to have become exchangeable for, as of
the Effective Time, the right to receive the consideration in accordance with
Section 2.1, without interest thereon, upon surrender of the certificate or
certificates formerly representing such shares to the Surviving Corporation
pursuant to the terms of this Agreement.
(b) The Seller shall give the Acquiror (i) prompt written notice
of any written demands for appraisals, withdrawals or demands for appraisal and
any other instruments in respect thereof received by the Seller and (ii) the
opportunity, to direct all negotiations and proceedings with respect to demands
for appraisal under Section 262 of the Delaware Statute. The Seller will not
voluntarily make any payment with respect to any demands for appraisal and will
not except with the prior written consent of the Acquiror, settle or offer to
settle any such demands.
(c) The Aggregate Merger Consideration shall be reduced for
purposes of Section 2.5(b) and Section 2.6 by the aggregate amount of the
following reductions: (i) the Series B Preferred Stock Merger Consideration
shall be reduced by an amount equal to the portion of the Series B Preferred
Stock Merger Consideration attributable to Dissenters' Shares which are shares
of Series B Preferred Stock; (ii) the 15% Preferred Stock Merger Consideration
shall be reduced by an amount equal to the portion of the 15% Preferred Stock
Merger Consideration attributable to Dissenters' Shares which are shares of 15%
Preferred Stock; (iii) the 8% Preferred Stock Merger Consideration shall be
reduced by an amount equal to the portion of the 8% Preferred Stock Merger
Consideration attributable to Dissenters' Shares which are shares of 8%
Preferred Stock; (iv) the Common Stock Merger Consideration shall be reduced by
an amount equal to the portion of the Common Stock Merger Consideration
attributable to Dissenters' Shares which are shares of Common Stock; and (v) the
aggregate principal of and interest outstanding as of the Effective Time with
respect to promissory
4
notes issued by the Stockholders of the Seller in consideration or partial
consideration of the issuance of shares of Series B Preferred Stock, 15%
Preferred Stock, 8% Preferred Stock or Common Stock to such Stockholders and
such reduction shall be allocated in accordance with Section 2.1(f) hereof.
2.3 SCHEDULES OF INDEBTEDNESS, RESERVE AMOUNT, STOCKHOLDER NOTES,
MERGER CONSIDERATION AND WORKING CAPITAL.
(a) The Seller will prepare and deliver to the Acquiror five
days prior to the Closing Date an estimate of the Indebtedness which will be
outstanding on the Closing Date and on the day prior to the Closing Date a
schedule of the Indebtedness as of the Closing Date.
(b) The Seller will prepare and deliver to the Acquiror five
days prior to the Closing Date an estimate of the Seller's and the Stockholders'
fees and expenses arising out of, incurred or to be incurred in connection with
the transactions contemplated by this Agreement (including, without limitations,
fees and expenses of their counsel, accountants, financial advisors and CIBC
Wood Gundy Securities Corp. and bonuses and other incentives payable to Xxxxx X.
XxXxxxxxxx, Xx., Xxxxxx Xxxx and Xxxxx Xxxxxxxxxxxx and other employees in
respect of the calendar year ended December 31, 1996), and on the day prior to
the Closing Date, a schedule as of the Closing Date of such fees and expenses
including invoices, receipts, bills or other statements detailing such amounts
(the total such amount, the "Reserve Amount"). The Stockholders severally agree
to indemnify and hold harmless, the Parent, the Company and the Surviving
Corporation from and against any and all liabilities to which such entities may
be subjected following the Closing Date in connection with Seller's and the
Stockholders' fees and expenses arising out of, incurred or to be incurred in
connection with the transactions contemplated by this Agreement.
(c) The Seller will prepare and deliver to the Acquiror five
days prior to the Closing Date a schedule showing the outstanding principal of
and interest which will have accrued as of the Effective Time with respect to
promissory notes issued to the Seller by holders of Series B Preferred Stock,
15% Preferred Stock, 8% Preferred Stock and Common Stock, as the case may be, in
consideration or partial consideration of the issuance of shares of such stock
to the holders thereof.
(d) The Seller will prepare and deliver to the Acquiror five
days prior to the Closing Date a schedule showing the amount of each of the
Series B Preferred Stock Merger Consideration, the 15% Preferred Stock Merger
Consideration, the 8% Preferred Stock Merger Consideration and the Common Stock
Merger Consideration.
5
2.4 WORKING CAPITAL. At the Closing Date, the Company will have
Working Capital of at least $5,000,000 and cash of $750,000. Any cash in excess
of $750,000 may be used by the Company to discharge Indebtedness in accordance
with Section 7.14 herein. The Seller will prepare and deliver to the Acquiror
five days prior to the Closing Date a schedule showing Working Capital as of
such date (the "Working Capital Schedule"). The Acquiror and the Parent shall
have the opportunity to participate in the preparation of such schedule and to
comment on and review such schedule. The parties hereto shall use their best
efforts to resolve any disputes with respect to the Working Capital Schedule
prior to the Effective Time. "Working Capital" shall mean the difference
between (i) consolidated current assets (but excluding cash) and
(ii) consolidated current liabilities (but excluding the current portion of
long-term debt). The Working Capital Schedule shall be prepared in accordance
with GAAP based upon the books and records of the Company.
2.5 PAYMENTS AT CLOSING. At the Effective Time, the Parent shall
make the following payments by wire transfer of immediately available funds:
(a) The Acquiror shall pay the Indebtedness outstanding on the
Closing Date to such persons and in such amounts as the Seller shall direct in
writing.
(b) The Acquiror shall pay to the Disbursing Agent the Aggregate
Merger Consideration, after giving effect to the reductions pursuant to Section
2.2(c). The Aggregate Merger Consideration, after giving effect to the
reductions pursuant to Section 2.2(c) shall be disbursed by the Disbursing Agent
in accordance with Section 2.6 of this Agreement.
2.6 DISBURSING AGENT; DISBURSEMENT OF AGGREGATE MERGER CONSIDERATION.
(a) DISBURSEMENT OF AGGREGATE MERGER CONSIDERATION.
After the Effective Time, the Disbursing Agent shall disburse the amount
received pursuant to Section 2.5(b) as follows:
(i) The Disbursing Agent shall pay to CIBC Wood Gundy
Securities Corp. the Wood Gundy Fee.
(ii) The Disbursing Agent shall deposit the Reserve Amount
(less the Wood Gundy Fee) in an interest-bearing account for application to the
payment of fees and expenses and other costs arising out of or incurred by the
Seller and its stockholders in connection with the Merger and the transactions
contemplated by this Agreement, including, those fees, expenses and other costs
referred to in Section 2.3(b) which have not been paid prior to the Effective
Time. At such time, not later than six months following the Closing Date, that
the Disbursing Agent
6
determines, in its sole discretion, that the remainder of the Reserve Amount is
no longer required to be maintained by the Disbursing Agent to satisfy such
fees, expenses and costs, the amount then being retained by the Disbursing
Agent, together with interest earned thereon, shall be remitted to the holders
of the Seller's Common Stock immediately before the Effective Time (other than
to holders of Dissenters' Shares which are Common Stock). Each such holder
shall be entitled to receive the amount to be so disbursed, multiplied by a
fraction of which the numerator is the number of shares of the Seller's Common
Stock held by such holder immediately prior to the Effective Time and the
denominator is the number of outstanding shares of the Seller's Common Stock
(other than Dissenters' Shares which are shares of Common Stock) immediately
prior to the Effective Time.
(iii) The Disbursing Agent shall remit to each holder of the
Seller's Series B Preferred Stock (other than to holders of Dissenters' Shares
which are shares of Series B Preferred Stock), upon surrender to the Disbursing
Agent of the certificates representing such shares, an amount equal to (i) the
Series B Preferred Stock Merger Consideration, after giving effect to any
reductions set forth in Section 2.2, multiplied by (ii) a fraction of which the
numerator is the number of shares of the Seller's Series B Preferred Stock held
by such holder immediately prior to the Effective Time and the denominator is
the number of outstanding shares of the Seller's Series B Preferred Stock (other
than Dissenters' Shares which are shares of Series B Preferred Stock)
immediately prior to the Effective Time.
(iv) The Disbursing Agent shall remit to each holder of the
Seller's 15% Preferred Stock (other than to holders of Dissenters' Shares which
are shares of 15% Preferred Stock), upon surrender to the Disbursing Agent of
the certificates representing such shares, an amount equal to (i) the 15%
Preferred Stock Merger Consideration, after giving effect to any reductions set
forth in Section 2.2, multiplied by (ii) a fraction of which the numerator is
the number of shares of the Seller's 15% Preferred Stock held by such holder
immediately prior to the Effective Time and the denominator is the number of
outstanding shares of the Seller's 15% Preferred Stock (other than Dissenters'
Shares which are shares of 15% Preferred Stock) immediately prior to the
Effective Time.
(v) The Disbursing Agent shall remit to each holder of the
Seller's 8% Preferred Stock (other than to holders of Dissenters' Shares which
are shares of 8% Preferred Stock), upon surrender to the Disbursing Agent of the
certificates representing such shares, an amount equal to (i) the 8% Preferred
Stock Merger Consideration after giving effect to any reductions set forth in
Section 2.2, multiplied by (ii) a fraction of which the numerator is the number
of shares of the Seller's 8%
7
Preferred Stock held by such holder immediately prior to the Effective Time and
the denominator is the number of outstanding shares of the Seller's 8% Preferred
Stock (other than Dissenters' Shares which are shares of 8% Preferred Stock)
immediately prior to the Effective Time.
(vi) The Disbursing Agent shall remit to each holder of the
Seller's Common Stock (other than to holders of Dissenters' Shares which are
shares of Common Stock), upon surrender to the Disbursing Agent of the
certificates representing such shares, an amount equal to (i) the Common Stock
Merger Consideration, after giving effect to any reductions set forth in Section
2.2 multiplied by (ii) a fraction of which the numerator is the number of shares
of the Seller's Common Stock held by such holder immediately prior to the
Effective Time and the denominator is the number of outstanding shares of the
Seller's Common Stock (other than Dissenters' Shares which are shares of Common
Stock) immediately prior to the Effective Time.
(vii) Notwithstanding the foregoing, the amount to be received
by any Stockholder pursuant to the preceding clauses (iii)-(vi) shall, if
applicable, be reduced as provided in Section 2.1 (f).
(b) RELIANCE ON SELLER'S BOOKS AND RECORDS. The Disbursing Agent
shall be fully protected in relying on, and is fully entitled to rely on the
books and records of the Seller to determine the names and addresses of and the
numbers of shares held by the holders of the Seller's Series B Preferred Stock,
15% Preferred Stock, 8% Preferred Stock or Common Stock.
(c) RELATIVE TO DISBURSING AGENT. (i) The Disbursing Agent shall be
protected in acting upon any written notice, statement, certificate, waiver,
consent or other instrument or document which the Disbursing Agent believes to
be genuine.
(ii) It is understood and agreed that the duties of the
Disbursing Agent hereunder are purely ministerial in nature and that the
Disbursing Agent shall not be liable for any error or judgment, or for any act
done or step taken or omitted in good faith, or for anything which the
Disbursing Agent may do or refrain from doing in connection with this Agreement,
except that the Disbursing Agent shall be liable for its own gross negligence or
willful misconduct. In no event shall the Disbursing Agent be required to
account for any application of funds subsequent to disposition thereof in
accordance with this Agreement by the Disbursing Agent. The Disbursing Agent
shall not be liable for any consequential or incidental damages arising from its
actions hereunder.
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(iii) The Disbursing Agent may consult with and obtain advice
from legal counsel in the event of any dispute or question as to the
construction of any of the provisions hereof or the Disbursing Agent's duties
hereunder. The Disbursing Agent shall incur no liability and shall be fully
protected in acting in accordance with the opinion of its legal counsel. The
Disbursing Agent shall not be responsible in any manner whatsoever for any
failure or inability of any of the other parties hereto, or anyone else, to
perform or comply with any provisions of this Agreement or any other agreement
or undertaking.
(iv) If at any time the Disbursing Agent shall be in doubt as
to any of its duties under this Agreement, the Disbursing Agent may apply to a
court of competent jurisdiction for a determination of such duties, and the
Disbursing Agent shall incur no liability therefor.
(v) If at any time the Disbursing Agent shall receive
conflicting notices, claims, demands or instructions with respect to the
Aggregate Merger Consideration, the Reserve Amount and the interest earned
thereon, or if for any other reason it shall be unable in good faith to
determine the party or parties to whom the Aggregate Merger Consideration, the
Reserve Amount and the interest earned thereon are to be distributed, the
Disbursing Agent may refuse to make such disbursement until the Disbursing Agent
is directed by a final order of a court of competent jurisdiction (in an action
brought by the Disbursing Agent or by any other person), whereupon the
Disbursing Agent shall make such disbursement in accordance with such order.
(vi) The Disbursing Agent shall act solely as the
representative of the Stockholders, and any action taken by the Disbursing Agent
as contemplated by this Agreement shall be for the benefit of, at the direction
of and as agent for the Stockholders. Neither the Parent, the Acquiror, the
Seller, the Company nor the Surviving Corporation shall be responsible or liable
for any actions of the Disbursing Agent or for any costs or expenses associated
with the Disbursing Agent and its actions hereunder. Any and all such
liabilities shall be liabilities of the Stockholders. Any action of the
Disbursing Agent involving incurrence of expense to third parties shall be paid
or reimbursed out of the Reserve Amount to the extent funds are therein
available, and otherwise shall be paid by the Stockholders. All other costs and
expenses associated with the Disbursing Agent and its actions hereunder shall be
paid by the Stockholders. The Stockholders agree to indemnify and hold
harmless, the Parent, the Company and the Surviving Corporation from and against
any and all liabilities to which such entities may be subjected to by reason of
any Losses associated with the Disbursing Agent and its actions or inactions.
9
(vii) Promptly following the disbursement of the Aggregate
Merger Consideration pursuant to Section 2.6 hereof, the Disbursing Agent shall
deliver to the Surviving Corporation the certificates formerly representing
shares of capital stock of the Seller surrendered to the Disbursing Agent by the
Stockholders in accordance with Section 2.6.
III. DEFINITIONS.
As used in this Agreement, the following terms shall have the indicated
meanings:
"ACQUIROR" shall mean Universal Acquisition Corp., a corporation organized
under the laws of Delaware.
"AFFILIATED GROUP" means any group of corporations with respect to which a
Consolidated Tax Return was, or was required to have been, filed.
"AGGREGATE MERGER CONSIDERATION" shall mean $240,000,000, MINUS an amount
equal to the Indebtedness outstanding as of the Closing Date.
"BALANCE SHEET" shall mean the unaudited consolidated financial statements
of the Company for the month and year to date ended June 30, 1996.
"BALANCE SHEET DATE" shall mean June 30, 1996.
"BEST EFFORTS" shall mean reasonable good faith efforts but shall in no
event require the commencement of litigation against any third party or the
payment of any fees to any third party.
"BUSINESS DAY" shall mean any weekday on which commercial banks in both
Boston, Massachusetts and New York, New York are open. Any action, notice or
right which is to be exercised or lapses on or by a given date which is not a
Business Day may be taken, given or exercised, and shall not lapse, until the
end of the next Business Day.
"CLOSING" has the meaning specified in Article XI of this Agreement.
"CLOSING DATE" has the meaning specified in Article XI of this Agreement.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" shall mean, collectively, the Seller's Class A Voting Common
Stock, $.01 par value per share, and the Seller's Class B Non-Voting Common
Stock, $.01 par value per share.
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"COMMON STOCK MERGER CONSIDERATION shall mean the Aggregate Merger
Consideration MINUS the sum of the Series B Preferred Stock Merger
Consideration, the 15% Preferred Stock Merger Consideration, the 8% Preferred
Stock Merger Consideration and the Reserve Amount.
"COMPANY" shall mean POA Acquisition Corporation, a Delaware corporation.
"COMPANY PLAN" has the meaning specified in Section 5.19 of this Agreement.
"CONFIDENTIALITY AGREEMENT" shall mean that certain Confidentiality
Agreement dated June 11, 1996 among the Seller, the Company, the Parent and
Boston Ventures Management, Inc. with respect to, among other things, the
treatment of confidential information regarding the Company.
"CONSOLIDATED TAX RETURN" shall mean any Tax Return required to be filed by
any consolidated, combined, unitary or similar group of corporations for federal
or state income tax purposes.
"DELAWARE CERTIFICATE" has the meaning specified in Section 1.1 of this
Agreement.
"DELAWARE STATUTE" has the meaning specified in Section 1.1 of this
Agreement.
"DISBURSING AGENT" shall mean Boston Ventures Management, Inc., a
Massachusetts corporation.
"8% PREFERRED STOCK" shall mean the Seller's 8% Cumulative Preferred Stock,
$.01 par value per share.
"8% PREFERRED STOCK MERGER CONSIDERATION shall mean the aggregate amount
equal to the sum of the Liquidation Values of each share of 8% Preferred Stock
outstanding on the Closing Date, determined in accordance with the Seller's
Certificate of Incorporation as in effect immediately prior to the Effective
Time.
"ENCUMBRANCES" shall mean any lien, security interest, mortgage, pledge,
hypothecation, easement or conditional sale or other title retention agreement;
provided, however, that Encumbrances shall not include any Permitted
Encumbrance.
"ENVIRONMENTAL LAWS" shall mean any applicable federal, state, or local
law, ordinance, regulation, order or permit pertaining to the environment,
natural resources or public or employee health or safety as presently in effect.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
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"15% PREFERRED STOCK" shall mean the Seller's 15% Cumulative Redeemable
Preferred Stock, $.01 par value per share.
"15% PREFERRED STOCK MERGER CONSIDERATION" shall mean the aggregate amount
equal to the sum of the Liquidation Values of each share of 15% Preferred Stock
outstanding on the Closing Date, determined in accordance with the Seller's
Certificate of Incorporation as in effect immediately prior to the Effective
Time.
"FINANCIAL STATEMENTS" shall mean the audited Consolidated Financial
Statements of the Company as at December 31, 1994 and December 31, 1995 and the
related audited Consolidated Statements of Operations, Stockholders' Equity and
Cash Flows of the Company for the years then ended, certified by Ernst & Young
LLP and the unaudited Consolidated Financial Statements of the Company as at
June 30, 1996 and the related unaudited Consolidated Statements of Operations,
Stockholders' Equity and Cash Flows of the Company for the month and year to
date ending June 30, 1996.
"XXXX-XXXXX-XXXXXX ACT" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
"HAZARDOUS MATERIALS" shall mean hazardous wastes as presently defined by
the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 609 et.
seq., as amended, and regulations promulgated thereunder and hazardous
substances as presently defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et. seq., as
amended ("CERCLA" or "Superfund") and regulations promulgated thereunder and
petroleum and petroleum products and any pollutants, contaminants, hazardous
wastes, substances or constituents, toxic or dangerous substances, or related
materials defined a such or any other similar designation in, or otherwise
subject to regulation under, Environmental Laws.
"INDEBTEDNESS" shall mean as at any date of determination, the sum of the
following items of the Seller, the Company and its Subsidiaries, if any,
determined on a consolidated basis: (i) obligations of the Seller, the Company
and its Subsidiaries created, issued or incurred for borrowed money, including
all fees and obligations thereunder, including, without limitation, any
prepayment or termination fees arising or which will arise out of the prepayment
of such Indebtedness prior to its maturity as a result of the transactions
contemplated hereby or otherwise and termination or prepayment fees arising out
of the early termination of interest rate swap and other interest rate
protection agreements, (ii) obligations of the Company and its Subsidiaries to
pay the deferred purchase or acquisition price of property or services, other
than trade or accounts payable arising, and accrued expenses incurred, in the
ordinary course of business, and (iii) capital lease obligations of the Company
and its Subsidiaries, if any.
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"LOSSES" means any liability, loss, claim, deficiency, damage, payment
(including, without limitation, those arising out of any demand, settlement or
judgment relating to any legal, equitable or arbitration action or proceeding),
cost or expense (including reasonable attorneys' fees) incurred by the Parent,
the Company or the Surviving Corporation or any of their respective officers,
directors, affiliates, employees or agents.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on the
business, operations, assets, or condition (financial or otherwise) of the
Company and its Subsidiaries, taken as a whole, excluding any effect or
potential effect resulting from or relating to any enacted or proposed statute
or regulation relating to the advertising of tobacco or tobacco products.
"MATERIAL LEASE" OR "MATERIAL LEASES" has the meaning specified in Section
5.9 of this Agreement.
"MERGER" has the meaning specified in Section 1.1 of this Agreement.
"MULTIEMPLOYER PLAN" has the meaning specified in Section 5.19 of this
Agreement.
"PERMITTED ENCUMBRANCE" shall mean: (a) Encumbrances imposed by any
governmental authority for taxes, assessments or charges not yet due and payable
or which are being contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained on the books of the
Company or its Subsidiaries in accordance with generally accepted accounting
principals; (b) carriers, warehousemen's, mechanics', materialmen's, repairmen's
or other like Encumbrances arising in the ordinary course of business which are
not overdue for a period of more than 30 days or which are being contested in
good faith and by appropriate proceedings, if adequate reserves with respect
thereto are maintained on the books of the Company or its Subsidiaries, in
accordance with generally accepted accounting principles; (c) pledges or
deposits in connection with worker's compensation, unemployment insurance and
other social security legislation; (d) deposits to secure the performance of any
or all of the following: bids, trade contracts (other than for borrowed money),
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of business;
and (e) easements, rights-of-way, restrictions and other similar encumbrances on
real property incurred in the ordinary course of business and encroachments
(whether or not in the ordinary course of business) which, in the aggregate, are
not substantial in amount, and which do not in any case materially detract from
the value of the property subject thereto or interfere with the ordinary conduct
of the business thereon.
"PARENT" shall mean Universal Outdoor, Inc., a corporation organized under
the laws of Illinois.
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"RESERVE AMOUNT" shall have the meaning set forth in Section 2.3(b).
"SELLER" shall mean Outdoor Advertising Holdings, Inc., a Delaware
corporation.
"SERIES B PREFERRED STOCK" shall mean the Seller's Series B Senior
Redeemable Preferred Stock, $.01 par value per share.
"SERIES B PREFERRED STOCK MERGER CONSIDERATION" shall mean the aggregate
amount equal to the sum of the Liquidation Values of each share of Series B
Preferred Stock outstanding on the Closing Date, as determined in accordance
with the Seller's Certificate of Incorporation in effect immediately prior to
the Effective Time.
"SIGN LOCATION LEASE" shall mean any lease, license or other agreement
between the Company or any Subsidiary and any person pursuant to which the
Company or such Subsidiary has obtained the right to erect, place and maintain
outdoor advertising sign structures on any ground space, roof or wall space or
upon any other improvement to real estate.
"STOCKHOLDER" shall mean a holder of the Seller's Series B Preferred Stock,
15% Preferred Stock, 8% Preferred Stock or Common Stock, and "STOCKHOLDERS"
shall mean all such holders.
"SUBSIDIARY" means any entity of which the Company has the power to
exercise 50% or more of the voting rights.
"SURVIVING CORPORATION" has the meaning specified in Section 1.2 of this
Agreement.
"TAX" OR "TAXES" means all taxes, charges, fees, imposts, levies or other
assessments, including, without limitation, all net income, gross income,
franchise, profits, gross receipts, capital, sales, use, ad valorem, value
added, transfer, transfer gains, inventory, capital stock, license, withholding,
payroll, employment, social security, unemployment, excise, severance, stamp,
recording, occupation, real or personal property, and estimated taxes, water,
rent and sewer service charges, customs duties, fees, assessments and charges of
any kind whatsoever, together with any interest and any penalties, fines,
additions to tax or additional amounts thereon, imposed by any taxing authority
(federal, state, local or foreign) and shall include any transferee liability in
respect of Taxes.
"TAX RETURN" means all returns, declarations, reports, estimates,
information returns, schedules and statements required to be filed in respect of
any Taxes.
"WARN ACT" shall mean the Workers Adjustment and Retraining Notification
Act of 1988 and any similar state or local plant closing law.
14
"WOOD GUNDY FEE" means an amount equal to $2,025,000.
IV. REPRESENTATIONS AND WARRANTIES OF THE SELLER AS TO ITSELF.
The Seller hereby represents and warrants to the Parent and the Acquiror
that:
4.1 ORGANIZATION AND AUTHORITY OF THE SELLER. The Seller is a
corporation duly organized and validly existing under the laws of the State of
Delaware and has full corporate power and authority to own, lease and operate
its properties and carry on its business as it is now being conducted. The
Seller is not qualified as a foreign corporation in any jurisdiction. The
Seller has full corporate power and authority to execute and deliver this
Agreement, to consummate the transactions contemplated hereby and otherwise to
perform its obligations hereunder. The copies of the Seller's Certificate of
Incorporation and By-Laws (together with all amendments thereto) which have been
previously delivered or made available to the Acquiror are correct and complete.
4.2 DUE EXECUTION AND ABSENCE OF BREACH. This Agreement and the
performance of the transactions contemplated hereby have been duly authorized by
and this Agreement has been validly executed and delivered by, the Seller and,
subject to the approval of the Stockholders of the Seller required by the
Delaware Statute, constitutes the valid and legally binding obligation of the
Seller, enforceable against the Seller in accordance with its terms. Except as
set forth in SCHEDULE 4.2, the execution, delivery and performance by the Seller
of this Agreement and the transactions contemplated hereby will not: (i) violate
or conflict with any provision of the Certificate of Incorporation or Bylaws of
the Seller; (ii) result in the breach of, or constitute a default (with or
without notice or lapse of time, or both) under, or violate or conflict with any
provision of, or result in (or give rise to a right of) termination or
acceleration of (a) any debt instrument, indenture, mortgage agreement or other
instrument, understanding or arrangement to which the Seller is a party or by
which its assets are bound or (b) any judgment, order, injunction, law, rule,
ordinance, regulation or decree by which the Seller is bound or by which its
assets are bound or affected, or (iii) result in the imposition of any lien or
security interest on any of the assets of the Seller or impair the Seller's
ability to perform its obligations under this Agreement.
4.3 CAPITALIZATION. The authorized capital stock of the Seller
consists of (i) 2,500,000 shares of Class A Voting Common Stock, $.01 par value
per share, of which 2,153,646.20 shares are outstanding as of the date hereof,
(ii) 2,500,000 shares of Class B Non-Voting Common Stock, $.01 par value per
share, of which 256,137.9 shares are outstanding as of the date hereof, (iii)
1,500,000 shares of Series B Preferred Stock, of which 1,500,000 shares are
outstanding as of the date hereof,
15
(iv) 376,154 shares of 15% Preferred Stock, of which 320,167.9 shares are
outstanding as of the date hereof, and (v) 2,549,714 shares of 8% Preferred
Stock, of which 2,438,903.20 shares are outstanding as of the date hereof. All
of the outstanding shares of capital stock of the Seller have been validly
issued and are fully paid and non-assessable and have not been issued in
violation of any preemptive rights, although certain of such shares have been
paid for in whole or in part by the delivery of promissory notes to the Seller
which will be due and payable as of the Effective Time, as described in SCHEDULE
4.3. All of the issued and outstanding shares of capital stock of the Company
are owned beneficially and of record by the Seller. Except as set forth in
SCHEDULE 4.3, there is no existing option, warrant, call, commitment or other
security or agreement of any kind to which the Seller or any direct or indirect
subsidiary thereof is a party or by which any of their assets are subject
requiring, and there are no convertible securities of the Seller outstanding
which upon conversion would require, the issuance of any additional shares of
capital stock of the Seller or other securities convertible into shares of
capital stock or any debt or equity security of the Seller of any kind.
4.4 SUBSIDIARIES. The only Subsidiary of the Seller is the Company.
Upon payment of the Indebtedness, the Seller will own all of the outstanding
shares of capital stock of the Company, free and clear of all Encumbrances. All
of the issued and outstanding shares of capital stock of the Company have been
validly issued and are fully paid and nonassessable and have not been issued in
violation of any preemptive rights. Except for the ownership interests set
forth in SCHEDULE 4.4, none of the Seller, the Company or the Subsidiaries owns,
directly or indirectly, any capital stock or other ownership interest in any
corporation, partnership, business association, joint venture or other entity or
is obligated to make any capital contribution to or other investment in any
other person.
4.5 BUSINESS OF THE SELLER. Except for liabilities of the Seller set
forth in SCHEDULE 4.5 hereof, since the date of its formation Seller has not
incurred any obligations or liabilities, nor engaged in any business or
activities (other than the holding of the capital stock of the Company) of any
type or kind whatsoever or, except as set forth in SCHEDULE 4.5 hereof, entered
into any agreements or arrangements with any person or entity. The only asset
of the Seller is 100 shares of the Class A Common Stock of the Company and an
account receivable owed to the Seller by the Company in the amount of $320,766.
4.6 STOCKHOLDER VOTE.
(a) Pursuant to the provisions of the Restated Certificate of
Incorporation of the Seller, the Bylaws of the Seller and the Delaware Statute
and any other applicable law, the only approval of holders of capital stock of
the Seller required to approve the Merger and to approve and adopt this
Agreement and transactions contemplated hereby is the approval of a majority of
16
the holders of issued and outstanding shares of Class A Voting Common Stock of
the Seller.
(b) The Board of Directors of the Seller has (i) approved this
Agreement and the transactions contemplated hereby, (ii) determined that the
terms of the Merger are in the best interests of the Stockholders and (iii)
resolved to recommend the approval of the Merger and the adoption of this
Agreement and the consummation of the transactions contemplated herein to the
Stockholders.
V. REPRESENTATIONS AND WARRANTIES OF THE SELLER AS TO THE
COMPANY.
The Seller hereby represents and warrants to the Parent and the Acquiror
that:
5.1 ORGANIZATION AND GOOD STANDING. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and has full corporate power and authority to own its
properties and carry on its business as it is now being conducted. The Company
and each of its Subsidiaries is duly qualified as a foreign corporation and is
in good standing under the laws of (i) each jurisdiction in which it owns real
property and (ii) each other jurisdiction in which the conduct of its business
or the ownership of its assets requires such qualification, except where such
failures to be so qualified, in the aggregate, would not have a Material Adverse
Effect. The copies of the Company's Certificate of Incorporation and By-Laws
(together with all amendments thereto) which have been previously delivered or
made available to the Acquiror are correct and complete.
5.2 CAPITALIZATION. The authorized capital stock of the Company
consists of (i) 100 shares of Class A Common Stock, par value $.01 per share, of
which 100 shares are outstanding as of the date hereof, (ii) 1,223,713 shares of
Series A Senior Redeemable Preferred Stock, $.01 par value per share, none of
which is outstanding and (iii) 550,000 shares of 14% Cumulative Preferred Stock,
$.01 par value per share, none of which is outstanding. There is no existing
option, warrant, call, commitment or other security or agreement of any kind to
which the Company or any of its Subsidiaries is a party or by which any of their
assets are subject requiring, and there are no convertible securities of the
Company or any of its Subsidiaries outstanding which upon conversion would
require, the issuance of any additional shares of capital stock of the Company
or any of its Subsidiaries or other securities convertible into shares of
capital stock or any debt or equity security of the Company or any of its
Subsidiaries of any kind.
5.3 SUBSIDIARIES. The only Subsidiaries of the Company are Xxxxx
Xxxxx Outdoor Advertising, Inc., a Florida corporation, and POZ Outdoor
Advertising of St. Lucie County, Inc., a Florida corporation. Each of such
Subsidiaries is a
17
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation, and each has full corporate power and
authority to own its properties and to carry on its business as it is now being
conducted. Upon payment of the Indebtedness, the Company will own all of the
outstanding shares of capital stock of each of the Subsidiaries, free and clear
of all Encumbrances.
5.4 FINANCIAL STATEMENTS. The Seller has delivered to the Acquiror
copies of the Financial Statements. The Financial Statements have been prepared
in accordance with the books and records of the Company and the Subsidiaries as
of the dates and for the periods indicated, have been prepared in accordance
with generally accepted accounting principles and in conformity with the
practices consistently applied by the Company in the immediately preceding
fiscal periods, and, with respect to the unaudited interim financial statements,
subject to normal year-end audit adjustments and the absence of footnotes,
present fairly the consolidated financial position, results of operations and
cash flows of the Company and its Subsidiaries as at the dates and for the
periods indicated.
5.5 NO UNDISCLOSED LIABILITIES. At the Balance Sheet Date, the
Company and its Subsidiaries had no indebtedness or liabilities (whether
accrued, absolute, contingent or otherwise, and whether due or to become due)
except for those set forth on the Balance Sheet or disclosed on SCHEDULE 5.5.
Except as set forth in the Balance Sheet, the Company and its Subsidiaries have
no material indebtedness or liability other than (i) immaterial liabilities
incurred since the Balance Sheet Date, or (ii) disclosed on SCHEDULE 5.5.
5.6 NO MATERIAL ADVERSE CHANGE; NO DIVIDENDS. Since the Balance
Sheet Date, there has been no Material Adverse Effect, and no event has occurred
which may reasonably be expected to result in a Material Adverse Effect. Since
the Balance Sheet Date, (i) the Company has conducted its business in the
ordinary course, consistent with past practices and, except as disclosed on
SCHEDULE 5.6, has taken no action of the type described in the second sentence
of Section 7.3 hereof, and (ii) no dividends or distributions have been declared
or paid on or made with respect to the shares of capital stock or other equity
interests of the Company nor, except as set forth in SCHEDULE 5.6 hereof, have
any such shares or equity interests been repurchased or redeemed.
5.7 TAXES. Except as set forth on SCHEDULE 5.7 hereto, (a) all Tax
Returns required to be filed by or on behalf of the Seller, the Company or any
Affiliated Group of which the Seller or the Company is or was a member are true,
complete and correct and have been duly filed with the appropriate taxing
authorities in all jurisdictions in which such Tax Returns are required to be
filed, and all amounts shown on such Tax Returns (including interest and
penalties) as due from the Seller or the Company and its Subsidiaries have been
fully and timely paid or
18
are adequately provided for on the Balance Sheet and (b) no waivers of statutes
of limitation have been given or requested with respect to the Seller, the
Company or its Subsidiaries in connection with any Taxes or Tax Returns with
respect to the Company or such Subsidiaries. Except as set forth on
SCHEDULE 5.7 hereto, all deficiencies asserted or assessments made with respect
to Taxes or Tax Returns of the Seller, the Company or its Subsidiaries have been
fully paid, and there are no unpaid deficiencies asserted or assessments made by
any taxing authority against the Seller, the Company or its Subsidiaries.
Neither the Seller, the Company nor any of its Subsidiaries (i) has made
payments, is obligated to make any payments, or is a party to any agreement that
under certain circumstances could obligate them to make any payments that will
not be deductible under Code Section 280G, (ii) is a party to any Tax allocation
or sharing agreement, (iii) has filed a consent under Code Section 341(f)
concerning collapsible corporations, or (iv) has any deferred intercompany
income or gains or excess loss accounts within the meaning of Treasury
Regulation Section 1.1502 ET. SEQ. (or any similar provisions of state law).
Except as set forth on SCHEDULE 5.7, neither the Seller, the Company nor any of
its Subsidiaries has undergone or will undergo an "ownership change" within the
meaning of Code Section 382(g)(1) since the date that Seller acquired the
Company through and including the Closing Date (excluding any ownership change
which occurs as a result of the acquisition of all of the capital stock of the
Seller by Parent under this Agreement).
5.8 PATENTS, TRADEMARKS AND COPYRIGHTS. SCHEDULE 5.8 hereto contains
a complete and correct list of each material patent, trademark, trade name,
service xxxx and copyright owned or used by the Company and its Subsidiaries and
pending applications therefor, and each license or other agreement relating
thereto. Except as set forth on SCHEDULE 5.8 hereto, each of the foregoing is
owned by the Company or its Subsidiaries, free and clear of all Encumbrances.
There have been no claims asserted in writing which are still pending, that any
of the foregoing is invalid or conflicts with the asserted rights of others,
which would, in the aggregate, reasonably be likely to result in a Material
Adverse Effect. The Company and its Subsidiaries possess all patents, patent
licenses, trade names, trademarks, service marks, brand marks, brand names,
copyrights, know-how, formulas and other proprietary and trade rights necessary
for the conduct of their respective businesses as now conducted, except for
those the absence of which, in the aggregate, would not be reasonably likely to
result in a Material Adverse Effect. To the knowledge of the Seller, the use by
the Company of such rights in the conduct of its business as now conducted does
not violate the rights of any third party, except for such violations which, in
the aggregate, would not be reasonably expected to have a Material Adverse
Effect.
5.9 REAL PROPERTY; LEASES OF REAL PROPERTY. As of the Closing, the
Company or one of its Subsidiaries will have good, valid and marketable fee
simple title to each piece of real property set forth on SCHEDULE 5.9 hereto as
owned by the Company
19
or one of its Subsidiaries (the "Owned Real Properties"). Except for Sign
Location Leases, SCHEDULE 5.9 hereto contains a complete and correct list in all
material respects of all leases, subleases, license agreements or other rights
of possession or occupancy of real property to which the Company or a Subsidiary
is a party (as tenant, occupier or possessor) pursuant to which the current net
annual rent payable by the Company currently exceeds $25,000 (each such lease or
agreement, a "Material Lease" and collectively the "Material Leases"). All of
the Material Leases are in full force and effect. Complete and correct copies
of each Material Lease have been furnished or made available to Acquiror.
Except as disclosed on SCHEDULE 5.9 hereto, no consent is required of any
landlord or other third party to any Material Lease to consummate the
transactions contemplated hereby, and upon consummation of the transactions
contemplated hereby, each Material Lease will continue to entitle the Company or
its Subsidiaries to the use and possession of the real property specified in
such Material Leases and for the purposes for which such real property is now
being used by the Company or its Subsidiaries. Except as set forth in such
Schedule, neither the Company nor any of its Subsidiaries is in default (or with
notice or lapse of time or both will be in default) or has received written
notice of default within the past 18 months (other than such notices of
immaterial defaults which are no longer outstanding) under any such Material
Lease, and to the best of Seller's knowledge, on the date hereof, there exists
no uncured default or any event which could give rise to a default thereunder by
any third party, which in either case would be reasonably likely to result in a
Material Adverse Effect. Except as disclosed on SCHEDULE 5.9, none of Seller,
the Company or any of its Subsidiaries is aware of any circumstance involving a
dispute, oral modification, misunderstanding, forbearance program or intention
to terminate the relationship thereunder (either at present or in the future)
regarding or in relation to any Material Lease or Sign Location Lease. Each
Material Lease and Sign Location Lease has been entered into on terms
substantially consistent with industry standards and practices with respect to
all matters the subject thereof. The properties leased by the Company or one of
its Subsidiaries pursuant to a Material Lease and the Owned Real Properties are
collectively referred to herein as the "Real Properties". Neither the Company
nor any of its Subsidiaries has received any written notice or communication
advising it of any general or special assessment relating to any of the Real
Properties. To the knowledge of Seller, except as disclosed in SCHEDULE 5.9,
there are no (i) plans by any governmental authority which may result in the
imposition of any special assessment relating to any of the Real Properties;
(ii) condemnation or eminent domain proceedings pending or threatened against
any of the Real Properties by any governmental authority; (iii) variances,
special exceptions, conditions or agreements pertaining to any of the Real
Properties imposed on or granted by or entered into by the Company or any of its
Subsidiaries, which are enforceable by any national, state, county or municipal
government, agent or body, any neighborhood or civic group, or any similar body;
(iv) written notices from any national, city,
20
county, or other governmental authority which have been received by the Company
or any of its Subsidiaries requiring or calling attention to the need for any
work, repair, construction, alteration or installation on, or in connection
with, any of the Real Properties; (v) any material structural defects in any of
the buildings constituting part of the Real Properties nor any material defects
in any system supporting such a building.
5.10 SIGN LOCATION LEASES. The Seller has delivered to the Acquiror a
schedule of Sign Location Leases (the "Lease Schedule"). The description of the
terms of each Sign Location Lease on each Lease Schedule is correct, except for
such minor irregularities, errors or omissions which would not be reasonably
likely to result in a Material Adverse Effect.
5.11 PERMITS; COMPLIANCE WITH LAWS. The Company and its Subsidiaries
have all necessary permits, licenses and governmental authorizations required
for the ownership or occupancy of their properties and assets and the carrying
on of their respective businesses, except for failures to have any such permit,
license or governmental authorization which, in the aggregate, would not be
reasonably likely to result in a Material Adverse Effect. Except as set forth
on SCHEDULE 5.11, the Company is, not in violation of, or, to the Seller's
knowledge, is under investigation with respect to or has been threatened to be
charged with or given notice that the continued operation of any assets does or
will violate, any applicable judgment, order, injunction, law, rule, ordinance,
regulation or decree of any federal, state, local or foreign governmental
authority (it being agreed that "legal non-conforming" signs shall not be in
violation of this sentence because they are "legal non-conforming") except for
such violations which, individually or in the aggregate, would not be reasonable
likely to result in a Material Adverse Effect; provided, that, in determining
whether the loss of any sign or signs would be reasonable likely to result in a
Material Adverse Effect, any rights arising therefrom to obtain or erect
replacement signs shall be taken in account.
5.12 INSURANCE. SCHEDULE 5.12 hereto contains a materially complete
and correct list of all policies of insurance of any kind or nature covering the
Company and the Subsidiaries, including, without limitation, policies of life,
fire, theft, employee fidelity and other casualty and liability insurance, and
such policies are in full force and effect. Except as set forth on SCHEDULE
5.12, there is no claim pending nor has there been a claim made since January 1,
1994 under any of such policies or bonds as to which coverage has been
questioned, denied or disputed by the underwriters of such policies or bonds or
in respect of which such underwriters have reserved their rights. The Company
and the Subsidiaries, to the Seller's knowledge, have complied with the terms
and conditions of all such policies and bonds. Such policies will remain in
effect immediately following Closing. All workers compensation insurance is in
full force and effect and no notice of any cancellation will respect to such
insurance has been received. Complete and correct copies of each
21
such policy have been furnished or made available to the Acquiror.
5.13 MATERIAL CONTRACTS. Except as set forth on SCHEDULE 5.13 hereto,
neither the Company nor any Subsidiary is a party to any (i) material contract
not made in the ordinary course of business; (ii) contract for the employment of
any officer or employee; (iii) contract for the future purchase of materials,
supplies, services, merchandise or equipment not capable of being fully
performed or not terminable within a period of one year from the date hereof or
in excess of normal operating requirements; (iv) agreement for the sale or lease
of any of its assets other than in the ordinary course of business; (v) contract
or commitment for capital expenditures in excess of $100,000; (vi) lease of
machinery or equipment involving annual payments in excess of $100,000; (vii)
loan agreement, promissory note issued by it, guarantee, subordination or
similar type of agreement; (viii) stock option, retirement, severance, pension,
bonus, profit sharing, group insurance, medical or other fringe benefit plan or
program providing employee benefits; (ix) consulting agreement; (x) municipal or
other governmental franchise agreements; (xi) agreement with a labor union or
labor association; (xii) agreement providing for indemnification of any other
parties; or (xiii) agreement restricting the Company's or any of its
Subsidiaries' ability to conduct business generally (or any type of business) in
any location. Complete and correct copies of each such agreement have been
furnished or made available to the Acquiror. Except as set forth in
SCHEDULE 5.13 hereto, to the Seller's knowledge, all of the foregoing
agreements, leases, and other documents are valid, binding and in full force and
effect, and the Company and its Subsidiaries have performed all of the
obligations required to be performed by them to date and are not in default (or
with notice or lapse of time or both will be in default) under any of the
agreements, leases, contracts or other documents to which any of then is a party
listed on SCHEDULE 5.13, other than for those failures to perform and defaults
which, in the aggregate, would not be reasonably likely to result in a Material
Adverse Effect. Except as set forth in SCHEDULE 5.13 hereto, to the Seller's
knowledge, no party with whom the Company or a Subsidiary has such a scheduled
agreement is in default (or with notice of lapse of time or both will be in
default) thereunder, which default, in the aggregate, would be reasonably likely
to result in a Material Adverse Effect. Except as disclosed herein or in
SCHEDULE 5.13 hereto, neither the Company nor any Subsidiary is a party to any
non-competition or similar agreement which restricts in any material way the
current operation of their businesses taken as a whole.
5.14 TITLE TO PROPERTIES; ABSENCE OF ENCUMBRANCES. The Company and
its Subsidiaries have good and marketable title to their properties and assets
shown as owned on the Balance Sheet and as acquired since the Balance Sheet Date
(except for assets disposed of in the ordinary course of business since the
Balance Sheet Date), free and clear of any and all Encumbrances,
22
except as set forth in SCHEDULE 5.14 thereto and except for Permitted
Encumbrances.
5.15 RESTRICTIONS. Except as set forth in SCHEDULE 5.15 hereto,
neither the execution or delivery of this Agreement nor the consummation of the
transactions contemplated hereby, will (after the giving of notice, the passage
of time, or both) violate or conflict with or result in a breach of, or result
in the termination of or give rise to a right of termination of, or accelerate
the performance required by, or require any consent of any party thereto or
thereunder, any terms of any agreement to which the Company or any Subsidiary is
a party or to which any of their assets are subject or constitute a default
thereunder, or result in the creation of any Encumbrance upon any of their
respective assets, except for such conflicts, breaches, rights of termination or
acceleration, defaults and Encumbrances that in the aggregate would not be
reasonably likely to result in a Material Adverse Effect, nor will it violate
any of the provisions of the Company's Certificate of Incorporation or By-Laws
or the charter or bylaws of any of the Subsidiaries or violate any judgment,
order, injunction, law, rule, ordinance, regulation or decree by which any of
them is bound or to which any of their assets are subject.
5.16 LITIGATION; CONSENTS. Except as disclosed in SCHEDULE 5.16
hereto, there is no action, suit, proceeding or formal governmental inquiry or
investigation pending against the Seller or the Company which seeks to restrain
or, prohibit or otherwise challenges the consummation, legality or validity of
the transactions contemplated hereby. Except as disclosed in SCHEDULE 5.16
hereto, there is no action, suit, proceeding or formal governmental inquiry or
investigation pending against the Seller, the Company or, to the Seller's
knowledge, any of the Subsidiaries, other than those which, if the relief
requested were granted, (without taking into account any insurance coverage
thereof) would not, in the aggregate, be reasonably likely to result in a
Material Adverse Effect. Except as set forth in Section 4.6 or Section 7.5 or
as set forth in SCHEDULE 5.16 hereto, and except with respect to local
governmental permits or licenses, no consent, approval, waiver, registration,
application, permit, license, action, filing, notice or authorization of or to
any governmental authority is required in connection with the execution and
delivery of this Agreement or the consummation of any of the transactions
contemplated hereby except for those required in connection with the proposed
name change of the Surviving Corporation, the financing to be obtained by the
Parent and the Acquiror in connection with the transactions contemplated hereby,
including, without limitation, to effectuate the Merger, to pay the transaction
fees and expenses associated therewith and to provide working capital to the
Surviving Corporation on a going forward basis (the "Financing") or as required
by reason of facts pertaining specifically to the Parent or the Acquiror.
23
5.17 ENVIRONMENTAL MATTERS. Except as disclosed in SCHEDULE 5.17
hereto, to the Seller's knowledge (i) the operations of the Company and its
Subsidiaries are in compliance with applicable Environmental Laws, except for
such noncompliance which is not reasonably likely to result in a Material
Adverse Effect, (ii) neither the Company nor any of its Subsidiaries is subject
to any judicial or administrative proceeding or has received a claim by any
person alleging the violation of or liability under any Environmental Law or
regarding any Hazardous Materials on any real property owned or leased by the
Company or any of its Subsidiaries (which, in the case of real property leased
by the Company or its Subsidiaries for the sole purpose of having a sign
thereon, arises from the Company's or its Subsidiary's activities or from the
sign, including its construction or maintenance), which proceeding or claim is
reasonably likely to result in a Material Adverse Effect, (iii) neither the
Company nor any of its Subsidiaries has received any written notice or request
for information from any governmental authority or other person alleging that it
is a potentially responsible party at any Superfund site or analogous site
subject to listing, investigation or remediation under another Environmental
Law, (iv) neither the Company nor any of its Subsidiaries has caused or
permitted its operations (X) to be used to generate, manufacture, transport,
treat, store, handle, dispose or process Hazardous Materials or other dangerous
or toxic substances, or solid wastes except in compliance with Environmental
Laws, or (Y) to release, spill, leak, emit, discharge, dispose or dump any
Hazardous Material that has gone onto or offsite of any real property owned or
eased by the Company or any of its Subsidiaries, in any quantity which is
reasonably likely to result in a Material Adverse Effect, (v) the Company and
its Subsidiaries have no knowledge that any person or entity has in the past
utilized any real property owned or leased by the Company or its Subsidiaries in
a manner which has created any Hazardous Material on or offside of such
property, and (vi) the Seller has delivered to the Buyer each environmental
investigation, study, audit, test, review or other analysis relating to the Real
Properties of which the Seller or the Company has knowledge.
5.18 LABOR AGREEMENTS. (a) Except as set forth in SCHEDULE 5.18
hereto, neither the Company nor any of its Subsidiaries is a party to any labor
or collective bargaining agreement and there are no labor or collective
bargaining agreements which pertain to employees of the Company or any of its
Subsidiaries.
(b) Except as set forth in SCHEDULE 5.18 hereto, there are no
pending or, to the Seller's knowledge, threatened strikes, work stoppages,
slowdowns, lockouts, grievances, arbitrations or other material labor disputes
against the Company or any of its Subsidiaries.
(c) Except as set forth in SCHEDULE 5.18 hereto, there are no
pending or, to the Seller's knowledge,
24
threatened complaints, charges or claims against the Company or any Subsidiary
filed with any public or governmental authority, arbitrator or court based upon
the employment or termination of employment by the Company or any Subsidiary of
any individual, which, in the aggregate, would be reasonably likely to result in
a Material Adverse Effect.
(d) Except as set forth in SCHEDULE 5.18 hereto, to the Seller's
knowledge the Company and its Subsidiaries are in compliance with all laws,
regulations and orders relating to the employment of labor, including all such
laws, regulations and orders relating to wages, hours, WARN Act, collective
bargaining, discrimination, civil rights, safety and health, workers'
compensation and the collection and payment of withholding and/or social
security taxes and any similar tax, except for such non-compliance as would not
be reasonably likely to result in a Material Adverse Effect.
(e) Except as set forth in SCHEDULE 5.18 hereto, none of the
Company or any of its Subsidiaries has any written personnel policy applicable
to employees.
(f) Except as set forth in SCHEDULE 5.18 hereto, to the Seller's
knowledge, no union organization campaign is presently in progress or has
occurred in the past three years and no representations question exists with
respect to the employees of the Company or any of its Subsidiaries.
5.19 ERISA. (a) SCHEDULE 5.19 hereto sets forth all material
"employee benefit plans", as defined in Section 3(3) of ERISA and each bonus,
deferred compensation, stock option, incentive compensation, severance, change
of control and other similar plans, policies and arrangements, maintained by the
Company and its Subsidiaries or to which the Company or its Subsidiaries
contributed or are obligated to contribute thereunder for current or former
employees of the Company and such Subsidiaries (the "Company Plans"). SCHEDULE
5.19 hereto separately identifies each Company Plan which is a multiemployer
plan, as defined in Section 3(37) of ERISA ("Multiemployer Plan").
(b) True, correct and complete copies of the following
documents, with respect to each of the Company Plans (other than the
Multiemployer Plans), have been made available or delivered to the Acquiror by
the Seller: (i) any plans and related trust documents, and amendments thereto;
(ii) the most recent Forms 5500; (ii) the last Internal Revenue Service
determination letter, if applicable; and (iv) summary plan descriptions.
(c) The Company Plans intended to qualify under Section 401 of
the Code are so qualified and the trusts maintained pursuant thereto are exempt
from federal income taxation under Section 501 of the Code, and nothing has
occurred with respect to the operation of the Company Plans which could
25
cause the loss of such qualification or exemption or the imposition of any
liability, penalty or tax under ERISA or the Code which is reasonably likely to
result in a Material Adverse Effect.
(d) The Company Plans have been maintained in accordance with
their terms and with all provisions of the Code and ERISA (including rules and
regulations thereunder) and other applicable federal and state laws and
regulations, except where the failure to so maintain would not be reasonably
likely to result in a Material Adverse Effect.
(e) No liability under Title IV of ERISA has been incurred by
the Company or its Subsidiaries within the past six years that has not been
satisfied in full, and no condition exists that presents a material risk to the
Company or its Subsidiaries of incurring a liability under such Title. With
respect to each of the Company Plans that is subject to Title IV of ERISA, the
present value of accrued benefits under such plan, based upon the actuarial
assumptions used for funding purposes in the most recent actuarial report
prepared by such plan's actuary with respect to such plan, did not, as of its
latest valuation date, exceed the then current value of the assets of such plan
allocable to such accrued benefits.
(f) With respect to any Multiemployer Plan, (i) neither the
Company nor any of its Subsidiaries has, in the past six years, made or suffered
a "complete withdrawal" or a "partial withdrawal," as such terms are
respectively defined in sections 4203 and 4205 of ERISA, (ii) no event has
occurred that presents a material risk of a partial withdrawal, (iii) neither
the Company nor its Subsidiaries has any contingent liability under section
4204 of ERISA, and no circumstances exist that present a material risk that any
such plan will go into reorganization, and (iv) the aggregate withdrawal
liability of the Company and its Subsidiaries, computed as if a complete
withdrawal by the Company and its Subsidiaries had occurred under each such plan
on the date hereof, would not exceed $100,000.
(g) Except as disclosed on SCHEDULE 5.19, no Company Plan
provides benefits, including without limitation death or medical benefits, with
respect to current or former employees after retirement or other termination of
service (other than coverage mandated by applicable law or benefits, the full
cost of which is borne by the current or former employee of beneficiary). There
are no pending, threatened or anticipated claims by or on behalf of any Company
Plan, by any employee or beneficiary covered under any such plan, or otherwise
involving any such plan (other than routine claims for benefits).
(h) Except as set forth on SCHEDULE 5.19, the consummation of
the transactions contemplated by this Agreement will not (i) entitle any current
or former employee or officer of the Company or its Subsidiaries to severance
pay, unemployment compensation or any other payment, except as expressly
provided
26
in this Agreement or (ii) accelerate the time of payment or vesting, or increase
the amount of compensation due any such employee or officer.
5.20 AFFILIATE TRANSACTIONS. SCHEDULE 5.20 sets forth all contracts,
agreements and arrangements in effect on or after January 1, 1995 between the
Seller, the Company and the Subsidiaries, on the one hand, and the Stockholders
and any affiliates of the Stockholders (excluding the Seller, the Company and
the Subsidiaries), on the other. All such contracts, agreements and
arrangements have been entered into on an arms-length basis and are commercially
reasonable.
5.21 TRANSFER OF ASSETS. Except as set forth in SCHEDULE 5.21, no
Material Lease, Sign Location Lease or other contract, agreement, lease,
understanding or document to which the Company or any of its Subsidiaries is a
party or to which any of their assets are subject contains any provisions or
terms regarding the sale, transfer or conveyance of, or contains any option to
sell, transfer or convey, any asset or right of the Company or any of its
Subsidiaries, including without limitation, sign structures, any permits,
licenses or governmental authorizations in connection therewith or any rights to
operate a sign structure as presently operated.
5.22 MATERIALITY. The representations and warranties set forth in
this Article V would in the aggregate be true and correct even without the
materiality exceptions or qualifications contained therein except for such
exceptions and qualifications which, in the aggregate for all such
representations and warranties, are not, and could not be reasonably expected to
have, a Material Adverse Effect.
VI. REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE ACQUIROR.
The Parent and the Acquiror hereby represent and warrant to the Seller as
follows:
6.1 ORGANIZATION AND GOOD STANDING. The Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Illinois, and has full corporate power and authority to own its properties and
carry on its business as it is now being conducted. The Acquiror is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, and has full corporate power and authority to own
its properties and carry on its business as it is now being conducted.
6.2 RESTRICTIONS. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby will not conflict with
or result in a breach of any terms of any agreement to which the Parent or the
Acquiror is a party, nor will it violate any of the provisions of the Parent's
or the Acquiror's organizational documents or By-Laws, except for such
27
conflicts or breaches which would not have a material adverse effect on the
ability of the Parent or the Acquiror to consummate the transactions
contemplated hereby.
6.3 LITIGATION; CONSENTS. There is no action, suit, proceeding or
formal governmental inquiry or investigation pending against the Parent or the
Acquiror which seeks to restrain or prohibit or otherwise challenges the
consummation, legality or validity of the transaction contemplated hereby, and,
except as set forth in SCHEDULE 6.3 hereto and Section 8.3 hereof, no consent,
approval or authorization of any governmental authority on the part of the
Parent or the Acquiror is required in connection with the execution and delivery
of this Agreement or the consummation of any of the transactions contemplated
hereby, except for such consents, approvals or authorizations as would be
required in connection with the Financing or by reason of the regulatory status
of the Seller, the Company or any of its Subsidiaries or by any facts
specifically relating thereto.
6.4 EXECUTION AND EFFECT OF AGREEMENT. Each of the Parent and the
Acquiror has the corporate power and authority to enter into this Agreement, and
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Parent and the Acquiror. This Agreement has
been duly executed and delivered by each of the Parent and the Acquiror and
constitutes the legal, valid and binding obligation of the Parent and the
Acquiror, enforceable against each of them in accordance with its terms.
6.5 FINANCING. The Acquiror has, or will have access to, sufficient
funds and financing to pay the Aggregate Merger Consideration and the
Indebtedness on the Closing Date.
6.6 MATERIALITY. The representations and warranties set forth in
this Article VI would in the aggregate be true and correct even without the
materiality exceptions or qualifications contained therein except for such
exceptions and qualifications which, in the aggregate for all such
representations and warranties, are not, and would not be reasonably expected to
have, a material adverse effect on the ability of the Parent or the Acquiror to
consummate the transactions contemplated hereby.
VII. COVENANTS OF THE SELLER.
The Seller hereby covenants and agrees that:
7.1 ACCESS TO DOCUMENTS; OPPORTUNITY TO ASK QUESTIONS. From and
after the date hereof and until the Closing Date, the Seller shall and shall
cause the Company to give reasonable access to offices and other facilities and
properties of the Seller and the Company and to make available for inspection by
the Acquiror or its representatives, upon reasonable advance notice and during
normal business hours, the
28
Seller's and the Company's corporate or comparable records, books of account,
tax records, contracts and all other documents reasonably requested by the
Acquiror, its managerial employees, counsel and auditors in order to permit the
Acquiror and such representatives to make reasonable inspection and examination
of the business and affairs of the Company, including, but not limited to, a
review of the estimations of Indebtedness, the Reserve Fund, the Stockholder
notes, merger consideration contemplated by Section 2.3 hereof and the Working
Capital Schedule contemplated by Section 2.4 hereof. The Seller shall further
cause the managerial employees, counsel and regular independent certified public
accountants of the Company to be available upon reasonable advance notice to
answer questions of the Acquiror's representatives concerning the business and
affairs of the Company and shall further cause them to make available all
relevant books and records in connection with such inspection and examination.
7.2 MAINTENANCE OF INSURANCE. From and after the date hereof and
until the Closing Date, the Seller shall cause the Company and its Subsidiaries
to use its Best Efforts to maintain in full force and effect all of their
presently existing insurance coverage or insurance comparable to such existing
coverage.
7.3 CONDUCT OF BUSINESS. From and after the date hereof and until
the Closing Date, the Seller shall, and shall cause the business of the Seller,
the Company and the Subsidiaries to be conducted in the ordinary course,
consistent with the present conduct of its business and to preserve and maintain
its business and operations, including all material leases, contracts and
arrangements and the goodwill of its employees, customers, suppliers and others
having a relationship with the Seller, the Company or any of its Subsidiaries.
During such period of time, except upon the prior written consent of the
Acquiror, the Seller shall not and shall cause the Company not to: (a) amend its
Certificate of Incorporation or By-Laws or comparable organizational documents,
(b) issue any additional shares of capital stock or securities convertible into
capital stock or issue, sell or grant any option or right to acquire or
otherwise dispose of or commit to dispose of any of its authorized but unissued
capital stock, or other corporate securities or securities convertible into
capital stock, (c) declare or pay any dividends or make any other distribution
in cash or property on its capital stock or other equity interests, (d)
repurchase or redeem or otherwise acquire any shares of its stock or other
equity interests, except pursuant to agreements with employees requiring
repurchase in the event of death or disability heretofore executed and delivered
if such repurchase is made only as of the last date permitted for such
repurchase and if such repurchase is funded by the incurrence of Indebtedness,
in any case at a price not to exceed a dollar amount per share equal to the
consideration payable for such class of share pursuant to this Agreement,
(e) voluntarily incur any obligation or liability, except for Indebtedness and
current
29
obligations and liabilities incurred in the ordinary course of business,
(f) enter into any employment agreement or become liable for any bonus, profit-
sharing or incentive payment to any of its employees, officers or directors,
except pursuant to presently existing plans, arrangements or agreements
disclosed herein or in a schedule hereto, (g) mortgage, pledge, or otherwise
encumber any part of its assets, tangible or intangible, except Permitted
Encumbrances, (h) sell, transfer, dispose of or acquire any (1) signs (other
than as a result of completing work-in-progress) and (2) other properties or
assets, tangible or intangible, other than, in the case of clause (2), in the
ordinary course of business consistent with past practice, (i) make any material
changes in its customary method of operations, including marketing and pricing
policies and maintenance of business premises, fixtures, furniture and equipment
and its accounting policies, (j) enter into any collective bargaining agreement,
(k) merge or consolidate with any corporation, acquire control or acquire any
capital stock or other securities or assets of any other corporation or business
entity (other than an amount of assets which is neither material to the Seller,
the Company or a Subsidiary, as the case may be, on the one hand, or to such
corporation or business entity, on the other), or take any steps incident to or
in furtherance of any such actions whether by entering into an agreement
providing therefor or otherwise, (1) modify, amend or cancel any of its existing
leases or enter into any contracts, agreements, leases or understandings, other
than in the ordinary course of business, (m) pay, discharge, settle or otherwise
satisfy any claim, litigation, liability or obligation except in the ordinary
course of business and consistent with past practice, (n) make any Tax election
or settle or compromise any Tax liability or file any federal income tax return
prior to the last day (including extensions) prescribed by law, in the case of
any of the foregoing, material to the business, financial condition or results
of operations of the Seller, the Company or any Subsidiary, (o) enter into any
transaction, arrangement or agreement with any affiliate (other than those in
existence on the date hereof), (p) factor or sell any accounts receivable of the
Company or any Subsidiary, (q) extend the average life of accounts payable
beyond the average life in effect at the Balance Sheet Date other than in the
ordinary course of business consistent with past practice, (r) adopt a plan of
complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization, (s) establish, adopt,
enter into, amend or terminate any collective bargaining, bonus, profit sharing,
thrift, compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any director,
officer or employees, (t) make any capital expenditure in excess of $100,000,
either individually or in the aggregate, other than capital expenditures
committed to as of the date of this Agreement (which such committed capital
expenditures in excess of $75,000 are set forth on Schedule 7.3), (u) enter into
any
30
agreement to do any of the foregoing, or (v) take any other action which would
cause any of the representations and warranties made by the Seller in this
Agreement not to be true and correct in all material respects on and as of the
Closing Date with the same force and effect as if such representations and
warranties had been made on and as of the Closing Date.
7.4 CONSENTS; CONDITIONS PRECEDENT. From and after the date hereof
and until the Closing Date, the Seller shall cause the Company to use its Best
Efforts to obtain the consents of those parties indicated on SCHEDULES 5.9 and
5.16 and any other consents required in connection with the transactions
contemplated hereby and to cause the Company to use its Best Efforts to cause
the conditions precedent to the consummation of the transactions contemplated
hereby to be satisfied.
7.5 XXXX-XXXXX-XXXXXX FILINGS. Within ten days after the date of
this Agreement, the Seller shall, and shall cause the Company to, make all
required filings as promptly as possible with the Federal Trade Commission and
the U.S. Department of Justice-Antitrust Division pursuant to the Xxxx-Xxxxx-
Xxxxxx Act, and shall, and shall cause the Company to, cooperate with the
Acquiror in connection with such filings.
7.6 SUPPLEMENTAL DISCLOSURE. The Seller will promptly inform the
Acquiror in writing of any fact or circumstance known to the Seller that would
constitute a breach of the Seller's representations or warranties or would cause
any of the conditions to either party's obligations to consummate the
transactions contemplated under this Agreement not to be fulfilled.
7.7 NO SOLICITATION OF TRANSACTIONS. The Seller shall not and shall
cause the Company and each of its Subsidiaries (and each of their respective
directors, officers, employees, advisors, representatives, agents or affiliates)
not to, directly or indirectly,encourage, engage in, solicit or initiate any
discussions or negotiations with, or provide any information to (except, that in
the event the Parent or the Acquiror shall be obligated by law to publicly
disclose (and does so disclose) that this Agreement exists, the Seller may
provide information to other persons for the sole purposes of advising them of
the existence of this Agreement), or negotiate or enter into any agreement or
agreement in principle with any other person, entity or group, with respect to a
sale of the Seller, the Company or any of its Subsidiaries, their assets or
capital stock or any similar transaction. The Seller shall, and shall cause the
Company and each of its Subsidiaries (and each of their respective directors,
officers, employees, advisors, representatives, agents or affiliates) to, notify
the Acquiror of any action taken by any person in connection with the foregoing
sentence and shall provide the Acquiror with any information, written or oral,
obtained by such party in connection therewith.
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7.8 RESIGNATIONS. Effective as of the Closing Date, the directors
and officers of the Seller and the Company shall resign from their positions as
directors and officers of the Seller and the Company. Such resignations shall
not constitute terminations of employment. The Acquiror shall, at its sole
discretion, make offers of employment to such directors and officers as it
wishes to retain.
7.9 ENVIRONMENTAL STUDIES. The Seller shall give access to the Real
Properties to the Parent (and such individuals designated by the Parent) to the
extent required to complete Phase I, Phase II and any other environmental
studies (the "Environmental Studies") of the following properties and such other
Real Properties of the Seller, the Company or any of its Subsidiaries as the
Parent shall reasonably request: (i) Corporate Headquarters, Orlando, Florida,
(ii) Orlando Facility, Orlando, Florida, (iii) Myrtle Beach Facility, Myrtle
Beach, South Carolina, (iv) Chattanooga Facility, Chattanooga, Tennessee, (v)
Ocala Facility, Ocala, Florida, (vi) Palm Beach Facility, Palm Beach, Florida,
(vii) East Coast Facility, Melbourne, Florida, (viii) Gulf Coast Facility,
Brooksville, Florida and (ix) the Myrtle Beach property owned by the Company and
leased to a camera shop at which environmental test borings are currently being
conducted.
7.10 TITLE INSURANCE. Upon ten days notice from the Parent, the
Seller shall deliver to the Parent any document with respect to any of the Real
Properties which the Parent shall reasonably request so that the Parent may
obtain title insurance or a survey in a form customary to the state which is the
location of the property to which such insurance policy or survey shall apply.
7.11 DISCLOSURE OF FINANCIAL INFORMATION. The Seller agrees to
provide such financial information as the Parent may reasonably request with
respect to the Seller, the Company and its Subsidiaries, in connection with,
among other things, obtaining the Financing, and that such financial information
may be disclosed by the Parent or the Acquiror to the extent reasonably
appropriate including, without limitation, in connection with obtaining the
Financing, capital market transactions and any filings required pursuant to
applicable law.
7.12 NON-COMPETITION AGREEMENTS. The Seller shall execute and use its
Best Efforts to cause Xxxxxx Xxxx and Xxxxx Xxxxxxxxxxxx to execute a Non-
Competition Agreement substantially in the form attached hereto as Exhibit 8.13
which shall provide for a two-year period non-compete containing terms and
provisions substantially similar to Section 7 (Confidentiality Obligations) and
Section 8 (Non-Competition) of the Employment Contract by and between the
Company and Xxxxx X. XxXxxxxxxx, Xx., dated January 1, 1993 (the "Employment
Contract").
7.13 EMPLOYMENT CONTRACT. The Seller agrees to cause the Company to,
and Xxxxx X. XxXxxxxxxx, Xx., agrees to,
32
amend the Employment Contract such that, effective as of the Closing Date,
(i) Section 7 (Confidentiality Obligations) and Section 8 (Non-Competition)
shall be applicable to all markets operated by the Company as of December 31,
1996 except the Palm Beach Market and shall survive through December 31, 1998,
(ii) any obligations for payment in respect of the year ended December 31, 1996,
other than salary compensation, payable to Xxxxx X. XxXxxxxxxx, Xx. thereunder
shall be payable by the Stockholders, (iii) any obligations for salary
compensation payable to Xxxxx X. XxXxxxxxxx, Xx. thereunder shall be payable by
the Surviving Corporation, (iv) the provisions of Section 3.2(b)(3) shall be
deleted and be of no further force and effect, and (v) all other obligations,
rights, covenants and agreements contained therein shall expire on December 31,
1996.
7.14 DISCHARGE OF INDEBTEDNESS. Notwithstanding the provisions of
Section 7.3, during the period between the date hereof and the Closing Date, the
Company may incur Indebtedness and pay Indebtedness and interest thereon,
subject to Section 2.4 hereof.
7.15 APPROVAL OF STOCKHOLDERS. The Seller shall circulate a Consent
of Stockholders as soon as practicable for the purpose of consenting to this
Agreement and all other actions contemplated hereby which require the approval
of the Stockholders. The Seller's Board of Directors shall recommend to the
Stockholders approval of the Merger, this Agreement and the actions contemplated
hereby.
VIII. COVENANTS OF THE PARENT AND THE ACQUIROR.
The Parent and the Acquiror hereby covenant and agree that:
8.1 REPRESENTATIONS AND WARRANTIES. From and after the date hereof
and until the Closing Date, the Parent and the Acquiror will not take any action
which would cause any of the representations and warranties made by them in this
Agreement not to be true and correct in all material respects on and as of the
Closing Date with the same force and effect as if such representations and
warranties had been made on and as of the Closing Date.
8.2 CONSENTS; CONDITIONS PRECEDENT. From and after the date hereof
and until the Closing Date, the Parent and the Acquiror shall use its Best
Efforts to obtain any consents required pursuant to SCHEDULE 6.3 hereto and any
other consents required hereunder in connection with the transactions
contemplated hereby and to cause the conditions precedent to the consummation of
the transactions contemplated hereby to be satisfied.
8.3 XXXX-XXXXX-XXXXXX FILINGS. Within ten days after the date of
this Agreement, the Parent and the Acquiror shall make all required filings as
promptly as possible with the
33
Federal Trade Commission and the U.S. Department of Justice-Antitrust Division
pursuant to the Xxxx-Xxxxx-Xxxxxx Act, and it shall cooperate with the Seller
and the Company in connection with such filings.
8.4 EMPLOYEE AND EMPLOYEE PLANS. As of the Closing Date, each
employee of the Company and of its Subsidiaries shall remain an employee of the
Company or such Subsidiary, on the same terms and conditions of employment as
were applicable to such employees immediately prior to the Closing Date, and the
Parent and the Acquiror shall cause the Company and such Subsidiaries to
continue to be bound by any employment agreement or arrangement to which it is a
party with respect to any such employee in accordance with and subject to the
terms thereof and the Surviving Corporation shall be liable for salary
compensation of Xxxxxx Xxxx and Xxxxx Xxxxxxxxxxxx through December 31, 1996.
The Parent and the Acquiror shall honor all of the Company's bonus and incentive
compensation agreements with employees of the Company and its Subsidiaries
disclosed on Schedule 5.19 in respect of the fiscal year ending December 31,
1996, provided, however, the Parent and the Acquiror shall have no obligation to
honor such bonus and incentive compensation agreements as they relate to Xxxxx
X. XxXxxxxxxx, Xx., Xxxxxx Xxxx or Xxxxx X. Xxxxxxxxxxxx.
8.5 SUPPLEMENTAL DISCLOSURE. The Parent and the Acquiror will
promptly inform the Seller in writing of any fact or circumstance known to the
Parent or the Acquiror that would constitute a breach of the Parent's or the
Acquiror's representations or warranties or would cause any of the conditions to
either party's obligations to consummate the transactions contemplated under
this Agreement not to be fulfilled.
IX. CONDITIONS PRECEDENT TO THE ACQUIROR'S OBLIGATION.
The obligation of the Acquiror to consummate the Merger and the
transactions contemplated by this Agreement is, at the option of the Acquiror,
subject to the satisfaction or waiver of the following conditions:
9.1 REPRESENTATIONS AND WARRANTIES TRUE. Each of the
representations and warranties of the Seller contained in Articles IV and V
hereof shall be true and correct in all respects as of the date hereof and as of
the Closing Date with the same force and effect as though the same had been made
on and as of the Closing Date, except for those given as of a particular date,
which shall be true and correct in all respects as of such date, and except for
changes permitted or contemplated hereby.
9.2 COVENANTS PERFORMED. The Seller shall have performed and
complied in all material respects with the covenants and provisions in this
Agreement required herein to be
34
performed or complied with by the Seller between the date hereof and the Closing
Date.
9.3 NO LEGAL PROCEEDINGS. No action or proceeding shall have been
instituted against the Parent, the Acquiror, the Seller or the Company before
any court or other governmental body seeking to restrain or prohibit the
consummation of the transactions contemplated hereby, which in the reasonable
opinion of the Parent and the Acquiror makes it inadvisable to consummate such
transactions.
9.4 COMPLIANCE CERTIFICATE. The Acquiror shall have received a
certificate to the effect set forth in Sections 9.1 and 9.2 above, dated the
Closing Date, signed by Xxxxx X. XxXxxxxxxx, Xx., the President of Seller and
Xxxxx X. XxXxxxxxxx, Xx. the President of the Company.
9.5 CORPORATE AUTHORITY. The Acquiror shall have received a
certificate of a duly authorized officer of the Seller, dated the Closing Date,
setting forth resolutions of the Board of Directors and votes of the
Stockholders of the Seller generally authorizing the signing of agreements and
certifying that such resolutions were duly adopted and have not been rescinded
or amended as of the Closing Date.
9.6 CONSENTS. The consents of all persons who are parties to the
agreements with the Seller or the Company identified on SCHEDULES 5.9 or 5.16
with an asterisk (*) shall have been obtained, and signed copies thereof shall
have been delivered to the Acquiror.
9.7 XXXX-XXXXX-XXXXXX. The waiting periods under the Xxxx-Xxxxx-
Xxxxxx Act shall have expired.
9.8 INDEBTEDNESS, RESERVE AMOUNT AND STOCKHOLDER NOTE SCHEDULES. The
Seller shall have provided to the Acquiror the schedules of Indebtedness,
Reserve Amount, Stockholder notes and merger consideration specified in Section
2.3 of this Agreement and the Working Capital Schedule specified in Section 2.4
of this Agreement.
9.9 STOCKHOLDER APPROVAL. The Stockholders of the Seller shall have
approved the Merger and the transactions contemplated by this Agreement in
accordance with the Delaware Statute.
9.10 NO MATERIAL ADVERSE EFFECT. Since the Balance Sheet Date, there
shall not have occurred any event, change or development which individually or
in the aggregate, has had or is reasonably likely to have a Material Adverse
Effect.
9.11 SELLER AFFIDAVIT. The Seller shall have delivered to the Parent
an affidavit, dated as of the Closing Date, that is satisfactory to the Parent
and which satisfies the
35
requirements of Code Section 1445(b)(3) and Treasury Regulation Section 1.1445-
2(c)(3)(i).
9.12 NON-COMPETITION AGREEMENTS. The Seller and each of the
Stockholders who is a senior executive or manager of the Seller, the Company or
any Subsidiary shall have delivered to the Parent an executed Non-Competition
Agreement consistent with the provisions of Section 7.12 hereof.
9.13 EMPLOYMENT CONTRACT. The Employment Contract shall have been
amended as contemplated by Section 7.13 hereof.
9.15 ENVIRONMENTAL MATTERS. The Parent and the Acquiror shall have
determined in good faith that the aggregate liabilities (including clean-up and
remedial costs) associated with any matters disclosed in the Environmental
Reports would not equal or exceed $2 million; PROVIDED, HOWEVER, that the
Stockholders may elect to cure any such matters disclosed or otherwise satisfy
any potential liabilities disclosed, in each case, in a manner reasonably
acceptable to the Parent and the Acquiror.
9.16 WORKING CAPITAL AND CASH. As of the Closing Date, the Company
shall have Working Capital of at least $5,000,000 and cash of $750,000 and shall
have received a certificate of the Chief Financial Officer of the Company to the
effect of the foregoing.
9.17 LEGAL OPINION. The Acquiror shall have received an opinion of
Xxxxxx, Hall & Xxxxxxx, counsel for the Seller, dated the Closing Date and in
form and substance reasonably satisfactory to the Acquiror and its counsel.
9.18 RELEASES OF LIENS AND PLEDGES. The Acquiror and the Parent shall
have received evidence satisfactory to them that all liens on the Company's
assets and pledges of the Company's and the Subsidiaries' stock held by the
several lenders pursuant to the Amended and Restated Credit Agreement among the
Company, the several lenders and the Canadian Imperial Bank of Commerce, New
York Agency, as Agent dated as of December 29, 1995 will be released upon
payment of the Indebtedness.
X. CONDITIONS PRECEDENT TO THE SELLER'S OBLIGATION.
The obligation of the Seller to consummate the Merger and the transactions
contemplated by this Agreement on the Closing Date is subject to the
satisfaction or waiver of the following conditions:
10.1 REPRESENTATIONS AND WARRANTIES TRUE. Each of the representations
and warranties of the Parent and the Acquiror contained in Article VII hereof
shall be true and correct in all respects as of the Closing Date with the same
force and effect as though the same had been made on and as of
36
the Closing Date, except for changes therein permitted or contemplated hereby.
10.2 COVENANTS PERFORMED. The Parent and the Acquiror shall have
performed and complied in all material respects with the covenants and
provisions in this Agreement required herein to be performed or complied with by
the Parent and the Acquiror between the date hereof and the Closing Date.
10.3 NO LEGAL PROCEEDINGS. No action or proceeding, shall have been
instituted against the Parent, the Acquiror, the Seller or the Company before
any court or other governmental body, seeking to restrain or prohibit the
consummation of the transactions contemplated hereby, which in the reasonable
opinion of the Seller makes it inadvisable to consummate such transactions.
10.4 COMPLIANCE CERTIFICATE. The Seller shall have received a
certificate to the effect set forth in Sections 10.1 and 10.2 above, dated the
Closing Date, signed by a duly authorized officer of each of the Parent and the
Acquiror.
10.5 AUTHORITY. The Seller shall have received a certificate of a
duly authorized officer of each of the Parent and the Acquiror, dated the
Closing Date, setting forth the resolutions of the Board of Directors of each of
the Parent and the Acquiror and the votes of stockholders of the Acquiror
authorizing the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby, and certifying that such resolutions were
duly adopted and have not been rescinded or amended as of the Closing Date.
10.6 XXXX-XXXXX-XXXXXX. The waiting periods under the Xxxx-Xxxxx-
Xxxxxx Act shall have expired.
10.7 STOCKHOLDER APPROVAL. The stockholders of the Acquiror shall
have approved the Merger and the transactions contemplated by this Agreement in
accordance with the Delaware Statute.
10.8 EVIDENCE OF FINANCING. The Parent shall have provided evidence
reasonably satisfactory to the Seller and the Company that the Parent has funds
or financing available to consummate the transactions contemplated by this
agreement.
10.9 LEGAL OPINION. The Acquiror shall have received an opinion of
Winston & Xxxxxx, special counsel for the Parent and the Acquiror, dated the
Closing Date, in form and substance reasonably satisfactory to the Seller and
its counsel.
XI. CLOSING.
37
11.1 THE CLOSING. The closing hereunder (herein called the "Closing")
shall take place at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 A.M. on October 11, 1996 or, if
later, the date that is five (5) Business Days after each of the conditions
precedent to the Closing shall have been satisfied or waived, but not later than
the close of business on November 14, 1996, unless otherwise mutually agreed to
in writing by the Acquiror and the Seller. The date of the Closing is referred
to in this Agreement as the "Closing Date".
11.2 CLOSING PROCEEDINGS. All proceedings to be taken and all
documents to be executed and delivered by the Seller in connection with the
consummation of the transactions contemplated hereby shall be reasonably
satisfactory in form and substance to the Acquiror and its counsel. All
proceedings to be taken and all documents to be executed and delivered by the
Parent or the Acquiror in connection with the consummation of the transactions
contemplated hereby shall be reasonably satisfactory in form and substance to
the Seller and its counsel. All proceedings to be taken and all documents to be
executed and delivered by all parties at the Closing shall be deemed to have
been taken and executed simultaneously and no proceedings shall be deemed taken
nor any documents executed or delivered until all have been taken, executed and
delivered.
11.3 DELIVERIES AT CLOSING.
(a) At the Closing, the Seller shall deliver, or shall cause to be
delivered, to the Acquiror, the following:
(i) The documents required by Sections 9.4, 9.5, 9.6, 9.15 and
9.16 hereof.
(iii) An incumbency certificate setting forth the names of
officers of the Seller who are authorized to execute this Agreement and all
documents executed by the Seller pursuant hereto, together with their respective
signatures, signed by a duly authorized officer of the Seller.
(b) At the Closing, the Acquiror shall deliver the following:
(i) To the Disbursing Agent, the Aggregate Merger
Consideration.
(ii) To the creditors specified by the Seller on the day prior
to the Closing, an amount equal to the Indebtedness.
(iii) The documents required by Sections 10.4, 10.5 and 10.9
hereof.
38
(iv) An incumbency certificate setting forth the names of
officers of the Parent and the Acquiror who are authorized to execute this
Agreement and all documents executed by the Parent and the Acquiror pursuant
hereto, together with their respective signatures, signed by a duly authorized
officer of Acquiror.
(c) At the Closing, each of the Seller, the Parent, the Acquiror and
the Stockholders shall deliver all other documents, instruments and writings
required to be delivered by such party at or prior to the Closing Date pursuant
to this Agreement.
XII. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
12.1 SURVIVAL. The parties hereto agree that none of the
representations and warranties contained in Article IV, Article V or Article VI
of the Agreement shall survive the Closing hereunder.
XIII. NO BROKERS.
The Seller and its Stockholders represent to the Parent and the Acquiror
that the only dealings with any broker or finder in connection with the
transactions contemplated by this Agreement are with CIBC Wood Gundy Securities
Corp. and that the only fee, expense or amount due in connection therewith is
the Wood Gundy Fee. The Parent and the Acquiror represent to the Seller that
they respectively have had no dealings with any broker or finder in connection
with the transactions contemplated by this Agreement. The Stockholders of the
Seller severally agree to indemnify and hold the Parent, the Company and the
Surviving Corporation harmless from and against any and all liability to which
the Parent, the Company and the Surviving Corporation may be subjected by reason
of any broker's, finder's or similar fee with respect to the transactions
contemplated by this Agreement to the extent such fee is attributable to any
action undertaken by or on behalf of the Seller. The Parent and the Acquiror
agree to indemnify and hold the Stockholders of the Seller harmless from and
against any and all liability to which such Stockholders or the Seller may be
subjected by reason of any broker's, finder's or similar fee with respect to the
transactions contemplated by this Agreement to the extent such fee is
attributable to any action undertaken by or on behalf of the Parent or the
Acquiror.
XIV. SPECIFIC PERFORMANCE.
The parties hereto acknowledge that irreparable damage would result if this
Agreement is not specifically enforced. Therefore, the rights and obligations
of the parties under this Agreement, including, without limitation, their
respective rights and obligations to consummate the Merger, shall be enforceable
by a decree of specific performance issued by any court of competent
jurisdiction, and appropriate injunctive relief may be applied
39
for and granted in connection therewith. Such remedies shall, however, be
cumulative and not exclusive and shall be in addition to any other remedies
which any party may have under this Agreement or otherwise.
XV. TERMINATION.
Anything contained in this Agreement to the contrary notwithstanding, this
Agreement may be terminated:
(a) At any time on or prior to the Closing Date, by the mutual
consent in writing of the Acquiror and the Seller; or
(b) By either the Acquiror or the Seller if the Closing shall not
have occurred before November 15, 1996 (or such later date as may be agreed upon
in writing by the parties hereto).
(c) By the Parent and the Acquiror, within two business days after
delivery by the Seller of the Schedules to this Agreement in accordance with
Article XXVI hereof, in the event that such Schedules disclose any matters
which, in the aggregate, would in the reasonable judgment of the Parent, be
reasonably likely to result in a Material Adverse Effect other than any which
were disclosed to the Parent in the draft of this Agreement delivered on
August 9, 1996.
In the event that this Agreement shall be terminated pursuant to this
Article XV, all further obligations of the parties under this Agreement (other
than Articles XIII, XVII and XXIII) shall terminate without further liability of
either party to the other unless such party has (i) willfully failed to have
performed its obligations hereunder or (ii) knowingly made a material
misrepresentation on any matter set forth herein.
XVI. FURTHER ASSURANCES.
Subject to the terms and conditions herein provided, each of the parties
hereto agrees to use Best Efforts to take, or cause to be taken, all action, and
to do, or cause to be done, all things necessary, proper or advisable to fulfill
the conditions to the parties' obligations hereunder and to consummate and make
effective the transactions contemplated by this Agreement, including, without
limitation, making all required filings and applications (including those
filings required under the Xxxx-Xxxxx-Xxxxxx Act) and complying with or
responding to any requests by governmental agencies and obtaining all consents,
approvals, orders, waivers, licenses, permits and authorizations required in
connection with the transactions contemplated hereby. If at any time prior to,
on or after the Closing Date any further action is necessary or desirable to
carry out the purposes of this Agreement, the parties hereto shall take or cause
to be taken all such necessary action, including, without limitation, the
execution and delivery of such further instruments and documents as may be
reasonably requested
40
by the other party for such purposes or otherwise to consummate and make
effective the transactions contemplated hereby.
XVII. CONFIDENTIALITY; PRESS RELEASES.
17.1 CONFIDENTIALITY OBLIGATION OF THE ACQUIROR. As more specifically
set forth in the Confidentiality Agreement, the Acquiror agrees to keep
proprietary information regarding the Company confidential and agrees that it
will only use such information in connection with the transactions contemplated
by this Agreement and that it will not disclose any of such information other
than (a) to the Acquiror's directors, officers, employees, representatives, and
agents who are or may be involved with the transactions contemplated by this
Agreement, (b) to the extent such information presently is or hereafter becomes
available on a non-confidential basis from a source other than the Seller or the
Company, (c) to the extent disclosure is required by law, regulation or judicial
order by any governmental authority, (d) as contemplated by Section 7.11 hereof
and (e) as may in the Acquiror's judgment be appropriate in light of it (and its
Parent) having publicly trading securities, including pursuant to meetings with
analysts.
17.2 CONFIDENTIALITY OBLIGATION OF THE SELLER. The Seller agrees to
keep proprietary information regarding the Parent and the Acquiror confidential
and agrees that it will only use such information in connection with the
transactions contemplated by this Agreement and not disclose any of such
information other than (a) to the Seller's or to the Company's directors,
officers, employees, representatives and agents who are involved with the
transactions contemplated by this Agreement, (b) to the extent such information
presently is or hereafter becomes available on a non-confidential basis from a
source other than the Parent or the Acquiror, and (c) to the extent disclosure
is required by law, regulation or judicial order by any governmental authority.
17.3 DISCLOSURE REQUIRED BY LAW. Prior to any disclosure required by
interrogatory, subpoena, discovery motion, civil investigative demand or other
judicial order the Acquiror or the Seller, as the case may be, shall advise the
other of such requirement so that it may seek a protective order.
17.4 PRESS RELEASES. Prior to Closing, neither the Acquiror nor the
Seller shall make any press release or public announcement in connection with
the transaction contemplated hereby without the prior written consent of the
other party or, if required by law, without having used its Best Efforts to
consult with the other parties prior thereto.
XVIII. NOTICES.
Any notices or other communications required or permitted hereunder, shall
be sufficiently given if in writing and
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personally delivered or sent by registered or certified mail, postage prepaid,
return receipt requested, or sent by facsimile, addressed as follows or to such
other address as the parties shall have given notice of pursuant hereto:
In the case of the Parent or the Acquiror:
Universal Outdoor, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
Xxxxx & Company
000 Xxxx Xxxxxx
00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
With a copy to:
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Telecopy: (000) 000-0000
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
In the case of the Seller or the Stockholders:
Xxxxxxx X. Xxxxxxx
Boston Ventures Management, Inc.
00 Xxxxxx Xxxxx Xxxxxx
Xxxxxx, XX 00000
Telecopy: 000-000-0000
and
Xxxxxx X. Xxxx, Esq.
Xxxxxx, Xxxx & Xxxxxxx
Exchange Place
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Telecopy: 000-000-0000
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In the case of Boston Ventures Management, Inc.:
Xxxxxxx X. Xxxxxxx
Boston Ventures Management, Inc.
00 Xxxxxx Xxxxx Xxxxxx
Xxxxxx, XX 00000
Telecopy: 000-000-0000
With copies to:
Xxxxxx X. Xxxx, Esq.
Xxxxxx, Hall & Xxxxxxx
Exchange Place
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Telecopy: 000-000-0000
XIX. ENTIRE AGREEMENT.
This Agreement and the Confidentiality Agreement represent the entire
understanding and agreement between the parties hereto with respect to the
subject matter hereof and supersede all prior agreements and understandings
relating to such subject matter. This Agreement can be amended, supplemented or
changed, and any provision hereof can be waived, only by written instrument
making specific reference to this Agreement signed by the parties against which
enforcement of any such amendment, supplement, modification or waiver is sought.
XX. SUCCESSORS.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, successors and assigns; provided,
however, that this Agreement and all rights and obligations hereunder may not be
assigned or transferred by the Acquiror (other than to Xxxxxx X. Xxxxx, Xxxxx &
Company or any of their, the Parent's or the Acquiror's affiliates) without the
prior written consent of the Seller, or by the Seller without the prior written
consent of the Acquiror.
XXI. SECTION HEADINGS.
The section headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
XXII. APPLICABLE LAW.
This Agreement shall be governed by, construed and enforced in accordance
with law of the State of Delaware, without regard to the principles thereof
relating to conflict of laws.
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XXIII. EXPENSES.
Subject to the provisions of Article XV and Section 2.3(b), whether or not
the transactions contemplated hereby are consummated, the parties hereto shall
pay their own respective expenses.
XXIV. SEVERABILITY.
If at any time subsequent to the date hereof, any provision of this
Agreement shall be held by any court of competent jurisdiction to be illegal,
void or unenforceable, such provision shall be of no force and effect, but the
illegality or unenforceability of such provision shall have no effect upon and
shall not impair the enforceability of any other provision of this Agreement.
XXV. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument.
XXVI. SCHEDULE DISCLOSURE.
The Seller agrees to furnish complete Schedules required by this Agreement
to the Parent and the Acquiror no later than the close of business on August 30,
1996. The parties agree that the inclusion of any item on a schedule to this
Agreement does not constitute an acknowledgement that such item is material or
would be reasonably likely to result in a Material Adverse Effect.
XXVII. PARTIES IN INTEREST.
This Agreement shall be binding upon and inure solely to the benefit of
each party hereto and its affiliates and nothing in this Agreement, express or
implied, is intended by or shall confer upon any other person any rights,
benefits or remedies of any nature whatsoever under or by any reason of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
ACQUIROR:
UNIVERSAL ACQUISITION CORP.
By:
--------------------------------
Name:
Title:
PARENT:
UNIVERSAL OUTDOOR, INC.
By:
--------------------------------
Name:
Title:
SELLER:
OUTDOOR ADVERTISING HOLDINGS, INC.
By:
--------------------------------
Xxxxx X. XxXxxxxxxx, President
DISBURSING AGENT AND AGENT:
BOSTON VENTURES MANAGEMENT, INC.
By:
--------------------------------
Name:
Title:
