SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Date of Report (Date of earliest event reported) September 1, 1998
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Obie Media Corporation
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(Exact name of registrant as specified in its charter)
Oregon 000-21623 93-0966515
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(State of other jurisdiction) (Commission (IRS Employer
File Number) Identification No.)
4211 West 11th Avenue, Eugene, Oregon 97402
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (541) 686-8400
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Item 2 Acquisition or Disposition of Assets
On September 1, 1998, Obie Media Corporation (the "Company") acquired all of the
outstanding capital stock of Philbin & Coine, Inc. dba P&C Media ("P&C"). P&C
will continue as a wholly owned subsidiary of the Company.
P&C sells transit advertising in the Midwestern and Eastern United States. P&C
has contracts with 20 transit districts including the markets of Cincinnati and
Cleveland, Ohio, Hartford and Stamford, Connecticut, Milwaukee, Wisconsin,
Richmond, Virginia, and Fort Lauderdale, Florida.
The acquisition was made pursuant to a stock purchase agreement (the
"Agreement") between the Company and P&C's sole shareholder, Wayne P. Schur.
Under the terms of the Agreement, Mr. Schur will become an Executive Vice
President of the Company and will remain as President of P&C. Mr. Schur is also
expected to join the Board of Directors of the Company. The Company paid $6.1
million in cash at closing, and the Agreement provides for deferred cash
payments aggregating $1.5 million over the next 4 years. In addition, the
Company issued Mr. Schur 50,000 shares of Company stock at closing with another
75,000 shares to be issued over the next 2 years depending on P&C performance.
The source of the funds to close the transaction was a new $7 million term loan
from U.S. Bank National Association ("US Bank"). US Bank also increased the
Company's operating line from $2 million to $4 million to accommodate the
operations of P&C and the Company's recent expansion in British Columbia,
Canada.
Item 7 Financial Statements and Exhibits
Stock Purchase Agreement dated as of August 25, 1998 among Obie Media
Corporation, Philbin & Coine, Inc. and Wayne P. Schur
The Company intends to file the required audited financial statements of P&C
within 60 days following the filing of this Current Report on Form 8-K.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
September 14, 1998 Obie Media Corporation
By /s/James W. Callahan
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James W. Callahan
Chief Financial Officer
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STOCK PURCHASE AGREEMENT
AMONG
OBIE MEDIA CORPORATION
AND
PHILBIN & COINE, INC.
AND
WAYNE P. SCHUR
AUGUST 25, 1998
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TABLE OF CONTENTS
1. Definitions.......................................................1
2. Purchase and Sale of Company Shares...............................5
(a) Basic Transaction........................................5
(b) Purchase Price...........................................5
(c) The Closing..............................................7
(d) Deliveries at the Closing................................7
3. Representations and Warranties Concerning the Transaction.........8
(a) Representations and Warranties of Seller.................8
(b) Representations and Warranties of Buyer..................9
4. Representations and Warranties Concerning the Company ...........10
(a) Organization, Qualification, and Corporate Power........10
(b) Capitalization..........................................10
(c) Noncontravention........................................11
(d) Brokers' Fees...........................................11
(e) Title to Assets.........................................11
(f) Subsidiaries............................................11
(g) Financial Statements....................................11
(h) Events Subsequent to Most Recent Fiscal Year End........12
(i) Undisclosed Liabilities.................................14
(j) Legal Compliance........................................14
(k) Tax Matters.............................................14
(l) Real Property...........................................16
(m) Intellectual Property...................................17
(n) Tangible Assets.........................................18
(o) Contracts...............................................18
(p) Notes and Accounts Receivable...........................19
(q) Powers of Attorney......................................20
(r) Insurance...............................................20
(s) Litigation..............................................20
(t) Product Warranty........................................21
(w) Product Liability.......................................21
(x) Employees...............................................21
(y) Employee Benefits.......................................21
(z) Guaranties..............................................23
(aa) Environment, Health, and Safety Matters.................23
(bb) Certain Business Relationships with the Company ........24
(cc) Transit District Relationships..........................24
(dd) Disclosure..............................................25
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5. Pre-Closing Covenants............................................25
(a) General.................................................25
(b) Notices and Consents....................................25
(c) Operation of Business...................................25
(d) Preservation of Business................................25
(e) Full Access.............................................25
(f) Notice of Developments..................................26
(g) Exclusivity.............................................26
(h) New Transmit Bids.......................................26
6. Post-Closing Covenants...........................................26
(a) General.................................................26
(b) Litigation Support......................................26
(c) Transition..............................................27
(d) Confidentiality.........................................27
(e) Covenant Not to Compete.................................27
(f) Buyer Shares............................................28
(g) Release of Seller.......................................28
(h) Registration of Buyer Shares............................28
7. Conditions to Obligation to Close................................28
(a) Conditions to Obligation of Buyer.......................28
(b) Conditions to Obligation of Seller......................30
8. Remedies for Breaches of This Agreement
(a) Survival of Representations and Warranties..............31
(b) Indemnification Provisions for Benefit of Buyer.........31
(c) Indemnification Provisions for Benefit of Seller........32
(d) Matters Involving Third Parties.........................32
(e) Determination of Adverse Consequences...................33
(f) Other Indemnification Provisions........................34
(g) Limitations on Indemnification..........................34
9. Tax Matters......................................................34
(a) Section 338(h)(10) Election.............................34
(b) Allocation of Purchase Price............................34
(c) S Corporation Status....................................34
(d) Tax Period Ending on or before the Closing Date.........35
(e) Cooperation on Tax Matters..............................35
(f) Tax Sharing Agreements..................................35
(g) Certain Taxes...........................................36
10. Termination......................................................36
(a) Termination of Agreement................................36
(b) Effect of Termination...................................37
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11. Miscellaneous....................................................37
(a) Press Releases and Public Announcements.................37
(b) No Third-Party Beneficiaries............................37
(c) Entire Agreement........................................37
(d) Succession and Assignment...............................37
(e) Counterparts............................................37
(f) Headings................................................37
(g) Notices.................................................38
(h) Governing Law...........................................38
(i) Amendments and Waivers..................................38
(j) Severability............................................38
(k) Expenses................................................39
(l) Construction............................................39
(m) Incorporation of Exhibits and Schedules.................39
(n) Specific Performance....................................39
Exhibit A-- Employment Agreement
Exhibit B--Transit Relationships
Exhibit C--Specified Assets
Exhibit D --Historical Financial Statements
Exhibit E--Non-Operating Assets
Exhibit F--Form of Opinion of Counsel to Seller
Exhibit G-- Form of Opinion of Counsel to Buyer
Disclosure Schedule-- Exceptions to Representations and Warranties
Concerning the Company
Allocation Schedule
Expense Schedule
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STOCK PURCHASE AGREEMENT
This Agreement is entered into effective July ___, 1998, by and among
OBIE MEDIA CORPORATION, an Oregon corporation (the "Buyer"), and WAYNE P. SCHUR
(the "Seller") and PHILBIN & COINE, INC., a New York corporation (the
"Company"). Buyer, Seller and Company are referred to collectively herein as the
"Parties."
RECITALS
Seller owns all of the outstanding capital stock of Company. The
Parties desire to enter into an Agreement pursuant to which Buyer will purchase
from Seller, and Seller will sell to Buyer, all of the outstanding capital stock
of the Company in return for cash, common stock of Buyer and the right to
certain future payments.
NOW, THEREFORE, the Parties agree as follows.
1. Definitions.
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"Accredited Investor" has the meaning set forth in Regulation D
promulgated under the Securities Act.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group within the meaning of
Code ss. 1504(a).
"Base Price" has the meaning set forth in Section 2(b)(i) below.
"Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the basis for
any specified consequence.
"Buyer" has the meaning set forth in the preface above.
"Buyer Shares" has the meaning set forth in Section 2(b)(i) below.
"Change of Management" has the meaning set forth in Section 2(b)(ii)
below.
"Closing" has the meaning set forth in Section 2(c) below.
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"Closing Date" has the meaning set forth in Section 2(c) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"COBRA" means the requirements of Part 6 of Subtitle B of Title I of
ERISA and Code ss. 4980B.
"Confidential Information" means any information concerning the
businesses and affairs of any of the Parties which is disclosed to any other
Party and that is not already generally available to the public.
"Contingent Price" has the meaning set forth in Section 2(b)(i) below.
"Controlled Group" has the meaning set forth in Code ss. 1563.
"Current Assets" shall mean the only accounts receivable, cash, prepaid
items and deposits (even though such deposits may not constitute current assets
under generally accepted accounting principles).
"Deferred Intercompany Transaction" has the meaning set forth in Reg.
ss. 1.1502-13.
"Disclosure Schedule" has the meaning set forth in Section 4 below.
"Employee Benefit Plan" means any (a) nonqualified deferred
compensation or retirement plan or arrangement, (b) qualified defined
contribution retirement plan or arrangement which is an Employee Pension Benefit
Plan, (c) qualified defined benefit retirement plan or arrangement which is an
Employee Pension Benefit Plan (including any Multiemployer Plan), or (d)
Employee Welfare Benefit Plan or material fringe benefit or other retirement,
bonus, or incentive plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA ss.
3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA ss.
3(1).
"Employment Agreement" shall mean the agreement attached hereto as
Exhibit A.
"Environmental, Health, and Safety Requirements" shall mean all
federal, state, local and foreign statutes, regulations, ordinances and other
provisions having the force or effect of law, all judicial and administrative
orders and determinations, all contractual obligations and all common law
concerning public health and safety, worker health and safety, and pollution or
protection of the environment, including without limitation all those relating
to the presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control, or cleanup of any hazardous
materials, substances or wastes, chemical substances or mixtures, pesticides,
pollutants, contaminants, toxic chemicals, petroleum products or by-products,
asbestos, polychlorinated biphenyls, noise or radiation, each as amended and as
now or hereafter in effect.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means each entity which is treated as a single
employer with Seller for purposes of Code ss. 414.
"Excess Loss Account" has the meaning set forth in Reg. ss. 1.1502-19.
"Fiduciary" has the meaning set forth in ERISA ss. 3(21).
"Financial Statement" has the meaning set forth in Section 4(g) below.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Indemnified Party" has the meaning set forth in Section 8(d) below.
"Indemnifying Party" has the meaning set forth in Section 8(d) below.
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (f) all computer software (including data and
related documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).
"Knowledge" means actual knowledge after reasonable investigation. With
respect to the Knowledge of Seller, such reasonable investigation shall include
consultation of Seller with the officers and directors of the company, and with
the senior employee of the Company at each of its branch offices, with respect
to the subject matter to which the Knowledge standard applies.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Most Recent Balance Sheet" means the balance sheet contained within
the Most Recent Financial Statements.
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"Most Recent Financial Statements" has the meaning set forth in Section
4(g) below.
"Most Recent Fiscal Month End" has the meaning set forth in Section
4(g) below.
"Most Recent Fiscal Year End" has the meaning set forth in Section 4(g)
below.
"Multiemployer Plan" has the meaning set forth in ERISA ss. 3(37).
"Net Operating Income Before Corporate Charges" means net operating
income as shown on the internal financial statements of the Company prepared
with expense categories substantially similar to those historically used by the
Company as shown, for illustrative purposes, on the Company's July, 1998 income
statements attached hereto as the Expense Schedule, plus (i) a credit for cross
order commissions, and (ii) a credit for profit made on production charges. For
these purposes the payroll and associated expenses of Mr. Wayne P. Schur and his
assistant, including related travel and office costs, are not to be included in
any way as a reduction of the net operating income as shown on such internal
financial statements. Also for these purposes, a charge for Buyer's sales
expenses for "national sales," shall be applied on a pro-rata basis based on the
total revenue of the Company's New York, Chicago, and Los Angeles sales offices
and the markets they are responsible for as compared to the total revenue of
Buyer, excluding its markets in Canada, provided that the charge shall not
exceed thirty percent of the total amount of such expenses incurred by Buyer.
"Net Operating Income Contingency" has the meaning set forth in Section
2(b)(iv)(A) below.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Party" has the meaning set forth in the preface above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Prohibited Transaction" has the meaning set forth in ERISA ss. 406 and
Code ss. 4975.
"Purchase Price" has the meaning set forth in Section 2(b) below.
"Reportable Event" has the meaning set forth in ERISA ss. 4043.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
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"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar liens, (b) liens for Taxes not yet due and payable or for Taxes that
the taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
"Seller" has the meaning set forth in the preface above.
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Survival Period" has the meaning set forth in Section 8(a) below.
"Company" has the meaning set forth in the preface above.
"Company Share" means any share of the Common Stock of the Company.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code ss. 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning set forth in Section 8(d) below.
2. Purchase and Sale of Company Shares.
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(a) Basic Transaction. On and subject to the terms and
conditions of this Agreement, Buyer agrees to purchase from Seller, and Seller
agrees to sell to Buyer, all of his Company Shares for the consideration
specified below in this Section 2.
(b) Purchase Price.
(i) The purchase price for the Company Shares (the "Purchase
Price") shall consist of a Base Price and a Contingent Price. The Base
Price will consist of $7,500,000, of which $6,000,000 will be paid in
readily available funds at Closing, and the balance shall be payable as
follows: (A) $500,000 shall be payable on or before January 1, 2000;
(B) $500,000 shall be payable on or before January 1, 2001; (C)
$250,000 shall be payable on or before January 1,
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2002; and (D) $250,000 shall be payable on or before January 1, 2003.
These installments shall bear simple interest on the unpaid balance
from and after the Closing at the rate of 6 percent per year. The
entire amount of the unpaid balance of the Base Price, or any portion
thereof, may be prepaid at any time without penalty. The Contingent
Price will consist of 125,000 shares of Buyer common stock (the "Buyer
Shares"), of which 50,000 will be delivered at Closing and the balance
will be delivered in accordance with Section 2(b)(iv)(D) below, subject
to the conditions set forth in this Agreement,
(ii) Notwithstanding anything in this Agreement to the contrary,
in the event of a Change of Management of Buyer, the entire unpaid
amount of Purchase Price shall become immediately payable to Seller or
his successors in interest. For purposes of this Agreement, the term
"Change of Management" of Buyer shall mean that Brian B. Obie shall,
for any reason, cease to be Chief Executive Officer of Buyer or own,
directly or indirectly through members of his immediate family, less
than 25 percent of Buyer's outstanding Common Stock. Notwithstanding
the foregoing, in the event that a Change of Management occurs due to
the death or disability of Brian B. Obie, the Net Operating Income
Contingency (as defined in Section 2(b)(iv)(A) below) shall be deemed
satisfied as of the date of such death or disability, but the payment
of the unpaid balance of the Purchase Price shall not be immediately
due and payable and shall be paid in accordance with the schedule set
forth herein.
(iii) Payment of each installment of Contingent Price enumerated
above under Section 2(b)(i) above will be contingent upon the continued
employment of Seller with the Company in accordance with the Employment
Agreement, unless his employment is terminated by the Company or Buyer
other than for cause as defined in the Employment Agreement.
(iv) The Purchase Price shall be increased or decreased on a
dollar-for-dollar basis to the extent, if any, that the Current Assets
of Company shall, at Closing, be less than or greater than the total
liabilities by more than or less than $500,000, provided that the
maximum amount of any increase in the Purchase Price shall be $100,000.
In making such determination, there shall be disregarded any audit
adjustments from the Company's previous reporting practices
necessitated by GAAP or Securities and Exchange Commission accounting
practice to pro-rate billings between fiscal periods together with
related adjustments, if any, in occupancy expense. Such determination
shall initially be made as of Closing by mutual agreement of the
parties based upon the Company's internally generated financial
documents for July of 1998, and any adjustment shall be made through an
increase or decrease in the cash payable at Closing. Buyer's auditors
shall make a final determination in accordance with GAAP within 60 days
following Closing and any adjustment shall be made though a cash
payment from Buyer to Seller, in the event of an increase, and from
Seller to Buyer, in the event of a decrease, within 10 days following
such determination. In the event that Seller disputes the final
determination made by Buyer's auditors, Seller shall notify Buyer in
writing within 10 days following the date of such determination, and
the dispute shall be resolved by a mutually acceptable nationally
recognized independent accounting firm within 60 days following the
date of such notice. The conclusion of such independent accounting firm
shall be binding on the parties, and Buyer and Seller shall each pay
one-half of the fees and expenses of such firm related to the
resolution of the dispute.
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(A) Payment of the two installments of Contingent Price
enumerated above under Section 2(b)(i) shall be made on or before
February 15, 2001 and February 15, 2002, respectively, provided that
such payments shall be conditioned upon Company realizing from
Company's transit agency relationships which exist at Closing
(including for this purpose transit agency relationships with respect
to which Company shall have submitted firm bids as of Closing, which
bids shall remain pending as of Closing, except for Madison, Wisconsin,
which shall be excluded) with respect to the fiscal year ending on the
November 30 immediately prior to the installment payment date, Net
Operating Income Before Corporate Charges (as shown on the Company's
internal financial statements) equal to not less than $1,750,000 as
follows: for each $1.00 by which Net Operating Income Before Corporate
Charges ("NOIBCC") shall be less than $1,750,000, the installment shall
be reduced by $1.00. A list of the Company's current transit agency
relationships is attached hereto as Exhibit B. Notwithstanding the
foregoing, in the event that NOIBCC is at least $1,650,000, no
reduction in the installment shall be made; in the event that NOIBCC is
less than $1,650,000, the installment shall be reduced by $1.10 for
each dollar that the NOIBCC is less than $1,650,000 until the reduction
is equal to the amount by which NOIBCC is less than $1,750,000 on a
dollar-for-dollar basis, and thereafter the reduction shall be on a
dollar-for-dollar basis.
(B) For purposes of calculating satisfaction of the Net
Operating Income Contingency with respect to the fiscal year ending
November 30, 2000, the $1,750,000 threshold shall be reduced by the
lesser of $98,000 or the amount of Company's net operating income for
the previous year from the TRT/Norfolk, Virginia Agreement, in the
event said agreement shall not be renewed.
(C) The two installments of Contingent Price enumerated in
Sections 2(a)(i) above will not be carried forward or backward from
year-to-year. In the event of the death or total disability (as the
term total disability is defined in the Employment Agreement) of Seller
prior to January 1, 2001, the Net Operating Income Contingency shall
not apply to any installments remaining unpaid at such time and any
unpaid installments of Contingent Price shall become payable within 30
days following such death or determination of permanent total
disability.
(D) The determination of whether the Net Operating Income
Contingency has been satisfied with respect to each installment payment
shall be made by Buyer's auditors within 60 days following the end of
the applicable fiscal year of Buyer. Buyer shall, within 10 days
following the date of such determination, issue to Seller 37,500 Buyer
Shares less the number of Buyer Shares which, rounded to the nearest
number of shares, is equal in value to the reduction, if any, in the
amount of the installment payment pursuant to Section 2(b)(iv)(A)
above, valued as of the most recent November 30 fiscal year end of the
Company. In the event that the value of 37,500 Buyer shares is less
than the amount of the reduction of the installment payment, Seller
shall owe the dollar amount of such discrepancy to Buyer, and Buyer
shall be entitled to offset such debt against, first, the remaining
Buyer Shares which are part of the Contingent Price and which have not
been issued to Seller and, second, to the extent that the amount of any
such unissued Buyer Shares is not adequate, against any amounts owing
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by Buyer to Seller pursuant to this Agreement. The indemnity limitation
set forth in Section 8(g) below shall not apply with respect to such
debt and offset rights. In the event that Seller disputes the Buyer's
determination of whether the Net Operating Income Contingency has been
satisfied, Seller shall notify Buyer in writing within 10 days
following the date of such determination, and the dispute shall be
resolved by a mutually acceptable nationally recognized independent
accounting firm within 60 days following the date of such notice. The
conclusion of such independent accounting firm shall be binding on the
parties, and Buyer and Seller shall each pay one-half of the fees and
expenses of such firm related to the resolution of the dispute.
(v) Buyer Shares shall be subject to the restrictions on
transfer described in Section 6(f).
(c) The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place by exchanging signatures and
closing documents by overnight delivery or in any other manner agreeable to the
parties on the second business day following the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions with respect to actions the
respective Parties will take at the Closing itself) or such other date as the
Parties may mutually determine (the "Closing Date"); provided, however, that the
Closing Date shall be no later than September 30, 1998.
(d) Deliveries at the Closing. At the Closing, (i) Seller will
deliver to Buyer the various certificates, instruments, and documents referred
to in Section 7(a) below, (ii) Buyer will deliver to Seller the various
certificates, instruments, and documents referred to in Section 7(b) below,
(iii) Seller will deliver to Buyer stock certificates representing the Company
Shares, endorsed in blank or accompanied by duly executed assignment documents,
and (iv) Buyer will deliver to Seller the consideration specified in Section
2(b) above which is to be delivered at Closing.
3. Representations and Warranties Concerning the Transaction.
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(a) Representations and Warranties of Seller. Seller represents
and warrants to Buyer that the statements contained in this Section 3(a) are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section
3(a)).
(i) Authorization of Transaction. Seller has full power and
authority to execute and deliver this Agreement and to perform his
obligations hereunder. This Agreement constitutes the valid and legally
binding obligation of Seller, enforceable in accordance with its terms
and conditions. Seller need not give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any
government or governmental agency in order to consummate the
transactions contemplated by this Agreement.
(ii) Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated
hereby, will (A) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which
Seller is subject
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or (B) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under
any agreement, contract, lease, license, instrument, or other
arrangement to which Seller is a party or by which he is bound or to
which any of his assets is subject.
(iii) Brokers' Fees. Seller has no Liability or obligation to
pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which
Buyer could become liable or obligated.
(iv) Investment. Seller (A) understands that Buyer Shares have
not been, and will not be, registered under the Securities Act, or
under any state securities laws, and are being offered and sold in
reliance upon federal and state exemptions for transactions not
involving any public offering, (B) is acquiring Buyer Shares solely for
his own account for investment purposes, and not with a view to the
distribution thereof, (C) is a sophisticated investor with knowledge
and experience in business and financial matters, (D) has received
certain information concerning Buyer and has had the opportunity to
obtain additional information as desired in order to evaluate the
merits and the risks inherent in holding Buyer Shares, (E) is able to
bear the economic risk and lack of liquidity inherent in holding Buyer
Shares, and (F) is an Accredited Investor for the reasons set forth on
Annex I. Notwithstanding the foregoing, the registration and subsequent
sale of any of the Buyer Shares pursuant to Section 6(h) below shall
not be deemed to be a breach of this Section 3(a)(iv).
(v) Company Shares. Seller holds of record and owns
beneficially Company Shares, free and clear of any restrictions
on transfer (other than any restrictions under the Securities Act and
state securities laws), Taxes, Security Interests, options, warrants,
purchase rights, contracts, commitments, equities, claims, and demands.
Seller is not a party to any option, warrant, purchase right, or other
contract or commitment that could require Seller to sell, transfer, or
otherwise dispose of any capital stock of the Company (other than this
Agreement). Seller is not a party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any capital
stock of the Company.
(vi) Litigation. Section 3(a)(vi) of the Disclosure Schedule
sets forth each instance in which Seller (i) is subject to any
outstanding injunction, judgment, order, decree, ruling, or charge or
(ii) is a party or, to the Knowledge of Seller, is threatened to be
made a party to any action, suit, proceeding, hearing, or investigation
of, in, or before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator. None of the actions, suits, proceedings, hearings, and
investigations set forth in Section 3(a)(vi) of the Disclosure Schedule
could result in any material adverse change in the business, financial
condition, operations, results of operations, or future prospects of
the Company. To the Knowledge of Seller there is no reason to believe
that any such action, suit, proceeding, hearing, or investigation may
be brought or threatened against Seller.
(b) Representations and Warranties of Buyer. Buyer represents
and warrants to Seller that the statements contained in this Section 3(b) are
correct and complete as of the date of this
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Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Section 3(b)).
(i) Organization of Buyer. Buyer is a corporation duly organized
and validly existing under the laws of the jurisdiction of its
incorporation.
(ii) Authorization of Transaction. Buyer has full power and
authority (including full corporate power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of
Buyer, enforceable in accordance with its terms and conditions. Buyer
need not give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental
agency in order to consummate the transactions contemplated by this
Agreement.
(iii) Noncontravention. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions
contemplated hereby, will (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court
to which Buyer is subject or any provision of its charter or bylaws or
(B) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under
any agreement, contract, lease, license, instrument, or other
arrangement to which Buyer is a party or by which it is bound or to
which any of its assets is subject.
(iv) Brokers' Fees. Buyer has no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement for which any Seller
could become liable or obligated.
(v) Investment. Buyer is not acquiring the Company Shares with a
view to or for sale in connection with any distribution thereof within
the meaning of the Securities Act.
(vi) Solvency. Buyer is solvent, and the transactions
contemplated by this Agreement shall not render Buyer insolvent.
4. Representations and Warranties Concerning the Company.
-----------------------------------------------------
Seller represents and warrants to Buyer that the statements contained in this
Section 4 are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout this
Section 4), except as set forth in the disclosure schedule delivered by Seller
to Buyer on the date hereof and initialed by the Parties (the "Disclosure
Schedule"). Nothing in the Disclosure Schedule shall be deemed adequate to
disclose an exception to a representation or warranty made herein, however,
unless the Disclosure Schedule identifies the exception with reasonable
particularity and describes the relevant facts in reasonable detail. Without
limiting the generality of the foregoing, the mere listing (or inclusion of a
copy) of a document or other item shall not be deemed adequate to disclose an
exception to a representation or warranty made herein (unless the representation
or warranty has to do with the
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existence of the document or other item itself). The Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section 4.
(a) Organization, Qualification, and Corporate Power. Company is
a corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation. Company is duly authorized to
conduct business and is in good standing under the laws of each jurisdiction
where such qualification is required. Company has full corporate power and
authority and all licenses, permits, and authorizations necessary to carry on
the businesses in which it is engaged and to own and use the properties owned
and used by it. Section 4(a) of the Disclosure Schedule lists the directors and
officers of Company. Seller has delivered to Buyer correct and complete copies
of the charter and bylaws of Company (as amended to date). The minute books
(containing the records of meetings of the stockholders, the board of directors,
and any committees of the board of directors), the stock certificate books, and
the stock record books of Company are correct and complete. Company is not in
default under or in violation of any provision of its charter or bylaws.
(b) Capitalization. The entire authorized capital stock of the
Company consists of Company Shares, of which Company Shares are
issued and outstanding. All of the issued and outstanding Company Shares have
been duly authorized, are validly issued, fully paid, and nonassessable, and are
held of record by Seller. There are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights, or other contracts or commitments that could require the Company to
issue, sell, or otherwise cause to become outstanding any of its capital stock.
There are no outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to the Company. There are no
voting trusts, proxies, or other agreements or understandings with respect to
the voting of the capital stock of the Company.
(c) Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Company is subject or any provision of
the charter or bylaws of Company or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which Company is a party or by which it is bound or to which any of its
assets is subject (or result in the imposition of any Security Interest upon any
of its assets). Company does not need to give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement.
(d) Brokers' Fees. Company does not have any Liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement.
(e) Title to Assets. The Company has good and marketable title
to, or a valid leasehold interest in, the properties and assets used by it,
located on its premises, or shown on the Most Recent Balance Sheet or acquired
after the date thereof, including without limitation those assets
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described on Exhibit C attached hereto, free and clear of all Security
Interests, except for properties and assets disposed of in the Ordinary Course
of Business since the date of the Most Recent Balance Sheet.
(f) Subsidiaries. Company has no subsidiaries.
(g) Financial Statements. Attached hereto as Exhibit D are the
following financial statements (collectively the "Financial Statements"): (i)
unaudited consolidating balance sheets and statements of income, changes in
stockholders' equity, and cash flow as of and for the fiscal years ended
December 31, 1996 and December 31, 1997 (the "Most Recent Fiscal Year End") for
the Company; and (ii) unaudited consolidated and consolidating balance sheets
and statements of income, changes in stockholders' equity, and cash flow (the
"Most Recent Financial Statements") as of and for the 6 months ended June 30,
1998 (the "Most Recent Fiscal Month End") for the Company. The Financial
Statements (including the notes thereto) have been prepared in accordance with
GAAP applied on a consistent basis throughout the periods covered thereby,
present fairly the financial condition of the Company as of such dates and the
results of operations of the Company for such periods, are correct and complete,
and are consistent with the books and records of the Company (which books and
records are correct and complete); provided, however, that the Most Recent
Financial Statements are subject to normal year-end adjustments (which will not
be material individually or in the aggregate) and lack footnotes and other
presentation items.
(h) Events Subsequent to Most Recent Fiscal Year End. Since the
Most Recent Fiscal Year End, there has not been any material adverse change in
the business, financial condition, operations, results of operations, or future
prospects of the Company taken as a whole. Without limiting the generality of
the foregoing, since that date:
(i) Company has not sold, leased, transferred, or assigned any
of its assets, tangible or intangible, other than for a fair
consideration in the Ordinary Course of Business;
(ii) Company has not entered into any agreement, contract,
lease, or license (or series of related agreements, contracts, leases,
and licenses) which is in effect as of the date of this Agreement and
which either involves the payment of more than $25,000 or is outside
the Ordinary Course of Business;
(iii) no party (including the Company) has accelerated,
terminated, modified, or canceled any agreement, contract, lease, or
license (or series of related agreements, contracts, leases, and
licenses) involving more than $25,000 to which the Company is a party
or by which it is bound;
(iv) Company has not imposed any Security Interest upon any of
its assets, tangible or intangible;
(v) Company has not made any capital expenditure (or series of
related capital expenditures) either involving more than $25,000 or
outside the Ordinary Course of Business;
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(vi) Company has not made any capital investment in, any loan
to, or any acquisition of the securities or assets of, any other Person
(or series of related capital investments, loans, and acquisitions)
either involving more than $25,000 or outside the Ordinary Course of
Business;
(vii) Company has not issued any note, bond, or other debt
security or created, incurred, assumed, or guaranteed any indebtedness
for borrowed money or capitalized lease obligation either involving
more than $25,000 in the aggregate;
(viii) Company has not delayed or postponed the payment of
accounts payable and other Liabilities outside the Ordinary Course of
Business;
(ix) Company has not canceled, compromised, waived, or released
any right or claim (or series of related rights and claims) either
involving more than $25,000 or outside the Ordinary Course of Business;
(x) Company has not granted any license or sublicense of any
rights under or with respect to any Intellectual Property;
(xi) there has been no change made or authorized in the charter
or bylaws of any of the Company;
(xii) Company has not issued, sold, or otherwise disposed of any
of its capital stock, or granted any options, warrants, or other rights
to purchase or obtain (including upon conversion, exchange, or
exercise) any of its capital stock;
(xiii) Company has not declared, set aside, or paid any dividend
or made any distribution with respect to its capital stock (whether in
cash or in kind) or redeemed, purchased, or otherwise acquired any of
its capital stock;
(xiv) Company has not experienced any damage, destruction, or
loss (whether or not covered by insurance) to its property;
(xv) Company has not made any loan to, or entered into any other
transaction with, any of its directors, officers, and employees outside
the Ordinary Course of Business;
(xvi) Company has not entered into any employment contract or
collective bargaining agreement, written or oral, or modified the terms
of any existing such contract or agreement;
(xvii) Company has not granted any increase in the base
compensation of any of its directors, officers, and employees outside
the Ordinary Course of Business;
(xviii) Company has not adopted, amended, modified, or
terminated any bonus, profit-sharing, incentive, severance, or other
plan, contract, or commitment for the benefit of
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any of its directors, officers, and employees (or taken any such action
with respect to any other Employee Benefit Plan);
(xix) Company has not made any other change in employment terms
for any of its directors, officers, and employees outside the Ordinary
Course of Business;
(xx) Company has not made or pledged to make any charitable or
other contribution outside the Ordinary Course of Business;
(xxi) there has not been any other material occurrence, event,
incident, action, failure to act, or transaction outside the Ordinary
Course of Business involving the Company; and
(xxii) Company has not committed to any of the foregoing.
(i) Undisclosed Liabilities. Company has no Liability (and, to
the Knowledge of Seller there is no Basis for any present or future action,
suit, proceeding, hearing, investigation, charge, complaint, claim, or demand
against any of them giving rise to any Liability), except for (i) Liabilities
set forth on the face of the Most Recent Balance Sheet (rather than in any notes
thereto); (ii) Liabilities which have arisen after the Most Recent Fiscal Month
End in the Ordinary Course of Business (none of which results from, arises out
of, relates to, is in the nature of, or was caused by any breach of contract,
breach of warranty, tort, infringement, or violation of law); (iii) contingent
liabilities pursuant to the terms of any agreement between the Company and any
transit agency, provided that the existence and terms of such agreement have
been disclosed to Buyer pursuant to this Agreement; and (iv) any contingent
liability of $25,000 or less arising in the ordinary course of business.
(j) Legal Compliance. To the Knowledge of Seller, each of
Company and its predecessors and Affiliates has complied with all applicable
laws (including rules, regulations, codes, plans, injunctions, judgments,
orders, decrees, rulings, and charges thereunder) of federal, state, local, and
foreign governments (and all agencies thereof), and no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or notice has been
filed or commenced against any of them alleging any failure so to comply.
(k) Tax Matters.
(i) Company has filed all Tax Returns that it was required to
file. All such Tax Returns were correct and complete in all respects.
All Taxes owed and for which payment is due by the Company (whether or
not shown on any Tax Return) have been paid. Company currently is not
the beneficiary of any extension of time within which to file any Tax
Return. No written claim which was received by the Company has ever
been made by an authority in a jurisdiction where the Company does not
file Tax Returns that it is or may be subject to taxation by that
jurisdiction. There are no Security Interests on any of the assets of
the Company that arose in connection with any failure (or alleged
failure) to pay any Tax.
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(ii) Company has withheld and/or paid all Taxes required by the
applicable taxing authority to have been withheld and/or paid in
connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party.
(iii) Seller has no Knowledge of any reason for any authority to
assess any additional Taxes for any period for which Tax Returns have
been filed. There is no dispute or claim concerning any Tax Liability
of the Company either (A) claimed or raised by any authority in writing
or (B) as to which Seller has Knowledge based upon personal contact
with any agent of such authority. Section 4(k) of the Disclosure
Schedule lists all federal, state, local, and foreign income Tax
Returns filed with respect to the Company for taxable periods ended on
or after September 30, 1994, indicates those Tax Returns that have been
audited, and indicates those Tax Returns that currently are the subject
of audit. Seller has made available to Buyer correct and complete
copies of all federal income Tax Returns, examination reports, and
statements of deficiencies assessed against or agreed to by the Company
since December 31, 1994.
(iv) Company has not waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a
Tax assessment or deficiency.
(v) Company has not filed a consent under Code ss. 341(f)
concerning collapsible corporations. Company has not made any payments,
is not obligated to make any payments, and is not a party to any
agreement that under certain circumstances could obligate it to make
any payments that will not be deductible under Code ss. 280G. Company
has not been a United States real property holding corporation within
the meaning of Code ss. 897(c)(2) during the applicable period
specified in Code ss. 897(c)(1)(A)(ii). Company has disclosed on its
federal income Tax Returns all positions taken therein that could give
rise to a substantial understatement of federal income Tax within the
meaning of Code ss. 6662. Company is not a party to any Tax allocation
or sharing agreement. Company (A) has not been a member of an
Affiliated Group filing a consolidated federal income Tax Return (other
than a group the common parent of which was the Company) or (B) has no
Liability for the Taxes of any Person (other than the Company) under
Reg. ss. 1.1502-6 (or any similar provision of state, local, or foreign
law), as a transferee or successor, by contract, or otherwise.
(vi) Section 4(k) of the Disclosure Schedule sets forth the
following information with respect to the Company as of December 31,
1997: (A) the basis of the Company in its assets; (B) the amount of any
net operating loss, net capital loss, unused investment or other
credit, unused foreign tax, or excess charitable contribution allocable
to the Company; and (C) the amount of any deferred gain or loss
allocable to the Company arising out of any Deferred Intercompany
Transaction.
(vii) The unpaid Taxes of the Company (A) did not, as of the
Most Recent Fiscal Month End, exceed the reserve for Tax Liability
(rather than any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) set forth on the face
of the Most Recent Balance Sheet (rather than in any notes thereto) and
(B) do not exceed that reserve as adjusted for the passage of time
through the Closing Date in accordance with the
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past custom and practice of the Company in filing its Tax Returns.
(viii) Company (and any predecessor of Company) has been a
validly electing S corporation within the meaning of Code ss.ss.1361
and 1362 at all times since 1988 and Company will be an S corporation
up to and including the Closing Date.
(ix) Company will not be liable for any Tax under Code ss.1374
in connection with the deemed sale of Company's assets (including the
assets of any qualified subchapter S subsidiary) caused by the Section
338(h)(10) Election. Neither Company nor any qualified subchapter S
subsidiary of Company has, in the past 10 years, (A) acquired assets
from another corporation in a transaction in which Company's Tax basis
for the acquired assets was determined, in whole or in part, by
reference to the Tax basis of the acquired assets (or any other
property) in the hands of the transferor or (B) acquired the stock of
any corporation which is a qualified subchapter S subsidiary.
(l) Real Property.
(i) Company does not own any real property.
(ii) Section 4(l)(ii) of the Disclosure Schedule lists and
describes briefly all real property leased or subleased to the Company.
Seller has delivered to Buyer correct and complete copies of the leases
and subleases listed in Section 4(l)(ii) of the Disclosure Schedule (as
amended to date). With respect to each lease and sublease listed in
Section 4(l)(ii) of the Disclosure Schedule:
(A) the lease or sublease is legal, valid, binding,
enforceable, and in full force and effect;
(B) the lease or sublease will continue to be legal,
valid, binding, enforceable, and in full force and effect on identical
terms following the consummation of the transactions contemplated
hereby;
(C) no party to the lease or sublease is in breach or
default, and no event has occurred which, with notice or lapse of time,
would constitute a breach or default or permit termination,
modification, or acceleration thereunder;
(D) no party to the lease or sublease has repudiated any
provision thereof;
(E) there are no disputes, oral agreements, or
forbearance programs in effect as to the lease or sublease;
(F) with respect to each sublease, the representations
and warranties set forth in subsections (A) through (E) above are true
and correct with respect to the underlying lease;
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(G) Company has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the leasehold
or subleasehold;
(H) to the Knowledge of Seller, all facilities leased or
subleased thereunder have received all approvals of governmental
authorities (including licenses and permits) required in connection
with the operation thereof and have been operated and maintained in
accordance with applicable laws, rules, and regulations;
(I) all facilities leased or subleased thereunder are
supplied with utilities and other services necessary for the operation
of said facilities; and
(J) to the Knowledge of Seller, the owner of the
facility leased or subleased has good and marketable title to the
parcel of real property, free and clear of any Security Interest,
easement, covenant, or other restriction, except for installments of
special easements not yet delinquent and recorded easements, covenants,
and other restrictions which do not impair the current use, occupancy,
or value, or the marketability of title, of the property subject
thereto.
(m) Intellectual Property.
(i) The Company owns or has the right to use pursuant to
license, sublicense, agreement, or permission all Intellectual Property
used by it for the operation of the business of the Company as
presently conducted. Each item of Intellectual Property owned or used
by the Company immediately prior to the Closing hereunder will be owned
or available for use by the Company on identical terms and conditions
immediately subsequent to the Closing hereunder. Company has taken all
necessary and desirable action to maintain each item of Intellectual
Property that it owns or uses and to protect each item of Intellectual
Property that it owns.
(ii) To the Knowledge of Seller, the Company has not interfered
with, infringed upon, misappropriated, or otherwise come into conflict
with any Intellectual Property rights of third parties, and none of
Seller and the directors and officers (and employees with
responsibility for Intellectual Property matters) of the Company has
ever received any charge, complaint, claim, demand, or notice alleging
any such interference, infringement, misappropriation, or violation
(including any claim that the Company must license or refrain from
using any Intellectual Property rights of any third party). To the
Knowledge of Seller, no third party has interfered with, infringed
upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of the Company.
(iii) Section 4(m)(iii) of the Disclosure Schedule identifies
each patent, trademark or copyright registration and each application
for such a registration which has been issued to or filed by the
Company with respect to any of its Intellectual Property.
(iv) Section 4(m)(iv) of the Disclosure Schedule identifies each
item of Intellectual Property that any third party owns and that the
Company uses pursuant to license, sublicense, or written agreement.
Seller has delivered to Buyer correct and complete copies of all such
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licenses, sublicenses, agreements, and permissions (as amended to
date). With respect to each item of Intellectual Property required to
be identified in Section 4(m)(iv) of the Disclosure Schedule, the
license, sublicense, or written agreement covering the item is legal,
valid, binding, enforceable, and in full force and effect.
(n) Tangible Assets. The Company owns or leases or has the right
to use all buildings, machinery, equipment, and other tangible assets used for
the conduct of its businesses as presently conducted.
(o) Contracts. Section 4(p) of the Disclosure Schedule lists the
following written and, to the Knowledge of Seller, oral, contracts and other
agreements to which Company is a party:
(i) any agreement with any transit authority;
(ii) any agreement (or group of related agreements) for the
lease of personal property to or from any Person providing for lease
payments in excess of $10,000 per annum;
(iii) any agreement (or group of related agreements) for the
purchase or sale of raw materials, commodities, supplies, products, or
other personal property, or for the furnishing or receipt of services,
the performance of which will extend beyond the end of the Company's
current fiscal year, result in a material loss to the Company, or
involve consideration in excess of $10,000;
(iv) any agreement concerning a partnership or joint venture;
(v) any agreement (or group of related agreements) under which
it has created, incurred, assumed, or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation, in excess of
$5,000 or under which it has imposed a Security Interest on any of its
assets, tangible or intangible;
(vi) any agreement concerning confidentiality or noncompetition;
(vii) any agreement with Seller and his Affiliates (other than
the Company );
(viii) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or
arrangement for the benefit of its current or former directors,
officers, and employees;
(ix) any collective bargaining agreement;
(x) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual
compensation in excess of $10,000 or providing severance benefits;
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(xi) any agreement under which it has advanced or loaned any
amount to any of its directors, officers, and employees outside the
Ordinary Course of Business;
(xii) any agreement under which the consequences of a default or
termination could have a material adverse effect on the business,
financial condition, operations, results of operations, or future
prospects of the Company taken as a whole; or
(xiii) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $10,000.
Seller has delivered to Buyer a correct and complete copy of each written
agreement listed in Section 4(p) of the Disclosure Schedule (as amended to date)
and a written summary setting forth the terms and conditions of each oral
agreement involving the payment of $10,000 or more by any party referred to in
Section 4(p) of the Disclosure Schedule. With respect to each such agreement:
(A) the agreement is legal, valid, binding, enforceable, and in full force and
effect; (B) the agreement will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms following the
consummation of the transactions contemplated hereby, unless terminated without
breach by the Company with the prior consent of Buyer, which shall not be
unreasonably withheld; (C) no party is in breach or default, and, to the
Knowledge of Seller, no event has occurred which with notice or lapse of time
would constitute a breach or default, or permit termination, modification, or
acceleration, under the agreement; and (D) no party has repudiated any provision
of the agreement.
(p) Notes and Accounts Receivable. All notes and accounts
receivable of the Company are reflected properly on its books and records, are
valid receivables subject to no setoffs or counterclaims, are current and
collectible.
(q) Powers of Attorney. There are no outstanding powers of
attorney executed on behalf of any of the Company.
(r) Insurance. Section 4(s) of the Disclosure Schedule sets
forth the following information with respect to each insurance policy (including
policies providing property, casualty, liability, and workers' compensation
coverage and bond and surety arrangements) to which the Company has been a
party, a named insured, or otherwise the beneficiary of coverage at any time
within the past five years:
(i) the name, address, and telephone number of the agent;
(ii) the name of the insurer, the name of the policyholder, and
the name of each covered insured;
(iii) the policy number and the period of coverage;
(iv) the scope (including an indication of whether the coverage
was on a claims made, occurrence, or other basis) and amount (including
a description of how deductibles and ceilings are calculated and
operate) of coverage; and
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(v) a description of any retroactive premium adjustments or
other loss-sharing arrangements.
With respect to each such insurance policy: (A) the policy is (or, with respect
to any policy which is no longer in effect and which has been replaced by a
current policy, was) legal, valid, binding, enforceable, and in full force and
effect; (B) the policy will continue to be legal, valid, binding, enforceable,
and in full force and effect on identical terms following the consummation of
the transactions contemplated hereby; (C) neither the Company nor any other
party to the policy is in breach or default (including with respect to the
payment of premiums or the giving of notices), and, to the Knowledge of Seller,
no event has occurred which, with notice or the lapse of time, would constitute
such a breach or default, or permit termination, modification, or acceleration,
under the policy; and (D) no party to the policy has repudiated any provision
thereof. Section 4(s) of the Disclosure Schedule describes any self-insurance
arrangements affecting the Company.
(s) Litigation. Section 4(t) of the Disclosure Schedule sets
forth each instance in which the Company (i) is subject to any outstanding
injunction, judgment, order, decree, ruling, or charge or (ii) is a party or, to
the Knowledge of Seller, is threatened to be made a party to any action, suit,
proceeding, hearing, or investigation of, in, or before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator. None of the actions, suits, proceedings,
hearings, and investigations set forth in Section 4(t) of the Disclosure
Schedule could result in any material adverse change in the business, financial
condition, operations, results of operations, or future prospects of the
Company. None of Seller and the directors and officers (and employees with
responsibility for litigation matters) of the Company has any reason to believe
that any such action, suit, proceeding, hearing, or investigation may be brought
or threatened against the Company.
(t) Product Warranty. The Company has never manufactured, sold,
leased, or delivered any product, and the Company has no Liability (and there is
no Basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any of them giving
rise to any Liability) for replacement or repair thereof or other damages in
connection therewith.
(u) Product Liability. Because the Company has never
manufactured, sold or leased any products, the Company has no Liability (and
there is no Basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any of them giving
rise to any Liability) arising out of any injury to individuals or property as a
result of the ownership, possession, or use of any product manufactured, sold,
leased, or delivered by the Company.
(v) Employees. To the Knowledge of Seller, (i) no executive, key
employee, or group of employees has any plans to terminate employment with the
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Company. Company is not a party to or bound by any collective bargaining
agreement, nor has it experienced any strikes, grievances, claims of unfair
labor practices, or other collective bargaining disputes, and (ii) no director,
officer or employee has committed any act of sexual harassment with or any act
which could reasonably be construed to create a hostile work environment with
respect to any employee of the Company. Company has not committed any unfair
labor practice. Seller has no Knowledge of any organizational effort presently
being made or threatened by or on behalf of any labor union with respect to
employees of the Company.
(w) Employee Benefits.
(i) Section 4(x) of the Disclosure Schedule lists each Employee
Benefit Plan that the Company maintains or to which the Company
contributes or has any obligation to contribute.
(A) Each such Employee Benefit Plan (and each related
trust, insurance contract, or fund) complies in form and in operation
in all respects with the applicable requirements of ERISA, the Code,
and other applicable laws.
(B) All required reports and descriptions (including
Form 5500 Annual Reports, summary annual reports, PBGC-1's, and summary
plan descriptions) have been timely filed and distributed appropriately
with respect to each such Employee Benefit Plan. The requirements of
COBRA have been met with respect to each such Employee Benefit Plan
which is an Employee Welfare Benefit Plan.
(C) All contributions (including all employer
contributions and employee salary reduction contributions) which are
due have been paid to each such Employee Benefit Plan which is an
Employee Pension Benefit Plan and all contributions for any period
ending on or before the Closing Date which are not yet due have been
paid to each such Employee Pension Benefit Plan or accrued in
accordance with the past custom and practice of the Company. All
premiums or other payments for all periods ending on or before the
Closing Date have been paid with respect to each such Employee Benefit
Plan which is an Employee Welfare Benefit Plan.
(D) Each such Employee Benefit Plan which is an Employee
Pension Benefit Plan meets the requirements of a "qualified plan" under
Code ss. 401(a), has received, within the last two years, a favorable
determination letter from the Internal Revenue Service that it is a
"qualified plan," and Seller is not aware of any facts or circumstances
that could result in the revocation of such determination letter.
(E) The market value of assets under each such Employee
Benefit Plan which is an Employee Pension Benefit Plan (other than any
Multiemployer Plan) equals or exceeds the present value of all vested
and nonvested Liabilities thereunder determined in accordance with PBGC
methods, factors, and assumptions applicable to an Employee Pension
Benefit Plan terminating on the date for determination.
(F) Seller has delivered to Buyer correct and complete
copies of the plan documents and summary plan descriptions, the most
recent determination letter received from the Internal Revenue Service,
the most recent Form 5500 Annual Report, and all related trust
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agreements, insurance contracts, and other funding agreements which
implement each such Employee Benefit Plan.
(ii) With respect to each Employee Benefit Plan that the
Company and any ERISA Affiliate maintains or ever has maintained or to
which any of them contributes, ever has contributed, or ever has been
required to contribute:
(A) No such Employee Benefit Plan which is an Employee
Pension Benefit Plan (other than any Multiemployer Plan) has been
completely or partially terminated or been the subject of a Reportable
Event as to which notices would be required to be filed with the PBGC.
No proceeding by the PBGC to terminate any such Employee Pension
Benefit Plan (other than any Multiemployer Plan) has been instituted
or, to the Knowledge of Seller, threatened.
(B) There have been no Prohibited Transactions with
respect to any such Employee Benefit Plan. No Fiduciary has any
Liability for breach of fiduciary duty or any other failure to act or
comply in connection with the administration or investment of the
assets of any such Employee Benefit Plan. No action, suit, proceeding,
hearing, or investigation with respect to the administration or the
investment of the assets of any such Employee Benefit Plan (other than
routine claims for benefits) is pending or, to the Knowledge of Seller,
threatened. Seller has no Knowledge of any Basis for any such action,
suit, proceeding, hearing, or investigation.
(C) Company has not incurred, and neither Seller nor any
of the directors and officers (and employees with responsibility for
employee benefits matters) of the Company has any reason to expect that
the Company will incur, any Liability to the PBGC (other than PBGC
premium payments) or otherwise under Title IV of ERISA (including any
withdrawal liability as defined in ERISA ss. 4201) or under the Code
with respect to any such Employee Benefit Plan which is an Employee
Pension Benefit Plan.
(iii) Company never has been required to contribute to any
Multiemployer Plan or has any Liability (including withdrawal liability
as defined in ERISA ss. 4201) under any Multiemployer Plan.
(iv) Company does not maintain and never has maintained or
contributed or been required to contribute to any Employee Welfare
Benefit Plan providing medical, health, or life insurance or other
welfare-type benefits for current or future retired or terminated
employees, their spouses, or their dependents (other than in accordance
with COBRA).
(x) Guaranties. Company is not a guarantor or otherwise is
liable for any Liability or obligation (including indebtedness) of any
other Person.
(y) Environmental, Health, and Safety Matters. To the Knowledge
of Seller:
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(i) Each of Company and its predecessors and Affiliates has
complied and is in compliance with all Environmental, Health, and
Safety Requirements.
(ii) Without limiting the generality of the foregoing, each of
Company and its Affiliates has obtained and complied with, and is in
compliance with, all permits, licenses and other authorizations that
are required pursuant to Environmental, Health, and Safety Requirements
for the occupation of its facilities and the operation of its business;
a list of all such permits, licenses and other authorizations is set
forth on the attached "Environmental and Safety Permits Schedule."
(iii) Neither the Company nor its predecessors or Affiliates has
received any written or oral notice, report or other information
regarding any actual or alleged violation of Environmental, Health, and
Safety Requirements, or any liabilities or potential liabilities
(whether accrued, absolute, contingent, unliquidated or otherwise),
including any investigatory, remedial or corrective obligations,
relating to any of them or its facilities arising under Environmental,
Health, and Safety Requirements.
(iv) None of the following exists at any property or facility
owned or operated by the Company: (1) underground storage tanks, (2)
asbestos-containing material in any form or condition, (3) materials or
equipment containing polychlorinated biphenyls, or (4) landfills,
surface impoundments, or disposal areas.
(v) None of the Company or its predecessors or Affiliates has
treated, stored, disposed of, arranged for or permitted the disposal
of, transported, handled, or released any substance, including without
limitation any hazardous substance, or owned or operated any property
or facility (and no such property or facility is contaminated by any
such substance) in a manner that has given or would give rise to
liabilities, including any liability for response costs, corrective
action costs, personal injury, property damage, natural resources
damages or attorney fees, pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), the Solid Waste Disposal Act, as amended ("SWDA") or any
other Environmental, Health, and Safety Requirements.
(vi) To the Knowledge of Seller, neither this Agreement nor the
consummation of the transaction that is the subject of this Agreement
will result in any obligations for site investigation or cleanup, or
notification to or consent of government agencies or third parties,
pursuant to any of the so-called "transaction-triggered" or
"responsible property transfer" Environmental, Health, and Safety
Requirements.
(vii) Neither the Company nor any of its predecessors or
Affiliates has, either expressly or by operation of law, assumed or
undertaken any liability, including without limitation any obligation
for corrective or remedial action, of any other Person relating to
Environmental, Health, and Safety Requirements.
(viii) To the Knowledge of Seller, no facts, events or
conditions relating to the past or present facilities, properties or
operations of the Company or any of its predecessors or
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Affiliates will prevent, hinder or limit continued compliance with
Environmental, Health, and Safety Requirements, give rise to any
investigatory, remedial or corrective obligations pursuant to
Environmental, Health, and Safety Requirements, or give rise to any
other liabilities (whether accrued, absolute, contingent, unliquidated
or otherwise) pursuant to Environmental, Health, and Safety
Requirements, including without limitation any relating to onsite or
offsite releases or threatened releases of hazardous materials,
substances or wastes, personal injury, property damage or natural
resources damage.
(z) Certain Business Relationships with the Company. Neither
Seller nor any of his Affiliates has been involved in any business arrangement
or relationship with the Company within the past 12 months, other than by
serving as a director, officer or employee of the Company, and neither Seller
nor any of his Affiliates owns any asset, tangible or intangible, which is used
in the business of the Company.
(aa) Transit District Relationships. None of the transit
agencies listed on Exhibit B has (i) terminated or threatened to terminate any
contract with the Company prior to its date of expiration, or (ii) notified the
Company that it intends to terminate or materially reduce the business which it
conducts with the Company.
(bb) Disclosure. The representations and warranties contained in
this Section 4 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 4 not misleading.
5. Pre-Closing Covenants.
---------------------
The Parties agree as follows with respect to the period between the execution of
this Agreement and the Closing.
(a) General. Each of the Parties will use his or its best
efforts to take all action and to do all things necessary, proper, or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions set
forth in Section 7 below).
(b) Notices and Consents. Seller will cause the Company to give
any notices to third parties, and will cause the Company to use its best efforts
to obtain any third party consents, that Buyer may request in connection with
the matters referred to in Section 4(c) above. Each of the Parties will (and
Seller will cause the Company to) give any notices to, make any filings with,
and use its best efforts to obtain any authorizations, consents, and approvals
of governments and governmental agencies in connection with the matters referred
to in Section 3(a)(ii), Section 3(b)(ii), and Section 4(c) above.
(c) Operation of Business. Seller will not cause or permit the
Company to engage in any practice, take any action, or enter into any
transaction outside the Ordinary Course of Business. Without limiting the
generality of the foregoing, Seller will not cause or permit the Company to (i)
make any change in its authorized capital stock, (ii) issue any stock options or
stock appreciation rights or similar benefits, (iii) make any reclassification
in respect of its capital stock, (iv) declare, set aside, or pay any dividend or
make any distribution with respect to its capital stock except for
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dividends and distributions, consistent with past practice, in amounts
reasonably necessary to pay or provide for income tax liability of Seller
related to the operations of Company (v) redeem, purchase, or otherwise acquire
any of its capital stock, (vi) sell, transfer, mortgage, encumber or otherwise
dispose of any of its properties, except for transactions in the usual and
ordinary course of its business, (vii) enter into or commit to any pension,
retirement, profit-sharing or welfare plan or benefit or employment agreement
with or for the benefit of any employee, officer or director of Company, (viii)
purchase or sell any transit advertising contract or relationship, or (ix)
otherwise engage in any practice, take any action, or enter into any transaction
of the sort described in Section 4(h) above.
(d) Preservation of Business. Seller will cause the Company to
keep its business and properties substantially intact, including its present
operations, physical facilities, working conditions, and relationships with
lessors, licensors, suppliers, customers, and, where it is in the best interest
of the Company to use reasonable efforts to keep the employees, and to use
reasonable efforts to continue the growth of the Company's business.
(e) Full Access. Seller will permit, and Seller will cause the
Company to permit, representatives of Buyer to have reasonable access to all
premises, properties, personnel, books, records (including Tax records),
contracts, and documents of or pertaining to the Company. Such representatives
will not cause unreasonable disruption of the business of the Company.
(f) Notice of Developments. Each party will give prompt written
notice to the other parties of any material adverse development causing a breach
of any of the representations and warranties in this Agreement. No disclosure by
any Party pursuant to this Section 5(f), however, shall be deemed to amend or
supplement the Disclosure Schedule or to prevent or cure any misrepresentation,
breach of warranty, or breach of covenant.
(g) Exclusivity. Seller will not (and Seller will not cause or
permit the Company to) (i) solicit, initiate, or encourage the submission of any
proposal or offer from any Person relating to the acquisition of any capital
stock or other voting securities, or any substantial portion of the assets, of
the Company (including any acquisition structured as a merger, consolidation, or
share exchange) or (ii) participate in any discussions or negotiations
regarding, furnish any information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any Person to do or seek
any of the foregoing. Seller will not vote his Company Shares in favor of any
such acquisition structured as a merger, consolidation, or share exchange.
Seller will notify Buyer immediately if any Person makes any proposal, offer,
inquiry, or contact with respect to any of the foregoing.
(h) New Transit Bids. Seller will cause the Company to notify
Buyer with respect to any bid to any transit agency which the Company plans to
make which would, if awarded, involve payments by the Company in excess of
$10,000 in the aggregate, and the Company will not make any such bid without the
Buyer's consent, which shall not be unreasonably withheld.
6. Post-Closing Covenants. The Parties agree as follows with respect to
the period following the Closing.
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(a) General. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the Parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other Party
reasonably may request, all at the sole cost and expense of the requesting Party
(unless the requesting Party is entitled to indemnification therefor under
Section 8 below). Seller acknowledges and agrees that from and after the Closing
Buyer will be entitled to possession of all documents, books, records (including
Tax records), agreements, and financial data of any sort relating to the Company
which are in the possession of the Company or Seller.
(b) Litigation Support. In the event and for so long as any
Party actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Company, each of the other Parties will
cooperate with him or it and his or its counsel in the contest or defense, make
available their personnel, and provide such testimony and access to their books
and records as shall be necessary in connection with the contest or defense, all
at the sole cost and expense of the contesting or defending Party (unless the
contesting or defending Party is entitled to indemnification therefor under
Section 8 below).
(c) Transition. Seller will not take any action that is designed
or intended to have the effect of discouraging any lessor, licensor, customer,
supplier, or other business associate of the Company from maintaining the same
business relationships with the Company after the Closing as it maintained with
the Company prior to the Closing. Seller will pursue on behalf of the Company or
refer to another employee of the Company all customer inquiries relating to the
business of the Company to Buyer from and after the Closing.
(d) Confidentiality. Each Party will treat and hold as such all
of the Confidential Information disclosed to it by any other Party, refrain from
using any of the Confidential Information except in connection with this
Agreement, and, upon termination of this Agreement, deliver promptly to the
disclosing Party or destroy, at the request and option of the disclosing Party,
all tangible embodiments (and all copies) of the Confidential Information which
are in his possession. In the event that any of the Parties is requested or
required (by oral question or request for information or documents in any legal
proceeding, interrogatory, subpoena, civil investigative demand, or similar
process) to disclose any Confidential Information of any other Party, that Party
will notify the disclosing party promptly of the request or requirement so that
the disclosing Party may seek an appropriate protective order or waive
compliance with the provisions of this Section 6(d). If, in the absence of a
protective order or the receipt of a waiver hereunder, any of the Parties is, on
the advice of counsel, compelled to disclose any Confidential Information to any
tribunal or else stand liable for contempt, that Party may disclose the
Confidential Information to the tribunal; provided, however, that the Party
shall use his best efforts to obtain, at the reasonable request and expense of
the disclosing Party, an order or other assurance that confidential treatment
will be accorded to such portion of the Confidential Information required to be
disclosed as the disclosing Party shall designate. The foregoing provisions
shall not apply to any Confidential Information which is generally available to
the public immediately prior to the time of disclosure.
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(e) Covenant Not to Compete. For a period commencing on the
Closing Date and ending on the latest date upon which the second renewal term
put out for bid by the agency for any of the transit agency contracts listed on
Exhibit B has been completed, Seller will not engage directly or indirectly in
any business that the Company conducts as of the Closing Date in any geographic
area in which the Company conducts that business as of the Closing Date;
provided, however, that no owner of less than 1% of the outstanding stock of any
publicly-traded corporation shall be deemed to engage solely by reason thereof
in any of its businesses. If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Section 6(e) is invalid
or unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed. The restrictions set forth in this Section
6(e) shall not apply while Buyer is in default under any of its obligations
under this Agreement or the Employment Agreement.
(f) Buyer Shares. Each certificate for Buyer Shares to be issued
to Seller pursuant to this Agreement will be imprinted with a legend
substantially in the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT"). THE SHARES HAVE BEEN ACQUIRED
WITHOUT A VIEW TO DISTRIBUTION AND MAY NOT BE OFFERED, SOLD, TRANSFERRED,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SHARES UNDER THE ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS, OR
AN OPINION OF COUNSEL TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED
AS TO SUCH SALE OR OFFER. THE STOCK TRANSFER AGENT HAS BEEN ORDERED TO
EFFECTUATE TRANSFERS OF THIS CERTIFICATE ONLY IN ACCORDANCE WITH THE ABOVE
INSTRUCTION.
(g) Release of Seller. Following Closing, Buyer and Company
shall use their reasonable best efforts to cause Seller to be released from
personal liability in respect of obligations of Company which are disclosed to
Buyer prior to Closing and reflected on the Financial Statements, and Buyer
shall defend, indemnify and hold Seller harmless with respect to all such
liabilities.
(h) Registration of Buyer Shares. Buyer agrees that if it
determines to register any of its capital stock for sale to the public on a form
that would also permit sale of the Buyer Shares, Buyer will use its best efforts
to include in such registration and in any related underwriting up to 50,000 of
the Buyer Shares which are held by Seller, upon written request by Seller within
10 days following written notice from Buyer of its intent to pursue such
registration. In the event that the underwriters for any such offering require
the reduction of the number of shares included in the offering which are held by
shareholders who are officers, directors or employees of Buyer, the number
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of Buyer Shares held by Seller to be included in such offering pursuant to this
section shall be reduced on a pro-rata basis along with the shares of such other
shareholders.
7. Conditions to Obligation to Close.
(a) Conditions to Obligation of Buyer. The obligation of Buyer
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 3(a)
and Section 4 above shall be true and correct in all material respects
at and as of the Closing Date;
(ii) Seller shall have performed and complied with all of his
covenants hereunder in all material respects through the Closing;
(iii) the Company shall have procured all of the third party
consents specified in Section 5(b) above;
(iv) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, (C) affect adversely the right of Buyer to own the
Company Shares and to control the Company, or (D) affect adversely the
right of the Company to own its assets and to operate its businesses
(and no such injunction, judgment, order, decree, ruling, or charge
shall be in effect);
(v) Seller shall have delivered to Buyer a certificate to the
effect that each of the conditions specified above in Section
7(a)(i)-(iv) is satisfied in all respects;
(vi) Seller and Company shall have entered into the Employment
Agreement and the same shall be in full force and effect;
(vii) Buyer shall have received from Flamm, Boroff & Bacine
P.C., counsel to Seller, an opinion in form and substance as set forth
in Exhibit F attached hereto, addressed to Buyer, and dated as of the
Closing Date;
(viii) Buyer shall have received the resignations, effective as
of the Closing, of each director and officer of the Company other than
those whom Buyer shall have specified in writing at least five business
days prior to the Closing, provided that Seller shall remain an officer
and director of the Company following Closing;
(ix) Buyer shall have obtained on terms and conditions
reasonably satisfactory to it all of the financing it needs in order to
fund the
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cash portion of the Purchase Price and fund the working
capital requirements of the Company after the Closing, which condition
shall be deemed waived if Buyer has not applied for such financing by
July 15, 1998, and Buyer shall thereafter diligently prosecute such
application; Buyer shall provide Seller with reasonable information
concerning such financing efforts;
(x) the Company shall have obtained and delivered to Buyer, at
Company's expense, financial statements consistent with Securities and
Exchange Commission requirements, audited by Arthur Anderson LLP or by
another firm or independent certified public accountants designated by
Buyer; provided that if the fees and charges of such auditors in
performing such audit shall exceed the sum of $15,000, the excess shall
be paid by Buyer;
(xi) Buyer shall have obtained a letter, in form and substance
satisfactory to Buyer, from an investment banker, financial adviser or
consultant of Buyer's selection, to the effect that the purchase of the
Company Shares as set forth in this Agreement is fair to Buyer and its
Shareholders from a financial point of view, provided that unless Buyer
shall notify Seller on or before the tenth day following Buyer's
receipt of the financial statements referred to in Section 7(a)(x) that
it has failed to obtain such a letter, this condition shall be deemed
to have been satisfied;
(xii) Buyer shall be satisfied, in its sole discretion, with the
results of its due diligence with respect to the financial condition,
results of operations, business prospects, employees, systems, books
and records and other properties of Company, provided that unless Buyer
shall notify Seller on or before the tenth day following Buyer's
receipt of the financial statements referred to in Section 7(a)(x) that
it is not satisfied with the results of such due diligence, this
condition shall be deemed to have been satisfied;
(xiii) The average between the high and low "asked" price for
Buyer's common stock shall not exceed $15 per share during any period
of ten consecutive trading days between the date of this Agreement and
Closing.
(xiv) This Agreement and the transactions contemplated hereby
shall have been approved by Buyer's Board of Directors;
(xv) Company shall have no liabilities payable to its officers,
directors, shareholders or employees, except as otherwise disclosed in
writing to Buyer pursuant to this Agreement;
(xvi) All actions to be taken by Seller in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to Buyer.
Buyer may waive any condition specified in this Section 7(a) if it executes a
writing so stating at or prior to the Closing.
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(b) Conditions to Obligation of Seller. The obligation of Seller
to consummate the transactions to be performed by them in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 3(b)
above shall be true and correct in all material respects at and as of
the Closing Date;
(ii) Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement or (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation (and no such injunction, judgment, order, decree, ruling,
or charge shall be in effect);
(iv) Buyer shall have delivered to Seller a certificate to the
effect that each of the conditions specified above in Section
7(b)(i)-(iii) is satisfied in all respects;
(v) Company shall have received all authorizations, consents,
and approvals of governments and governmental agencies referred to in
Section 3(a)(ii), Section 3(b)(ii), and Section 4(c) above;
(vi) Seller and the Company shall have entered into the
Employment Agreement and the same shall be in full force and effect;
(vii) Seller shall have received from Tonkon Torp LLP, counsel
to Buyer, an opinion in form and substance as set forth in Exhibit G
attached hereto, addressed to Seller, and dated as of the Closing Date;
(viii) the average between the high and low "asked" price for
Buyer's common stock shall not be less than $5 per share during any
period of ten consecutive trading days between the date of this
Agreement and Closing;
(ix) all actions to be taken by Buyer in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Seller; and
(x) Seller shall be satisfied, in his sole discretion, with the
results of his due diligence with respect to the financial condition,
results of operations, business prospects, employees, systems, books
and records and other properties of Buyer, provided that unless Seller
shall notify Buyer on or before the tenth day following Buyer's receipt
of the financial statements
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referred to in Section 7(a)(x) that he is not satisfied with the
results of such due diligence, this condition shall be deemed to have
been satisfied.
The Seller may waive any condition specified in this Section 7(b) if they
execute a writing so stating at or prior to the Closing.
8. Remedies for Breaches of This Agreement.
---------------------------------------
(a) Survival of Representations and Warranties. All of the
representations and warranties of Seller or Buyer contained in this Agreement
shall survive the Closing hereunder (even if any other Party knew or had reason
to know of any misrepresentation or breach of warranty at the time of Closing)
and continue in full force and effect until March 1, 2001 (the Survival
Period").
(b) Indemnification Provisions for Benefit of Buyer.
(i) In the event Seller breaches (or in the event any third
party alleges facts that, if true, would mean Seller has breached) any
of his representations, warranties, and covenants contained herein and
provided that Buyer makes a written claim for indemnification against
Seller pursuant to Section 11(h) below within the Survival Period, then
Seller agrees to indemnify Buyer from and against the entirety of any
Adverse Consequences Buyer may suffer through and after the date of the
claim for indemnification (including any Adverse Consequences Buyer may
suffer after the end of the Survival Period) resulting from, arising
out of, relating to, in the nature of, or caused by the breach (or the
alleged breach).
(ii) Seller agrees to indemnify Buyer from and against the
entirety of any Adverse Consequences Buyer may suffer resulting from,
arising out of, relating to, in the nature of, or caused by any
Liability of the Company (x) for any Taxes of the Company with respect
to any Tax year or portion thereof ending on or before the Closing Date
(or for any Tax year beginning before and ending after the Closing Date
to the extent allocable (determined in a manner consistent with Section
9(c)) to the portion of such period beginning before and ending on the
Closing Date), to the extent such Taxes are not reflected in the
reserve for Tax Liability (rather than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income)
shown on the face of the Most Recent Balance Sheet (rather than in any
notes thereto), as such reserve is adjusted for the passage of time
through the Closing Date in accordance with the past custom and
practice of the Company in filing its Tax Returns, and (y) for the
unpaid Taxes of any Person (other than the Company) under Reg. ss.
1.1502-6 (or any similar provision of state, local, or foreign law), as
a transferee or successor, by contract, or otherwise.
(c) Indemnification Provisions for Benefit of Seller. In the
event Buyer breaches (or in the event any third party alleges facts that, if
true, would mean Buyer has breached) any of its representations, warranties, and
covenants contained herein, and provided that Seller makes a written claim for
indemnification against Buyer pursuant to Section 11(h) below within the
Survival Period, then Buyer agrees to indemnify Seller from and against the
entirety of any Adverse Consequences Seller may suffer through and after the
date of the claim for indemnification (including any Adverse
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Consequences Seller may suffer after the end of any applicable survival period)
resulting from, arising out of, relating to, in the nature of, or caused by the
breach (or the alleged breach).
(d) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the "Indemnified
Party") with respect to any matter (a "Third Party Claim") which may
give rise to a claim for indemnification against any other Party (the
"Indemnifying Party") under this Section 8, then the Indemnified Party
shall promptly notify each Indemnifying Party thereof in writing;
provided, however, that no delay on the part of the Indemnified Party
in notifying any Indemnifying Party shall relieve the Indemnifying
Party from any obligation hereunder unless (and then solely to the
extent) the Indemnifying Party thereby is prejudiced.
(ii) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its
choice reasonably satisfactory to the Indemnified Party so long as (A)
the Indemnifying Party notifies the Indemnified Party in writing within
15 days after the Indemnified Party has given notice of the Third Party
Claim that the Indemnifying Party will indemnify the Indemnified Party
from and against the entirety of any Adverse Consequences the
Indemnified Party may suffer resulting from, arising out of, relating
to, in the nature of, or caused by the Third Party Claim, (B) the
Indemnifying Party provides the Indemnified Party with evidence
reasonably acceptable to the Indemnified Party that the Indemnifying
Party will have the financial resources to defend against the Third
Party Claim and fulfill its indemnification obligations hereunder, (C)
the Third Party Claim involves only money damages and does not seek an
injunction or other equitable relief, (D) settlement of, or an adverse
judgment with respect to, the Third Party Claim is not, in the good
faith judgment of the Indemnified Party, likely to establish a
precedential custom or practice materially adverse to the continuing
business interests of the Indemnified Party, and (E) the Indemnifying
Party conducts the defense of the Third Party Claim actively and
diligently.
(iii) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with Section 8(d)(ii)
above, (A) the Indemnified Party may retain separate co-counsel at its
sole cost and expense and participate in the defense of the Third Party
Claim, (B) the Indemnified Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party
Claim without the prior written consent of the Indemnifying Party (not
to be withheld unreasonably), and (C) the Indemnifying Party will not
consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written consent of
the Indemnified Party (not to be withheld or delayed unreasonably).
(iv) In the event any of the conditions in Section 8(d)(ii)
above is or becomes unsatisfied, however, (A) the Indemnified Party may
defend against, and consent to the entry of any judgment or enter into
any settlement with respect to, the Third Party Claim in any manner it
reasonably may deem appropriate (and the Indemnified Party need not
consult with, or obtain any consent from, any Indemnifying Party in
connection therewith), (B) the Indemnifying Parties will reimburse the
Indemnified Party promptly and periodically for the costs of
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defending against the Third Party Claim (including reasonable
attorneys' fees and expenses), and (C) the Indemnifying Parties will
remain responsible for any Adverse Consequences the Indemnified Party
may suffer resulting from, arising out of, relating to, in the nature
of, or caused by the Third Party Claim to the fullest extent provided
in this Section 8.
(e) Determination of Adverse Consequences. The Parties shall
take into account the time cost of money (using the Applicable Rate as the
discount rate) in determining Adverse Consequences for purposes of this Section
8.
(f) Other Indemnification Provisions. The foregoing
indemnification provisions are in addition to, and not in derogation of, any
statutory, equitable, or common law remedy (including without limitation any
such remedy arising under Environmental, Health, and Safety Requirements) any
Party may have with respect to the Company or the transactions contemplated by
this Agreement. Seller hereby agrees that he will not make any claim for
indemnification against the Company by reason of the fact that he, she or it was
a director, officer, employee, or agent of any such entity or was serving at the
request of any such entity as a partner, trustee, director, officer, employee,
or agent of another entity (whether such claim is for judgments, damages,
penalties, fines, costs, amounts paid in settlement, losses, expenses, or
otherwise and whether such claim is pursuant to any statute, charter document,
bylaw, agreement, or otherwise) with respect to any action, suit, proceeding,
complaint, claim, or demand brought by Buyer against such Seller (whether such
action, suit, proceeding, complaint, claim, or demand is pursuant to this
Agreement, applicable law, or otherwise).
(g) Limitation on Indemnification Obligations. Anything herein
to the contrary notwithstanding, any Indemnifying Party otherwise liable for an
indemnification payment hereunder shall only be required to make an
indemnification payment to the Indemnified Party otherwise entitled thereto to
the extent that the aggregate of all amounts which would otherwise be due
hereunder to such Indemnified Party by the Indemnifying Party for all indemnity
claims hereunder exceeds $50,000, and then only for that portion that exceeds
$50,000.
9. Tax Matters.
-----------
(a) Section 338(h)(10) Election. Company and Seller will join
with Buyer in making an election under Code ss.338(h)(10) of the Code (and any
corresponding election under state, local, and foreign tax law) with respect to
the purchase and sale of the stock of Company hereunder (a "Section 338(h)(10)
Election"). Seller will include any income, gain, loss, deduction, or other tax
item resulting from the Section 338(h)(10) Election on their Tax Returns to the
extent permitted by applicable law. Seller shall also pay any Tax imposed on
Company or its Subsidiaries attributable to the making of the Section 338(h)(10)
Election, including, but not limited to, (i) any Tax imposed under Code ss.1374,
(ii) any tax imposed under Reg. ss.1.338(h)(10)-1(e)(5), or (iii) any state,
local or foreign Tax imposed on Company's or its Subsidiaries' gain, and Seller
shall indemnify Buyer, Company and its Subsidiaries against any Adverse
Consequences arising out of any failure to pay any such Taxes.
(b) Allocation of Purchase Price. The Purchase Price and the
liabilities of Company and its qualified subchapter S subsidiaries (plus other
relevant items) will be allocated to the assets of Company and its qualified
subchapter S subsidiaries for all purposes (including Tax and
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<PAGE>
financial accounting) as shown on the Allocation Schedule attached hereto.
Buyer, Company, Company's Subsidiaries, and Seller will file all Tax Returns
(including amended returns and claims for refund) and information reports in a
manner consistent with such allocation.
(c) S Corporation Status. Company and Seller will not revoke
Company's election to be taxed as an S corporation within the meaning of Code
ss.ss.1361 and 1362. Company and Seller will not take or allow any action other
than the sale of Company's stock pursuant to this agreement that would result in
the termination of Company's status as a validly electing S corporation within
the meaning of Code ss.ss.1361 and 1362.
(d) Tax Periods Ending on or before the Closing Date. Buyer
shall prepare or cause to be prepared and file or cause to be filed all Tax
Returns for the Company and its Subsidiaries for all periods ending on or prior
to the Closing Date which are filed after the Closing Date. Buyer shall permit
Seller to review and comment on each such Tax Return described in the preceding
sentence prior to filing. To the extent permitted by applicable law, Seller
shall include any income, gain, loss, deduction or other tax items for such
periods on their Tax Returns in a manner consistent with the Schedule K-1s
furnished by Company to the Seller for such periods. Seller shall reimburse
Buyer for any Taxes of the Company and its Subsidiaries with respect to such
periods within fifteen (15) days after payment by Buyer or the Company and its
Subsidiaries of such Taxes to the extent such Taxes are not reflected in the
reserve for Tax Liability (rather than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) shown on
the face of the Closing Balance Sheet.
(e) Cooperation on Tax Matters.
(i) Buyer, Company and its Subsidiaries and Seller shall
cooperate fully, as and to the extent reasonably requested by the other
party, in connection with the filing of Tax Returns pursuant to this
Section and any audit, litigation or other proceeding with respect to
Taxes. Such cooperation shall include the retention and (upon the other
party's request) the provision of records and information which are
reasonably relevant to any such audit, litigation or other proceeding
and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder. Company and its Subsidiaries and Seller agree (A) to retain
all books and records with respect to Tax matters pertinent to Company
and its Subsidiaries relating to any taxable period beginning before
the Closing Date until the expiration of the statute of limitations
(and, to the extent notified by Buyer or Seller, any extensions
thereof) of the respective taxable periods, and to abide by all record
retention agreements entered into with any taxing authority, and (B) to
give the other party reasonable written notice prior to transferring,
destroying or discarding any such books and records and, if the other
party so requests, Company and its Subsidiaries or Seller, as the case
may be, shall allow the other party to take possession of such books
and records.
(ii) Buyer and Seller shall, upon request, use their best
efforts to obtain any certificate or other document from any
governmental authority or any other Person as may be necessary to
mitigate, reduce or eliminate any Tax that could be imposed (including,
but not limited to, with respect to the transactions contemplated
hereby).
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(f) Tax Sharing Agreements. All tax sharing agreements or
similar agreements with respect to or involving Company and its Subsidiaries
shall be terminated as of the Closing Date and, after the Closing Date, Company
and its Subsidiaries shall not be bound thereby or have any liability
thereunder.
(g) Certain Taxes. All transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with this Agreement (including any
corporate-level gains tax triggered by the sale of Company stock and any
transfer or similar tax imposed in any state or subdivision), shall be paid by
Seller when due, and Seller will, at their own expense, file all necessary Tax
Returns and other documentation with respect to all such transfer, documentary,
sales, use, stamp, registration and other Taxes and fees, and, if required by
applicable law, Buyer will, and will cause its affiliates to, join in the
execution of any such Tax Returns and other documentation.
10. Termination.
-----------
(a) Termination of Agreement. Certain of the Parties may
terminate this Agreement as provided below:
(i) Buyer and the Seller may terminate this Agreement by mutual
written consent at any time prior to the Closing;
(ii) Buyer may terminate this Agreement by giving written notice
to the Seller on or before the tenth day following the date of delivery
to Buyer of the financial statements described at Section 7(a)(x) above
if Buyer is not satisfied with the results of its continuing business,
legal, environmental, and accounting due diligence regarding the
Company;
(iii) Seller may terminate this Agreement by giving written
notice to the Buyer on or before the tenth day following the date of
delivery to Buyer of the financial statements described at Section
7(a)(x) above if Seller is not satisfied with the results of his
continuing business, legal, environmental, and accounting due diligence
regarding the Buyer;
(iv) Buyer may terminate this Agreement by giving written notice
to the Seller at any time prior to the Closing (A) in the event Seller
has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, Buyer has notified
the Seller of the breach, and the breach has continued without cure for
a period of 20 days after the notice of breach or (B) if the Closing
shall not have occurred on or before September 30,1998, by reason of
the failure of any condition precedent under Section 7(a) hereof
(unless the failure results primarily from Buyer itself breaching any
representation, warranty, or covenant contained in this Agreement); and
(v) the Seller may terminate this Agreement by giving written
notice to Buyer at any time prior to the Closing (A) in the event Buyer
has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, Seller has
notified
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Buyer of the breach, and the breach has continued without cure
for a period of 20 days after the notice of breach or (B) if the
Closing shall not have occurred on or before September 30, 1998, by
reason of the failure of any condition precedent under Section 7(b)
hereof (unless the failure results primarily from Seller himself
breaching any representation, warranty, or covenant contained in this
Agreement).
(b) Effect of Termination. If any Party terminates this
Agreement pursuant to Section 10(a) above, all rights and obligations of the
Parties hereunder shall terminate without any Liability of any Party to any
other Party (except for any Liability of any Party then in breach and except
with respect to the confidentiality obligations set forth at Section 6(d)
above).
11. Miscellaneous.
-------------
(a) Press Releases and Public Announcements. No Party shall
issue any press release or make any public announcement relating to the subject
matter of this Agreement prior to the Closing without the prior written approval
of the other Parties; provided, however, that any Party may make any public
disclosure it believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly-traded securities (in which
case the disclosing Party will use its reasonable best efforts to advise the
other Parties prior to making the disclosure).
(b) No Third-Party Beneficiaries. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
(c) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or among
the Parties, written or oral, to the extent they related in any way to the
subject matter hereof provided, however, that (i) the provisions of paragraph 7
of that certain letter of intent dated June 9, 1998 by and among Buyer, Company
and Wayne P. Schur, and (ii) the Confidentiality Agreement between Buyer and
Company dated as of March 17, 1998, shall continue in full force and effect
notwithstanding the execution of this Agreement.
(d) Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of his or its rights, interests, or obligations hereunder without the prior
written approval of Buyer and the Seller; provided, however, that Buyer may (i)
assign any or all of its rights and interests hereunder to one or more of its
Affiliates and (ii) designate one or more of its Affiliates to perform its
obligations hereunder (in any or all of which cases Buyer nonetheless shall
remain responsible for the performance of all of its obligations hereunder).
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The Section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
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(g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to the Buyer: Brian Obie, President
OBIE Media Corporation
4211 West 11th Avenue
Eugene, OR 97402
With a copy to: Kenneth D. Stephens
Tonkon Torp LLP
1600 Pioneer Tower
888 S.W. Fifth Avenue
Portland, OR 97204-2099
If to Seller or
Company: Mr. Wayne P. Schur
8 Russell Court
Newtown, PA 18940
With a copy to: Stephen H. Frishberg
Flamm, Boroff & Bacine PC
220 Union Meeting Corporate Center
925 Harvest Drive
Blue Bell, PA 19422
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
(h) Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Oregon without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Oregon or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Oregon.
(i) Amendments and Waivers. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
the Parties. No waiver by any Party of any default, misrepresentation, or breach
of warranty or covenant hereunder, whether intentional or not, shall be deemed
to extend to any prior or subsequent default, misrepresentation, or breach of
37
<PAGE>
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
(j) Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.
(k) Expenses. Each of the Parties will bear his or its own costs
and expenses (including legal fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby. Seller agrees that
Company has not borne or will not bear any of Seller's costs and expenses
(including any of its legal fees and expenses) in connection with this Agreement
or any of the transactions contemplated hereby.
(l) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. The Parties intend
that each representation, warranty, and covenant contained herein shall have
independent significance. If any Party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant.
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<PAGE>
(m) Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
(n) Specific Performance. Each of the Parties acknowledges and
agrees that the other Parties would be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Parties shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter, in addition to any other remedy to
which they may be entitled, at law or in equity.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
OBIE MEDIA CORPORATION
By: /s/Brian B, Obie
------------------------------------
Title: President
---------------------------------
PHILBIN & COINE, INC.
By: /s/Wayne P. Schur
------------------------------------
Title: President
---------------------------------
/s/Wayne P. Schur
---------------------------------------
Wayne P. Schur, individually
The undersigned spouse of Wayne P. Schur consents to this
Agreement and subjects her community property interest and rights to its terms.
/s/Barbara G. Schur
---------------------------------------
Signature
Barbara Schur
---------------------------------------
Printed Name
Date: August 25, 1998
----------------------------------
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EXHIBIT B
- - Greater Bridgeport Transit District
- - Broward County, Florida
- - The City of Charlottesville, Charlottesville Transit Service (Charlottesville)
- - Southwest Ohio Regional Transit Authority (Cincinnati)
- - Greater Cleveland Regional Transit Authority
- - CT Transit (Hartford)
- - Volusia County (Daytona Beach)
- - City of Gainsville
- - Kenosha Transit
- - Greater Lynchburg Transit Company
- - Milwaukee County Transit System
- - Tidewater Transportation District (Norfolk, Virginia)
- - City of Norwood
- - Dattco Bus Inc. (New Britain)
- - Petersberg Area Transit
- - City of Racine
- - Greater Richmond Transit Company
- - Greater Roanoke Transit Company
- - Northeast Transportation Company (Waterbury)
- - Palm Beach County (West Palm Beach)
