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EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
by and among
Lamar Advertising Company
as Buyer,
Outdoor Communications, Inc.,
as the Company
and
The Stockholders of Outdoor Communications, Inc.,
as the Stockholders
August 10, 1998
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TABLE OF CONTENTS
PAGE
SECTION 1. CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. SALE OF COMPANY SECURITIES AND PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 Purchase and Sale of Company Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3 Post-Closing Purchase Price Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.4 Closing Deliveries; Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.5 Time and Place of Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.6 The Stockholders' Representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . 9
3.1 Making of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.2 Organization and Qualifications of the Company . . . . . . . . . . . . . . . . . . . . . . . 9
3.3 Capital Stock of the Company; Beneficial Ownership . . . . . . . . . . . . . . . . . . . . . 9
3.4 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.5 Authority of the Company; Consents and Approvals . . . . . . . . . . . . . . . . . . . . . 10
3.6 Real and Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7 Financial Statements; SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.8 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.9 Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.10 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.11 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.12 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.13 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.14 Finder's Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.15 Corporate Records; Copies of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.16 Employee Benefit Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.17 Labor Disputes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.18 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.19 List of Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.20 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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3.21 Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.22 Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.23 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.24 No Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.25 Disclaimer of Other Representations and Warranties;
Knowledge; Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF STOCKHOLDERS . . . . . . . . . . . . . . . . . 18
4.1 Company Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.3 Termination of Management Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.4 Noncompetition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5. COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.1 Making of Covenants and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.2 Affirmative Covenants Pending Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.3 Negative Covenants Pending Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.4 Authorization from Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.5 Access and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.6 Hart-Scott-Rodino Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.7 No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 6. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.1 Making of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.2 Organization of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.3 Authority of Buyer; Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . 21
6.4 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.5 Finder's Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.6 Financial Ability to Perform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.7 Acknowledgment of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7. COVENANTS OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.1 Making of Covenants and Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.2 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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7.3 Hart-Scott-Rodino Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.4 Consummation of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.5 Indebtedness of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.6 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.7 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.8 Severance Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 8. CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.1 Conditions to the Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.2 Conditions to Obligations of the Company and the Stockholders . . . . . . . . . . . . . . . 25
SECTION 9. TERMINATION OF AGREEMENT; RIGHTS TO PROCEED . . . . . . . . . . . . . . . . . . . . . . . . 25
9.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.3 Waiver; Extension of Time for Performance . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION;
OTHER REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.2 Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.3 Indemnification of Buyer and Its Affiliates . . . . . . . . . . . . . . . . . . . . . . . . 27
10.4 Indemnification of the Stockholders and any Affiliate of
the Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.5 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.6 Certain Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.1 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.3 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.4 Assignability; Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.5 Captions and Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.6 Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.7 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.8 Publicity and Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.9 Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.10 Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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STOCK PURCHASE AGREEMENT
AGREEMENT entered into as of August 10, 1998 by and among Lamar
Advertising Company, ("Buyer"), Outdoor Communications, Inc., a Delaware
corporation (the "Company"), and all of the holders (collectively referred to
as the "Stockholders" and each, individually, as a "Stockholder") of the
Company Securities.
W I T N E S S E T H
WHEREAS, the Stockholders own of record and beneficially all of the
issued and outstanding capital stock of the Company, consisting of 8,417.72
shares of the Company's Class A Common Stock, 3,689.28 shares of the Company's
Class B Common Stock, and 186,130.52 shares of the Company's Series A Preferred
Stock; 5,483,615.90 Preferred LLC Interests; and Management Options to purchase
621 shares of Class A Common Stock (the issued and outstanding shares of Class
A Common Stock, Class B Common Stock and Series A Preferred Stock; the
Preferred LLC Interests; and the Management Options are referred to herein
collectively as the "Company Securities"); and
WHEREAS, the Stockholders desire to sell all of the Company Securities
to Buyer, and Buyer desires to acquire all of the Company Securities.
NOW, THEREFORE, in order to consummate said purchase and sale and in
consideration of the mutual agreements set forth herein, the parties hereto
agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
1.1 As used herein, the following terms shall have the following
designated meanings:
Aggregate LLC Preferred Return. The term "Aggregate LLC Preferred
Return" shall mean the aggregate LLC Preferred Returns payable to all holders
of Preferred LLC Interests pursuant to Section 2.2(b).
Aggregate Preferred Stock Liquidation Amount. The term "Aggregate
Preferred Stock Liquidation Amount" shall mean the aggregate Preferred Stock
Liquidation Amounts payable to all holders of Series A Preferred Stock pursuant
to Section 2.2(a).
Base Balance Sheet. The term "Base Balance Sheet" shall have the
meaning given to such term in Section 3.7 hereof.
Buyer. The term "Buyer" shall mean Lamar Advertising Company.
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Buyer Indemnitee. The term "Buyer Indemnitee" shall have the meaning
given to such term in Section 10.3 hereof.
Class A Common Stock. The term "Class A Common Stock" shall mean the
Class A Common Stock, par value $.01 per share, of the Company.
Class B Common Stock. The term "Class B Common Stock" shall mean the
Class B Common Stock, par value $.01 per share, of the Company.
Closing. The term "Closing" shall have the meaning given to such term
in Section 2.5 hereof.
Closing Date. The term "Closing Date" shall have the meaning given to
such term in Section 2.5 hereof.
Closing Working Capital. The term "Closing Working Capital" shall
mean the Working Capital of the Company at Closing determined in accordance
with Section 2.3(a).
Common Stock. The term "Common Stock" shall mean shares of Class A
Common Stock and Class B Common Stock.
Common Stock Consideration. The term "Common Stock Consideration"
shall mean an amount equal to the quotient (a) the sum of the Net Equity Value
plus an amount equal to the aggregate exercise price of all of the Management
Options divided by (b) the number of shares of Common Stock outstanding at the
Closing Date assuming exercise of all of the Management Options.
Company. The term "Company" shall mean Outdoor Communications, Inc.,
a Delaware corporation.
Company Securities. The term "Company Securities" shall have the
meaning given to such term in the preamble to this Agreement.
Costs. The term "Costs" shall have the meaning given to such term in
Section 10.3 hereof.
Credit Agreement. The term "Credit Agreement" shall mean the Credit
Agreement dated as of August 15, 1997 (the "Credit Agreement"), by and among
the Company, the Subsidiaries, First Union National Bank, as Co-Agent, CIBC
Inc., as Documentation Agent, Chase Manhattan Bank, as Administrative Agent,
and various lending institutions party thereto.
Damages. The term "Damages" shall have the meaning given to such term
in Section 10.3 hereof.
Encumbrances. The term "Encumbrances" shall have the meaning given to
such term in Section 3.6 hereof.
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ERISA. The term "ERISA" shall have the meaning given to such term in
Section 3.16 hereof.
Estimated Working Capital. The term "Estimated Working Capital" shall
mean the amount of the Company's Working Capital at Closing, as set forth in a
statement provided by the Company to Buyer not later than three (3) business
days prior to the Closing.
Estimated Working Capital Adjustment. The term "Estimated Working
Capital Adjustment" shall mean an amount (which amount may be a positive or
negative number) equal to Estimated Working Capital minus $6,623,000.
Exchange Act. The term "Exchange Act" shall have the meaning given to
such term in Section 3.5 hereof.
Governmental Entity. The term "Governmental Entity" shall have the
meaning given to such term in Section 3.5 hereof.
Gross Enterprise Value. The term "Gross Enterprise Value" shall mean
the sum of (i) Three Hundred Eighty-Five Million Dollars ($385,000,000) plus
(ii) an amount equal to the Estimated Working Capital Adjustment.
Hart-Scott-Rodino Act. The term "Hart-Scott-Rodino Act" shall mean
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
Indebtedness. The term "Indebtedness" means (without duplication),
with respect to any person, any indebtedness at any time outstanding, secured
or unsecured, contingent or otherwise, which is for borrowed money (whether or
not the recourse of the lender is to the whole of the assets of such person or
only to a portion thereof), or evidenced by bonds, notes, debentures or similar
instruments or representing the balance deferred and unpaid of the purchase
price of any property (excluding any balances that constitute accounts payable
or trade payables, and other accrued liabilities arising in the ordinary course
of business) if and to the extent any of the foregoing indebtedness would
appear as a long-term liability upon a balance sheet of such person prepared in
accordance with generally accepted accounting principles, and shall also
include, to the extent not otherwise included (i) any capitalized lease
obligations of such person, (ii) obligations secured by a lien to which the
property or assets owned or held by such person is subject, whether or not the
obligation or obligations secured thereby shall have been assumed (the amount
of such obligation being deemed to be the lesser of the value of such property
or asset or the amount of the obligations so secured), (iii) guarantees of
obligations of other persons which would be included within this definition for
such other persons (whether or not such items would appear upon the balance
sheet of the guarantor) and (iv) all obligations for the reimbursement of any
obligor on any letter of credit with respect to drawings made thereunder and
not yet reimbursed.
Indebtedness Amount. The term "Indebtedness Amount" shall mean the
sum of (i) the outstanding indebtedness of the Company and the Subsidiaries
under the Credit Agreement as of the Closing Date, excluding any indebtedness
arising from the letter of credit securing payment of the Stockholder Note;
(ii) the outstanding principal plus accrued and unpaid interest on the
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Subordinated Notes as of the Closing Date; (iii) the outstanding principal plus
accrued and unpaid interest on the Stockholder Note as of the Closing Date; and
(iv) such other outstanding principal and accrued interest as shall constitute
Indebtedness and which is not characterized as a current liability under the
determination of Working Capital; each as certified by the Company to Buyer no
later than two (2) business days prior to the Closing Date.
Intellectual Property. The term "Intellectual Property" shall have
the meaning given to such term in Section 3.10 hereof.
IRS. The term "IRS" shall mean the Internal Revenue Service.
Leased Real Properties. The term "Leased Real Properties" shall have
the meaning given to such term in Section 3.6 hereof.
LLC Preferred Return. The term "LLC Preferred Return" means the
amount payable to a holder of Preferred LLC Interests sufficient to cause such
holder to have received, as of the date of determination, the amount of such
holder's preferred capital contribution to OCIH LLC plus a 10% cumulative rate
of return on such holder's preferred capital contribution, less amounts
previously distributed to such holder.
Losses. The term "Losses" shall have the meaning given to such term
in Section 10.3 hereof.
Management Options. The term "Management Options" shall mean all
issued and outstanding options, as of the Closing Date, granted pursuant to the
Company's 1998 Stock Option and Incentive Plan.
Material Adverse Effect. The term "Material Adverse Effect" means any
change in, effect on, or circumstances that, individually or in the aggregate,
would have a materially adverse effect on the operations, business, results of
operations or financial condition of the Company and its Subsidiaries, taken as
a whole.
Net Equity Value. The term "Net Equity Value" shall mean the Gross
Enterprise Value minus the sum of (a) the Indebtedness Amount, (b) the
Aggregate Preferred Stock Liquidation Amount and (c) the Aggregate LLC
Preferred Return.
Owned Real Properties. The term "Owned Real Properties" shall have
the meaning given to such term in Section 3.6 hereof.
Post-Closing Working Capital Statement. The term "Post-Closing
Working Capital Statement" shall have the meaning given to such term in Section
2.3(a) hereof.
Preferred LLC Interests. The term "Preferred LLC Interests" shall
mean the preferred membership interests in OCIH LLC, a Delaware limited
liability company, in which the Company is the sole holder of common membership
interests.
Preferred Stock Liquidation Amount. The term "Preferred Stock
Liquidation Amount" shall mean the sum of $100.00 per share of Series A
Preferred Stock (subject to equitable
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adjustment whenever there shall occur a stock dividend, distribution,
combination of shares, reclassification or other similar event with respect to
the Series A Preferred Stock) plus all accrued dividends payable with respect
to one share of Series A Preferred Stock pursuant to the terms of Series A
Preferred Stock as of the Closing Date.
SEC Reports. The term "SEC Reports" shall have the meaning given to
such term in Section 3.6 hereof.
Series A Preferred Stock. The term "Series A Preferred Stock" shall
mean the Series A Preferred Stock, par value $.01 per share, of the Company.
Stockholder Indemnitee. The term "Stockholder Indemnitee" shall have
the meaning given to such term in Section 10.4 hereof.
Stockholder Note. The term "Stockholder Note" shall mean the
promissory note in the principal amount of $2,000,000 issued by the Company to
John C Stanley IV.
Stockholders. The term "Stockholders" shall mean all of the
stockholders and option holders of the Company and all of the holders of
preferred membership interests in OCIH LLC.
Stockholders' Representative. The term "Stockholders' Representative"
shall have the meaning given to such term in Section 2.6 hereof.
Subordinated Notes. The term "Subordinated Notes" shall mean the
Company's 9-1/4% Senior Subordinated Notes due 2007, issued pursuant to that
certain Indenture dated as of August 15, 1997 by and among the Company, the
Subsidiaries and First Union National Bank.
Subsidiaries. The term "Subsidiaries" shall have the meaning given to
such term in Section 3.4 hereof.
Surviving Representations. The term "Surviving Representations" shall
have the meaning given to such term in Section 10.1 hereof.
Working Capital. The term "Working Capital" shall mean (a) current
assets minus (b) current liabilities, excluding all accrued and unpaid interest
and principal included in the Indebtedness Amount and amounts payable pursuant
to the arrangements disclosed in Items 1, 2 and 3 of Schedule 7.6 hereto,
determined in accordance with generally accepted accounting principles
consistently applied by the Company.
SECTION 2. SALE OF COMPANY SECURITIES AND PURCHASE PRICE.
2.1 Purchase and Sale of Company Securities. In consideration of
and in reliance upon the representations, warranties and covenants contained
herein and subject to the terms and conditions of this Agreement, at the
Closing, each Stockholder shall sell, and Buyer shall purchase, the Company
Securities listed opposite such Stockholder's name on Exhibit A attached hereto
for the purchase price set forth in Section 2.2.
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2.2 Purchase Price. At the Closing, Buyer shall pay to the
Stockholders the following amounts:
(a) Buyer shall pay to each holder of the Company's
Series A Preferred Stock cash in an amount equal to such holder's Preferred
Stock Liquidation Amount multiplied by the number of shares of Series A
Preferred Stock held by such holder;
(b) Buyer shall pay to each holder of Preferred LLC
Interests cash in an amount equal to such holder's LLC Preferred Return;
(c) Buyer shall pay to each holder of Management Options
cash in an amount equal to (x) the Common Stock Consideration minus the
exercise price per share of Class A Common Stock provided for under the terms
of the Management Option, multiplied by (y) the number of shares of Class A
Common Stock that would have been received by such holder if all Management
Options held by such holder were exercised prior to the Closing; and
(d) Buyer shall pay to each Stockholder cash in an amount
equal to the Common Stock Consideration multiplied by the number of shares of
Common Stock held by such Stockholder.
2.3 Post-Closing Purchase Price Adjustment.
(a) Within thirty (30) days following the Closing, Buyer
will furnish to the Stockholders' Representative a statement (the "Post-Closing
Working Capital Statement") which sets forth Buyer's calculation of the Working
Capital of the Company at Closing. Buyer will give the Stockholders'
Representative and its accountants and attorneys reasonable access to the
premises of the Company, to its books, records, and work papers, and to the
appropriate personnel of Buyer and the Company for purposes of confirming the
Post-Closing Working Capital Statement. Unless the Stockholders'
Representative notifies Buyer in writing that it disagrees with the
Post-Closing Working Capital Statement within 30 days after the Stockholders'
Representative's receipt thereof, the Post-Closing Working Capital Statement
shall be conclusive and binding on all parties hereto and not subject to
dispute or review and Buyer's calculation of the Working Capital at Closing as
set forth therein shall be the "Closing Working Capital" for purposes of
Section 2.3(b). If the Stockholders' Representative notifies Buyer in writing
of its disagreement with the Post-Closing Working Capital Statement within
such 30-day period, then the Stockholders' Representative and Buyer shall
attempt to resolve their differences with respect thereto within 30 days after
Buyer's receipt of the Stockholders' Representative's written notice of
disagreement. Any dispute regarding the Post-Closing Working Capital Statement
not resolved by the Stockholders' Representative and Buyer within such 30-day
period will be resolved by KPMG or another accounting firm mutually acceptable
to both parties. The parties will engage the accounting firm within seven days
after such 30-day period. The determination by the accounting firm so selected
of the Working Capital at Closing shall be made within twenty (20) days of its
engagement, shall be conclusive and binding upon all parties hereto and not
subject to dispute or review, and shall be the "Closing Working Capital" for
purposes of Section 2.3(b). The fees and expenses of such accounting firm in
acting (in the event of a dispute) under this Section shall be shared equally
by Buyer and the Stockholders.
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(b) Within five (5) business days following determination
of the Closing Working Capital in accordance with Section 2.3(a), (i) in the
event the Closing Working Capital is less than the Estimated Working Capital,
each Stockholder shall pay to Buyer an amount equal to such Stockholder's pro
rata share (as set forth in column 7 of Exhibit A attached hereto) of the
difference between such amounts or, (ii) in the event the Closing Working
Capital is greater than the Estimated Working Capital, Buyer shall pay to the
Stockholders' Representative, on behalf of the Stockholders, the difference
between such amounts.
2.4 Closing Deliveries; Payment.
(a) At the Closing, each Stockholder shall deliver or
cause to be delivered to Buyer certificates or other instruments representing
all of the Company Securities owned by such Stockholder. Such stock
certificates or other instruments shall be duly endorsed in blank for transfer
or shall be presented with stock powers duly executed in blank.
(b) Buyer shall pay the purchase price set forth in
Section 2.2 by wire transfer of immediately available funds to an account
designated by the Stockholders' Representative for distribution to the
Stockholders.
2.5 Time and Place of Closing. The closing of the purchase and
sale provided for in this Agreement (herein called the "Closing") shall be held
at the offices of Goodwin, Procter & Hoar LLP, Exchange Place, Boston,
Massachusetts, at 10:00 a.m. on the date (the "Closing Date") that is five (5)
business days following the date on which the conditions to closing set forth
in Sections 8.1(c) and 8.2(c) of this Agreement shall have been satisfied.
2.6 The Stockholders' Representative.
(a) By the execution and delivery of this Agreement, each
Stockholder hereby irrevocably constitutes and appoints Media/Communications
Partners II Limited Partnership and John C Stanley IV, and each of them acting
singly, as his, her or its true and lawful agent and attorney-in-fact
(together, the "Stockholders' Representative"), with full power of substitution
to act in its name, place and stead with respect to all transactions
contemplated by and all terms and provisions of this Agreement, and to act on
its behalf in any dispute, litigation or arbitration involving this Agreement,
and to do or refrain from doing all such further acts and things, and execute
all such documents as the Stockholders' Representative shall deem necessary or
appropriate in connection with the transactions contemplated by this Agreement,
including, without limitation, the power:
(i) to waive any condition to the obligations of
such Stockholder to consummate the transactions contemplated by this Agreement;
(ii) to execute and deliver all ancillary
agreements, certificates and documents, and to make representations and
warranties therein, on behalf of such Stockholder which the Stockholders'
Representative deems necessary or appropriate in connection with the
consummation of the transactions contemplated by this Agreement;
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(iii) to receive on behalf of, and to distribute
(after payment of (A) any unpaid expenses chargeable to the Stockholders or the
Company prior to the Closing in connection with the transactions contemplated
by this Agreement, including, without limitation any investment banking fee
payable to Chase Securities Inc. by the Company and (B) amounts payable by the
Stockholders pursuant to Section 2.3(b)), all amounts payable to such
Stockholder under the terms of this Agreement; and
(iv) to do or refrain from doing any further act
or deed on behalf of such Stockholder which the Stockholders' Representative
deems necessary or appropriate in his sole discretion relating to the subject
matter of this Agreement, as fully and completely as such Stockholder could do
if personally present.
(b) The appointment of the Stockholders' Representative
shall be deemed coupled with an interest and shall be irrevocable, and Buyer,
its affiliates and any other person may conclusively and absolutely rely,
without inquiry, upon any action of the Stockholders' Representative on behalf
of the Stockholders in all matters referred to herein. All notices delivered
by Buyer or the Company (following the Closing) to the Stockholders'
Representative (whether pursuant hereto or otherwise) for the benefit of the
Stockholders shall constitute notice to the Stockholders. The Stockholders'
Representative shall act for the Stockholders on all of the matters set forth
in this Agreement in the manner the Stockholders' Representative believes to be
in the best interest of the Stockholders and consistent with his obligations
under this Agreement, but the Stockholders' Representative shall not be
responsible to the Stockholders for any loss or damages it or they may suffer
by reason of the performance by the Stockholders' Representative of its duties
under this Agreement, other than loss or damage arising from willful violation
of the law or gross negligence in the performance of his duties under this
Agreement.
Each Stockholder agrees to indemnify and hold harmless the
Stockholders' Representative from any loss, damage or expense arising from the
performance of its duties as the Stockholders' Representative hereunder,
including without limitation the cost of legal counsel retained by the
Stockholders' Representative on behalf of the Stockholders, but excluding any
loss or damage arising from willful violation of the law or gross negligence in
the performance of his duties under this Agreement.
(c) All actions, decisions and instructions of the
Stockholders' Representative taken, made or given pursuant to the authority
granted to the Stockholders' Representative pursuant to paragraph (a) above
shall be conclusive and binding upon each Stockholder, and no Stockholder shall
have the right to object, dissent, protest or otherwise contest the same.
(d) The provisions of this Section 2.4 are independent
and severable, shall constitute an irrevocable power of attorney, coupled with
an interest and surviving death or dissolutions, granted by the Stockholders to
the Stockholders' Representative and shall be binding upon the executors,
heirs, legal representatives, successors and assigns of each such Stockholder.
(e) Buyer and the Company (following the Closing) shall
be entitled to rely conclusively on the instructions and decisions of the
Stockholders' Representative as to any actions required or permitted to be
taken by the Stockholders or the Stockholders' Representative
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hereunder, and no party hereunder shall have any cause of action against any
Buyer for any action taken by any of them in reliance upon the instructions or
decisions of the Stockholders' Representative.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
3.1 Making of Representations and Warranties. The Company hereby
makes to Buyer the representations and warranties contained in this Section 3.
3.2 Organization and Qualifications of the Company. The Company
is a corporation duly organized, validly existing and in good standing under
the laws of Delaware with full corporate power and authority to own or lease
its properties and to conduct its business in the manner and in the places
where such properties are owned or leased or such business is currently
conducted. The Company is duly qualified to do business as a foreign
corporation in each jurisdiction in which such qualification is necessary,
except where the failure to be so qualified would not have a Material Adverse
Effect.
3.3 Capital Stock of the Company; Beneficial Ownership. The
authorized capital stock of the Company consists of (i) 20,000 shares of the
Company's Class A Common Stock, of which 8,417.72 shares are duly and validly
issued, outstanding, fully paid and non-assessable; (ii) 20,000 shares of the
Company's Class B Common Stock of which 3,689.28 shares are duly and validly
issued, outstanding, fully paid and non-assessable; (iii) 300,000 shares of
Series A Preferred Stock, of which 186,130.52 shares are duly and validly
issued, outstanding, fully paid and non-assessable; and 4,700,000 shares of an
undesignated class of preferred stock, par value $.01 per share, none of which
are issued and outstanding. Except for the Management Options and shares of
Class A Common Stock reserved for issuance with respect thereto, shares of
Series 1 Preferred Stock reserved for issuance upon conversion of the Preferred
LLC Interests, shares of Class A Common Stock and Class B Common Stock reserved
for conversion from one into the other, and shares of Class A Common Stock
reserved for issuance upon conversion of shares of Series 1 Preferred Stock,
there are no outstanding options, warrants, rights, commitments, preemptive
rights or agreements of any kind for the issuance or sale of, or outstanding
securities convertible into, any additional shares of capital stock of any
class of the Company. Each of the Stockholders owns beneficially and of record
the Company Securities set forth opposite such Stockholder's name on Exhibit A
hereto free and clear of any liens, restrictions or encumbrances.
3.4 Subsidiaries. The Company's subsidiaries and investments in
any other corporation or business organization are listed in Schedule 3.4
(collectively, the "Subsidiaries" or individually, a "Subsidiary"). Except as
set forth in Schedule 3.4, each Subsidiary of the Company is a duly organized,
validly existing corporation or limited liability company in good standing
under the laws of the state of its incorporation with full corporate power and
authority to own or lease its properties and to conduct its business in the
manner and in the places where such properties are owned or leased or such
business is currently conducted. Except where the failure to be so qualified
would not have a Material Adverse Effect, each Subsidiary is duly qualified to
do business as a foreign corporation or limited liability company in each
jurisdiction where such qualification is required and it is not required to be
licensed or qualified to conduct its business or own its property in any other
jurisdiction. There are no outstanding warrants,
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options or other rights to purchase or acquire any of the shares of capital
stock of any Subsidiary, or any outstanding securities convertible into such
shares or outstanding warrants, options or other rights to acquire any such
convertible securities.
3.5 Authority of the Company; Consents and Approvals.
(a) The Company has full right, authority and power to
enter into this Agreement and each agreement, document and instrument to be
executed and delivered by the Company pursuant to this Agreement and to carry
out the transactions contemplated hereby. The execution, delivery and
performance by the Company of this Agreement and each such other agreement,
document and instrument have been duly authorized by all necessary action of
the Company and the Stockholders. This Agreement and each agreement, document
and instrument executed and delivered by the Company pursuant to this Agreement
constitutes, or when executed and delivered will constitute, valid and binding
obligations of the Company enforceable in accordance with their terms.
(b) The execution and delivery of this Agreement by the
Company do not, and the performance of this Agreement by the Company will not,
require any filing with or notification to, or any consent, approval,
authorization or permit from, any governmental or regulatory authority ( a
"Governmental Entity") except (i) for applicable requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Hart-Scott-Rodino
Act, or other applicable anti-trust laws, or (ii) where failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or delay consummation of the transactions
contemplated by this Agreement or otherwise prevent the Company from performing
its obligations under this Agreement and would not, individually or in the
aggregate, have a Material Adverse Effect.
(c) Except as set forth in Schedule 3.5, the execution
and delivery of this Agreement by the Company do not, and the performance of
this Agreement by the Company and the consummation of the transactions
contemplated by this Agreement, will not (i) conflict with or violate the
Certificate of Incorporation or By-Laws (or other organizational documents, as
applicable) of the Company or of any of its Subsidiaries, (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, contract, agreement or other instrument or
obligation to which the Company or a Subsidiary is a party or by which any of
them or any of their respective properties or assets may be bound, excepting
such violations, breaches and defaults which would not individually or in the
aggregate have a Material Adverse Effect or (iii) violate any order, judgment,
writ, injunction, decree, statute, treaty, rule or regulation applicable to the
Company or any of its Subsidiaries or any of their respective properties or
assets, in each case, excepting such conflicts, violations, breaches, defaults,
terminations, cancellations or accelerations which would not individually or in
the aggregate have a Material Adverse Effect.
3.6 Real and Personal Property. Schedule 3.6 lists all real
properties owned by the Company or its Subsidiaries that are individually
material to the operation of the business of the Company ("Owned Real
Properties") and all real properties leased by the Company or its Subsidiaries
that are individually material to the operation of the business of the Company
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("Leased Real Properties"). The Company or a Subsidiary (i) has good and
marketable title to all of its Owned Real Properties; (ii) possesses a valid
leasehold interest in its Leased Real Properties; and (iii) has title to, or
subsisting leasehold interests in, all of its personal properties and assets
which are material to the business of the Company and its Subsidiaries and are
used solely in the business of the Company and its Subsidiaries or reflected on
the Base Balance Sheet (as defined below) (except for property and assets
disposed of since the date of the Base Balance Sheet or acquired since the date
of the Base Balance Sheet and required by the generally accepted accounting
principles to be recorded on the balance sheets of the Company), free and clear
of any liens, security interests and other encumbrances ("Encumbrances"),
except for (a) Encumbrances set forth on Schedule 3.6, (b) Encumbrances
reflected in the Base Balance Sheet or created in the ordinary course of
business subsequent to the date of the Base Balance Sheet, (c) Encumbrances of
record or otherwise that do not and will not materially interfere with the
present use by the Company or its Subsidiaries of the property subject thereto
or affected thereby or which otherwise have not in the aggregate had a Material
Adverse Effect, (d) Encumbrances for taxes, assessments or governmental
charges, or landlords', mechanics', workmen's, materialmen's or similar liens,
in each case that are not delinquent or which are being contested in good faith
and (e) Encumbrances that are reflected in the title reports or surveys, if
any, delivered or otherwise made available to Buyer in connection with the
transactions contemplated hereby.
3.7 Financial Statements; SEC Reports.
(a) Attached hereto as Schedule 3.7 is a copy of the
unaudited consolidated balance sheet for the Company (the "Base Balance Sheet")
as of June 30, 1998 and the unaudited consolidated statement of operations for
the Company for the twelve months ended June 30, 1998 (together with the Base
Balance Sheet, the "Unaudited Financial Statements"), each of which has been
prepared in conformity in all material respects with generally accepted
accounting principles. The audited financial statements of the Company for the
twelve months ended June 30, 1998, which shall be delivered by the Company to
Buyer prior to the Closing, will not contain any adjustment to the Unaudited
Financial Statements that would result in a Material Adverse Effect.
(b) The Company has filed all required forms, reports and
documents with the SEC (collectively, the "SEC Reports"), all of which were
prepared in accordance with and complied in all material respects with the
applicable requirements of the Securities Act of 1933, as amended, and the
Exchange Act.
(c) None of the SEC Reports, including, without
limitation, any financial statements or schedules included therein, as of the
dates they were respectively filed with the SEC, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading and
the balance sheets (including the related notes) included in the SEC Reports
fairly present the consolidated financial position of the Company and its
consolidated subsidiaries as of the respective dates thereof, and the other
related statements (including the related notes) included therein fairly
present the results of operations and cash flows of the Company and its
consolidated subsidiaries for the respective fiscal periods set forth therein
in accordance with generally accepted accounting principles applied on a
consistent basis, except in the case of
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interim financial statements for normal recurring and certain non-recurring
adjustments necessary for a fair presentation of the financial position and
operating results of the Company and its consolidated subsidiaries for the
interim periods.
3.8 Taxes.
(a) Each of the Company and its Subsidiaries has filed
all federal, state, local and foreign tax returns (including income tax
returns) that it was required to file, and has paid all taxes shown thereon as
owing, except where the failure to file tax returns or to pay taxes would not
have a Material Adverse Effect.
(b) Schedule 3.8 contains a list of income tax returns
filed by the Company and its Subsidiaries since June 30, 1996. Schedule 3.8
indicates those tax returns that have been audited and those tax returns that
currently are the subject of audit.
(c) Except as indicated on Schedule 3.8, neither the
Company nor any Subsidiary has waived any statute of limitations in respect of
taxes or agreed to any extension of time with respect to a tax assessment or
deficiency.
(d) Except as indicated on Schedule 3.8, neither the
Company nor any Subsidiary is a party to any tax allocation or sharing
agreement.
3.9 Ordinary Course. Except as set forth on Schedule 3.9, since
the date of the Base Balance Sheet, each of the Company and its Subsidiaries
has conducted its business only in the ordinary course and consistent with its
prior practices.
3.10 Intellectual Property. The Company or a Subsidiary has
ownership of, or license to use, all copyrights, or trademarks (collectively,
"Intellectual Property") used in the business of the Company and its
Subsidiaries as presently conducted. All of the rights of the Company and the
Subsidiaries in such Intellectual Property are freely transferable. To the
knowledge of the Company, no proceedings have been instituted, or are pending
or threatened, which challenge the rights of the Company or the Subsidiaries in
such Intellectual Property.
3.11 Contracts. Except for contracts, commitments, plans,
agreements and licenses described in Schedule 3.11 (true and complete copies of
which have been delivered to Buyer), neither the Company nor any of the
Subsidiaries is a party to:
(a) any employment contract or contract for services
which requires the payment of more than $50,000 annually or which is not
terminable within 30 days by the Company or a Subsidiary without liability for
any penalty or severance payment;
(b) any other contracts or agreements creating any
obligations of the Company or a Subsidiary of $100,000 or more with respect to
any such contract or agreement not specifically disclosed elsewhere under this
Agreement; or
(c) any contract containing covenants limiting the
freedom of the Company or a Subsidiary to compete in any line of business or
with any person or entity.
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3.12 Litigation. Except for matters described in Schedule 3.12,
there is no litigation or governmental or administrative proceeding or
investigation pending or, to the knowledge of the Company, threatened against
the Company or its affiliates which may have a Material Adverse Effect or which
would prevent or hinder the consummation of the transactions contemplated by
this Agreement.
3.13 Insurance. The physical properties and assets of the Company
and its Subsidiaries are insured to the extent disclosed in Schedule 3.13
attached hereto and all such insurance policies and arrangements are disclosed
in said Schedule. Said insurance policies and arrangements are in full force
and effect, all premiums with respect thereto are currently paid.
3.14 Finder's Fee. Except for the investment banking fee payable
to Chase Securities Inc. in connection with the transactions contemplated by
this Agreement and payable by the Stockholders from the amounts paid to the
Stockholders hereunder, the Company has not incurred or become liable for any
broker's commission or finder's fee relating to or in connection with the
transactions contemplated by this Agreement.
3.15 Corporate Records; Copies of Documents. The copies of the
corporate records of the Company and each of its Subsidiaries, as made
available to Buyer for review, are true and complete copies of the originals of
such documents. The Company has made available for inspection and copying by
Buyer and its counsel true and correct copies of all documents referred to in
this Section or in the Schedules delivered to Buyer pursuant to this Agreement.
3.16 Employee Benefit Programs.
(a) Schedule 3.16 lists every Employee Program (as
defined below) that is maintained (as defined below) by the Company or any
Subsidiary at the date hereof.
(b) Each Employee Program maintained by the Company or
any Subsidiary as of the date hereof and which is intended to qualify under
Section 401(a) or 501(c)(9) of the Code has received a favorable determination
or approval letter from the IRS regarding its qualification under such section.
(c) The Company does not know and has no reason to know,
of any material failure of any party to comply with any laws applicable to the
Employee Programs by the Company or any Subsidiary as of the date hereof. With
respect to any Employee Program ever maintained by the Company or any
Subsidiary as of the date hereof, there has occurred no "prohibited
transaction," as defined in Section 406 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or Section 4975 of the Code, or
breach of any material duty under ERISA or other applicable law (including,
without limitation, any health care continuation requirements or any other tax
law requirements, or conditions to favorable tax treatment, applicable to such
plan), which could result, directly or indirectly, in any material taxes,
penalties or other liability to the Company, any Subsidiary or Buyer. No
litigation, arbitration, or governmental administrative proceeding (or
investigation) or other proceeding (other than those relating to routine claims
for benefits) is pending or, to the knowledge of the Company, threatened with
respect to any such Employee Program.
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(d) Neither the Company nor any Affiliate (as defined
below) (i) has ever maintained any Employee Program which has been subject to
title IV of ERISA (including, but not limited to, any Multiemployer Plan (as
defined below)) or (ii) has ever provided health care or any other non-pension
benefits to any employees after their employment is terminated (other than as
required by part 6 of subtitle B of title I of ERISA or applicable state laws)
or has ever promised to provide such post-termination benefits.
(e) With respect to each Employee Program maintained by
the Company or any Subsidiary as of the date hereof, complete and correct
copies of the following documents (if applicable to such Employee Program) have
previously been delivered to Buyer: (i) all documents embodying or governing
such Employee Program, and any funding medium for the Employee Program
(including, without limitation, trust agreements) as they may have been
amended; (ii) the most recent IRS determination or approval letter with respect
to such Employee Program under Code Sections 401 or 501(c)(9); (iii) the two
most recently filed IRS Forms 5500, with all applicable schedules and
accountants' opinions attached thereto; (iv) the summary plan description for
such Employee Program and all modifications thereto; and (v) any insurance
policy (including any fiduciary liability insurance policy) related to such
Employee Program.
(f) For purposes of this section:
(i) "Employee Program" means (A) all employee
benefit plans within the meaning of ERISA Section 3(3), including, but not
limited to, multiple employer welfare arrangements (within the meaning of ERISA
Section 3(4)), plans to which more than one unaffiliated employer contributes
and employee benefit plans (such as foreign or excess benefit plans) which are
not subject to ERISA; and (B) all stock option plans, bonus or incentive award
plans, severance pay policies or agreements, deferred compensation agreements,
supplemental income arrangements, vacation plans, and all other employee
benefit plans, agreements, and arrangements not described in (A) above. In the
case of an Employee Program funded through an organization described in Code
Section 501(c)(9), each reference to such Employee Program shall include a
reference to such organization.
(ii) An entity "maintains" an Employee Program if
such entity sponsors, contributes to, or provides (or has promised to provide)
benefits under such Employee Program, or has any obligation (by agreement or
under applicable law) to contribute to or provide benefits under such Employee
Program, or if such Employee Program provides benefits to or otherwise covers
employees of such entity, or their spouses, dependents, or beneficiaries.
(iii) An entity is an "Affiliate" of the Company if
it would have ever been considered a single employer with the Company or any of
its Subsidiaries under ERISA Section 4001(b) or part of the same "controlled
group" as the Company or any of its Subsidiaries for purposes of ERISA Section
302(d)(8)(C).
(iv) "Multiemployer Plan" means a (pension or
non-pension) employee benefit plan to which more than one employer contributes
and which is maintained pursuant to one or more collective bargaining
agreements.
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3.17 Labor Disputes. Except as set forth on Schedule 3.17 (i)
there is no labor strike, dispute, or work stoppage or lockout pending or, to
the best of the knowledge of the Company, organizing or demand for recognition,
or, to the best of the knowledge of the Company, threatened against or
affecting the Company or any Subsidiary; (ii) no question concerning
representation exists respecting employees of the Company or any Subsidiary;
(iii) there is no unfair labor practice charge or complaint against the Company
or any Subsidiary, or to the best of the knowledge of the Company, threatened
against the Company or any Subsidiary before the National Labor Relations
Board; (iv) there is no pending or, to the best of the knowledge of the
Company, threatened grievance under any applicable collective bargaining
agreement; (v) neither the Company nor any Subsidiary has received notice of
the intent of any federal, state or local agency responsible for the
enforcement of labor or employment laws to conduct an investigation with
respect to or relating to the Company and its Subsidiaries and, to the best of
the knowledge of the Company, no such investigation is in progress; and (vi)
during the past two years there have been no grievance or arbitration
proceedings under any collective bargaining agreements concerning the Company
or any Subsidiary.
3.18 Environmental Matters.
Except as set forth in Schedule 3.18 or except as would not
reasonably be expected to result in a Material Adverse Effect, to the best of
the Company's knowledge, without any investigation:
(a) Each of the Company and its Subsidiaries is presently
in compliance with all Environmental Laws applicable to the real property owned
or leased by the Company or any Subsidiary or to any facilities or improvements
or any operations or activities thereon.
(b) There has been no release or threat of release of any
Hazardous Material on, in, under, or from the real property owned or leased by
the Company or any Subsidiary.
(c) No lien has been imposed on the real property owned
or leased by the Company or any Subsidiary by any governmental agency at the
federal, state, or local level in connection with the presence of any Hazardous
Material.
(d) Neither the Company nor any Subsidiary has: (i)
entered into or been subject to any consent decree, compliance order, or
administrative order with respect to the real property owned or leased by the
Company or any Subsidiary or (ii) received any request for information, notice,
demand letter, administrative inquiry, or complaint with respect to
environmental matters relating to the real property owned or leased by the
Company or any Subsidiary.
(e) The Company or a Subsidiary has all environmental
permits necessary for the real property owned or leased by the Company or any
Subsidiary.
(f) For purposes of this Agreement, (i) "Hazardous
Material" shall mean and include any hazardous waste, hazardous material,
hazardous substance, petroleum product, oil, toxic substance, pollutant or
contaminant, as defined or regulated under any Environmental Law; (ii)
"Hazardous Waste" shall mean and include any hazardous waste as defined or
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regulated under any Environmental Law; and (iii) "Environmental Law" shall mean
any environmental or health and safety-related law, regulation, rule,
ordinance, or By-law at the foreign, federal, state, or local level.
3.19 List of Directors and Officers. Schedule 3.19 hereto contains
a true and complete list of all current directors and officers of the Company
and each of its Subsidiaries.
3.20 Absence of Certain Changes. Since the date of the Base
Balance Sheet, the business conducted by the Company has been conducted only in
the ordinary course. Except as set forth in Schedule 3.20 there has not been:
(a) any damage, destruction or loss, whether or not
covered by insurance, resulting in a Material Adverse Effect;
(b) any material increase in the compensation or benefits
payable or to become payable to any employee of the Company or any Subsidiary;
(c) any change in the Company's methods of maintaining
its books, accounts or business records;
(d) any sale, transfer or disposal or purchase by the
Company or any Subsidiary of any properties or assets with a value in excess of
$100,000; or
(e) any dividend or other distribution in respect of
capital stock of the Company to any Stockholder.
3.21 Affiliate Transactions. Except as set forth on Schedule 3.21,
as of the Closing, no affiliate of the Company or a Subsidiary or a Stockholder
nor any officer or director of any thereof, will have any interest in any
property used in or pertaining to the business of the Company and neither the
Company nor its Subsidiaries will be indebted or otherwise obligated to any
such person, except for matters disclosed in this Agreement and amounts due
under normal arrangements applicable to all employees generally as to salary or
reimbursement of ordinary business expenses not unusual in amount or
significance.
3.22 Permits. The Company and its Subsidiaries hold all permits
that are required by any governmental entity to permit each to conduct their
respective businesses as now conducted, and all such permits are valid and in
full force and effect and will remain so upon consummation of the transactions
contemplated by this Agreement in each case except where the failure to so hold
or to be valid and in full force and effect would not have a Material Adverse
Effect on the Company as a whole. To the Company's knowledge, no suspension,
cancellation or termination of any of such permits is threatened or imminent
that could reasonable be expected to have a Material Adverse Effect.
3.23 Compliance with Law. The Company and its Subsidiaries are
organized and have conducted their business in accordance with applicable laws,
and the forms, procedures and practices of the Company and its Subsidiaries are
in compliance with all such laws, to the extent applicable, the failure to so
conduct or the violation of which could reasonably be expected to
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have a Material Adverse Effect (it being agreed that "legal and non-conforming"
signs shall not be in violation of law for purposes of this Section 3.23).
3.24 No Undisclosed Liabilities. To the best knowledge of the
Company, the Company and its Subsidiaries do not have any liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise, of
a type required by generally accepted accounting principles to be reflected on
a balance sheet except (a) liabilities or obligations reflected in any of the
Unaudited Financial Statements and (b) liabilities or obligations which would
not in the aggregate have a Material Adverse Effect on the Company as a whole.
3.25 Disclaimer of Other Representations and Warranties; Knowledge;
Disclosure.
(a) None of the Company, its representatives, including,
without limitation, Chase Securities, Inc. ("Chase") or the Stockholders have
made any representations or warranties relating to the Company or the
Subsidiaries or the business of the Company or otherwise in connection with the
transactions contemplated hereby other than those expressly set forth herein in
this Section 3 or Section 4. Without limiting the generality of the foregoing,
none of the Company, Chase, other representatives of the Company or the
Stockholders has made, and shall not be deemed to have made, any
representations or warranties in the materials relating to the business of the
Company made available to Buyer by Chase or in any presentation of the business
of the Company in connection with the transactions contemplated hereby, and no
statement contained in any of such materials or made in any such presentation
shall be deemed a representation or warranty hereunder or otherwise. It is
understood that any cost estimates, projections or other predictions, any data,
any financial information or any memoranda or offering materials or
presentations, including but not limited to the materials made available by
Chase and the Company, are not and shall not be deemed to be or to include
representations or warranties of the Company. No person has been authorized by
the Stockholders or the Company to make any representation or warranty relating
to the Stockholders, the Company, the business of the Company or otherwise in
connection with the transactions contemplated hereby and, if made, such
representation or warranty must not be relied upon as having been authorized by
the Stockholders or the Company.
(b) Whenever a representation or warranty made by the
Company herein refers to the knowledge of the Company, such knowledge shall be
deemed to consist only of the actual knowledge on the date hereof and on the
Closing Date, as applicable, of the senior management of the Company. The
Company has not undertaken, nor shall the Company have any duty to undertake,
any investigation concerning any matter as to which a representation or
warranty is made as to the knowledge of the Company.
(c) Notwithstanding anything to the contrary contained in
this Agreement or in any of the Schedules, any information disclosed in one
Schedule shall be deemed to be disclosed in all Schedules. Certain information
set forth in the Schedules is included solely for informational purposes and
may not be required to be disclosed pursuant to this Agreement. The disclosure
of any information shall not be deemed to constitute an acknowledgment that
such information is required to be disclosed in connection with the
representations and warranties made by the Company in this Agreement or that it
is material, nor shall such information be deemed to establish a standard of
materiality.
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(d) From time to time prior to the Closing, the Company and
the Stockholders may amend or supplement the Schedules attached to this
Agreement with respect to any matter that, if existing or occurring at or prior
to the Closing Date, would have been required to be set forth or described on
such a Schedule or that is necessary to complete or correct any information in
any representation or warranty contained in this Section 3 or Section 4 hereof,
except that no such amendment or supplement shall reflect a matter which would
represent or cause a Material Adverse Effect.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF STOCKHOLDERS.
As a material inducement to Buyer to enter into this Agreement and
consummate the transactions contemplated hereby, each Stockholder hereby
severally, and not jointly, makes to Buyer each of the representations and
warranties set forth in this Section 4 with respect to such Stockholder.
4.1 Company Securities. Such Stockholder owns of record and
beneficially the number of the Company Securities set forth opposite such
Stockholder's name in Exhibit A. Such Company Securities are, and when
delivered by such Stockholder to Buyer pursuant to this Agreement will be, free
and clear of any and all liens, encumbrances, charges or claims and upon
payment for such Company Securities pursuant to Section 2 hereof at Closing,
Buyer will acquire good and valid title to the Company Securities being sold by
such Stockholder.
4.2 Authority.
(a) Such Stockholder has full right, authority, power and
capacity to enter into this Agreement and each agreement, document and
instrument to be executed and delivered by or on behalf of such Stockholder
pursuant to this Agreement and to carry out the transactions contemplated
hereby and thereby. This Agreement and each agreement, document and instrument
executed and delivered by such Stockholder pursuant to this Agreement
constitutes a valid and binding obligation of such Stockholder, enforceable in
accordance with their respective terms, and has been duly authorized by all
necessary corporate action of each Stockholder which is a corporation, and such
Stockholder has full power and authority to transfer, sell and deliver the
Company Securities to Buyer pursuant to this Agreement.
(b) The execution and delivery of this Agreement by such
Stockholder do not, and the performance of this Agreement by such Stockholder
and the consummation of the transactions contemplated by this Agreement, will
not (i) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, license, contract,
agreement or other instrument or obligation to which such Stockholder is a
party or by which it or its properties or assets may be bound or (ii) violate
any order, judgment, writ, injunction, decree, statute, treaty, rule or
regulation applicable to such Stockholder or its properties or assets.
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4.3 Termination of Management Options. Each Stockholder who holds
Management Options hereby acknowledges and agrees that such Managements Option
shall terminate effective as of the Closing.
4.4 Noncompetition. Each of Messrs. John C Stanley IV and A.B.
Isbell (together, the "Founding Stockholders" and, each a "Founding
Stockholder"), in order to induce Buyer to enter into this Agreement, severally
covenants and agrees that neither Founding Stockholder nor any corporation,
partnership, limited liability company, trust or other entity owned or
controlled by a Founding Stockholder will, directly or indirectly, during the
period commencing with the Closing Date and terminating on the first
anniversary of the Closing Date, (a) disclose or furnish to any person, other
than the Buyer, any proprietary information of, or confidential information
relating to the business of the Company, except as required by law; or (b)
engage or participate in, be employed by or assist in any manner or in any
capacity, or have any interest in or make any loan to any person, firm,
corporation or business which engages in the outdoor advertising business in
the counties in which the Company has operations as of the Closing Date. Each
Founding Stockholder agrees that this provision is reasonable in view of the
nature of the Company Securities being purchased and the relevant counties in
which the Company has operations and that any breach hereof would result in
continuing and irreparable harm to Buyer and would adversely affect the value
to Buyer of the Company Securities. The sole exception to this restriction
shall be that either Founding Stockholder may make passive investments in a
competitive enterprise the shares of which are publicly traded if such
investment constitutes less than one percent of the outstanding capital stock
or other interests in the equity of such enterprises.
SECTION 5. COVENANTS OF THE COMPANY.
5.1 Making of Covenants and Agreements. The Company hereby makes
the covenants and agreements set forth in this Section 5.
5.2 Affirmative Covenants Pending Closing. The Company shall:
(a) Preservation of Personnel. Use reasonable efforts to
preserve intact and keep available the services of the Company's or the
Subsidiaries' present management employees;
(b) Insurance. Use reasonable efforts to keep in effect
casualty, public liability, worker's compensation and other insurance policies
through the Closing Date, in coverage amounts not less than the same at the
date of this Agreement; and
(c) Ordinary Course of Business. Operate the Company's
business solely in the ordinary course and in the normal, usual and customary
manner, in accordance with past practice.
5.3 Negative Covenants Pending Closing. Without the prior written
consent of Buyer, the Company shall not and shall cause each Subsidiary not to:
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(a) Disposition of Assets. Sell, transfer, mortgage,
pledge or create or permit to be created any security interest on, any of the
Company's or the Subsidiaries' assets other than in the ordinary course of
business;
(b) Dividends; Distributions. Declare, set aside or pay
any dividends or other distribution (whether in cash, stock or property or any
combination thereof) in respect of any of its capital stock or repurchase,
redeem or otherwise acquire any of its capital stock;
(c) Indebtedness. Incur any indebtedness for borrowed
money, guarantee any indebtedness, issue or sell debt securities or warrants or
rights to acquire any debt securities, guarantee (or become liable for) any
debt of others, make any loans, advances or capital contributions, mortgage,
pledge or otherwise encumber any material assets, create or suffer any material
lien thereupon other than working capital borrowings pursuant to credit
facilities in existence on the date hereof;
(d) Compensation. Increase the rates of direct
compensation payable or to become payable to any officer, employee, agent or
consultant of the Company or any Subsidiary, except in the ordinary course of
business or in accordance with the existing terms of contracts entered into
prior to the date of this Agreement or increase the rates of bonus compensation
payable or to become payable to any officer, employee, agent or consultant of
such Company or Subsidiary, except in the ordinary course of business and in
accordance with the existing terms of contracts entered into prior to the date
of this Agreement;
(e) Capital Stock. Make any change in the number of
shares of such Company's capital stock authorized, issued or outstanding or
grant any option, warrant or other right to purchase, or to convert any
obligation into, shares of the Company's capital stock; provided, however, that
any outstanding option, warrant or Preferred LLC Interest may be exercised or
converted in accordance with its terms for or to shares of capital stock;
(f) Charter and Bylaws. Amend the Certificate of
Incorporation, Bylaws or limited liability company operating agreement of the
Company or any Subsidiary;
(g) Acquisitions. Make any material acquisition or
capital expenditure other than in the ordinary course of business; or
(h) Accounting Principles. Change any of the accounting
principles or practices used by it (except as required by generally accepted
accounting principles).
5.4 Authorization from Others. The Company shall use its
reasonable efforts to perform and fulfill all conditions and obligations on its
part to be performed and fulfilled under this Agreement. The Company will use
reasonable efforts to obtain all authorizations, consents and permits of others
required to permit the consummation by the Stockholders and the Company of the
transactions contemplated by this Agreement.
5.5 Access and Information. The Company shall permit Buyer and
its representatives after the date of this Agreement to have reasonable access
during normal business hours, upon reasonable advance notice, to the books and
records of the Company and the Subsidiaries for the
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purpose of verifying the representations and warranties of the Company
hereunder, provided that such access shall be conducted by Buyer and its
representatives in such a manner as not to interfere unreasonably with the
business or operations of the Company.
5.6 Hart-Scott-Rodino Filings. Within five (5) business days of
the date of this Agreement, the Company will make any filings required under
the Hart-Scott-Rodino Act in connection with the transactions contemplated by
this Agreement.
5.7 No Solicitation. Unless this Agreement is terminated in
accordance with its terms, neither the Company nor the Stockholders shall
directly or indirectly solicit, knowingly encourage or enter into any agreement
with respect to or participate in negotiations with, provide any confidential
information to, or otherwise cooperate in any way in connection with, or enter
into any agreement with respect to, any third party concerning any merger or
any other business combination, sale of all or any substantial portion of the
assets or stock of the Company.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF BUYER.
6.1 Making of Representations and Warranties. As a material
inducement to the Company and the Stockholders to enter into this Agreement and
consummate the transactions contemplated hereby, Buyer hereby makes the
representations and warranties to the Company and the Stockholders contained in
this Section 6.
6.2 Organization of Buyer. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of Delaware with full
corporate power to own or lease its properties and to conduct its business in
the manner and in the places where such properties are owned or leased or such
business is conducted by it.
6.3 Authority of Buyer; Consents and Approvals.
(a) Buyer has full right, authority and power to enter
into this Agreement, and each agreement, document and instrument to be executed
and delivered by Buyer pursuant to this Agreement and to carry out the
transactions contemplated hereby. The execution, delivery and performance by
Buyer of this Agreement, and each such other agreement, document and instrument
have been duly authorized by all necessary corporate action of Buyer, including
the approval of the Board of Directors of Buyer, and no other action on the
part of Buyer is required in connection therewith. This Agreement, and each
other agreement, document and instrument executed and delivered by Buyer
pursuant to this Agreement constitute, or when executed and delivered will
constitute, valid and binding obligations of Buyer enforceable in accordance
with their terms.
(b) The execution and delivery of this Agreement by Buyer
do not, and the performance of this Agreement by Buyer will not, require any
filing with or notification to, or any consent, approval, authorization or
permit from, any Governmental Entity except (i) for applicable requirements of
the Exchange Act, the Hart-Scott-Rodino Act, or other applicable anti-trust
laws, or (ii) where failure to obtain such consents, approvals, authorizations
or permits, or to make such filings or notifications, would not prevent or
delay consummation of the
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transactions contemplated by this Agreement or otherwise prevent Buyer from
performing its obligations under this Agreement and would not, individually or
in the aggregate, have a material adverse effect on the business, financial
condition or results of operations of Buyer.
(c) The execution and delivery of this Agreement by Buyer
do not, and the performance of this Agreement by Buyer and the consummation of
the transactions contemplated by this Agreement, will not (i) conflict with or
violate the Certificate of Incorporation or By-Laws (or other organizational
documents, as applicable) of Buyer or of any of its subsidiaries, (ii) result
in a violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, license, contract, agreement or other
instrument or obligation to which Buyer or any of its subsidiaries is a party
or by which any of them or any of their respective properties or assets may be
bound, excepting such violations, breaches and defaults which would not
individually or in the aggregate have a Material Adverse Effect, or (iii)
violate any order, judgment, writ, injunction, decree, statute, treaty, rule or
regulation applicable to Buyer or any of its subsidiaries or any of their
respective properties or assets, in each case, excepting such conflicts,
violations, breaches, defaults, terminations, cancellations or accelerations
which would not individually or in the aggregate have a material adverse effect
on the business, financial condition or results of operations of Buyer.
6.4 Litigation. There is no litigation pending or, to its
knowledge, threatened against Buyer which would prevent or hinder the
consummation of the transactions contemplated by this Agreement.
6.5 Finder's Fee. Buyer has not incurred or become liable for any
broker's commission or finder's fee relating to or in connection with the
transactions contemplated by this Agreement.
6.6 Financial Ability to Perform. Buyer has sufficient funds to
purchase the Company Securities and the pay the amount of the Gross Enterprise
Value on the terms and conditions contemplated by this Agreement and has
heretofore furnished the Company and the Stockholders with sufficient evidence
of its ability to purchase the Company Securities and to pay the amount of the
Gross Enterprise Value. Buyer acknowledges and agrees that Buyer's performance
of its obligations under this Agreement is not in any way contingent upon the
availability of financing to Buyer.
6.7 Acknowledgment of Buyer. Buyer acknowledges that it is a
sophisticated investor, that it has undertaken a full investigation of the
Company and that it has only a contractual relationship with the Company and
the Stockholders, based solely on the terms of this Agreement.
SECTION 7. COVENANTS OF BUYER.
7.1 Making of Covenants and Agreement. Buyer hereby makes the
covenants and agreements set forth in this Section 7.
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7.2 Confidentiality. Buyer agrees that, all information provided
to Buyer pursuant hereto shall be subject to that certain confidentiality
agreement dated July 24, 1998 executed by Buyer (the "Confidentiality
Agreement").
7.3 Hart-Scott-Rodino Filings. Within five (5) business days of
the date of this Agreement, Buyer will make any filings required under the
Hart-Scott-Rodino Act in connection with the transactions contemplated by this
Agreement. Buyer shall pay all filings and related fees in connection with any
such filings which must be made by any of the parties. Buyer hereby covenants
and agrees to use its best efforts to secure termination of any waiting periods
under the Hart-Scott-Rodino Act, including without limitation, if necessary,
promptly offering to sell any assets of Buyer as may be necessary to secure
such termination.
7.4 Consummation of Agreement. Buyer shall use its reasonable
efforts to perform and fulfill all conditions and obligations on its part to be
performed and fulfilled under this Agreement. Buyer will use reasonable
efforts to obtain all authorizations/covenants and permits required to or
permit the consummation by Buyer of the transactions contemplated by this
Agreement.
7.5 Indebtedness of the Company. Buyer hereby covenants and
agrees that, at or after the Closing, Buyer will pay or offer to pay the
Indebtedness Amount in accordance the respective terms of the obligations
giving rise to the Indebtedness Amount to the holders of any such indebtedness
in accordance with its terms.
7.6 Employee Matters.
(a) Buyer acknowledges that consummation of the
transactions contemplated by this Agreement will constitute a change in control
of the Company (to the extent such concept is applicable) for the purposes of
all employee or employee benefit agreements, contracts, plans, programs,
policies or arrangements of the Company as set forth in Schedule 7.6. From and
after the Closing, Buyer and the Company will honor in accordance with their
terms all cash bonus plans, stock option and stock incentive plans, employment
agreements, consulting agreements, change-of-control agreements, and severance
agreements or plans between the Company or any of its Subsidiaries and any
officer, director, or employee of the Company or any of its subsidiaries in
effect prior to the Closing Date which are set forth on Schedule 7.6.
(b) From and after the Closing, each employee of the
Company or any of its Subsidiaries shall be eligible to participate in any and
all employee benefit plans of Buyer generally made available to similarly
situated employees thereof on the same basis and without distinction. To the
extent that any employee of the Company or any of its Subsidiaries becomes a
participant in any such plan, such employee shall be given credit under such
plans for all service prior to the Closing with the Company and its
Subsidiaries, or any predecessor employer (to the extent such credit was given
by the Company or a Subsidiary under a similar plan) and prior to the time such
employee becomes such a participant, for all purposes (including, without
limitation, eligibility, waiting periods and vesting, excluding benefit
accruals). In addition, if any employees of the Company or any of its
Subsidiaries employed as of the Closing become covered by a medical plan of
Buyer or any of its affiliates, such medical plan shall not impose
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any exclusion on coverage for preexisting medical conditions with respect to
these employees, which exclusion is not generally applicable to employees of
Buyer or any of its affiliates.
(c) This Section 7.6 is intended for the irrevocable
benefit of, and to grant third party rights to, the employees of the Company or
any Subsidiary employed as of the Closing and shall be binding on all
successors and assigns of Buyer and the Company. Each of the employees of the
Company or any Subsidiary employed as of the Closing shall be entitled to
enforce the covenants contained in this Section 7.6. Notwithstanding the
foregoing, (i) but subject to the terms of the agreements described in Schedule
7.6, nothing in this Agreement shall be interpreted or construed to confer upon
the employees of the Company or any Subsidiary any right with respect to
continuance of employment by the Company, any Subsidiary or Buyer, nor shall
this Agreement interfere in any way with the right of the Company, any
Subsidiary or Buyer to terminate the employee's employment at any time and (ii)
nothing in this Agreement shall interfere in any way with the right of Buyer to
amend, terminate or otherwise discontinue any or all plans, practices or
policies of Buyer in effect from time to time. Finally, the parties hereto
agree that Buyer in its sole discretion shall determine which employees are
similarly situated; provided, however, that such determination shall be made in
good faith and may not be based on whether the employee was, prior to the
Closing, an employee of the Company or any of its Subsidiaries.
7.7 Books and Records. Buyer will, and will cause the Company and
its Subsidiaries to, until the seventh anniversary of the Closing Date, retain
all books, records and other documents pertaining to the businesses of the
Company and its Subsidiaries in existence on the Closing Date and to make the
same available for inspection and copying by the Stockholders or any affiliate
of the Stockholders at the expense of the Stockholders during the normal
business hours of Buyer, the Company or its Subsidiaries, as applicable, upon
reasonable request and upon reasonable notice. No such books, records or
documents shall be destroyed after the seventh anniversary of the Closing Date
by Buyer, the Company or its Subsidiaries without first advising the
Stockholders in writing and giving the Stockholders a reasonable opportunity to
obtain possession thereof.
7.8 Severance Payments. At the Closing, Buyer shall make the
payments described in Schedule 7.8 hereto.
SECTION 8. CONDITIONS.
8.1 Conditions to the Obligations of Buyer. The obligation of
Buyer to consummate this Agreement and the transactions contemplated hereby are
subject to the fulfillment, prior to or at the Closing, of the following
conditions precedent:
(a) Representations; Warranties; Covenants. Each of the
representations and warranties of the Company and the Stockholders contained in
Sections 3 and 4 shall be true and correct in all material respects as of the
date of this Agreement and as of the Closing Date as though made on and as of
the Closing; (except for such representations and warranties that are as of a
specific date, which representations and warranties shall be true and correct
in all material respects as of such date); and the Company and each of the
Stockholders shall, on or before the
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Closing, have performed in all material respects all of their obligations
hereunder which by the terms hereof are to be performed on or before the
Closing.
(b) No Injunction. No injunction, stay or restraining
order shall be in effect prohibiting the consummation of the transactions
contemplated by this Agreement.
(c) Hart-Scott-Rodino. All required filings under the
Hart-Scott-Rodino Act shall have been completed and all applicable time
limitations under such Act shall have expired without a request for further
information by the relevant federal authorities under such Act, or in the event
of such a request for further information, the expiration of all applicable
time limitations under the Act shall have occurred without the objection of
such federal authorities.
(d) Resignations. At or prior to the Closing, the
Company shall have delivered by Buyer the resignations of each director of the
Company.
(e) Releases. At the Closing, each officer and director
of OCI and the Subsidiaries listed on Schedule 3.19 hereto shall have delivered
to Buyer general releases of the Company and its Subsidiaries effective upon,
and subject to, the Closing, except with respect to the matters disclosed in
Items 1, 2 and 3 of Schedule 7.6 hereto and the matters disclosed in Schedule
3.21 hereto.
8.2 Conditions to Obligations of the Company and the Stockholders.
The obligation of the Company and the Stockholders to consummate this Agreement
and the transactions contemplated hereby is subject to the fulfillment, prior
to or at the Closing, of the following conditions precedent:
(a) Representations; Warranties; Covenants. Each of the
representations and warranties of Buyer contained in Section 6 shall be true
and correct in all material respects as though made on and as of the Closing
and Buyer shall, on or before the Closing, have performed all of its
obligations hereunder which by the terms hereof are to be performed on or
before the Closing.
(b) No Litigation. No injunction, stay or restraining
order shall be in effect prohibiting the consummation of the transactions
contemplated by this Agreement.
(c) Hart-Scott-Rodino. All required filings under the
Hart-Scott-Rodino Act shall have been completed and all applicable time
limitations under such Act shall have expired without a request for further
information by the relevant federal authorities under such Act, or in the event
of such a request for further information, the expiration of all applicable
time limitations under the Act without the objection of such federal
authorities.
SECTION 9. TERMINATION OF AGREEMENT; RIGHTS TO PROCEED.
9.1 Termination. At any time prior to the Closing, this Agreement
may be terminated as follows:
(a) by mutual written consent of all of the parties to
this Agreement;
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(b) by Buyer, if not in breach of any of the terms of
this Agreement, pursuant to written notice by Buyer to the Company and the
Stockholders' Representative, if any of the conditions set forth in Section 8.1
of this Agreement have not been satisfied at the Closing, such written notice
to set forth such conditions which have not been satisfied;
(c) by the Company and the Stockholders, if not in breach
of any of the terms of this Agreement, pursuant to written notice by the
Company to Buyer, if any of the conditions set forth in Section 8.2 of this
Agreement have not been satisfied at the Closing, such written notice to set
forth such conditions which have not been satisfied;
(d) by Buyer, if not in breach of any of the terms of
this Agreement, pursuant to written notice by Buyer to the Company and the
Stockholders' Representative of a the occurrence of a breach of this Agreement
by the Company or the Stockholders, if such breach is not cured within five (5)
business days of delivery of the notice referenced in this subsection (iv);
(e) by the Company and the Stockholders, if not in breach
of any of the terms of this Agreement, pursuant to written notice by the
Company of the occurrence of a breach of this Agreement by Buyer, if such
breach is not cured within five (5) business days of delivery of the notice
referenced in this subsection (v); and
(f) by either the Company and the Stockholders, on the
one hand, or Buyer, on the other, if the party seeking to terminate this
Agreement is not in breach of any of the terms of this Agreement, if the
Closing has not occurred prior to December 31, 1998.
9.2 Effect of Termination. All obligations of the parties
hereunder shall cease upon any termination pursuant to Section 9.1, provided,
however, that (a) the provisions of this Section 9 and Section 7.2 hereof shall
survive any termination of this Agreement; and (b) except as provided in
Section 10.5(a) below, nothing herein shall relieve any party from any
liability for a material error or omission in any of its representations or
warranties contained herein or a material failure to comply with any of its
covenants, conditions or agreements contained herein.
9.3 Waiver; Extension of Time for Performance. The Company and
the Stockholders' Representative may extend the time for the performance of any
of the obligations or other acts of Buyer hereunder, waive any inaccuracies in
the representations and warranties of Buyer contained herein or in any document
delivered pursuant hereto, or waive compliance by Buyer with any of the
agreements or conditions contained herein. Any such extension or waiver shall
be valid if set forth in an instrument in writing signed by the Company or the
Stockholders' Representative. Buyer may extend the time for the performance of
any of the obligations or other acts of the Company or the Stockholders
hereunder, waive any inaccuracies in the representations and warranties of the
Company or the Stockholders contained herein or in any document delivered
pursuant hereto, or waive compliance by the Company or the Stockholders with
any of the agreements or conditions contained herein. Any such extension or
waiver shall be valid if set forth in an instrument in writing signed by Buyer.
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SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION;
OTHER REMEDIES.
10.1 Survival. The respective representations and warranties of
the Company, the Stockholders and of Buyer hereunder shall not survive the
Closing; provided, however, the representations and warranties in Sections 3.3,
3.7, 4.1 and 4.2 (the "Surviving Representations") shall survive the Closing
for a period of one (1) year.
10.2 Information. Buyer hereby acknowledges each of the following:
(a) Buyer has received all materials relating to the
businesses of the Company and each Subsidiary which it has requested and has
been afforded the opportunity to obtain any additional information necessary to
verify the accuracy of any such information or of any representation or
warranty made by the Company and the Stockholders hereunder or to otherwise
evaluate the merits of the transactions contemplated hereby; and
(b) The Company, the Stockholders and their
representatives have answered to Buyer's satisfaction all inquiries that Buyer
or its representatives have made concerning the businesses of the Company and
each Subsidiary or otherwise relating to the transactions contemplated hereby.
10.3 Indemnification of Buyer and Its Affiliates. Each Stockholder
severally, and not jointly, agrees to defend, indemnify and hold harmless Buyer
and its partners, shareholders, officers, directors, employers and agents
(individually, a "Buyer Indemnitee" and collectively, the "Buyer Indemnitees"),
against and in respect of:
(a) any and all losses, damages, deficiencies or
liabilities ("Losses") caused by, resulting or arising from or otherwise
relating to (A) any failure of any of the Surviving Representations of the
Company or any Stockholder contained herein to be true in all material respects
when made and as at the Closing Date, it being understood that to the extent
that any such representations and warranties were made as of a specified date
the same shall apply only to the failure of such representations and warranties
to be true in all material respects as of such specified date or (B) the
failure of any Stockholder to comply in all material respects with any
undertaking or other agreement or obligation hereunder to be performed,
fulfilled or otherwise complied with by such Stockholder after the Closing; and
(b) any and all actions, suits, proceedings, claims,
liabilities, demands, assessments, judgments, reasonable costs and expenses
(all together "Costs"; Costs and Losses together shall hereinafter be referred
to as "Damages"), including reasonable attorneys' fees, incident to any of the
foregoing or such indemnification;
provided, however, that if any action, suit, proceeding, claim, liability,
demand or assessment shall be asserted against any Buyer Indemnitee in respect
of which such Buyer Indemnitee proposes to demand indemnification, such Buyer
Indemnitee shall notify the Stockholders' Representative thereof within a
reasonable period of time (and in no event more than fifteen (15) days) after
assertion thereof. The Stockholders shall have the right within thirty (30)
days after receipt of such notice to assume the control of the defense,
compromise or settlement of any such action, suit, proceeding, claim,
liability, demand or assessment, including, at their own expense, employment of
counsel and at any time thereafter to exercise on behalf of the Buyer
Indemnitee any rights which may mitigate any of the foregoing; provided,
however, that if the Stockholders
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shall have exercised their right to assume such control, the Buyer Indemnitee
(i) may, in its sole discretion, employ counsel to represent it (in addition to
counsel employed by the Stockholders, and in the latter case, at the Buyer
Indemnitee's sole expense) in any such matter, and in such event counsel
selected by the Stockholders shall be required to cooperate with such counsel
of the Buyer Indemnitee in such defense, compromise or settlement for the
purpose of informing and sharing information with such Buyer Indemnitee and
(ii) will, at its own expense, make available to the Stockholders those
employees of Buyer or any affiliate of Buyer (including but not limited to the
Company and its Subsidiaries) whose assistance, testimony or presence is
necessary to assist the Stockholders in evaluating and in defending any such
action, suit, proceeding, claim, liability, demand or assessment; provided,
however, that any such access shall be conducted in such a manner as not to
interfere unreasonably with the operations of the businesses of Buyer and its
affiliates (including but not limited to the Company and its Subsidiaries).
10.4 Indemnification of the Stockholders and any Affiliate of the
Stockholders. Buyer agrees to defend, indemnify and hold harmless the
Stockholders and their partners, shareholders, officers, directors, employers
and agents (individually, a "Stockholder Indemnitee", and collectively, the
"Stockholder Indemnitees"), against and in respect of:
(a) any and all Losses caused by, resulting or arising
from or otherwise relating to (A) any failure of any representation or warranty
of Buyer contained herein to be true in all material respects when made and as
at the Closing Date, it being understood that to the extent that any such
representations and warranties were made as of a specified date the same shall
apply only to the failure of such representations and warranties to be true in
all material respects as of such specified date or (B) the failure of Buyer to
comply in all material respects with any undertaking or other agreement or
obligation hereunder to be performed, fulfilled or otherwise complied with by
Buyer after the closing;
(b) any and all liabilities and obligations of the
Stockholders and any affiliate of the Stockholders assumed by Buyer or any
affiliate of Buyer pursuant to Section 7.5 or 7.6 or otherwise relating to the
businesses of the Company or its Subsidiaries (other than with respect to the
Stockholders' obligations under Section 10.3 hereof); and
(c) any and all Costs, including reasonable attorneys'
fees incident to any of the foregoing or such indemnification;
provided, however, that if any action, suit, proceeding, claim, liability,
demand or assessment shall be asserted against any Stockholder Indemnitee in
respect of which such Stockholder Indemnitee proposes to demand
indemnification, such Stockholder Indemnitee shall notify Buyer thereof within
a reasonable period of time (and in no event more than fifteen (15) days) after
assertion thereof. Buyer shall have the right within thirty (30) days after
receipt of such notice to assume the control of the defense, compromise or
settlement of any such action, suit, proceeding, claim, liability, demand or
assessment, including, at its own expense, employment of counsel and at any
time thereafter to exercise on behalf of Stockholder Indemnitee any rights
which may mitigate any of the foregoing; provided, however, that if Buyer shall
have exercised its right to assume such control, a Stockholder Indemnitee (i)
may, in its sole discretion, employ counsel to represent it (in addition
to-counsel employed by Buyer, and in the latter case, at such
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Stockholder Indemnitees' sole expense) in any such matter, and in such event
counsel selected by Buyer shall be required to cooperate with such counsel of
such Stockholder Indemnitee in such defense, compromise or settlement for the
purpose of informing and sharing information with such Stockholder Indemnitee
and (ii) will, at its own expense, make available to Buyer those employees of
the Stockholders or any affiliate of the Stockholders whose assistance,
testimony or presence is necessary to assist Buyer in evaluating and in
defending any such action, suit, proceeding, claim, liability, demand or
assessment; provided, however, that any such access shall be conducted in such
a manner as not to interfere unreasonably with the operations of the businesses
of the Stockholders or any affiliate of the Stockholders.
10.5 Remedies.
(a) Prior to the Closing, Buyer shall have no right or
remedy to take any action in respect of, and the Company and the Stockholders
shall have no liability to Buyer in respect of, any breach by the Company or
the Stockholders of any of their respective representations or warranties
contained herein or a material failure to comply with any of their covenants,
conditions or agreements contained herein, except (i) to terminate this
Agreement pursuant to Section 9.1 hereof, in which event, the Company and the
Stockholders shall thereupon have no obligation or liability to Buyer
whatsoever hereunder; or (ii) to seek specific performance or injunctive relief
as provided in Section 10.5(c) below.
(b) After the Closing Date, the sole and exclusive remedy
of both Buyer and the Stockholders hereunder or otherwise in connection with
the transactions contemplated hereby shall be restricted to the indemnification
rights set forth in this Section 10. After the Closing, the Stockholders shall
not be entitled to recover from the Company any Damages arising from a breach
of the representations of the Company set forth in Section 3.
(c) The Company and the Stockholders acknowledge and
agree that Buyer will be irreparably damaged in the event of any breach by the
Company or the Stockholders of any of their obligations to sell, assign and
transfer the Company Securities to Buyer. Buyer acknowledges and agrees that
the Company and the Stockholders will be irreparably damaged in the event of
any breach by Buyer of its obligations to purchase the Company Securities from
the Stockholders. Buyer, the Company and the Stockholders agree that remedies
available to Buyer, the Company and the Stockholders at law alone will be
inadequate for any breach described in this Section 10.5(c). Buyer, the
Company and the Stockholders may enforce their rights by an action in a court
of equity for a decree of specific performance or for a temporary or permanent
injunction, without the necessity of showing actual damages or furnishing a
bond or other security, and each of Buyer, the Company and the Stockholders
expressly waives the defense that a remedy in damages will be adequate.
10.6 Certain Limitations. The liability of the Stockholder or
Buyer, as applicable, for claims under this Agreement shall be limited by the
following:
(a) One (1) year after the Closing Date, neither the
Stockholders nor Buyer shall have any further obligations under this Section 10
or this Agreement or otherwise, except for Damages with respect to which a
Buyer Indemnitee has given the Stockholders, or a Stockholder Indemnitee has
given Buyer, as applicable, written notice prior to such date.
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(b) The amount of Damages otherwise recoverable under
this Section 10 shall be reduced to the extent to which any Federal, state,
local or foreign tax liabilities of the Stockholder Indemnitee or the Buyer
Indemnitee, as applicable, or any of their respective affiliates (including in
the case of Buyer, the Company and its Subsidiaries once the Closing has
occurred) is decreased by reason of any Damage in respect of which such
Stockholder Indemnitee or Buyer Indemnitee, as applicable, shall be entitled to
indemnity under this Agreement.
(c) No Damages shall be recoverable by a Stockholder
Indemnitee or Buyer Indemnitee with respect to any matter which is covered by
insurance, to the extent proceeds of such insurance or other third party
indemnitor are paid net of any costs incurred in connection with the collection
thereof and the Stockholder Indemnitee or the Buyer Indemnitee, as the case may
be, hereby agree to exhaust its remedies against all applicable insurers or
indemnitors prior to recovering any amounts hereunder.
(d) Any payment required under this Section 10 paid to
any Buyer Indemnitee or any Stockholder Indemnitee, as the case may be, shall
be treated by Buyer and the Stockholder as a further adjustment of the Purchase
Price for the Company Securities.
(e) (i) Except for Damages resulting from a breach of
the representations and warranties contained in Sections 3.3, 4.1 and 4.2, no
Damages shall be recoverable by a Stockholder Indemnitee or Buyer Indemnitee
pursuant to the provisions of this Section 10, and no claim therefor shall be
asserted for any purpose whatsoever hereunder, unless the aggregate amount of
the Stockholder Indemnitees' or the Buyer Indemnitees', as the case may be,
Damages equals at least $5,000,000 in the aggregate and then only to the extent
such Damages exceed $5,000,000 in the aggregate.
(ii) Except for Damages resulting from a breach of
the representations and warranties contained in Sections 3.3, 4.1 and 4.2,
Damages for breach of which are limited to the purchase price to be paid tothe
applicable Stockholder Indemnitee, the aggregate amount of Damages recoverable
pursuant to the provisions of this Section 10 by all the Buyer Indemnitees in
the aggregate shall be limited to $10,000,000.
(iii) Except for Damages resulting from a breach of
the representations and warranties contained in Sections 3.3, 4.1 and 4.2,
Damages for breach of which are limited to the purchase price to be paid to the
applicable Stockholder Indemnitee, the amount to be payable by any Stockholder
Indemnitee to all Buyer Indemnitees pursuant to the provisions of this Section
10 shall in no event exceed such Stockholder Indemnitee's indemnification cap
as set forth opposite such Stockholder Indemnitee's name in column 8 of Exhibit
A hereto.
(f) No Damages shall be recoverable by any Buyer
Indemnitee pursuant to the provisions of this Section 10, and no claim therefor
shall be asserted for any purpose whatsoever hereunder, which arise out of
facts, circumstances or conditions which are disclosed in this Agreement or any
Schedule or Exhibit hereto or of which any Buyer Indemnitee had knowledge on or
before the Closing Date.
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SECTION 11. MISCELLANEOUS
11.1 Governing Law. This Agreement shall be construed under and
governed by the internal laws of the State of New York without regard to its
conflict of laws provisions.
11.2 Notices. Any notice, request, demand or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been given if delivered or sent by facsimile transmission, upon receipt, or if
sent by registered or certified mail or a nationally-recognized overnight
courier, upon the sooner of the date on which receipt is acknowledged or the
expiration of three days after deposit in United States post office facilities
properly addressed with postage prepaid. All notices to a party will be sent
to the addresses set forth below or to such other address or person as such
party may designate by notice to each other party hereunder:
TO BUYER: Lamar Advertising Company
5551 Corporate Blvd.
P.O. Box 66338
Baton Rouge, LA 70896
Attn: Chief Financial Officer
With a copy to: Kean, Miller, Hawthorne, D'Armond, et. al.
Twenty-Second Floor
One American Place
Baton Rouge, LA 70825
Attn: Ben R. Miller, Jr., Esq.
TO COMPANY: Outdoor Communications, Inc.
512 Taylor Street
Corinth, MS 38834
Attn: Chairman
With a copy to: Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
Attn: David F. Dietz, P.C.
TO ANY STOCKHOLDER: At such Stockholder's address as set forth on
Exhibit A attached hereto.
With a copy to: Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
Attn: David F. Dietz, P.C.
Any notice given hereunder may be given on behalf of any party by his counsel
or other authorized representatives.
11.3 Entire Agreement. This Agreement, including the Schedules and
Exhibits referred to herein and the other writings specifically identified
herein or contemplated hereby, is
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complete, reflects the entire agreement of the parties with respect to its
subject matter, and supersedes all previous written or oral negotiations,
commitments and writings. No promises, representations, understandings,
warranties and agreements have been made by any of the parties hereto except as
referred to herein or in such Schedules and Exhibits or in such other writings;
and all inducements to the making of this Agreement relied upon by either party
hereto have been expressed herein or in such Schedules or Exhibits or in such
other writings.
11.4 Assignability; Binding Effect. This Agreement is not
assignable without the written consent of the parties hereto except, that Buyer
may assign its rights and obligations hereunder to a corporation or partnership
controlling, controlled by or under common control with Buyer upon written
notice to the Company and the Stockholders, and such assignment shall not
relieve Buyer of any liability hereunder. This Agreement shall be binding upon
and enforceable by, and shall inure to the benefit of, the parties hereto and
their respective successors and permitted assigns.
11.5 Captions and Gender. The captions in this Agreement are for
convenience only and shall not affect the construction or interpretation of any
term or provision hereof. The use in this Agreement of the masculine pronoun
in reference to a party hereto shall be deemed to include the feminine or
neuter, as the context may require.
11.6 Execution in Counterparts. For the convenience of the parties
and to facilitate execution, this Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.
11.7 Amendments. This Agreement may not be amended or modified,
nor may compliance with any condition or covenant set forth herein be waived,
except by a writing duly and validly executed by each party hereto, or in the
case of a waiver, the party waiving compliance.
11.8 Publicity and Disclosures. Except as required by the
Exchange Act, no press releases or public disclosure, either written or oral,
of the transactions contemplated by this Agreement, shall be made by a party to
this Agreement without the prior knowledge and written consent of Buyer and the
Company.
11.9 Consent to Jurisdiction. Each of the parties hereby consents
to personal jurisdiction, service of process and venue in the federal or state
courts of Massachusetts for any claim, suit or proceeding arising under this
Agreement, or in the case of a third party claim subject to indemnification
hereunder, in the court where such claim is brought.
11.10 Dispute Resolution. Any dispute arising out of or relating to
this Agreement or the breach, termination or validity hereof shall be finally
settled by arbitration conducted expeditiously in accordance with the Center
for Public Resources Rules for Nonadministered Arbitration of Business Disputes
(the "CPR Rules"). The Center for Public Resources shall appoint a neutral
advisor from its National CPR Panel. The arbitration shall be governed by the
United States Arbitration Act, 9 U.S.C. Sections 1-16, and judgment upon the
award rendered by the arbitrators may be entered by any court having
jurisdiction thereof. The place of arbitration shall be Boston, Massachusetts.
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Such proceedings shall be administered by the neutral advisor in
accordance with the CPR Rules as he/she deems appropriate, however, such
proceedings shall be guided by the following agreed upon procedures:
(a) mandatory exchange of all relevant documents, to be
accomplished within forty-five (45) days of the initiation of the procedure;
(b) no other discovery;
(c) hearings before the neutral advisor which shall not
exceed three hours; such hearings to take place in one or two days at a
maximum; and
(d) decision to be rendered not later than 10 days
following such hearings.
Each of Buyer, the Company and the Stockholders (a) hereby
unconditionally and irrevocably submits to the jurisdiction of the United
States District Court for the District of Massachusetts, for the purpose of
enforcing the award or decision in any such proceeding and (b) hereby waives,
and agrees not to assert in any civil action to enforce the award, any claim
that it is not subject personally to the jurisdiction of the above-named court,
that its property is exempt or immune from attachment or execution, that the
civil action is brought in an inconvenient forum, that the venue of the civil
action is improper or that this Agreement or the subject matter hereof may not
be enforced in or by such court, and (c) hereby waives and agrees not to seek
any review by any court of any other jurisdiction which may be called upon to
grant an enforcement of the judgment of any such court. Each of Buyer, the
Company and the Stockholders hereby consents to service of process by
registered mail at the address to which notices are to be given. Each of
Buyer, the Company and the Stockholders agrees that its submission to
jurisdiction and its consent to service of process by mail is made for the
express benefit of the other parties hereto. Final judgment against Buyer, the
Company or the Stockholders in any such action, suit or proceeding may be
enforced in other jurisdictions by suit, action or proceeding on the judgment,
or in any other manner provided by or pursuant to the laws of such other
jurisdiction; provided, however, that any party may at its option bring suit,
or institute other judicial proceedings, in any state or federal court of the
United States or of any country or place where the other parties or their
assets, may be found.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed as of the date set forth above by their duly authorized
representatives.
BUYER:
LAMAR ADVERTISING COMPANY
By: /s/ KEITH A. ISTRE
-------------------------------------
Title: Chief Financial Officer
COMPANY:
OUTDOOR COMMUNICATIONS, INC.
By: /s/ JC STANLEY
-------------------------------------
Title: Chairman
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STOCKHOLDERS:
/s/ John C Stanley IV
----------------------------------------
John C Stanley IV
/s/ A.B. Isbell
----------------------------------------
A.B. Isbell
/s/ Norman Isbell
----------------------------------------
Norman Isbell
/s/ William Hull Davis
----------------------------------------
William Hull Davis
THE JCS TRUST
By: /s/ John C Stanley IV
-----------------------------------
John C Stanley IV, Trustee
THE LWS TRUST
By: /s/ John C Stanley IV
-----------------------------------
John C Stanley IV, Trustee
/s/ Priscilla S. Denton
----------------------------------------
Priscilla S. Denton
/s/ Douglas W. Ferris, Jr.
----------------------------------------
Douglas W. Ferris, Jr.
/s/ Richard W. Ebersole
----------------------------------------
Richard W. Ebersole
/s/ G. Robert Joiner
----------------------------------------
G. Robert Joiner
/s/ Gerald P. Scott
----------------------------------------
Gerald P. Scott
/s/ John Andrews
----------------------------------------
John Andrews
/s/ Mark Sherwood
----------------------------------------
Mark Sherwood
/s/ Ricky W. Thomas
----------------------------------------
Ricky W. Thomas
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MEDIA/COMMUNICATIONS
PARTNERS II LIMITED PARTNERSHIP
By: M/CP II L.P., General Partner
By: M/CP II General Partner-S, Inc.,
a General Partner
By: /s/ Stephen F. Gormley
-----------------------------------
Stephen F. Gormley
President
MEDIA/COMMUNICATIONS
INVESTORS LIMITED PARTNERSHIP
By: M/C Investors General Partner-S,
Inc., a General Partner
By: /s/ Stephen F. Gormley
-----------------------------------
Stephen F. Gormley
President
CHASE VENTURE CAPITAL
ASSOCIATES, L.P.
By: Chase Capital Partners,
its General Partner
By: /s/ Brian J. Richmand
-----------------------------------
Brian J. Richmand
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JCS TRUST NO. 2
By: /s/ LENOIR W. STANLEY
-------------------------------------
LWS TRUST NO. 2
By: /s/ LENOIR W. STANLEY
-------------------------------------
/s/ Steven B. Isbell
----------------------------------------
Steven B. Isbell
/s/ Brad Isbell
----------------------------------------
Brad Isbell
/s/ Lydia A. Bethay
----------------------------------------
Lydia A. Bethay
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SCHEDULES
Schedule 3.4 Subsidiaries
Schedule 3.5 Conflicts
Schedule 3.6 Owned and Leased Real Properties; Encumbrances
Schedule 3.7 Financial Statements
Schedule 3.8 Taxes
Schedule 3.9 Actions Outside the Ordinary Course
Schedule 3.11 Certain Contracts
Schedule 3.12 Litigation
Schedule 3.13 Insurance
Schedule 3.16 Employee Benefit Programs
Schedule 3.17 Labor Disputes
Schedule 3.18 Environmental Matters
Schedule 3.19 List of Officers and Directors
Schedule 3.20 Certain Changes
Schedule 3.21 Affiliate Transactions
Schedule 7.6 Employee Matters
Schedule 7.8 Employee Payments