<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 20, 1998
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------
OUTDOOR SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
--------------
<TABLE>
<S> <C>
DELAWARE 86-073400
(State or other jurisdiction, incorporation or organization) (IRS Employer Identification Number)
</TABLE>
--------------
OUTDOOR SYSTEMS, INC.
2502 N. BLACK CANYON HIGHWAY
PHOENIX, ARIZONA 85009
(602) 246-9569
(Address, including zip code and telephone number, including area code, of
Registrant's principal executive offices)
--------------
WILLIAM S. LEVINE
CHAIRMAN OF THE BOARD
OUTDOOR SYSTEMS, INC.
2502 N. BLACK CANYON HIGHWAY
PHOENIX, ARIZONA 85009
(602) 246-9569
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------
WITH COPY TO:
GABRIEL DUMITRESCU, ESQ.
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
191 PEACHTREE STREET, N.E., 16TH FLOOR
ATLANTA, GEORGIA 30303
(404) 572-6600
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after the effective date of this Registration Statement.
--------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Section
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -------------------------------------------- --------------------- -------------------- ----------------------- -------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
OF SECURITIES TO BE REGISTERED REGISTERED SHARE(1) PRICE(1) FEE(1)
- -------------------------------------------- --------------------- -------------------- ----------------------- -------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 1,650,784 $29.91 $49,374,949.44 $14,565.61
============================================ ===================== ==================== ======================= ===================
</TABLE>
(1) Pursuant to Rule 457(c), the proposed maximum offering price and
registration fee are based upon the average of the high and low prices of
the Common Stock on the New York Stock Exchange on May 18, 1998.
---------------
<PAGE> 2
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE> 3
PROSPECTUS
1,650,784 SHARES
OUTDOOR SYSTEMS, INC.
COMMON STOCK
-------------------------------------
This Prospectus relates to 1,650,784 shares (the "Shares") of Common
Stock, $.01 par value per share ("Common Stock") of Outdoor Systems, Inc. (the
"Company"). The Shares may be offered by certain stockholders (the "Selling
Stockholders") of the Company from time to time in transactions in the open
market, in negotiated transactions or a combination of such methods of sale, at
fixed prices which may be changed, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. The Selling Stockholders may effect such transactions by selling the
Shares to or through broker-dealers, and such broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
Selling Stockholders and/or the purchasers of the Shares for whom such
broker-dealers may act as agents or to whom they sell as principals, or both
(which compensation as to a particular broker-dealer might be in excess of
customary commissions). See "Sale of Shares."
The Selling Stockholders acquired the Shares from the Company on May
19, 1998 in connection with the Company's acquisition of a company previously
owned by the Selling Stockholders. See "Recent Development." The Selling
Stockholders may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"). See "Selling
Stockholders" and "Sale of the Shares."
None of the proceeds from the sale of the Shares by the Selling
Stockholders will be received by the Company. The Company has agreed to bear all
expenses (other than selling commissions) in connection with the registration
and sale of the Shares being offered by the Selling Stockholders and to
indemnify the Selling Stockholders against certain liabilities, including
liabilities under the Securities Act.
The Common Stock is listed for trading on the New York Stock Exchange
under the symbol "OSI." On May 18, 1998, the last reported sales price of the
Common Stock reported on the New York Stock Exchange was $29.75 per Share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRACT IS A CRIMINAL OFFENSE.
----------------------------------------------
THE DATE OF THIS PROSPECTUS IS _______________, 1998.
<PAGE> 4
THE COMPANY
The Company is the largest out-of-home media company in North America,
operating, as of December 31, 1997, approximately 98,300 bulletin, poster, mall
and transit advertising display faces in 90 metropolitan markets in the United
States and 13 metropolitan markets in Canada. The Company also operates
approximately 125,000 subway advertising display faces in New York City. The
Company currently has operations in all of the 50 largest U.S. markets, as well
as 13 of the 15 largest Canadian markets.
RECENT DEVELOPMENTS
On May 19, 1998, the Company acquired Gator Outdoor Advertising, Inc.,
a Florida corporation ("Gator"), by means of a merger of GATOA, Inc., a Florida
corporation and indirect subsidiary of the Company ("GATOA"), with and into
Gator pursuant to an Agreement and Plan of Merger dated as of May 19, 1998 (the
"Merger Agreement") among the Company, Gator, GATOA and Peter D. Sleiman,
Anthony T. Sleiman, Joseph E. Sleiman and Eli T. Sleiman, Jr., former
stockholders of Gator (the "Selling Stockholders"). Pursuant to the Merger
Agreement, the Company issued the Shares to the Selling Stockholders as merger
consideration. Under the terms of the Merger Agreement, the Company agreed to
register the Shares for resale by the Selling Stockholders and to indemnify the
Selling Stockholders against certain liabilities, including liabilities under
the Securities Act. The Registration Statement of which this Prospectus is a
part was filed with the Securities and Exchange Commission (the "Commission")
pursuant to the registration provisions of the Merger Agreement.
SELLING STOCKHOLDERS
The table below sets forth the number of outstanding shares of Common
Stock beneficially owned by each of the Selling Stockholders, which are being
offered hereby. The Company believes that each individual named has sole
investment and voting power with respect to shares of Common Stock indicated as
beneficially owned by such Selling Stockholder. Prior to the offering, each
Selling Stockholder beneficially owned less than one percent (1%) of the number
of Shares of Common Stock of the Company outstanding on the date of this
Prospectus. Upon the sale by the Selling Stockholders of all of the Shares and
completion of the offering, assuming all of the Shares being offered hereby are
sold and that no other changes in the Selling Stockholders' beneficial ownership
occur prior to the completion of this offering, none of the Selling Stockholders
will beneficially own any shares of Common Stock of the Company.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY OWNED
NAME OF SELLING STOCKHOLDER PRIOR TO THE OFFERING
--------------------------- ---------------------
<S> <C>
Peter D. Sleiman 412,696
Anthony T. Sleiman 412,696
Joseph E. Sleiman 412,696
Eli T. Sleiman, Jr. 412,696
</TABLE>
SALE OF THE SHARES
The sale of the Shares by the Selling Stockholders may be effected from
time to time in transactions in the open market, in negotiated transactions or
through a combination of such methods of sale, at fixed prices, which may be
changed, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. The Selling Stockholders
may effect such transactions by selling the Shares to or through broker-dealers,
and such broker-dealers may receive
2
<PAGE> 5
compensation in the form of discounts, concessions or commissions from the
Selling Stockholders and/or the purchasers of the Shares for which such
broker-dealers may act as agents or to whom they sell as principals, or both
(which compensation as to a particular broker-dealer may be in excess of
customary compensation).
The Selling Stockholders and any broker-dealers who act in connection
with the sale of the Shares hereunder may be deemed to be "underwriters" within
the meaning of Section 2(ii) of the Securities Act, and any commissions received
by them and profit on any resale of the Shares as principals might be deemed to
be underwriting discounts and commissions under the Securities Act. The Company
has agreed to indemnify the Selling Stockholders against certain liabilities,
including liabilities under the Securities Act.
LEGAL MATTERS
The validity of the issuance of the Shares offered hereby will be
passed upon for the Company by Powell, Goldstein, Frazer & Murphy LLP, Atlanta,
Georgia.
EXPERTS
The financial statements and the related financial statement schedule
incorporated in this prospectus by reference from the Company's Annual Report on
Form 10-K for the year ended December 31, 1997 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their reports, which are
incorporated herein by reference, and have been so incorporated in reliance upon
the reports of such firm given upon their authority as experts in accounting and
auditing.
The financial statements of National Advertising Company, as of
December 31, 1996 and 1995 and for each of the three years in the period ended
December 31, 1996 incorporated by reference in this prospectus, have been so
incorporated in reliance on the report of Coopers & Lybrand L.L.P., independent
accountants, given on the authority of that firm as experts in accounting and
auditing.
AVAILABLE INFORMATION
The Company has filed with the Commission a Registration Statement on
Form S-3 (the "Registration Statement"), of which this Prospectus forms a part,
covering the Shares to be sold pursuant to this offering.
As permitted by the rules and regulations of the Commission, this
Prospectus omits certain information, exhibits and undertakings contained in the
Registration Statement. Such additional information, exhibits and undertakings
can be inspected at and obtained from the Commission as set forth below. For
additional information regarding the Company, the Common Stock and related
matters and documents, reference is made to the Registration Statement and
exhibits thereto.
The Company is subject to the informational requirements of the
Exchange Act and, in accordance therewith, files reports and other information
with the Commission. Reports and other information filed with the Commission
pursuant to the Exchange Act may be inspected and copied, at the offices of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at its regional
offices at Seven World Trade Center, New York, New York 10048, and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials
may be obtained from the public reference section of the Commission at its
Washington address upon payment of the prescribed fee. The Commission also
maintains an Internet Web Site at http:/www.sec.gov that contains reports and
other information about the Company. The
3
<PAGE> 6
Common Stock is listed for trading on the New York Stock Exchange under the
symbol "OSI." Reports, proxy statements and other information concerning the
Company may also be inspected or copied at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or information filed by the Company with the
Commission are incorporated in this Prospectus by reference and made a part
hereof: (i) Annual Report on Form 10-K for the fiscal year ended December 31,
1997 (File No. 1-13275); (ii) Amendment No. 1 on Form 10-K/A to Annual Report on
Form 10-K for fiscal year ended December 31, 1997 filed on March 26, 1998 (File
No. 1-13275); (iii) Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 1998; (iv) the description of the Common Stock contained in
Registration Statement on Form 8-A filed on August 15, 1997 (File No. 1-13275);
(v) the balance sheets of National Advertising Company as of December 31, 1996
and 1995 and the related statements of income and cash flows for each of the
three years in the period ended December 31, 1996, together with notes thereto
and Independent Auditor's Report thereon, contained in the Company's Current
Report on Form 8-K filed on August 29, 1997 (File No. 1-13275); and (vi)
unaudited consolidated pro forma financial information and notes thereto
contained in the Company's Amendment No. 1 on Form 8-K/A to Current Report on
Form 8-K filed on October 29, 1997 (File No. 1-13275).
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the Offering shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the respective dates
of filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document incorporated or
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute part of this Prospectus.
The Company undertakes to provide without charge to each person to whom
a copy of this Prospectus has been delivered, upon written or oral request, a
copy of any or all information incorporated by reference in this Prospectus (not
including exhibits to such information, unless such exhibits are specifically
incorporated by reference into such information). Such requests should be
directed to Outdoor Systems, Inc., Attention: Bill M. Beverage, Chief Financial
Officer, Treasurer and Secretary, at 2502 North Black Canyon Highway, Phoenix,
Arizona 85009, telephone number (602) 246-9569.
4
<PAGE> 7
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is a statement of estimated expenses incurred in
connection with the shares of Common Stock being registered hereby, other than
underwriting discounts and commissions:
<TABLE>
<S> <C>
SEC Registration Fee............................................. $14,565.61
Accounting Fees and Expenses..................................... 8,000.00
Legal Fees and Expenses.......................................... 10,000.00
Miscellaneous.................................................... 1,434.39
----------
Total............................................................ $34,000.00
==========
</TABLE>
The foregoing items, except for the SEC Registration Fee, are
estimated.
ITEM 15..INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "Delaware
Law"), Article VII of the Registrant's Fourth Amended and Restated Certificate
of Incorporation (the "Certificate of Incorporation"), and Article VI of the
Company's Amended and Restated Bylaws (the "Bylaws") provide for indemnification
of the Registrant's directors and officers to the maximum extent provided by
Delaware law, which may include liabilities under the Securities Act of 1933, as
amended (the "Securities Act").
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to its Certificate of Incorporation, Bylaws, or otherwise, the
Company has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding) is asserted
by such director, officer, or controlling person in connection WITH the
securities being registered, the Company will, unless in the opinion of its
counsel, the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
As permitted by Section 102(b) of the Delaware Law, the Certificate of
Incorporation provides that directors of the Company shall have no personal
liability to the Company or its stockholders for monetary damages for breach of
fiduciary duty as a director, except (i) for any breach of a director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or knowing violations of law,
(iii) under Section 174 of the Delaware Law, or (iv) for any transaction from
which a director derived an improper personal benefit.
The Company maintains directors' and officers' liability insurance.
II-1
<PAGE> 8
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
3.1 -- Fourth Amended and Restated Certificate of Incorporation
(filed as Exhibit 99.2 to the Registrant's Current Report on
Form 8-K filed on June 4, 1997 and incorporated herein by
reference).
3.2 -- Amended and Restated Bylaws (filed as Exhibit 3.2 to the
Registrant's Amendment No. 2 to Form S-1 Registration
Statement No. 333-1582 and incorporated herein by reference).
4.1 -- Specimen Common Stock Certificate of the Registrant (filed as
Exhibit 4.1 to the Registrant's Amendment No. 2 to Form S-1
Registration Statement No. 333-1582 and incorporated herein by
reference).
5.1 -- Opinion of Powell, Goldstein, Frazer & Murphy LLP.*
23.1 -- Consent of Deloitte & Touche LLP.
23.2 -- Consent of Coopers & Lybrand L.L.P.
23.3 -- Consent of Powell, Goldstein, Frazer & Murphy LLP (to be
included in Exhibit 5.1).
24.1 -- Powers of Attorney (included on Signature Page).
99.1 -- Agreement and Plan of Merger dated as of May 19, 1998 by and
among Gator Outdoor Advertising, Inc., Outdoor Systems, Inc.,
GATOA, Inc., and Peter D. Sleiman, Anthony T. Sleiman, Joseph
E. Sleiman and Eli T. Sleiman, Jr.
- ------------------
*To be filed by amendment or by Current Report on Form 8-K.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to section 13 (a) or section
15 (d) of the Securities Exchange Act of 1934, (the "Exchange Act")
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(b) Insofar as the indemnification for liabilities arising under the
Securities Act of 1933 (the "Securities Act") may be permitted to
directors, officers and controlling persons of the registrant pursuant
to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
(c) The undersigned Registrant hereby undertakes that:
II-2
<PAGE> 9
(1) For purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the Registrant pursuant
to Rule 424 (b) (I) or (4) or 497 (h) under the Securities Act shall be
deemed to be part of the Registration Statement as of the time it was
declared effective.
(2) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new Registration Statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
II-3
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe it meets all the
requirements for filing on Form S-3 and has duly caused the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Phoenix, State of Arizona, on the 19th day of May
1998.
OUTDOOR SYSTEMS, INC.
By: /s/ William S. Levine
-------------------------
William S. Levine
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints WILLIAM S. LEVINE and BILL M. BEVERAGE, and each
of them, as his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him or and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, to sign any related registrations
statements pursuant to Rule 462 (b) of the Securities Act of 1933, and to file
the same with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them, for their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on behalf of the
Registrants and in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Arturo R. Moreno President (Principal Executive Officer) and May 19, 1998
- -------------------- Director
Arturo R. Moreno
/s/ William S. Levine Chairman of the Board and Director May 19,1998
- ---------------------
William S. Levine
/s/ Bill M. Beverage Secretary, Treasurer and Chief Financial Officer May 19, 1998
- -------------------- (Principal Accounting and Financial Officer)
Bill M. Beverage
/s/ Brian J. O'Connor Director May 19,1998
- ---------------------
Brian J. O'Connor
/s/ Stephen F. Butterfield Director May 19, 1998
- --------------------------
Stephen F. Butterfield
</TABLE>
II-4
<PAGE> 11
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
3.1 -- Fourth Amended and Restated Certificate of Incorporation
(filed as Exhibit 99.2 to the Registrant's Current Report on
Form 8-K filed on June 4, 1997 and incorporated herein by
reference).
3.2 -- Amended and Restated Bylaws (filed as Exhibit 3.2 to the
Registrant's Amendment No. 2 to Form S-1 Registration
Statement No. 333-1582 and incorporated herein by reference).
4.1 -- Specimen Common Stock Certificate of the Registrant (filed as
Exhibit 4.1 to the Registrant's Amendment No. 2 to Form S-1
Registration Statement No. 333-1582 and incorporated herein by
reference).
5.1 -- Opinion of Powell, Goldstein, Frazer & Murphy LLP.*
23.1 -- Consent of Deloitte & Touche LLP.
23.2 -- Consent of Coopers & Lybrand L.L.P.
23.3 -- Consent of Powell, Goldstein, Frazer & Murphy LLP (to be
included in Exhibit 5.1).
24.1 -- Powers of Attorney (included on Signature Page).
99.1 -- Agreement and Plan of Merger dated as of May 19, 1998 by and
among Gator Outdoor Advertising, Inc., Outdoor Systems, Inc.,
GATOA, Inc. and Peter D. Sleiman, Anthony T. Sleiman, Joseph
E. Sleiman and Eli T. Sleiman, Jr.
- ---------------
*To be filed by amendment or by Current Report on Form 8-K.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement of Outdoor Systems, Inc. on Form S-3 of our report dated February 3,
1998, except for the last paragraph of Note 5, for which the date is March 17,
1998 appearing in the Annual Report on Form 10-K of Outdoor Systems, Inc. for
the year ended December 31, 1997, and incorporated by reference in the Amendment
No. 1 on Form 10-K/A, and to the reference to us under the heading "Experts" in
the Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE
Phoenix, Arizona
May 19, 1998
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-3 of Outdoor Systems, Inc. of our report dated March 21,
1997, except for Note 10 as to which the date is May 1, 1997, on our audits of
the financial statements of National Advertising Company as of December 31, 1996
and 1995 and for each of the three years in the period ended December 31, 1996,
which report is included in the Current Report on Form 8-K filed by Outdoor
Systems, Inc. on August 29, 1997. We also consent to the reference to our firm
under the caption "Experts."
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
May 19, 1998
<PAGE> 1
EXHIBIT 99.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of
______________, 1998, is by and among GATOR OUTDOOR ADVERTISING, INC., a Florida
corporation ("GATOR"); OUTDOOR SYSTEMS, INC., a Delaware corporation (THE
"COMPANY"); GATOA, INC. ("GATOA"), a Florida corporation and a subsidiary of the
Company; and the Stockholders of Gator for purposes of Articles V, X, XI and
XII.
RECITALS
A. The Company desires to acquire Gator, and Gator desires to be acquired
by the Company on the terms and conditions herein set forth.
B. The respective Boards of Directors of Gator, the Company and GATOA have
determined that it is in the best interests of their respective stockholders
that GATOA merge with and into Gator (the "Merger"), in accordance with the Laws
of the State of Florida ("Florida Law"), as a result of which Gator will be the
surviving corporation in the Merger.
C. The respective Boards of Directors of the Company, Gator and GATOA have
adopted and approved this Agreement and the other transactions contemplated
hereby.
D. The shareholders of both GATOA and Gator have voted to adopt and approve
this Agreement and the other transactions contemplated hereby.
AGREEMENT
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the indicated
meanings, which meanings shall be applicable both to the singular and plural
forms of such term, except to the extent otherwise indicated in a definition of
a particular term.
1.1 "Affiliate" shall have the meaning specified in Rule 12b-2 of the
regulations promulgated under the Exchange Act. With respect to an individual,
the term Affiliate shall also include any immediate family member of such
individual and any Affiliates of such family members.
1.2 "Affiliate Lease" shall have the meaning specified in Section 7.6 of
this Agreement.
<PAGE> 2
1.3 "Affiliated Group" shall mean any group of corporations with respect
to which a consolidated tax return was, or was required to have been, filed.
1.4 "Agreement" shall have the meaning specified in the first paragraph of
this Agreement.
1.5 "Articles of Merger" shall mean that certain Articles of Merger dated
as of the Closing Date, substantially in the form of Exhibit 1.5 hereto.
1.6 "Average Share Price" shall mean the average closing price of Outdoor
Systems Stock on the New York Stock Exchange during the five (5) trading days
prior to the first (1st) trading day before the Closing Date.
1.7 "Balance Sheet" shall mean the unaudited Balance Sheet of Gator as of
the Balance Sheet Date.
1.8 "Balance Sheet Date" shall mean May 15, 1998.
1.9 "Bankruptcy and Equity Exceptions" shall mean applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
1.10 "Best Efforts" shall mean reasonable good faith efforts but shall in
no event require the commencement of litigation against any third party or any
payment to any third party.
1.11 "Billboard Leases" shall have the meaning specified in Section
4.9(c).
1.12 "Billboards" shall have the meaning specified in Section 4.9(a).
1.13 "Business Day" shall mean any weekday on which commercial banks in
New York City are open. Any action, notice or right which is to be exercised or
lapses on or by a given date which is not a Business Day may be taken, given or
exercised, and shall not lapse, until the end of the next Business Day.
1.14 "Closing" shall have the meaning specified in Section 2.1 of this
Agreement.
1.15 "Closing Date" shall have the meaning specified in Section 2.1 of
this Agreement.
1.16 "Closing Date Balance Sheet" shall mean the unaudited balance sheet
of Gator as of the Closing Date prepared in accordance with GAAP.
1.17 "Code" shall mean the Internal Revenue Code of 1986, as amended.
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1.18 "Commission" shall mean the Securities and Exchange Commission.
1.19 "Constituent Corporations" shall mean Gator and GATOA.
1.20 "Disclosure Schedules" shall mean the schedules prepared and
delivered by Gator to the Company and GATOA setting forth the exceptions to the
representations and warranties contained in Article of this Agreement and
certain other information called for by this Agreement. Unless otherwise
specified, each reference in this Agreement to any numbered schedule is a
reference to that numbered schedule which is included in the Disclosure
Schedules.
1.21 "Employee Benefit Plan" shall mean all plans, programs, arrangements,
contracts or practices, whether in writing or not, providing benefits to one or
more past, present or future employees, officers, directors or independent
contractors of Gator or any ERISA Affiliate, including without limitation, any
plan contemplated by Section 3(3) of ERISA.
1.22 "Encumbrances" shall mean any lien, security interest, factoring
arrangement, mortgage, deed of trust, pledge, option, hypothecation, easement or
conditional sale or other title retention agreement or restriction on use,
transfer, receipt of income or exercise of any attribute of ownership.
1.23 "Environmental Laws" shall mean any federal, state, or local law,
ordinance, regulation, order or permit pertaining in any way to the environment,
natural resources or public health or safety as presently in effect.
1.24 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.25 "ERISA Affiliate" shall mean any trade or business, whether or not
incorporated, which together with Gator is treated as a single employer within
the meaning of Section 414(b), (c), (m) or (o) of the Code.
1.26 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
1.27 "Financial Statements" shall mean (a) the unaudited balance sheet of
Gator as of May 15, 1998, (b) the unaudited balance sheet of Gator as of the end
of each calendar month thereafter that ends at least fifteen (15) days prior to
the Closing Date; (c) the unaudited statement of earnings and cash flows of
Gator for the period from January 1, 1998 through May 15, 1998; and (d) the
unaudited statement of earnings and cash flows of Gator for each calendar month
thereafter that ends at least fifteen (15) days prior to the Closing Date.
1.28 "GAAP" shall mean generally accepted accounting principles
consistently applied.
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1.29 "Gator" shall have the meaning specified in the first paragraph of
this Agreement.
1.30 "Gator Capital Stock" shall mean all issued and outstanding capital
stock of Gator, regardless of class, together with all options, warrants, calls,
commitments, or other rights to acquire in any manner capital stock of Gator.
1.31 "Gator Plans" shall have the meaning specified in Section 4.21 of
this Agreement.
1.32 "HSRA" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
1.33 "Hazardous Materials" shall mean hazardous wastes as presently
defined by the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section
609 et seq., as amended, and regulations promulgated thereunder and hazardous
substances as presently defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et seq., as
amended ("CERCLA" or "Superfund") and regulations promulgated thereunder, and
shall also mean every "hazardous material," "hazardous substance," "hazardous
waste," "toxic substance," or petroleum or petroleum products, as defined or
described in every state, local or other federal Environmental Law which is or
was applicable to the operations of Gator.
1.34 "Indebtedness" shall mean all obligations which arise from borrowed
money or the deferred purchase price of property or services, including
capitalized leases under GAAP (other than accounts payable arising in the
ordinary course of business), provided that no amounts payable under contracts
or agreements listed on Schedule 4.13(b) shall be treated as Indebtedness.
1.35 "Material Adverse Effect" shall mean a material adverse effect on any
portion of the business of Gator taken as a whole.
1.36 "Material Lease" or "Material Leases" shall have the meaning
specified in Section 4.10 of this Agreement.
1.37 "Merger" shall have the meaning specified in Recital B of this
Agreement.
1.38 "Merger Consideration" shall mean the aggregate of the Shares.
1.39 "Merger Price" shall mean Fifty-Three Million and Five Hundred
Thousand Dollars ($53,500,000), less (a) the aggregate amount of Gator's
Indebtedness on the Closing Date as determined from the Closing Date Balance
Sheet, plus (b) the Net Working Capital, if it is a positive amount, or minus
(c) the Net Working Capital, if it is a negative amount.
1.40 "Net Working Capital" shall mean current assets minus current
liabilities of Gator as of the Closing Date determined in accordance with GAAP
after giving effect to the Proration, provided that current liabilities shall
not include any liabilities included in the computation of Indebtedness in
clause (a) of the definition of Merger Price and provided, further, that no
prepaid expenses in excess of one year shall be included in the calculation of
Net Working
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Capital except with respect to that certain Amended and Restated Sign Lease, by
and between Xentury City Development Company, L.C. and Gator, the prepaid rent
therefor shall be credited as a current asset in the amount of $325,000 and
provided, further, that no amounts payable under any contracts or agreements
listed on Schedule 4.13(b) shall be treated as current liabilities is
determining Net Working Capital. Net Working Capital shall be calculated based
on the Closing Date Balance Sheet.
1.41 "Outdoor Systems SEC Documents" shall have the meaning specified in
Section 6.5 of this Agreement.
1.42 "Outdoor Systems Stock" shall mean the common stock of the Company,
$.01 par value.
1.43 "Permitted Encumbrances" shall mean (a) Encumbrances imposed by any
governmental authority for Taxes, assessments or charges not yet due and payable
or which are being contested in good faith and by appropriate proceedings, if
adequate reserves with respect thereto are maintained on the books of Gator in
accordance with GAAP; (b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Encumbrances arising in the ordinary course of
business which are not overdue or which are being contested in good faith and by
appropriate proceedings, if adequate reserves with respect thereto are
maintained on the books of Gator in accordance with GAAP; (c) pledges or
deposits in connection with worker's compensation, unemployment insurance and
other social security legislation; (d) deposits to secure performance bonds and
other obligations of a like nature incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar encumbrances on
real property which do not materially detract from the value of the property
subject thereto or interfere with the ordinary use thereof or conduct of
business thereon, and (f) all the exceptions to title reflected on Schedule
4.14.
1.44 "Proration" shall mean the proration of all of Gator's revenues and
expenses as of the Closing Date. Revenues and expenses will be recognized
according to GAAP and based on the number of days of posting before and after
the Closing Date. For purposes of this definition, one month shall be deemed to
have thirty (30) days and one year shall be deemed to have three hundred and
sixty (360) days. No prepaid expenses in excess of one year shall be recognized
for purposes of the proration.
1.45 "Requisite Stockholder Approval" shall mean the vote in favor of this
Agreement and the Merger by the holders of a majority of each class of Gator
Capital Stock entitled to vote thereon.
1.46 "Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
1.47 "Shares" means the shares of Outdoor Systems Stock issuable pursuant
to Section 3.4 and Sections 11.8 and 11.9.
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1.48 "Stockholders" shall mean the holders of Gator Capital Stock on the
date of this Agreement, whose names are set forth on the signature page of this
Agreement.
1.49 "Stockholder Representative" means Peter D. Sleiman.
1.50 "Straddle Period" shall mean any taxable period beginning before and
ending after the Closing Date.
1.51 "Subsidiary" shall mean each corporation, partnership or other
entity, fifty percent (50%) or more of the outstanding voting shares of which,
or other voting interests or equity interests in the case of a partnership, are
owned or controlled directly or indirectly by another entity.
1.52 "Surviving Corporation" shall mean Gator.
1.53 "Tax Returns" shall mean all returns, declarations, reports,
estimates, information returns and statements required to be filed in respect of
any Taxes.
1.54 "Taxes" shall mean all taxes, charges, fees, imposts, levies or other
assessments, including, without limitation, all net income, franchise, profits,
gross receipts, capital, sales, use, ad valorem, value added, transfer, transfer
gains, inventory, capital stock, license, withholding, payroll, employment,
social security, unemployment, excise, severance, stamp, occupation, real or
personal property, and estimated taxes, water, rent and sewer service charges,
customs duties, fees, assessments and charges of any kind whatsoever, together
with any interest and any penalties, fines, additions to tax or additional
amounts thereon, imposed by any taxing authority (federal, state, local or
foreign) and shall include any transferee liability with respect to Taxes.
ARTICLE II
CLOSING DATE; CLOSING
2.1 Time and Place. Except as hereinafter provided, the closing hereunder
(the "Closing") shall take place at the office of FOLEY & LARDNER, 200 Laura
Street, Jacksonville, Florida 32202, at 10:00 A.M., local time, on the first
(1st) Business Day after all the conditions precedent to the Closing shall have
been satisfied or waived in writing, unless otherwise mutually agreed to in
writing by the Company, GATOA and Gator. Subject to the provisions of Section
9.3, failure to consummate the transactions contemplated hereby on the date and
time and at the place determined pursuant to this Section 2.1 shall not relieve
a party of any obligation for breaching this Agreement. The date of the Closing
is referred to in this Agreement as the "Closing Date."
2.2 Proceedings and Deliveries Simultaneous. All proceedings to be taken
and all documents to be executed and delivered by all parties at the Closing
shall be deemed to have been
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taken and executed simultaneously and no proceedings shall be deemed taken nor
any documents executed or delivered until all have been taken, executed and
delivered.
2.3 Determination of Merger Price. The Merger Price shall be calculated
based on an estimated Closing Date Balance Sheet and income statement prepared
by Gator's outside certified public accountants pursuant to the terms of this
Agreement and reviewed by Company's outside certified public accountants. Within
ninety (90) days after receipt thereof, the Company shall provide the
Stockholders with any objections to such calculations. The parties and their
respective representatives shall thereafter work in good faith to resolve any
discrepancies. If the parties and their representatives are unable to resolve
such discrepancies within thirty (30) days, the matter shall be submitted to an
accounting firm or other third party mutually acceptable to the parties, whose
determination shall be final and binding on the parties, and fifty (50%) of the
fees and expenses of such third party shall be borne by each of the Company, on
the one hand, and the Stockholders, jointly and severally, on the other hand.
Any required refund or payment with respect to the Merger Price shall be made
promptly after a final determination of such calculation is made, provided that
the Company shall be entitled to pay any additional Merger Price in cash or
shares of Outdoor Systems Stock in an amount equal to the payment based on the
Average Share Price (provided that the Stockholder's Representative shall be
permitted to direct that such payment be made in additional shares if, in the
opinion of the Stockholders' tax counsel, such form of payment should be made in
order to reasonably ensure the tax-free treatment of the merger or any other
related transactions) and that the Stockholders shall be entitled to satisfy any
refund of excess Merger Price paid by return of shares of Outdoor Systems Stock
in an amount equal to the payment made based on the Average Share Price or cash.
The Company shall not be required to register under the Securities Act any
additional shares that may be issued pursuant to this Section 2.3.
ARTICLE III
THE MERGER
3.1 The Merger. On the Closing Date, the parties hereto shall cause the
Merger to be consummated by filing with the Secretary of State of the State of
Florida the Certificate of Merger. On the Closing Date, in accordance with this
Agreement and Florida Law, GATOA shall be merged with and into Gator; (b) the
separate existence of GATOA (except as may be continued by operation of law)
shall cease; and (c) Gator shall continue as the surviving corporation with the
corporate name it possesses immediately prior to the Closing Date but shall
continue its business from and after the Closing Date under the name "OS
Florida, Inc."
3.2 Effect of the Merger. Effective on the Closing Date: (a) the Surviving
Corporation shall possess all of the rights, privileges, powers and franchises
of a public as well as of a private nature of each of the Constituent
Corporations; (b) the Surviving Corporation shall be subject to all of the
restrictions, disabilities and duties of each of the Constituent Corporations;
(c) all property, real, personal and mixed, and all debts due to either of the
Constituent Corporations,
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as well as stock subscriptions and all other things in action or belonging to
each of the Constituent Corporations, shall be vested in the Surviving
Corporation; (d) all property, rights, privileges, powers and franchises of each
of the Constituent Corporations, and every other interest of each of the
Constituent Corporations, shall be the property of the Surviving Corporation as
they were of the Constituent Corporations, and the title to any real estate
vested by deed or otherwise, in either of the Constituent Corporations, shall
not revert or be in any way impaired; (e) all rights of creditors and all liens
upon any property of either of the Constituent Corporations shall be preserved
unimpaired; and (f) all debts, liabilities and obligations of the Constituent
Corporations shall thenceforth attach to the Surviving Corporation and be
enforceable against it to the same extent as if said debts, liabilities and
obligations had been incurred by it.
3.3 Charter Documents; Directors; Officers. Upon the Closing Date, the
Articles of Incorporation and the Bylaws of Gator shall be the Articles of
Incorporation and Bylaws of the Surviving Corporation, as in effect immediately
prior to the Closing Date, until thereafter amended as provided therein and
under Florida Law, provided that, at the Closing Date the officers and directors
of GATOA immediately prior to the Closing Date shall become the officers and
directors of the Surviving Corporation, until their successors are elected and
qualified.
3.4 Merger Consideration. On the Closing Date, the Company shall deliver
to the Stockholders the number of shares of Outdoor Systems Stock determined by
dividing the Average Share Price into the Merger Price (estimated at Closing).
No payment shall be made with respect to any shares of Gator Capital Stock held
in treasury by Gator. The Merger Consideration shall be allocated among the
Stockholders in accordance with the percentages set forth after each
Stockholder's name on Exhibit 3.4. If, between the date of this Agreement and
the Closing Date, the outstanding shares of Outdoor Systems Stock shall have
been changed into a different number of shares or a different class by reason of
any reclassification, recapitalization, split-up, stock dividend, stock
combination, exchange of shares or readjustment, the Merger Consideration shall
be proportionately adjusted. No fractional shares of Outdoor Systems Stock shall
be issued, but in lieu thereof each holder of Gator Capital Stock who would
otherwise be entitled to receive a fraction of a share of Outdoor Systems Stock
shall receive an amount of cash equal to the product of (i) the fraction of a
share of Outdoor Systems Stock to which such holder would otherwise be entitled
multiplied by (ii) the Average Share Price.
3.5 Conversion of GATOA Common Stock. Each share of Gator Capital Stock
(and all interests therein) shall be canceled and extinguished. Each share of
GATOA common stock issued and outstanding immediately prior to the Closing Date
shall be converted into and become one validly issued, fully paid and
nonassessable share of common stock of Gator. Each stock certificate of GATOA
shall continue to evidence ownership of such shares of common stock of Gator.
3.6 Tax Consequences. It is intended that the Merger constitute a
reorganization within the meaning of Section 368(a) of the Code and that this
Agreement constitute a "plan of organization" for purposes of Section 368 of the
Code.
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ARTICLE IV
REPRESENTATIONS AND
WARRANTIES OF GATOR
Gator hereby represents and warrants to the Company and to GATOA that,
except as otherwise set forth in the Disclosure Schedules, the following
representations and warranties are, as of the date hereof, true and correct:
4.1 Organization and Good Standing. Gator is a corporation duly organized,
validly existing and in good standing under Florida Law and has full corporate
power and authority to own its properties and carry on its business as presently
conducted. Gator is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction where the character of its properties
owned or leased or the nature of its activities makes such qualification
necessary, except where the failure to be so qualified or in good standing would
not have a Material Adverse Effect. The copies of Gator's Articles of
Incorporation and Bylaws (together with all amendments thereto) which have been
delivered to the Company and to GATOA are correct and complete as of the date
hereof.
4.2 Capitalization. The authorized capital stock of Gator consists of
1,000 shares of Gator common stock, $1.00 par value, of which 1,000 shares are
issued and outstanding as of the date hereof. All of the outstanding shares of
Gator common stock have been validly issued and are fully paid and
non-assessable. No shares of Gator common stock are held by Gator as treasury
stock. No existing option, warrant, call, commitment or other security or
agreement of any kind to which Gator is a party requires and no convertible
securities of Gator are outstanding which upon conversion would require, the
issuance of any additional shares of capital stock of Gator or other securities
convertible into shares of capital stock of Gator or any debt or equity security
of Gator of any kind.
4.3 Subsidiaries. Gator has no Subsidiaries. Gator owns no shares or any
other ownership or investment interest, beneficially or of record, in any
corporation, limited liability corporation, joint venture, partnership or other
legal entity.
4.4 Execution and Effect of Agreement. Gator has the corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder, and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by Gator and the consummation by Gator of the
transactions contemplated hereby have been duly authorized by the Board of
Directors and shareholders of Gator and no other corporate proceeding on the
part of Gator is necessary to authorize the execution, delivery and performance
of this Agreement and the transactions contemplated hereby. This Agreement has
been duly executed and delivered by Gator and constitutes the legal, valid and
binding obligation of Gator, enforceable in accordance with its terms, except as
limited by Bankruptcy and Equity Exceptions.
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4.5 Financial Statements. The Financial Statements of Gator are attached
hereto as Schedule 4.5. Each of the Financial Statements has been prepared in
accordance with GAAP; and, subject to the addition of footnotes, none of which,
if included, would have a material effect upon the Financial Statements, the
Financial Statements present fairly in all material respects the financial
position, results of operations and cash flows of Gator at the dates and for the
periods indicated.
4.6 No Undisclosed Liabilities. Gator has no Indebtedness or other
liabilities (whether accrued, absolute, contingent or otherwise, and whether due
or to become due) which are not shown on the Balance Sheet in excess of $25,000
in the aggregate, except for Indebtedness or liabilities (a) incurred in the
ordinary course of business since the Balance Sheet Date and shown on the
Closing Date Balance Sheet or (b) disclosed on Schedule 4.6. or (c) on another
schedule to this Article IV.
4.7 No Material Adverse Change; No Dividends. Since the Balance Sheet
Date, no material adverse change has occurred with respect to any portion of the
business of Gator taken as a whole. Since the Balance Sheet Date, no dividends
or distributions of any kind have been declared or paid on or made with respect
to Gator Capital Stock except distributions that would not violate Section
7.4(c), nor have any shares or other interests in Gator Capital Stock been
repurchased or redeemed.
4.8 Taxes.
(a) Except as set forth in Schedule 4.8 hereto, Gator has no
liability for any Taxes with respect to any taxable period ending on or
before the Closing Date, or any Taxes with respect to the portion of any
Straddle Period, other than amounts properly reserved or reflected in the
Financial Statements.
(b) Except as set forth on Schedule 4.8 hereto, (i) all Tax
Returns required to be filed by or on behalf of Gator or any Affiliated
Group of which Gator is or was a member have been filed with the
appropriate taxing authorities in all jurisdictions in which such Tax
Returns are required to be filed; (ii) all amounts shown on such Tax
Returns (including interest and penalties) as due from Gator either
directly, as part of a tax return, or otherwise, have been fully and
timely paid; (iii) all such Tax Returns, insofar as they relate to Gator,
are true, correct and complete in all material respects; (iv) no waivers
of statutes of limitation have been given or requested with respect to
Gator in connection with any Tax Returns; and (v) all Taxes that Gator is
required by law to withhold or collect have been duly withheld or
collected, and have been timely paid to the appropriate tax authorities.
(c) Except as set forth on Schedule 4.8 hereto, all
deficiencies asserted or assessments made as a result of any examinations
by the Internal Revenue Service or any other taxing authority of the Tax
Returns of Gator have been fully paid; no unpaid deficiencies have been
asserted or assessments made by any taxing authority against Gator;
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and no audits are currently pending or issues raised in writing by any
taxing authority in connection with Tax Returns of Gator; and Gator has
not granted any person a power of attorney that is currently in force with
respect to any matter relating to taxes.
(d) Neither Gator nor any other person on its behalf has
filed a consent pursuant to Section 341(f) of the Code or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a subsection (f)
asset (as such term is defined in Section 341(f)(4) of the Code) owned by
Gator.
(e) Gator is not a member of an Affiliated Group of
companies under Section 1504 of the Code.
(f) No property owned by Gator (i) is property required to
be treated as being owned by another person pursuant to the provisions of
Section 168(f)(8) of the Internal Revenue Code of 1954, as amended and in
effect immediately prior to the enactment of the Tax Reform Act of 1986,
(ii) constitutes "tax-exempt use property" within the meaning of Section
168(h)(l) of the Code, or (iii) is tax-exempt bond financed property
within the meaning of Section 168(g) of the Code.
(g) Gator is not a party to any tax indemnity agreement, tax
sharing agreement or other agreement under which Gator could become liable
to another person as a result of the imposition of Taxes upon such person,
or the assessment or collection of such Taxes.
(h) Gator has not agreed nor is required to make any
adjustments under Section 481 of the Code by reason of a change in method
of accounting or otherwise.
(i) No payment required to be made to any employee
associated with Gator as a result of the transactions contemplated hereby
under any contract or otherwise will, if made, constitute an "excess
parachute payment" within the meaning of Section 280G of the Code.
4.9 Billboards and Billboard Leases. Schedule 4.9 hereto contains a
complete and correct list of all of Gator's:
(a) outdoor advertising display structures (the
"Billboards") by size, number of display faces, and locations, including
the direction the displays face;
(b) all state and local permits held by Gator for each
Billboard; and
(c) all leases, subleases, license agreements, easements,
other rights of occupancy, possession or access (collectively, the
"Billboard Leases") authorizing the operation of each Billboard at its
present location, or authorizing the construction and operation of any
other outdoor advertising display structures, indicating in each case the
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commencement of each Lease, its termination date (including option
periods), and the rental or other payment terms therefor. Except as set
forth in Schedule 4.9, each Billboard is (i) located entirely on real
property covered by a Billboard Lease or owned by Gator, (ii) in adequate
condition and repair for the uses to which it is being put, and (iii) not
currently the subject of any dispute with any Person.
4.10 Real Property and Material Leases of Real Property. Except as set
forth on Schedule 4.10 hereto, Gator does not own any real property. Schedule
4.10 hereto also contains a complete and correct list in all material respects
of all leases, subleases, license agreements or other rights of occupancy,
possession or access to or of real property to which Gator is a party pursuant
to which the current net annual rent payable by Gator currently exceeds $10,000,
other than the Billboard Leases (collectively with the Billboard Leases, the
"Material Leases"). Complete and correct copies of each Material Lease have been
furnished or made available to the Company and GATOA. Except as disclosed on
Schedule 4.10 hereto, no consent is required of any landlord or other third
party to any Material Lease to consummate the transactions contemplated hereby;
and upon consummation of the transactions contemplated hereby, each Material
Lease will continue to entitle Gator to the use and possession of the real
property specified in such Material Lease for the purposes for which such real
property is now being used by Gator. Except as set forth in such Schedule 4.10
hereto, Gator is not on the date hereof in default, or in default but for the
passage of time or giving of notice, under any such Material Lease; and to
Gator's knowledge, on the date hereof, no default (including defaults but for
the passage of time or giving of notice) by any third party exists thereunder,
which default would result in a Material Adverse Effect. All Material Leases are
in full force and effect and are enforceable against the parties thereto in
accordance with their terms subject to the Bankruptcy and Equity Exceptions.
4.11 Permits; Compliance with Laws.
(a) Gator has all material permits, licenses and
governmental authorizations required for the ownership or occupancy of its
properties and assets and the carrying on of its business, including, the
installation, maintenance and operation of the Billboards (collectively
"Permits"). Except as set forth on Schedule 4.11(a), (i) each Permit is in
full force and effect, (ii) each Billboard to which a Permit pertains
complies in all material respects with the terms and conditions of such
Permit (including, without limitation, terms as to size and location),
(iii) no material violation of any Permit by Gator has occurred thereunder
which has not been cured, and no event, occurrence or condition exists
which (which with or without notice or lapse of time) would become a
violation by Gator thereunder, and (iv) Gator has not received notice of
any material violation which has not been cured or notice of any
termination or cancellation of any Permit.
(b) Gator and the Billboards are in compliance in all
material respects with all applicable federal, state and local laws and
regulations relating to zoning, land use, and billboard operations and
content.
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(c) Except as set forth on Schedule 4.11(c) hereto, Gator is
in compliance in all material respects with all applicable federal, state
and local laws and regulations including without limitation those relating
to employee or occupational safety, discrimination in hiring, promotion or
pay of employees, employee hours and wages or employee benefits.
4.12 Insurance. Schedule 4.12 hereto contains a complete and correct list
in all material respects of all policies of insurance of any kind or nature
covering Gator, including, without limitation, policies of life, fire, theft,
employee fidelity and other casualty and liability insurance, and such policies
are in full force and effect. Complete and correct copies of each such policy
have been furnished or made available to the Company and GATOA. All such
policies are in full force and effect and no notice of cancellation or
termination has been received by Gator with respect to any such policy. No
claims are pending under any such insurance policies.
4.13 Material Contracts. Except as listed on Schedule 4.13(a) or (b)
hereto or any other schedule hereto, Gator is not a party to any:
(a) contract not made in the ordinary course of business;
(b) contract for the employment of any officer or employee;
(c) advertising agreements; consulting or independent
contractor agreements;
(d) franchise, distributorship or sales agency, broker or
representation agreement;
(e) contract for the future purchase of materials, supplies,
services, merchandise or equipment for an amount in excess of $10,000, or
not capable of being fully performed or not terminable within a period of
one year from the date hereof, or in excess of normal operating
requirements;
(f) agreement for the sale or lease by Gator of any of its
assets;
(g) contract or commitment for capital expenditures in
excess of $25,000;
(h) Encumbrance with respect to any of its real or personal
property;
(i) lease of machinery or equipment involving annual
payments in excess of $10,000;
(j) agreement with a labor union or labor association;
(k) loan agreement, promissory note issued by it, guarantee,
subordination, indemnity or similar type of agreement;
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(l) stock option, retirement, severance, pension, bonus,
profit sharing, group insurance, medical or other fringe benefit plan or
program providing employee benefits; or
(m) any agreement involving annual payments in excess of
$10,000 or not capable of being fully performed or terminated within one
year from the date hereof.
Complete and correct copies of each such document have been furnished or made
available to the Company and GATOA. Except as set forth on Schedule 4.13(a) or
(b) hereto, Gator has performed all of the obligations required to be performed
by it to date and is not in material default, or in material default but for the
passage of time or giving of notice, under any of the documents to which it is a
party listed on Schedule 4.13(a) or (b) hereto. Except as set forth on Schedule
4.13(a) or (b) hereto, to the best of Gator's knowledge, no party to any of such
documents is in material default thereunder, or is in material default but for
the passage of time or giving of notice. All such documents are in full force
and effect and are enforceable against the parties thereto in accordance with
their terms subject to the Bankruptcy and Equity Exceptions. Except as disclosed
herein or on Schedule 4.13(a) or (b) hereto, Gator is not a party to any
non-compete or similar agreement which restricts in any way the current
operation of its business.
4.14 Title to Properties; Absence of Encumbrances. Gator has good and
marketable title to all of its properties and assets, free and clear of any and
all Encumbrances, except as set forth on Schedule 4.14 hereto and except for
Permitted Encumbrances.
4.15 Restrictions. Except as set forth on Schedule 4.15 hereto, neither
the execution nor delivery of this Agreement by Gator, nor the consummation by
Gator of the transactions contemplated hereby:
(a) will violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge or restriction
of any government, governmental agency to which Gator is a party or by or
to which Gator is bound or subject, or the provisions of the charter or
bylaws of Gator; or
(b) will conflict with or result in a breach of, or give
rise to a right of termination of, or the performance required by, any
terms of any agreement to which Gator is a party, or constitute a default
thereunder, or result in the creation of any lien, security interest,
mortgage, deed of trust, pledge, hypothecation, easement or conditional
sale or other title retention agreement upon any of their respective
assets.
4.16 Patents, Trademarks and Copyrights. Schedule 4.16 hereto contains a
complete and correct list of each material patent, trademark, trade name,
service mark and copyright owned or used by Gator and pending applications
therefor, and each license or other agreement relating thereto. Except as set
forth on Schedule 4.16 hereto, each of the foregoing is owned by the
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party shown on such Schedule as owning the same, free and clear of all
Encumbrances. To the best of Gator's knowledge, no claims have been asserted and
are still pending, contending that any of the foregoing is invalid or conflicts
with the asserted rights of others. Gator possesses all patents, patent
licenses, trade names, trademarks, service marks, brand marks, brand names,
copyrights, know-how, and other proprietary and trade rights necessary for the
conduct of its business as now conducted, except for those the absence of which
would not result in a Material Adverse Effect.
4.17 Litigation. No action, suit, proceeding or formal governmental
inquiry or investigation is pending against Gator which seeks to restrain or
prohibit or otherwise challenge the consummation, legality or validity of the
transactions contemplated hereby. Except as disclosed on Schedule 4.17 hereto,
no action, suit, proceeding or formal governmental inquiry or investigation is
pending or to Gator's knowledge, threatened against Gator.
4.18 Regulatory Approval. Other than as required to comply with HSRA, the
Securities Act, the Exchange Act, the "takeover" or "blue sky" laws of various
states, and as set forth on Schedule 4.18, no consent, approval or authorization
of any governmental authority is required in connection with the execution and
delivery of this Agreement or the consummation of any of the transactions
contemplated hereby.
4.19 Environmental Matters. Except as disclosed on Schedule 4.19:
(a) the operations of Gator are in compliance with
applicable Environmental Laws, except for such noncompliance which would
not result in a Material Adverse Effect;
(b) Gator is not subject to any pending or, to the best of
Gator's knowledge, threatened judicial or administrative proceeding
alleging the violation of any Environmental Law;
(c) Gator has not received any written notice from any
governmental authority that it is a potentially responsible party at any
Superfund site;
(d) Gator has not disposed of or released Hazardous
Materials (nor, to the best of Gator's knowledge, are underground storage
tanks present) on, in or at any real property in any quantity which would
result in a Material Adverse Effect;
(e) Gator has not agreed to indemnify any predecessor or
other party, including a buyer, the Company, landlord or tenant, with
respect to any environmental liability; and
(f) to the best of Gator's knowledge, no other party has
released Hazardous Materials at a concentration or level which requires
remedial action under any applicable Environmental Law at any property now
or formerly owned or operated by Gator or any of
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its Subsidiaries or in a location that would threaten or contaminate such
properties in any material respect.
4.20 Collective Bargaining Agreements and Labor.
(a) Gator is not a party to any labor or collective
bargaining agreement; no labor or collective bargaining agreements exist
which pertain to employees of Gator; and no proceeding for the recognition
of a labor union is pending.
(b) Except as set forth on Schedule 4.20 hereto, no pending
complaints, charges or claims against Gator have been filed with any
public or governmental authority, arbitrator or court based upon the
employment or termination of employment by, or any alleged act of
discrimination or harassment by, Gator and to the knowledge of Gator, no
such complaints, charges or claims are threatened.
(c) Except as set forth on Schedule 4.20 hereto, Gator is in
material compliance with all laws, regulations and orders relating to the
employment of labor, including all such laws, regulations and order
relating to wages, hours, collective bargaining, discrimination, civil
rights, safety and health, workers' compensation.
4.21 Employee Benefit Plans; ERISA.
(a) Schedule 4.21 hereto sets forth all material, written
"Employee Benefit Plans," maintained by Gator or to which Gator
contributed or is obligated to contribute thereunder for current or former
employees of Gator (the "Gator Plans"). Schedule 4.21 hereto separately
identifies each Gator Plan which is a multiemployer plan, as defined in
Section 3(37) of ERISA ("Multiemployer Plan"). No ERISA Affiliates of
Gator maintain any material, written "employee benefit plans," as defined
in Section 3(3) of ERISA.
(b) True, correct and complete copies of the following
documents, with respect to each of Gator Plans (other than the
Multiemployer Plans) have been delivered to the Company and GATOA by Gator
or its Subsidiaries: (i) all plans and related trust documents, and
amendments thereto; (ii) the most recent Forms 5500; (iii) the last
Internal Revenue Service determination letter, if applicable; (iv) summary
plan description; and (v) the last actuarial valuation if the plan is a
"defined benefit plan" as defined in Section 3(35) of ERISA.
(c) Gator Plans intended to qualify under Section 401 of the
Code and the trusts maintained pursuant thereto are exempt from federal
income taxation under Section 501 of the Code, and nothing has occurred
with respect to the operation of the Gator Plans, which would cause the
loss of such qualification or exemption or the imposition of any
liability, penalty or tax under ERISA or the Code which would result in a
Material Adverse Effect.
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(d) No Gator Plans have been amended in any manner which
would require the posting of any security under Section 401(a)(29) of the
Code or Section 307 of ERISA;
(e) Gator and any ERISA Affiliates have met the minimum
funding standards and have made all contributions required under Section
302 of ERISA and Section 412 of the Code; no accumulated funding
deficiency, whether or not waived, exists with respect to any Gator Plan,
and no event has occurred or circumstances exist that may result in an
accumulated funding deficiency as of the last day of the current plan year
for any such plan; and all amounts required to be contributed under the
terms of each Gator Plan have been made;
(f) Gator and any ERISA Affiliates have paid all amounts due
to the PBGC pursuant to Section 4007 of ERISA;
(g) the actuarial report for each Gator Plan fairly presents
the financial condition and the results of operations of each such plan in
accordance with GAAP;
(h) the benefit liabilities (as defined in Section
4001(a)(16) of ERISA) of each Gator Plan which is a defined benefit plan
calculated using the actuarial assumptions that would be used by the PBGC
in the event of the termination of such plan do not exceed the fair market
value of the assets of such plan; and the liabilities of each other plan
are properly and accurately reported in the Financial Statement.
(i) there are no material pending claims or lawsuits which
have been asserted or instituted by or against Gator Plans, against the
assets of any of the trusts under such plans or by or against the plan
sponsor, plan administrator, or any fiduciary of Gator Plans (other than
routine benefit claims) and neither Gator, nor any ERISA Affiliates have
knowledge of facts which could form the basis for any such claim or
lawsuit;
(j) Gator Plans have been maintained in accordance with
their plan documents and with all provisions of the Code and ERISA
(including rules and regulations thereunder) except for those terms which
are inconsistent with changes required by law for which plan amendments
are not yet required and other applicable law, in all material respects,
and neither Gator nor, to the knowledge of Gator, any ERISA Affiliates,
and any other "party in interest" or "disqualified person" with respect to
the Gator Plans, has engaged in a "prohibited transaction" within the
meaning of Section 4975 of the Code or Title I, Part 4 or ERISA which is
not exempt under applicable law, regulations and administrative
exemptions;
(k) no reportable event (as defined in Section 4043 of ERISA
and the regulations thereunder, excluding any such event with respect to
which the Department of Labor has waived the requirement of 30-days
notice) has occurred with respect to any Gator Plan;
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(l) except to the extent advance notice may be required by
applicable law, each of the Gator Plans (including without limitation each
such plan covering retirees of Gator or an ERISA Affiliate, or the
beneficiaries of such retirees) may be terminated or amended by its
sponsoring employer, in any manner and at any time, without the consent of
and without any further liability to its participants and beneficiaries
for benefits that may be accrued or expenses that may be incurred after
the date of such termination or amendment;
(m) the Gator Plans have been maintained in accordance with
their terms and with all provisions of the Code and ERISA (including rules
and regulations thereunder) and other applicable federal and state laws
and regulations, except where the failure to so maintain would not result
in a Material Adverse Effect;
(n) the assets of all Gator Plans which are required under
applicable laws to be held in trust are in fact held in trust; and
(o) each Gator Plan containing a cash or deferred
arrangement under Section 401(k) of the Code has been tested for
compliance with, and has satisfied the requirements of Section 401(k)(3)
and 401(m)(2) of the Code for each plan year ending prior to the Closing.
4.22 Employees At Will. Gator employees are employees at will whose
employment with Gator may be terminated at any time without cause.
4.23 Tangible Personal Property. Schedule 4.23 (a) sets forth a list of
all of Gator's automobiles, trucks and cranes and a description in reasonable
detail of Gator's other tangible personal property, except as set forth on
Schedule 4.23(b). Schedule 4.23(b) sets forth a list of certain tangible
personal property of Gator which will be retained by the Stockholders. All
material items of tangible personal property, fixtures and equipment of Gator
are in a good state of repair (ordinary wear and tear excepted) and operating
condition, and are sufficient and adequate for the conduct of Gator's business
on the date hereof.
4.24 Affiliate Transactions. Except as set forth on Schedule 4.24 and
other than the Affiliate Leases, Gator is not a party to any contract with any
Stockholder or any Affiliate of Gator or any Stockholder. Neither Gator nor the
Stockholders, nor any Affiliate of Gator or any Stockholder is the owner, of
record or beneficially, of an equity interest or any other financial or profit
interest in, a Person (other than Gator) that has business dealings or a
material financial interest in any transaction with Gator.
4.25 HSRA Compliance.
(a) No shareholder of Gator holds more than 50% of the outstanding
voting securities of Gator. No person or entity has the contractual power to
designate 50% or more of the directors of Gator.
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(b) Attached as Schedule 4.25(b) solely for the purposes of
determining compliance with HSRA is the most recent regularly prepared balance
sheet of Gator, which has been prepared in accordance with the accounting
principles normally used by Gator. The total assets of Gator as reflected
therein are less than $10 million.
(c) Attached as Schedule 4.25(c) solely for the purposes of
determining compliance with HSRA is the annual statement of income and expense
of Gator for the year ended December 31, 1997. This is the last regularly
prepared annual statement of income and expense of Gator and has been prepared
in accordance with the accounting principles normally used by Gator. The annual
net sales of Gator as reflected thereon are less than $10 million.
ARTICLE V
REPRESENTATIONS AND
WARRANTIES OF THE STOCKHOLDERS
Each of the Stockholders hereby severally represents and warrants to the
Company that the following representations and warranties are, as of the date
hereof, true and correct:
5.1 Stockholder Approval. The Merger and this Agreement have been
submitted to, and adopted and approved by, the Stockholders.
5.2 Title; Agreements. Each Stockholder holds of record and holds
beneficially the number of shares of Gator Capital Stock set forth on Exhibit
5.2, free and clear of any and all Encumbrances or other restrictions on
transfer. No Stockholder is a party to any voting trust, proxy or other
agreement or understanding with respect to any Gator Capital Stock.
5.3 Execution and Effect of Agreement. Each Stockholder has the full
right, power (corporate or otherwise) and authority to execute and deliver this
Agreement and to perform such Stockholder's obligations hereunder, and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by each Stockholder, and the consummation by each Stockholder of
the transactions contemplated hereby have been duly authorized by all necessary
action (corporate or otherwise) and no other proceeding on the part of each
Stockholder is necessary to authorize the execution, delivery and performance of
this Agreement and the transactions contemplated hereby. This Agreement has been
duly executed and delivered by each Stockholder and constitutes the legal, valid
and binding obligation of each Stockholder, enforceable against each Stockholder
in accordance with its terms, except as limited by the Bankruptcy and Equity
Exceptions.
5.4 Investment Representations. Each Stockholder hereby represents,
warrants and acknowledges that:
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(a) he is acquiring the Shares to be issued to him pursuant to this
Agreement for his own account, to hold for investment and with no present
intention of dividing his participation with others or reselling or otherwise
participating, directly or indirectly, in a distribution of Shares (it being
understood that this representation and warranty shall in no way limit the
Stockholder's right to sell Shares pursuant to the registration statement
referred to in Section 11.1 hereof) and shall not make any sale, transfer or
other disposition of Shares in violation of the Securities Act or the rules and
regulations promulgated by the Commission thereunder or any applicable state
securities laws:
(b) he has been advised that the Shares to be issued to him
pursuant to this Agreement have not been registered under the Securities Act or
any state securities laws in reliance on certain exemptions from registration
thereunder and that reliance by the Company on such exemptions is predicated in
part on the representations and warranties contained herein;
(c) under the Securities Act, the Shares to be issued to him
pursuant to this Agreement must be held indefinitely unless such Shares are
subsequently registered under the Securities Act or unless an exemption form
such registration is available with respect to any proposed transfer or
disposition of such Shares;
(d) the Company may refuse to permit the sale, transfer or
disposition of any of the Shares to be issued to him under this Agreement unless
there is in effect a registration statement under the Securities Act covering
such transfer or he furnishes an opinion of counsel or other evidence,
satisfactory to counsel for the Company, to the effect that such registration is
not required; and
(e) stop transfer instructions may be given to the Company's
transfer agent and that there will be placed on the certificate or certificates
representing Shares to be issued to him under this Agreement, any substitutions
therefor, and any certificates for any additional shares which might be
distributed with respect to such Shares an appropriate legend reflecting the
restrictions on transfer referred to herein.
ARTICLE VI
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY AND GATOA
Each of the Company and GATOA hereby represents and warrants to Gator and
the Stockholders that the following representations and warranties are, as of
the date hereof, true and correct:
6.1 Organization and Good Standing. Each of the Company and GATOA is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation. Each of the Company and GATOA has full corporate
power and authority to own its properties and carry on its business as it is now
being conducted. Each of the Company and GATOA is duly
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qualified to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction in which the conduct of its business or the
ownership of its assets requires such qualification and where a failure to be so
qualified or in good standing would not have a Material Adverse Effect.
6.2 Execution and Effect of Agreement. Each of the Company and GATOA has
the corporate power and authority to enter into this Agreement, to perform its
respective obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by each of the Company and
GATOA and the consummation by each of the Company and GATOA of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of each of the Company and GATOA, and no other corporate proceeding
on the part of the Company and GATOA is necessary to authorize the execution,
delivery and performance of this Agreement and the transactions contemplated
hereby. This Agreement has been duly executed and delivered by each of the
Company and GATOA and constitutes the legal, valid and binding obligation of
each of the Company and GATOA, enforceable against each of them in accordance
with its terms, except as limited by Bankruptcy and Equity Exceptions.
6.3 Restrictions. Neither the execution or delivery of this Agreement by
the Company and GATOA nor the consummation of the transactions contemplated
hereby:
(a) will violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge or restriction
of any government, governmental agency to which the Company or GATOA is a
party or by or to which either of them is bound or subject, or the
provisions of the charter or bylaws of the Company or GATOA; or
(b) will conflict with or result in a breach of, or give
rise to a right of termination of, or accelerate the performance required
by, any terms of any agreement to which the Company or GATOA is a party,
or constitute a default thereunder, or result in the creation of any lien,
security interest, mortgage, deed of trust, pledge, hypothecation,
easement or conditional sale or other title retention agreement upon any
of their respective assets, except for such violations, conflicts,
breaches, rights of termination or acceleration, defaults and encumbrances
that would not have a Material Adverse Effect.
6.4 Litigation; Consents. No action, suit, proceeding or formal
governmental inquiry or investigation is pending against the Company or GATOA
seeking to restrain or prohibit or otherwise challenge the consummation,
legality or validity of the transactions contemplated hereby; and, except as
expressly contemplated hereby, no consent, approval or authorization of any
governmental authority on the part of the Company or GATOA is required in
connection with the execution and delivery of this Agreement or the consummation
of any of the transactions contemplated hereby. No action, suit, proceeding or
formal governmental inquiry or investigation is pending against the Company or
GATOA which would have a Material Adverse Effect.
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6.5 SEC Reports. The Company has filed with the Commission all forms,
reports, schedules, statements and other documents required to be filed by it
and any of its subsidiaries under the Exchange Act or the Securities Act since
January 1, 1998 (as such documents have been amended since the time of their
filing, collectively the "Outdoor Systems SEC Documents"). As of their
respective dates or, if amended, as of the date of the last such amendment, the
Outdoor Systems SEC Documents (a) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading and (b) complied in all material
respects with the applicable requirements of the Exchange Act and Securities
Act, as the case may be. The Company has delivered to each of Gator and the
Stockholders a correct and complete copy of each Outdoor System SEC Document
(together with all exhibits and schedules thereto and as amended to date). Since
the date of the most recent Outdoor System SEC Document, there has been no
material adverse change in the business (as presently conducted or presently
expected to be conducted), financial condition or results of operations of the
Company and any of its subsidiaries, taken as a whole.
6.6 Capitalization. The authorized capital stock of the Company consists
of (a) 200,000,000 shares of common stock (of which 121,123,367 shares were
outstanding as of March 13, 1998) and, (b) 12,000,000 shares of Preferred Stock,
par value $1.00 per share, of which no shares are outstanding as of the date
hereof. All of the outstanding shares of capital stock of the Company have been,
and the shares to be issued pursuant to this Agreement will be validly issued
and are fully paid and non-assessable. Except as disclosed in the Outdoor
Systems SEC Documents, as of the date hereof, there are no outstanding
subscriptions, options, warrants, rights, convertible securities or other
agreements or commitments of any character obligating the Company to issue any
securities.
6.7 GATOA. GATOA is a wholly-owned subsidiary of the Company.
ARTICLE VII
COVENANTS OF GATOR,
THE COMPANY AND GATOA
7.1 Filings; Other Actions.
Upon the terms and subject to the conditions contained herein:
(a) each of the parties hereto shall cooperate with one
another in determining whether any filings are required to be made with or
consents or permits required to be obtained from, any governmental
authority in any jurisdiction under any regulation, or from any lender,
lessor or other third party prior to the Closing Date in connection with
the consummation of the transactions contemplated hereby and cooperate in
making any such filings promptly and in seeking to obtain timely all such
consents and permits;
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(b) each of the parties hereto shall furnish to each other
party hereto all such information in its possession as may be necessary
for the completion of such filings and submissions to be filed by the
other party hereto;
(c) each of the parties hereto shall use all measures
available to its Best Efforts to defend all actions challenging this
Agreement or the consummation of the Merger, and to use its Best Efforts
to lift or rescind and to prevent any threatened injunction or restraining
order or other court order adversely affecting the ability of the parties
to consummate the Merger, including any injunction or order under any
antitrust or trade or regulatory laws;
(d) each of the parties hereto shall use all measures
available its Best Efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all other things necessary to consummate and
make effective the transactions contemplated by this Agreement.
7.2 Stock Exchange Listing. The Company shall use Best Efforts to cause
the Shares to be issued in the Merger to be listed or approved for listing on
the New York Stock Exchange, subject to official notice of issuance, as of the
Closing Date.
7.3 Access to Information. From and after the date hereof and until the
Closing Date, Gator shall make available for inspection by the Company or GATOA
or their respective representatives, upon reasonable advance notice, during
normal business hours and in a manner so as not to interfere with normal
business operations, all of Gator's corporate records, books of account,
contracts and all other documents in Gator's possession or control that are
reasonably requested by the Company or GATOA, or by the Company's managerial
employees, counsel and auditors in order to permit the Company, GATOA and their
representatives to make reasonable inspection and examination of the business
and affairs of Gator. Gator shall cause its managerial employees, counsel and
regular independent certified public accountants to be available upon reasonable
advance notice to answer questions of the Company's and GATOA's representatives
concerning the business and affairs of Gator. Each of the Company and GATOA and
their respective representatives shall treat and hold as confidential any
information they receive from Gator in the course of the reviews contemplated by
this Section 7.3; shall not use any of the confidential information except in
connection with this Agreement; and if this Agreement is terminated for any
reason whatsoever, shall return to Gator all tangible embodiments (and all
copies) of such confidential information in their possession.
7.4 Conduct of Business. From and after the date hereof and until the
Closing Date, Gator shall cause the business of Gator to be conducted in the
ordinary course, consistent with the present conduct of its business. During
such period of time, except upon the prior written consent of the Company which
consent shall not be unreasonably withheld, Gator shall not:
(a) amend its Articles of Incorporation or Bylaws or
comparable organizational documents;
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(b) issue any additional shares of capital stock, or issue,
sell or grant any option or right to acquire or otherwise dispose of or
commit to dispose of any of its authorized but unissued capital stock or
other corporate securities;
(c) declare or pay any dividends or make any other
distribution in cash or property on its capital stock or other equity
interests, except distributions of cash as Gator may elect provided that
no such distribution reduces the amount of Gator's current assets
determined in accordance with GAAP to less than the amount of its current
liabilities determined in accordance with GAAP;
(d) repurchase or redeem any Gator Capital Stock;
(e) incur any Indebtedness or other obligation or liability,
except obligations and liabilities incurred in the ordinary course of
business;
(f) enter into any employment agreement or become liable for
any bonus, profit-sharing, incentive, or severance payment to any of its
officers, directors or employees, or otherwise change personnel policies,
compensation programs or benefit plans;
(g) grant any kind of Encumbrance with respect to any of its
assets, real or personal, tangible or intangible, except Permitted
Encumbrances;
(h) sell, transfer or acquire (except in the ordinary course
of business) any properties or assets, real or personal, tangible or
intangible, including but not limited to, discounting or transferring for
less than full value any account receivable, without the prior written
consent of the Company;
(i) merge or consolidate with any corporation, acquire
control or acquire any capital stock or other securities of any other
corporation or business entity, or take any steps incident to or in
furtherance of any such actions whether by entering into an agreement
providing therefor or otherwise, without the prior written consent of the
Company;
(j) adopt any Employee Benefit Plan, or amend any Gator
Plan, except as may be required by law; nor
(k) take any other action not contemplated hereby which
would cause any of the representations and warranties made by Gator in
this Agreement not to be true and correct in all material respects on and
as of the Closing Date with the same force and effect as if such
representations and warranties had been made on and as of the Closing
Date.
7.5 Notification of Certain Matters. Gator shall give prompt written
notice to the Company and GATOA, and the Company and GATOA shall give prompt
written notice to Gator, of:
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7.5.1 the occurrence, or failure to occur, of any event which
occurrence or failure would cause any representation or warranty contained
in this Agreement, the Disclosure Schedules or any written certificate or
schedule delivered pursuant hereto to be untrue or inaccurate in any
material respect at any time from the date of this Agreement through the
Closing Date; and
7.5.2 any material failure of Gator, the Company, GATOA or any of
their Affiliates, as the case may be, or of any officer, director,
employee or agent thereof, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied under this
Agreement; provided, however, that no such notification shall affect the
representations or warranties of the parties or the conditions to the
obligations to the parties.
7.6 Affiliate Leases. There are currently in effect Billboard Leases with
certain Affiliates of Gator (the "Affiliate Leases"), which are set forth on
Schedule 7.6. The Affiliate Leases shall be amended effective as of the Closing,
pursuant to amendments in the form attached as Exhibit 7.6, to provide that no
rent or other charges shall be payable by Gator thereunder for a period of 60
months following the Closing Date.
ARTICLE VIII
CONDITIONS PRECEDENT TO
THE COMPANY'S AND GATOA'S OBLIGATIONS
The obligations of the Company and GATOA to consummate the transactions
contemplated hereby are subject to the satisfaction, on or prior to the Closing
Date, of the following conditions:
8.1 Representations and Warranties True. Each of the representations and
warranties of Gator contained in Article hereof shall be true and correct in all
material respects as of the Closing Date with the same force and effect as
though each had been made on and as of the Closing Date, except for those given
as of a particular date.
8.2 Covenants Performed. Gator shall have performed and complied in all
material respects with the covenants and provisions in this Agreement required
herein to be performed or complied with by Gator between the date hereof and the
Closing Date.
8.3 No Judicial or Administrative Restraint. No order shall have been
entered against the Company, GATOA or Gator by any court or other governmental
body, restraining or prohibiting the consummation of the transactions
contemplated hereby.
8.4 Officer's Certificate. the Company and GATOA shall have received a
certificate to the effect set forth in Sections 8.1 and 8.2 above, dated the
Closing Date, signed by a duly authorized officer of Gator.
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8.5 Board and Stockholder Approval. The Company and GATOA shall have
received a certificate of a duly authorized officer of Gator, dated the Closing
Date, setting forth resolutions of the Board of Directors and Stockholders of
Gator authorizing the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and certifying that such
resolutions were duly adopted and have not been rescinded or amended as of the
Closing Date.
8.6 Affiliate Leases. The Amendments to the Affiliate Leases shall have
been fully executed and delivered.
8.7 Gator Capital Stock. The Stockholders and the Company shall have
delivered for cancellation all certificates (endorsed in blank) representing
Gator's common stock and all other evidences of ownership of Gator Capital
Stock.
8.8 Articles of Merger. The Articles of Merger fully executed by the
parties shall have been filed with the Secretary of State of the State of
Florida.
8.9 Opinion of Counsel. The Company shall have received a legal opinion
from Foley & Lardner, counsel for Gator, dated as of the Closing Date, as to
such matters as it may reasonably request prior to the Closing, including
organization and authorization.
8.10 Non-Solicitation Agreements. Joseph E. Sleiman shall have executed
and delivered to the Company a Non-Solicitation Agreement in the form of Exhibit
8.10.
8.11 Non-Foreign Affidavit. Each of the Stockholders shall have delivered
to the Company a Non-Foreign Affidavit in the form of Exhibit 8.11.
ARTICLE IX
CONDITIONS PRECEDENT
TO GATOR'S OBLIGATION
The obligations of Gator and the Stockholders to consummate the
transactions contemplated hereby are subject to the satisfaction, on or prior to
the Closing Date, of the following conditions:
9.1 Representations and Warranties True. Each of the representations and
warranties of the Company and GATOA contained in Article VI hereof shall be true
and correct in all material respects as of the Closing Date with the same force
and effect as though the same had been made on and as of the Closing Date,
except for changes herein permitted or contemplated hereby.
9.2 Covenants Performed. The Company and GATOA shall have performed and
complied in all material respects with the covenants and provisions in this
Agreement required herein to be
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performed or complied with by the Company and GATOA between the date hereof and
the Closing Date.
9.3 No Judicial or Administrative Restraint. No order shall have been
entered against the Company, GATOA or Gator by any court or other governmental
body, restraining or prohibiting the consummation of the transactions
contemplated hereby.
9.4 Officers' Certificate. Gator shall have received a certificate to the
effect set forth in Sections 9.1 and 9.2 above, dated the Closing Date and
signed by a duly authorized officer of each of the Company and GATOA.
9.5 Board Approval. Gator shall have received a certificate of a duly
authorized officer of each of the Company and GATOA, dated the Closing Date,
setting forth the resolutions of the respective Board of Directors of each of
the Company and GATOA authorizing the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby, and certifying
that such resolutions were duly adopted and have not been rescinded or amended
as of the Closing Date.
9.6 Merger Consideration. As provided in Section 3.4 above, the Company
shall have issued and delivered to the Stockholders certificates for the Shares
as provided therein.
9.7 NYSE Listing. The Shares shall have been listed on the New York Stock
Exchange, or approved for listing, subject to official notice of issuance.
9.8 Articles of Merger. The Articles of Merger duly executed by the
parties shall have been filed with the Secretary of State of the State of
Florida.
9.9 Opinion of Counsel. The Stockholders shall have received a legal
opinion from Powell, Goldstein, Frazer & Murphy, LLP, counsel for the Company,
as to such matters as they may reasonably request prior to the Closing,
including that the Shares are duly authorized, validly issued, fully paid and
nonassessable.
ARTICLE X
INDEMNIFICATION
10.1 The Company's Rights to Indemnification. From and after the Closing,
the Company, Gator and any other Affiliate of either, shall be entitled to
indemnification jointly and severally, from the Stockholders, subject to the
limitations set forth herein, against all losses, claims, demands, liabilities,
obligations, damages, deficiencies, assessments, judgments, payments, penalties,
costs and expenses (including without limitation reasonable attorneys fees, and
any amounts paid in investigation, defense or settlement of any of the
foregoing) (collectively, "Damages") incurred in connection with, arising out
of, resulting from or incident to any breach
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of a representation, warranty, covenant or agreement made by Gator and/or the
Stockholders in this Agreement.
10.2 The Company's Right to Assert a Claim. The Company shall have the
right to make one or more claims for Damages (a "Claim") on or prior to the
expiration of the survival period in Section 2.12 by delivering a notice of such
Claim (a "Claim Notice") to the Stockholder Representative and his counsel prior
to such time (the date of such notice, the "Claim Date"). If the Company asserts
a Claim, such Claim Notice shall state with particularity (a) the basis for the
Claim, together with sufficient facts relating thereto so that the Stockholder
Representative may reasonably evaluate such Claim, and (b) the Company's
estimate of the amount that equals the aggregate amount of the resulting Damages
(it being understood that such estimate shall not preclude the Company from
revising such estimate by notice to the Stockholder Representative). If the
Stockholder Representative disputes either the validity, amount or calculation
of the Claim and/or the Damages, the Stockholder Representative shall give
written notice of such dispute to the Company within twenty (20) Business Days
after the delivery of the Claim Notice by the Company to the Stockholder
Representative. If the Stockholder Representative fails to respond to the Claim
Notice within twenty (20) Business Days after the delivery to the Stockholder
Representative of the Claim Notice, the Stockholders shall be deemed to have
accepted the Claim.
10.3 Third Party Claims. Anything in this Agreement to the contrary
notwithstanding, the following provisions shall apply in the event that a Claim
relates to one or more third parties:
10.3.1 Notice and Defense. The Company shall give the Stockholder
Representative and his counsel a Claim Notice prior to the expiration of the
survival period in Section 2.12, and the Stockholder Representative may
undertake the defense of the Claim by representatives chosen by it. Failure to
give such Claim Notice shall not affect the Stockholders' obligation of
indemnification hereunder, except to the extent that they are prejudiced
thereby. So long as the Stockholder Representative is defending the Claim
actively and in good faith, the Stockholder Representative shall not have the
right to settle such Claim without the Company's written consent (which shall
not be unreasonably withheld), provided, however, that the Stockholder
Representative shall have the right to settle or compromise any Claim for money
damages only which does include as an unconditional term thereof the giving by
the claimant or the plaintiff to the Company and Gator of a release from all
liability with respect to such Claim. The Company shall make reasonably
available to the Stockholder Representative and his representatives all records
and other materials required by them and in the possession or under the control
of the Company or Gator, for the use of the Stockholder Representative and his
representatives in defending any such Claim, and shall cooperate in all other
reasonable respects in such defense.
10.3.2 Failure to Defend. If the Stockholder Representative, within
a reasonable time (and in no event later than 20 days) after notice of any such
Claim, fails to give notice of acceptance or fails to defend such Claim actively
and in good faith, the Company shall have the right to undertake the defense of
such Claim. Until the Company has received notice of the
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Stockholder Representative's election to defend any Claim or the expiration of
the aforesaid 20 day notice period, the Company shall take reasonable steps to
defend (but may not settle) such Claim.
10.4 Payment. Each Stockholder shall promptly pay to or on behalf of the
Company any amount for which it is established that the Company is entitled to
indemnification under this Article X. Upon the payment in full by a Stockholder
of amounts required to be paid by him hereunder, the Stockholder shall succeed
to the rights of the Company, to the extent not waived in settlement, against
any third party who was the source of an indemnified Claim.
10.5 Threshold and Cap. Anything in this Agreement to the contrary
notwithstanding, the Stockholders shall not be liable for indemnification
hereunder until the cumulative aggregate amount of all Claims of the Company
exceed $535,000.00 in which case the Stockholders shall be liable for that
portion of such Claims that exceeds $535,000.00 but only to the extent that such
Claims do not exceed an aggregate of $3,210,000 (the "Cap") except, however,
that in the case of a Claim or Claims based upon a breach of Sections 5.1, 5.2
or 5.3 hereof, the Cap shall be the Merger Price.
10.6 Scope. This Article sets forth the sole remedies for the breach by
Gator or any Stockholder of any representation, warranty, covenant or agreement
in this Agreement, and the Company shall not have a separate cause of action for
damages for any such breach except as set forth in this Article X.
10.7 Stockholder Representative.
10.7.1 The Stockholders hereby appoint the Stockholder
Representative as their agent and authorize and empower him to fulfill the role
of Stockholder Representative hereunder. In the event of the resignation of the
Stockholder Representative, the resigning Stockholder Representative shall
appoint a successor either from among the Stockholders or who shall otherwise be
acceptable to the Company and who shall agree in writing to accept such
appointment, and the resigning Stockholder Representative's resignation shall
not be effective until such a successor shall exist. The Stockholders holding a
majority of the Shares may remove the Stockholder Representative at any time. If
the Stockholder Representative should die or become incapacitated or be removed
by the Stockholders pursuant to this Section 10.7.1, his successor shall be
appointed within 21 days of his death or incapacity by the Stockholders holding
a majority of the Shares, and such successor either shall be a Stockholder or
shall otherwise be acceptable to the Company. If the Stockholders fail to
appoint a successor within 21 days of notice from the Company to the
Stockholders of such obligation to appoint a successor, the Company shall have
the right to appoint the successor from among the Stockholders. The choice of a
successor Stockholder Representative appointed in any manner permitted above
shall be final and binding upon all of the Stockholders. The decisions and
actions of any successor Stockholder Representative shall be, for all purposes,
those of a Stockholder Representative as if originally named herein.
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10.7.2 Each Stockholder hereby appoints the Stockholder
Representative as such person's true and lawful attorney in fact and agent, for
such person and in such person's name, to receive all notices and communications
directed to such Stockholder under Article X of this Agreement X and any
document executed in connection therewith.
10.7.3 The designation of the Stockholder Representative as
attorney-in-fact is coupled with an interest and is binding upon the
Stockholders notwithstanding the death, incapacity or dissolution of any
Stockholder. If any such event shall occur prior to the completion of the
transactions contemplated by Article X of this Agreement, the Stockholder
Representative is, nevertheless, to the extent that he is legally able to do so,
authorized and directed to complete all transactions and act pursuant to this
authority as if such event had not occurred. The Company is entitled to deal
solely with the Stockholder Representative in connection with Article X of this
Agreement, and is entitled to rely upon the provisions hereof and the authority
granted to the Stockholder Representative to act on behalf of the Stockholders.
10.7.4 The Stockholder Representative's acceptance of his duties
under Article X of this Agreement is subject to the following terms and
conditions, which the parties hereto agree shall govern and control with respect
to the rights, duties, liabilities and immunities of the Stockholder
Representative to or with respect to the other Stockholders as their
representative (but not in his capacity as a Stockholder or as an officer,
director, or employee of Gator):
(a) The Stockholder Representative makes no representation
and has no responsibility as to the validity of this Agreement or of any
other instrument referred to herein, or as to the correctness of any
statement contained herein, and he shall not be required to inquire as to
the performance of any obligation under this Agreement.
(b) The Stockholder Representative shall be protected in
acting upon written notice, request, waiver, consent, receipt or other
paper or document, not only as to its due execution and the validity and
effectiveness of its provisions, but also as to the truth of any
information therein contained, which he in good faith believes to be
genuine and what it purports to be.
(c) The Stockholder Representative shall not be liable for
any error of judgment, or for any act done or step taken or omitted by him
in good faith, or for any mistake of fact or law, or for anything which he
may do or refrain from doing in connection therewith, except as a result
of his own gross negligence or willful misconduct.
(d) The Stockholder Representative may consult with
competent and responsible legal counsel selected by him and he shall not
be liable for any action taken or omitted by him in good faith in
accordance with the advice of such counsel.
(e) The Stockholders shall bear pro rata all reasonable
expenses incurred by the Stockholder Representative in connection with his
duties hereunder and shall indemnify him
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against and save him harmless from any and all claims, liabilities, costs,
payments and expenses, including fees of counsel (who may be selected by
the Stockholder Representative), for anything done or omitted by him in
the performance of Article X of this Agreement, except as a result of his
own gross negligence or willful misconduct.
(f) The Stockholder Representative shall have no duties or
responsibilities except those expressly set forth herein. He shall not be
bound by any modification under Article X of this Agreement unless in
writing and signed by the other parties hereto, and if his duties as
Stockholder Representative hereunder or thereunder are affected, unless he
shall have given prior written consent thereto.
ARTICLE XI
REGISTRATION OF SHARES
11.1 Registration Rights. The Company shall (a) prepare and file with the
Commission on or before the 7th day following the Closing Date, a "shelf"
registration statement on appropriate form pursuant to Rule 415 under the
Securities Act with respect to the Shares and use its Best Efforts to cause such
registration statement to become effective as soon thereafter as practicable but
no later than the 51st day following the Closing Date and to keep such
registration statement continuously effective until the earlier to occur of (i)
the date on which none of the Stockholders holds any Shares and (ii) the date as
of which the Stockholders who are not "affiliates" of the Company as such term
is used under Rule 144 under the Securities Act become entitled to sell their
Shares pursuant to the provisions of Rule 144(k); (b) promptly prepare and file
with the Commission such amendments (including post-effective amendments) to
such registration statement and supplements to the related prospectus to
appropriately reflect the plan of distribution of the Shares until the
completion of the distribution contemplated by such registration statement or
for so long thereafter as a dealer is required by law to deliver a prospectus in
connection with the offer and sale of any Shares and/or as shall be necessary so
that neither such registration statement nor the related prospectus shall
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and so that such registration statement and the related prospectus
will otherwise comply with applicable legal requirements and will remain
effective as required hereunder; (c) provide to the Stockholder Representative
and his counsel copies of, and an opportunity to review and provide comments
with respect to, such registration statement (and any post-effective amendment
thereto) prior to, such registration statement (or post-effective amendment)
becoming effective; (d) use its Best Efforts to register and qualify the Shares
under applicable securities or "Blue Sky" laws of such jurisdictions as the
Stockholder Representative may reasonably request to facilitate the distribution
of the Shares; (e) take such other actions as are reasonable and necessary to
comply with the requirements of the Securities Act and state "Blue Sky" laws;
(f) furnish such number of prospectuses (including preliminary prospectuses) and
documents incident thereto as a Stockholder from time to time may reasonably
request; (g) provide to any Stockholder
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and any managing underwriter participating in any distribution thereof, and to
any attorney, accountant or other agent retained by such Stockholder or managing
underwriter, reasonable access to appropriate officers and directors of the
Company to ask questions and to obtain all public financial and other records
and pertinent corporate documents reasonably requested by any such Stockholder,
managing underwriter, attorney, accountant or other agent in connection with
such registration statement or any amendment thereto; (h) notify each
Stockholder and the managing underwriters participating in the distribution
pursuant to such registration statement promptly (A) when the Company is
informed that such registration statement or any post-effective amendment to
such registration statement becomes effective, (B) of any request by the
Commission for an amendment or any supplement to such registration statement or
any related prospectus, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of such registration statement or of any order
preventing or suspending the use of any related prospectus or the initiation or
threat of any proceeding for that purpose, (D) of the suspension of the
qualification of any Shares for sale in any jurisdiction or the initiation or
threat of a proceeding for that purpose and (E) of any determination by the
Company that any event has occurred which makes untrue any statement of a
material fact made in such registration statement or any related prospectus or
which requires the making of a change in such registration statement or any
related prospectus in order that the same will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; (i) in the
event of the issuance of any stop order suspending the effectiveness of such
registration statement or of any order suspending or preventing the use of any
related prospectus or suspending the qualification of the Shares for sale in any
jurisdiction, use its Best Efforts to obtain its withdrawal; (j) otherwise use
its Best Efforts to comply with all applicable rules and regulations of the
Commission, and make available to its security holders, as soon as reasonably
practicable, but not later than fifteen months after the effective date of such
registration statement, an earnings statement covering the period of at least
twelve months beginning with the first full fiscal quarter after the effective
date of such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act; (k) use reasonable diligence
to obtain an opinion from legal counsel in customary form and covering such
matters of the type customarily covered by opinions as the underwriters, if any,
may reasonably request; (l) enter into such customary agreements (including an
underwriting agreement in customary form) as the underwriters, if any, may
reasonably request in order to expedite or facilitate the disposition of the
Shares; and (m) use reasonable diligence to obtain a "comfort letter" from the
Company's independent public accountants in customary form and covering such
matters of the type customarily covered by comfort letters as the underwriters,
if any, may reasonably request. All expenses incurred in the registration of the
Shares, or in connection therewith, other than underwriting discounts or
commissions or broker or any other selling fees or commissions and fees and
expenses of counsel to the underwriters, if any, and/or the Stockholders, shall
be paid by the Company. Any managing underwriter or underwriters retained by the
Stockholders in connection with any underwritten public offering under the
registration statement shall be a nationally recognized investment banking firm
or firms reasonably acceptable to the Company.
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11.2 Indemnification. The Company agrees to indemnify and hold harmless
each Stockholder who sells Shares under the registration statement (a "Selling
Stockholder"), from and against any and all losses, claims, damages, liabilities
and expenses (including reasonable legal expenses) arising out of or based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in the registration statement or prospectus relating to the Shares or
in any amendment or supplement thereto or in any related preliminary prospectus,
(ii) any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
(iii) any violation or alleged violation by the Company of the Securities Act,
any state securities law or any rule or regulation promulgated under the
Securities Act or any state securities law, (iv) any and all loss, liability,
claim, damage and expense whatsoever, as reasonably incurred, to the extent of
the aggregate amount paid in settlement of any litigation, or investigation or
proceeding by any governmental agency or body, commenced or threatened, or of
any claim whatsoever based upon any such untrue statement or alleged untrue
statement or any omission or alleged omission, if such settlement is effected
with the written consent of the Company, or (v) any and all reasonable expense
whatsoever, as incurred (including reasonable fees and disbursements of
counsel), in investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body, commenced or
threatened, in each case whether or not a party, or any claim whatsoever based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission, to the extent that any such expense is not paid under
subparagraphs (i) through (v) above, and the Company will reimburse such Selling
Stockholder for any reasonable legal or other expenses incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability, expense or action; except insofar as such losses, claims, damages,
liabilities or expenses arise out of, or are based upon, any such untrue
statement or omission or allegation thereof based upon information furnished in
writing to the Company by such Selling Stockholder or on such Selling
Stockholder's behalf expressly for use therein. In connection with an
underwritten offering of Shares, the Company will indemnify any underwriters of
the Shares, their partners, officers and directors and each person who controls
such underwriters (within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act) on substantially the same basis as that of
the indemnification of the Selling Stockholders provided in this Section 11.2.
Notwithstanding the foregoing, the Company's indemnification obligations with
respect to any preliminary prospectus shall not inure to the benefit of any
Selling Stockholder or underwriter with respect to any loss, claim, damage,
liability (or actions in respect thereof) or expense arising out of or based on
any untrue statement or alleged untrue statement or omission or alleged omission
to state a material fact in such preliminary prospectus, in any case where (i) a
copy of the prospectus used to confirm sales of Shares was not sent or given to
the person asserting such loss, claim damage or liability at or prior to the
written confirmation of the sale to such person and (ii) such untrue statement
or alleged untrue statement or omission or alleged omission was corrected in
such prospectus; provided, however, that the Selling Stockholders and/or the
underwriter shall have been provided with copies of all such prospectuses prior
to the date on which such prospectus was required to be sent or given to such
person.
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Each Selling Stockholder agrees to indemnify and hold harmless the
Company, each other Selling Stockholder and each person, if any, who controls
the Company or such other Selling Stockholder, from and against any and all
loss, damage, liability or claim, to which the Company or such other holder or
any controlling person becomes subject under the Securities Act or otherwise and
to reimburse them, from time to time upon request, for any legal or other costs
or expenses reasonably incurred by them in connection with investigating any
claims or defending any actions, insofar as such losses, damages, liabilities,
costs, or expenses are caused by any untrue or alleged untrue statement of any
material fact contained in the registration statement, any prospectus contained
therein, or any amendment or supplement thereto, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was so made in reliance upon
and in conformity with written information furnished by such holder with respect
to such holder expressly for use in the preparation of the registration
statement.
11.3 Conduct of Indemnification Proceedings. Promptly after receipt by an
indemnified party of notice of any claim or the commencement of any action or
proceeding brought or asserted against such an indemnified party in respect of
which indemnity may be sought such an indemnified party shall notify the
indemnifying party in writing of the claim or the commencement of that action or
proceeding; provided, however, that the failure to so notify the indemnifying
party shall not relieve the indemnifying party from any liability or from any
liability that it may have to the indemnified party otherwise than pursuant to
the indemnification provisions of this Agreement, except to the extent that the
indemnified party has been prejudiced thereto. If any such claim or action or
proceeding shall be brought against an indemnified party and such indemnified
party shall have duly notified the indemnifying party thereof, the indemnifying
party shall have the right to assume the defense thereof, including the
employment of counsel. Such indemnified party shall have the right to employ
separate counsel in any such action and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party has agreed to pay such fees
and expenses or (ii) the named parties to any such action or proceeding include
both such indemnified party and the indemnifying party, and such indemnified
party shall have been advised by counsel that there may be one or more legal
defenses available to such indemnified party which are different from or
additional to those available to the indemnifying party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
or proceeding on behalf of such indemnified party; it being understood, however,
that the indemnifying party shall not, in connection with any one such action or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (together with appropriate local counsel) at any time for all
indemnified parties. The indemnifying party shall not be liable for
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any settlement of any such action or proceeding effected without the
indemnifying party's written consent.
11.4 Contribution. If the indemnification provided for in this Article XI
is unavailable to any indemnified party in respect of any losses, claims,
damages, liabilities or expenses referred to herein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities and expenses in such proportion as is appropriate
to reflect the relative fault of the indemnifying party and the indemnified
parties in connection with the actions that resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
parties shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by such indemnified party or indemnified parties and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The indemnifying party and the indemnified party
agree that it would not be just and equitable if contribution pursuant to this
Section 11.4 were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in this Section 11.4. No person guilty of fraudulent misrepresentation
(within the meaning of section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
11.5 Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may permit the sale of the
Shares held by the Stockholders to the public without registration, the Company
agrees to:
(a) use its Best Efforts to make and keep public information
available (as those terms are understood and defined in Rule 144) at all times;
(b) use its Best Efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act at any time that it is subject to such
reporting requirements;
(c) so long as a Stockholder owns any Shares, furnish to the
Stockholder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of the Exchange Act (at any time that
it is subject to such reporting requirements), a copy of the most recent annual
or quarterly report of the Company, and such other reports and documents filed
in accordance with such reporting requirements as a Stockholder may reasonably
request in availing itself of any rule or regulation of the Commission allowing
a Stockholder to sell any such Shares without registration; and
(d) if required by the transfer agent and registrar for the
Company's Stock, use reasonable diligence to obtain an opinion from legal
counsel addressed to such transfer agent and
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registrar, with respect to any sale of Shares pursuant to Rule 144 (or, at the
option of the Company, pay the reasonable fees and expenses of legal counsel
retained by a Stockholder to provide such an opinion).
11.6 Obligations of the Stockholders. The Stockholders shall provide all
such information and materials and shall take all such actions as may be
reasonably required in order to permit the Company to comply with all applicable
requirements of the Commission and to obtain any desired acceleration of the
effective date of the registration statement. Specifically, the Company may
require the Stockholders to furnish the Company with such information regarding
the Stockholders and the proposed distribution of the Shares as the Company may
from time to time reasonably determine is required by law or the Commission.
Each Stockholder hereby covenants with the Company that he will
promptly advise the Company of any changes in the information concerning such
Stockholder contained in the registration statement filed hereunder and that
such Stockholder will not make any sale of Shares pursuant to the registration
statement without complying with the prospectus delivery requirements of the
Securities Act. Each Stockholder acknowledges that occasionally there may be
times when, pursuant to applicable SEC regulations, the Company must temporarily
suspend the use of the prospectus forming a part of the registration statement
until such time as an amendment to the registration statement has been filed by
the Company and declared effective by the Commission, the relevant prospectus
supplemented by the Company or until such time as the Company has filed an
appropriate report with the Commission pursuant to the Exchange Act. Each
Stockholder covenants and agrees that he will not sell any Shares pursuant to
the prospectus during the period commencing at the time at which the Company
gives such notice of the suspension of the use of said prospectus and ending at
the time the Company gives notice that such Stockholder may thereafter effect
sales pursuant to said prospectus, but not to exceed 90 days during any 12 month
period.
11.7 Survival. The provisions of this Article XI shall survive the closing
date and the indemnification provisions hereunder shall be a continuing right to
indemnification and shall survive the registration and sale of any Shares by any
person entitled to indemnification hereunder.
11.8 Purchase Price Adjustment. If the registration statement required to
be filed under Section 11.1 hereof shall become effective on or before the 51st
day following the Closing Date, then the Company will be required to assure that
the Stockholders will receive Registered Shares (as hereinafter defined) as of
the Registration Effective Date (as hereinafter defined) with a value on the
Registration Effective Date (determined based on the average closing price of
Outdoor Systems Stock on the New York Stock Exchange during the five (5) trading
days determined one (1) trading day before the Registration Effective Date
(hereinafter, the "Registration Effective Date Price")) equal to the Merger
Price and the Stockholders will agree to return to the Company a portion of the
Shares they receive on the Closing Date if the Registration Effective Date Price
exceeds the Average Share Price so that the aggregate value of the Shares
retained by the
36
<PAGE> 37
Stockholders equal the Merger Price on the Registration Effective Date. Thus, if
on the Registration Effective Date, the Registration Effective Date Price is
greater than or less than the Average Share Price, shares of Outdoor Systems
Stock (the "Additional Shares" or the "Return Shares", as the case may be) will
be delivered or returned so that the sum of the following equals the Merger
Price:
(a) an amount obtained by multiplying the Registration Effective
Date Price by the number of Shares initially delivered on the Closing Date; plus
(b) an amount obtained by multiplying the Registration Effective
Date Price by the number of Additional Shares to be issued by the Company to the
Stockholders so that the sum of (a) and (b) equal the Merger Price, in the event
that the Average Share Price exceeds the Registration Effective Date Price; or
minus
(c) an amount obtained by multiplying the Registration Effective
Date Price by the number of Return Shares to be returned by the Stockholders to
the Company so that (a) minus (c) equals the Merger Price, in the event that the
Registration Effective Date Price exceeds the Average Share Price.
By way of example, if the Registration Effective Date Price is $28
per share, the Average Shares Price was $30 and the Merger Price is $53,500,000,
the number of shares of Outdoor Systems Stock (valued at the Registration
Effective Date Price) with a value equal to the Merger Price as of the
Registration Effective Date is 1,910,714 ($53,500,000 divided by $28 per share).
Since the number of Shares initially delivered on the Closing Date was
1,783,333, 127,381 Additional Shares would be delivered by the Company to the
Stockholders under this Agreement. Any Additional Shares issued pursuant to this
Section 11.8 shall be listed on the New York Stock Exchange and included in the
registration statement by way of a pre-effective amendment or otherwise
registered pursuant to this Article XI within seven (7) days of the Registration
Effective Date pursuant to an additional registration statement under Rule
462(b) of the Securities Act or other amendment or filing which otherwise
accomplishes the desired registration. Any Return Shares shall be returned
within seven (7) days of the Registration Effective Date. Any Additional Shares
shall be issued, and any Return Shares shall be returned, in accordance with the
percentages set forth after each Stockholder's name on Exhibit 3.4. If between
the Closing Date and the Registration Effective Date, the outstanding shares of
Outdoor Systems Stock shall have been changed into a different number of shares
or a different class by reason of any reclassification, recapitalization,
split-up, stock dividend, stock combination, exchange of shares or readjustment,
the application of this Section 11.8 and the determination of the number of
Shares, Additional Shares and Return Shares shall be commensurately adjusted. No
fractional shares of Outdoor Systems Stock shall be issued or returned, but in
lieu thereof an amount of cash equal to the value of such fractional share shall
be substituted. For purposes of this paragraph, the Registration Effective Date
shall mean the date on which the Registration Statement filed under Section 11.1
shall become effective and the term Registered Shares shall
37
<PAGE> 38
mean shares of Outdoor Systems Stock that are listed on the New York Stock
Exchange and are registered pursuant to this Article XI.
11.9 Price Protection. If the registration statement required to be filed
under Section 11.1 hereof shall not, for any reason, become effective on or
before the 51st day following the Closing Date, then the Company shall provide
the following share price protection ("Price Protection") to the Stockholders.
The Company will be required to assure that the Stockholders will receive
Registered Shares (as hereinafter defined) as of the Price Protection
Registration Effective Date (as hereinafter defined) with a value on the Price
Protection Registration Effective Date (determined based on the average closing
price of Outdoor Systems Stock on the New York Stock Exchange during the five
(5) trading days determined one (1) trading day before the Price Protection
Registration Effective Date (hereinafter, the "Price Protection Registration
Effective Date Price")) at least equal to the Merger Price. Thus, if on the
Price Protection Registration Effective Date, the Price Protection Registration
Effective Date Price is less than the Average Share Price, shares of Outdoor
Systems Stock (the "Price Protection Additional Shares") will be delivered so
that the sum of the following equals the Merger Price:
(a) an amount obtained by multiplying the Price Protection
Registration Effective Date Price by the number of Shares initially delivered on
the Closing Date; plus
(b) an amount obtained by multiplying the Price Protection
Registration Effective Date Price by the number of Price Protection Additional
Shares to be issued by the Company to the Stockholders so that the sum of (a)
and (b) equal the Merger Price, in the event that the Average Share Price
exceeds the Price Protection Registration Effective Date Price.
By way of example, if the Price Protection Registration Effective
Date Price is $28 per share, the Average Shares Price was $30 and the Merger
Price is $53,500,000, the number of shares of Outdoor Systems Stock (valued at
the Price Protection Registration Effective Date Price) with a value equal to
the Merger Price as of the Price Protection Registration Effective Date is
1,910,714 ($53,500,000 divided by $28 per share). Since the number of Shares
initially delivered on the Closing Date was 1,783,333, 127,381 Price Protection
Additional Shares would be delivered by the Company to the Stockholders under
this Agreement. Any Price Protection Additional Shares issued pursuant to this
Section 11.9 shall be listed on the New York Stock Exchange and included in the
registration statement by way of a pre-effective amendment or otherwise
registered pursuant to this Article XI within seven (7) days of the Price
Protection Registration Effective Date pursuant to an additional registration
statement under Rule 462(b) of the Securities Act or other amendment or filing
which otherwise accomplishes the desired registration. Any Price Protection
Additional Shares shall be issued in accordance with the percentages set forth
after each Stockholder's name on Exhibit 3.4. If between the Closing Date and
the Price Protection Registration Effective Date, the outstanding shares of
Outdoor Systems Stock shall have been changed into a different number of shares
or a different class by reason of any reclassification, recapitalization,
split-up, stock dividend, stock combination, exchange of shares or readjustment,
the application of this Section 11.9 and the determination of the number
38
<PAGE> 39
of Shares and Price Protection Additional Shares shall be commensurately
adjusted. No fractional shares of Outdoor Systems Stock shall be issued, but in
lieu thereof an amount of cash equal to the value of such fractional share shall
be substituted. For purposes of this paragraph, the Price Protection
Registration Effective Date shall mean the earlier of the date on which the
Registration Statement filed under Section 11.1 shall become effective or the
date as of which the Stockholders who are not "affiliates" of the Company as
such term is used under Rule 144 under the Securities Act become entitled to
sell their Shares pursuant to the provisions of Rule 144(k) and the term
Registered Shares shall mean shares of Outdoor Systems Stock that are listed on
the New York Stock Exchange and are registered pursuant to this Article XI. Any
shares of Outdoor Systems Stock issued under this Section 11.9 shall be treated
as part of the consideration payable in the Merger.
ARTICLE XII
MISCELLANEOUS
12.1 No Brokers. Gator and the Stockholders represent to the Company and
GATOA, and the Company and GATOA represent to Gator and the Stockholders, that
they respectively have had no dealings with and no obligations to any broker or
finder in connection with the transactions contemplated by this Agreement.
12.2 Survival of Representations and Warranties. All of the
representations and warranties contained in this Agreement shall survive for a
period of one year following the Closing Date, except that the following
sections shall survive for the applicable statute of limitations: 4.1, 4.2, 4.8,
4.15, 5.1, 5.2, 5.3, 5.4, 6.1, 6.2, 6.3 and 6.6.
12.3 Specific Performance. The parties hereto acknowledge that irreparable
damage would result if this Agreement is not specifically enforced. Therefore,
the rights and obligations of the parties under the Agreement, including,
without limitation, their respective rights and obligations to effect the
Merger, shall be enforceable by a decree of specific performance issued by any
court of competent jurisdiction, and appropriate injunctive relief may be
applied for and granted in connection therewith. Such remedies shall, however,
be cumulative and not exclusive and shall be in addition to any other remedies
which any party may have under this Agreement or otherwise.
12.4 Termination. Anything contained in this Agreement to the contrary
notwithstanding, the parties may terminate this Agreement without the prior
authorization of its Board of Directors as provided below:
(a) At any time on or prior to the Closing Date, by the
mutual consent in writing of the Company, GATOA and Gator;
39
<PAGE> 40
(b) The Company and GATOA may terminate this Agreement by
giving written notice to Gator at any time prior to the Closing Date (i)
in the event Gator has breached any material representation, warranty or
covenant contained in this Agreement in any material respect, the Company
or GATOA has notified Gator of the breach, and the breach has continued
without cure for a period of 30 days after the notice of breach, or (ii)
if the Closing shall not have occurred on or before June 30, 1998 by
reason of the failure of any condition precedent (unless the failure
results primarily from the Company or GATOA breaching any representation,
warranty or covenant contained in this Agreement);
(c) Gator may terminate this Agreement by giving written
notice to the Company and GATOA at any time prior to the Closing Date (i)
in the event the Company or GATOA has breached any material
representation, warranty or covenant contained in this Agreement in any
material respect, Gator has notified the Company and GATOA of the breach,
and the breach has continued without cure for a period of 30 days after
notice of breach, or (ii) if the Closing shall not have occurred on or
before June 30, 1998 by reason of the failure of any condition precedent
(unless the failure results primarily from Gator breaching any
representation, warranty or covenant contained in this Agreement);
In the event that this Agreement shall be terminated pursuant to this Section
12.4, (i) each party shall redeliver all documents, work papers and other
material of any other party relating to the transactions contemplated hereby,
whether so obtained before or after the execution hereof, to the party
furnishing the same, and (ii) all further obligations of the parties under this
Agreement shall terminate without further liability of any party to any other
party (except for any liability of any party then in breach); provided, however,
that Sections 12.5 and 12.11 below shall survive such termination.
Notwithstanding the foregoing, any willful or intentional breach of any
representation, warranty, covenant or agreement set forth in this Agreement by
any party to this Agreement, prior to the Closing Date, shall not limit or
restrict the availability of specific performance or other injunctive relief to
the extent that specific performance or such other relief would otherwise be
available to a party hereunder.
12.5 Confidentiality; Press Releases; Other Restricted Actions.
(a) The Company and GATOA agree to keep non-public
information regarding Gator confidential and agree that they shall only
use such information in connection with the transactions contemplated by
this Agreement and not disclose any of such information other than (i) to
the Company's and GATOA's directors, officers, employees, representatives,
and agents who are involved with the transactions contemplated by this
Agreement (but the Company shall be responsible for any unauthorized use
or disclosure of such information by any such person), (ii) to the extent
such information presently is or hereafter becomes available, on a
non-confidential basis, from a source other than Gator provided that such
source is not bound by a confidentiality agreement with Gator or any of
the Stockholders or
40
<PAGE> 41
their respective representatives or otherwise prohibited from transmitting
such information to the Company and GATOA by a contractual, fiduciary or
other legal obligation, and (iii) to the extent disclosure is required by
law, regulation or judicial order by any governmental authority.
(b) Gator agrees to keep non-public information regarding
the Company and GATOA confidential and agrees that it shall only use such
information in connection with the transactions contemplated by this
Agreement and not disclose any of such information other than (i) to
Gator's directors, officers, employees, representatives, and agents who
are involved with the transactions contemplated by this Agreement (but
Gator shall be responsible for any unauthorized use or disclosure of such
information by any such person), (ii) to the extent such information
presently is or hereafter becomes available, on a non-confidential basis,
from a source other than the Company or GATOA provided that such source is
not bound by a confidentiality agreement with the Company or GATOA or
their respective representatives or otherwise prohibited from transmitting
such information to Gator by a contractual, fiduciary or other legal
obligation, and (iii) to the extent disclosure is required by law,
regulation or judicial order by any governmental authority.
(c) Prior to any disclosure required by law, regulation or
judicial order, the Company, GATOA or Gator, as the case may be, shall
advise each of the others of such requirement so that it may seek a
protective order.
(d) None of the Company, GATOA or Gator shall make any press
release or public announcement in connection with the transactions
contemplated hereby without the prior written consent of the other party
or, if required by law, without prior consultation with the other party.
(e) Unless the Closing shall occur, during the term of this
Agreement and for a period of three years from any termination of this
Agreement, the Company and GATOA, on the one hand, and Gator, on the other
hand, shall not (i) initiate or maintain contact (except for contacts
during the ordinary course of business or in connection with the
transactions contemplated by this Agreement) with any officer, director or
employee of the other, regarding its business operations, prospects or
finances, except with the express written permission of the company
employing such person, or (ii) solicit for hire any employees of the
other, provided that each can, if it so elects, after the expiration of 18
months from any termination of this Agreement, hire any employee who, on
his or her own volition, initiates contact with such company regarding
possible employment.
(f) The Company acknowledges that the Company, directly or
through Affiliates, is an existing or potential competitor of Gator in
Gator's market area. Accordingly, to prevent any unfair use of
confidential information of Gator, the Company agrees that if this
Agreement is terminated, for a period of three (3) years after such
termination, the Company agrees not to, and agrees to cause its Affiliates
not to: (i) solicit
41
<PAGE> 42
any of Gator's landlords so as to jeopardize the status of any of Gator's
Billboard Leases, (ii) lease, purchase or otherwise seek to obtain rights
to any of Gator's Billboards or Billboard sites from Gator's landlords or
any other party, or (iii) obtain or attempt to obtain a billboard site
which Gator currently possesses or for which Gator is currently
negotiating to establish a billboard site.
(g) The parties acknowledge the difficulty of determining
money damages resulting from any breach of the provisions of this Section
12.5. Accordingly, each agrees that the other shall be entitled to
equitable relief, including an injunction, as well as any other remedies
which may be available under applicable law with respect to any such
breach. If any court of competent jurisdiction shall hold that any
restriction contained in this Section 12.5 is too broad to be reasonable,
such restriction shall be reduced to the extent necessary in the opinion
of such court to make it reasonable, the intent of the parties being that
the broadest protection allowed by law or equity apply with respect to
such provision.
12.6 Notices. Any notices or other communications required or permitted
hereunder, shall be given in writing and personally delivered or sent by
certified mail, return receipt requested addressed as follows or to such other
address as the parties shall have given notice of pursuant hereto:
In the case of the Company:
William S. Levine
Chairman
Outdoor Systems, Inc.
1702 East Highland Avenue, Suite 310
Phoenix, Arizona 85016
(Fax) (602) 248-0884
With a copy to:
William A. Shearer, Jr., Esq.
Powell, Goldstein, Frazer & Murphy, LLP
191 Peachtree Street, N.E., Sixteenth Floor
Atlanta, Georgia 30303
(Fax) (404) 572-6600
In the case of Gator or the Stockholder Representative:
42
<PAGE> 43
Peter D. Sleiman
4347-10 University Boulevard South
Jacksonville, Florida 32216
Fax: (904) 731-1109
With a copy to:
Robert S. Bernstein, Esq.
FOLEY & LARDNER
The Greenleaf Building
200 Laura Street
Jacksonville, Florida 32202-3527
Fax: (904) 359-8700
All such notices and communications shall be effective upon receipt when
personally delivered, or if sent by certified mail, return receipt requested,
when receipt is acknowledged.
12.7 Entire Agreement. This Agreement together with all exhibits and
schedules hereto (including the Disclosure Schedules) represents the entire
understanding and agreement among the parties hereto with respect to the subject
matter hereof and supersedes all prior understandings and agreements, whether
written or oral, and can be amended, supplemented or changed, and any provision
hereof can be waived, only by written instrument making specific reference to
this Agreement signed by the party against whom enforcement of any such
amendment, supplement modification or waiver is sought. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provision hereof (whether or not similar) nor shall such waiver constitute
a continuing waiver unless otherwise expressly provided.
12.8 Successors. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assigns;
provided, however, that this Agreement and all rights and obligations hereunder
may not be assigned or transferred without the prior written consent of the
other parties hereto, except that the Company may assign its rights hereunder to
a wholly-owned subsidiary of the Company.
12.9 Choice of Law. This Agreement shall be construed, interpreted and the
rights of the parties determined in accordance with Florida Law (without
reference to the choice of law provisions of Florida Law) except with respect to
matters of law concerning the internal corporate affairs of any corporate entity
which is a party to or the subject of this Agreement, and as to those matters
the law of the jurisdiction under which the respective entity derives its powers
shall govern.
12.10 Jurisdiction. Any action, suit or proceeding arising out of or in
connection with this Agreement (collectively "Proceeding") shall be brought
exclusively in the U.S. District Court for the Middle District of Florida or a
state court of competent jurisdiction in Orange County,
43
<PAGE> 44
Florida, including any Proceeding relating to the indemnification obligations of
the Stockholders in Article X of this Agreement. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by law, any objection which
such party may have to the laying of venue for any Proceeding in any such court.
12.11 Expenses. Whether or not the transactions contemplated hereby are
consummated, the parties hereto shall pay their own respective legal,
accounting, out-of-pocket and other expenses.
12.12 Severability. If at any time subsequent to the date hereof, any
provision of this Agreement shall be held by any court of competent jurisdiction
to be illegal, void or unenforceable, such provision shall be of no force and
effect, but the illegality or unenforceability of such provision shall have no
effect upon and shall not impair the enforceability of any other provision of
this Agreement.
12.13 Titles. The titles, captions or headings of the Sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
12.14 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
12.15 No Third-Party Beneficiaries. No person (other than parties to this
Agreement or their respective successors or permitted assigns) shall have or be
construed to have any legal or equity right, remedy or claim under or in respect
of or by virtue of this Agreement or any provision herein contained.
12.16 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 or authorship of any provision
of this Agreement.
12.17 Cumulative Remedies. All rights and remedies of any party hereto are
cumulative of each other and of every right or remedy such party may otherwise
have at law or in equity, and the exercise of one or more rights or remedies
shall not prejudice or impair the concurrent or subsequent exercise of other
rights or remedies.
44
<PAGE> 45
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
GATOR OUTDOOR ADVERTISING, OUTDOOR SYSTEMS, INC.
INC., a Florida corporation
a Delaware corporation
By /s/ Peter Sleiman By /s/ William S. Levine
-------------------------------- -----------------------------
Name: Peter Sleiman William S. Levine, Chairman
Title: Chairman
GATOA, INC.,
a Florida corporation
By /s/ William S. Levine
------------------------------
William S. Levine, President
As to Articles V, X, XI and XII only:
/s/ Peter D. Sleiman /s/ Peter D. Sleiman
- -------------------------------- --------------------------------
Peter D. Sleiman Peter D. Sleiman, as Stockholder
Representative
Anthony T. Sleiman by Peter Sleiman
/s/ Peter D. Sleiman, attorney in fact
- --------------------------------
Anthony T. Sleiman
/s/ Joseph E. Sleiman
- --------------------------------
Joseph E. Sleiman
/s/ Eli T. Sleiman, Jr.
- --------------------------------
Eli T. Sleiman, Jr.
"Stockholders"
46
<PAGE> 46
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE I
DEFINITIONS................................................. 1
ARTICLE II
CLOSING DATE; CLOSING............................................ 6
2.1 Time and Place................................................................................. 6
2.2 Proceedings and Deliveries Simultaneous........................................................ 6
2.3 Determination of Merger Price.................................................................. 7
ARTICLE III
THE MERGER.................................................. 7
3.1 The Merger..................................................................................... 7
3.2 Effect of the Merger........................................................................... 7
3.3 Charter Documents; Directors; Officers......................................................... 8
3.4 Merger Consideration........................................................................... 8
3.5 Conversion of GATOA Common Stock............................................................... 8
3.6 Tax Consequences............................................................................... 8
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES OF GATOR............................................. 9
4.1 Organization and Good Standing................................................................. 9
4.2 Capitalization................................................................................. 9
4.3 Subsidiaries................................................................................... 9
4.4 Execution and Effect of Agreement.............................................................. 9
4.5 Financial Statements........................................................................... 10
4.6 No Undisclosed Liabilities..................................................................... 10
4.7 No Material Adverse Change; No Dividends....................................................... 10
4.8 Taxes.......................................................................................... 10
4.9 Billboards and Billboard Leases................................................................ 11
4.10 Real Property and Material Leases of Real Property............................................. 12
4.11 Permits; Compliance with Laws.................................................................. 12
4.12 Insurance...................................................................................... 13
4.13 Material Contracts............................................................................. 13
4.14 Title to Properties; Absence of Encumbrances................................................... 14
4.15 Restrictions................................................................................... 14
4.16 Patents, Trademarks and Copyrights............................................................. 14
4.17 Litigation..................................................................................... 15
</TABLE>
i
<PAGE> 47
<TABLE>
<S> <C> <C>
4.18 Regulatory Approval............................................................................ 15
4.19 Environmental Matters.......................................................................... 15
4.20 Collective Bargaining Agreements and Labor..................................................... 16
4.21 Employee Benefit Plans; ERISA.................................................................. 16
4.22 Employees At Will.............................................................................. 18
4.23 Tangible Personal Property..................................................................... 18
4.24 Affiliate Transactions......................................................................... 18
4.25 HSRA Compliance................................................................................ 18
ARTICLE V
REPRESENTATIONS AND
WARRANTIES OF THE STOCKHOLDERS........................................ 19
5.1 Stockholder Approval........................................................................... 19
5.2 Title; Agreements.............................................................................. 19
5.3 Execution and Effect of Agreement.............................................................. 19
5.4 Investment Representations..................................................................... 19
ARTICLE VI
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY AND GATOA..................................... 20
6.1 Organization and Good Standing................................................................. 20
6.2 Execution and Effect of Agreement.............................................................. 21
6.3 Restrictions................................................................................... 21
6.4 Litigation; Consents........................................................................... 21
6.5 SEC Reports.................................................................................... 21
6.6 Capitalization................................................................................. 22
6.7 GATOA.......................................................................................... 22
ARTICLE VII
COVENANTS OF GATOR,
THE COMPANY AND GATOA............................................ 22
7.1 Filings; Other Actions......................................................................... 22
7.2 Stock Exchange Listing......................................................................... 23
7.3 Access to Information.......................................................................... 23
7.4 Conduct of Business............................................................................ 23
7.5 Notification of Certain Matters................................................................ 25
7.6 Affiliate Leases............................................................................... 25
ARTICLE VIII
CONDITIONS PRECEDENT TO
THE COMPANY'S AND GATOA'S OBLIGATIONS.................................... 25
8.1 Representations and Warranties True............................................................ 25
8.2 Covenants Performed............................................................................ 25
</TABLE>
ii
<PAGE> 48
<TABLE>
<S> <C> <C>
8.3 No Judicial or Administrative Restraint........................................................ 25
8.4 Officer's Certificate.......................................................................... 26
8.5 Board and Stockholder Approval................................................................. 26
8.7 Gator Capital Stock............................................................................ 26
8.8 Articles of Merger............................................................................. 26
8.9 Opinion of Counsel............................................................................. 26
8.10 Non-Solicitation Agreements.................................................................... 26
8.11 Non-Foreign Affidavit.......................................................................... 26
ARTICLE IX
CONDITIONS PRECEDENT
TO GATOR'S OBLIGATION............................................ 26
9.1 Representations and Warranties True............................................................ 26
9.2 Covenants Performed............................................................................ 27
9.3 No Judicial or Administrative Restraint........................................................ 27
9.4 Officers' Certificate.......................................................................... 27
9.5 Board Approval................................................................................. 27
9.6 Merger Consideration........................................................................... 27
9.7 NYSE Listing................................................................................... 27
9.8 Articles of Merger............................................................................. 27
9.9 Opinion of Counsel............................................................................. 27
ARTICLE X
INDEMNIFICATION............................................... 27
10.1 The Company's Rights to Indemnification........................................................ 27
10.2 The Company's Right to Assert a Claim.......................................................... 28
10.3 Third Party Claims............................................................................. 28
10.3.1 Notice and Defense................................................................... 28
10.3.2 Failure to Defend.................................................................... 29
10.4 Payment........................................................................................ 29
10.5 Threshold and Cap.............................................................................. 29
10.6 Scope.......................................................................................... 29
10.7 Stockholder Representative..................................................................... 29
ARTICLE XI
REGISTRATION OF SHARES............................................ 31
11.1 Registration Rights............................................................................ 31
11.2 Indemnification................................................................................ 33
11.3 Conduct of Indemnification Proceedings......................................................... 34
11.4 Contribution................................................................................... 35
11.5 Rule 144 Reporting............................................................................. 35
11.6 Obligations of the Stockholders................................................................ 36
11.7 Survival....................................................................................... 36
</TABLE>
iii
<PAGE> 49
<TABLE>
<S> <C> <C>
11.8 Purchase Price Adjustment...................................................................... 36
11.9 Price Protection............................................................................... 38
ARTICLE XII
MISCELLANEOUS................................................ 39
12.1 No Brokers..................................................................................... 39
12.2 Survival of Representations and Warranties..................................................... 39
12.3 Specific Performance........................................................................... 39
12.4 Termination.................................................................................... 39
12.5 Confidentiality; Press Releases; Other Restricted Actions...................................... 40
12.6 Notices........................................................................................ 42
12.7 Entire Agreement............................................................................... 43
12.8 Successors..................................................................................... 43
12.9 Choice of Law.................................................................................. 43
12.10 Jurisdiction................................................................................... 43
12.11 Expenses....................................................................................... 44
12.12 Severability................................................................................... 44
12.13 Titles......................................................................................... 44
12.14 Counterparts................................................................................... 44
12.15 No Third-Party Beneficiaries................................................................... 44
12.16 Construction................................................................................... 44
12.17 Cumulative Remedies............................................................................ 44
</TABLE>
iv
<PAGE> 50
LIST OF SCHEDULES
Schedule 4.5 Financial Statements
Schedule 4.6 Undisclosed Liabilities
Schedule 4.8 Taxes
Schedule 4.9 Billboards and Billboard Master Lease List
Schedule 4.10 Material Leases of Real Property
Schedule 4.11 Permits; Compliance with Laws
Schedule 4.12 Insurance
Schedule 4.13 Material Contracts
Schedule 4.14 Title to Properties; Absence of Encumbrances
Schedule 4.15 Restrictions
Schedule 4.16 Patents, Trademarks and Copyrights
Schedule 4.17 Litigation
Schedule 4.18 Regulatory Approval
Schedule 4.19 Environmental Matters
Schedule 4.20 Collective Bargaining Agreements and Labor
Schedule 4.21 Employee Benefit Plans; ERISA
Schedule 4.23 Tangible Personal Property
Schedule 4.24 Affiliate Transactions
Schedule 4.25 HSRA Compliance
Schedule 7.6 Affiliate Leases
<PAGE> 51
LIST OF EXHIBITS
Exhibit 1.5 Form of Articles of Merger
Exhibit 3.4 Merger Consideration Percentages
Exhibit 5.2 Gator Capital Stock
Exhibit 7.6 Form of Amendment to Affiliate Lease
<PAGE> 52
EXHIBIT 3.4
MERGER CONSIDERATION PERCENTAGES
Peter D. Sleiman 25%
Anthony T. Sleiman 25%
Joseph E. Sleiman 25%
Eli T. Sleiman, Jr. 25%
<PAGE> 53
EXHIBIT 5.2
GATOR CAPITAL STOCK
STOCKHOLDER NUMBER OF SHARES
Peter D. Sleiman 250 Shares
Anthony T. Sleiman 250 Shares
Joseph E. Sleiman 250 Shares
Eli T. Sleiman, Jr. 250 Shares
