<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 12, 1997
REGISTRATION NO. 333-32607
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------
UNIVERSAL OUTDOOR HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 36-3766705
(State or other jurisdiction (I.R.S. Employer
of Identification
incorporation) No.)
</TABLE>
311 S. WACKER DRIVE, SUITE 6400
CHICAGO, ILLINOIS 60606
(312) 431-0821
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
----------------
PAUL G. SIMON
GENERAL COUNSEL
UNIVERSAL OUTDOOR HOLDINGS, INC.
311 S. WACKER DRIVE, SUITE 6400
CHICAGO, ILLINOIS 60606
(312) 431-0822
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------
COPIES TO:
Leland E. Hutchinson Stacy J. Kanter
Winston & Strawn Skadden, Arps, Slate, Meagher & Flom
LLP
35 West Wacker Drive 919 Third Avenue
Chicago, Illinois 60601 New York, New York 10022
(312) 558-5600 (212) 735-3000
----------------
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 to be offered
pursuant to dividend or interest investment 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. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act of 1933 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 of 1933, 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./ /
----------------
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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO THE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
STATE.
<PAGE>
SUBJECT TO COMPLETION
DATED AUGUST 12, 1997
[LOGO]
4,800,000 SHARES
UNIVERSAL OUTDOOR HOLDINGS, INC.
COMMON STOCK
----------
Of the shares of Common Stock ("Common Stock") offered hereby (the
"Offering"), 1,327,705 shares are being sold by Universal Outdoor Holdings, Inc.
("Universal Outdoor" or the "Company") and 3,472,295 shares are being sold by
certain selling stockholders named herein (the "Selling Stockholders"). See
"Principal and Selling Stockholders." The Company will not receive any of the
proceeds from the sale of Common Stock by the Selling Stockholders.
The Common Stock is quoted on the Nasdaq National Market under the symbol
"UOUT." On August 11, 1997, the last reported sale price for the Common Stock,
as reported on the Nasdaq National Market, was $37.25 per share.
--------------
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 9 HEREOF.
-------------
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 CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE UNDERWRITING PROCEEDS PROCEEDS TO
TO DISCOUNTS AND TO SELLING
PUBLIC COMMISSIONS COMPANY(1) STOCKHOLDERS
<S> <C> <C> <C> <C>
Per Share........................... $ $ $ $
Total(2)............................ $ $ $ $
</TABLE>
(1) Before deducting expenses of the Offering payable by the Company estimated
at $500,000.
(2) The Company and two of its senior executives have granted the Underwriters
30-day options to purchase up to an aggregate of 720,000 additional shares
of Common Stock solely to cover over-allotments, if any. To the extent that
the option is exercised, the Underwriters will offer the additional shares
at the Price to Public shown above. If the option is exercised in full, the
total Price to Public, Underwriting Discounts and Commissions, Proceeds to
Company and Proceeds to Selling Stockholders will be $ ,
$ , $ and $ , respectively. See
"Underwriting" and "Principal and Selling Stockholders."
--------------
The shares of Common Stock are offered by the several Underwriters subject
to prior sale, when, as and if delivered to and accepted by them, and subject to
the right of the Underwriters to reject any order in whole or in part. It is
expected that delivery of the shares of Common Stock will be made at the offices
of Alex. Brown & Sons Incorporated, Baltimore, Maryland, on or about
, 1997.
ALEX. BROWN & SONS
INCORPORATED
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES
CORPORATION
THE DATE OF THIS PROSPECTUS IS , 1997.
<PAGE>
<TABLE>
<S> <C>
MIDWEST EAST
- --Chicago, IL --New York/New Jersey
- --Minneapolis, MN --Philadelphia, PA
- --Indianapolis, IN --Baltimore, MD
- --Milwaukee, WI --Washington, DC
- --Des Moines, IA --Wilmington, DE
--Salisbury, MD
</TABLE>
[MAP OF THE UNITED STATES
ANNOTATED TO SHOW COMPANY MARKETS]
OUT OF HOME
- --Mall Media
<TABLE>
<S> <C>
MIDSOUTH FLORIDA
- --Memphis, TN --Orlando, FL
- --Myrtle Beach, SC --Jacksonville, FL
- --Chattanooga, TN --Ocala, FL
- --Evansville, IN --Atlantic Coast, FL
- --Dallas, TX --Gulf Coast, FL
</TABLE>
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING NOTES THERETO,
APPEARING IN THE DOCUMENTS INCORPORATED BY REFERENCE IN THIS PROSPECTUS. AS USED
HEREIN, THE "COMPANY" MEANS UNIVERSAL OUTDOOR HOLDINGS, INC., TOGETHER WITH ITS
CONSOLIDATED SUBSIDIARIES, UNLESS THE CONTEXT OTHERWISE REQUIRES. "UOI" REFERS
TO UNIVERSAL OUTDOOR, INC. AND ITS CONSOLIDATED SUBSIDIARIES, WHICH CONSTITUTE
THE OPERATING SUBSIDIARIES OF THE COMPANY. THE TERM "MARKET" REFERS TO THE
GEOGRAPHIC AREA CONSTITUTING A METROPOLITAN STATISTICAL AREA DELINEATED BY THE
U.S. CENSUS BUREAU. "EBITDA" HAS THE MEANING SET FORTH IN FOOTNOTE (3) ON PAGE 8
HEREOF AND "EBITDA MARGIN" HAS THE MEANING SET FORTH IN FOOTNOTE (4) ON PAGE 8
HEREOF.
THE COMPANY
The Company is a leading outdoor advertising company operating approximately
33,000 advertising display faces in four large regions: the Midwest (Chicago,
Minneapolis/St. Paul, Indianapolis, Milwaukee and Des Moines), Florida (Orlando,
Jacksonville, Ocala and the Atlantic Coast and Gulf Coast areas of Florida), the
Midsouth (Evansville (IN), Dallas, Memphis/Tunica and Chattanooga (TN) and
Myrtle Beach (SC)) and the East (New York, Washington D.C., Baltimore,
Philadelphia, Northern New Jersey, Wilmington (DE), Salisbury (MD) and Hudson
Valley (NY)). The Company's advertising display face inventory includes transit
display faces and kiosks in shopping malls, in addition to billboards and other
outdoor display faces. The Company believes that the diversity of its
advertising display inventory throughout its markets provides its customers with
a unique opportunity to select a variety of media and outlets in delivering
their marketing messages. The Company's customer base is also highly
diversified, with no one category of customers accounting for more than 16.0% of
net revenues for the six months ended June 30, 1997. During this same time
period, tobacco advertising accounted for approximately 10.6% of net revenues.
See "Risk Factors--Negative Implications of Tobacco Industry Regulation on
Outdoor Advertising."
SECOND QUARTER AND SIX MONTHS RESULTS
On July 31, 1997, the Company announced the results of its operations for
the second quarter and first six months of 1997. For the three months ended June
30, 1997, the Company reported record net revenues and EBITDA of $53.1 million
and $28.3 million, respectively, which compare favorably to the net revenues and
EBITDA of $17.8 million and $10.0 million, respectively, for the same period in
1996. For the six months ended June 30, 1997, the Company had net revenues and
EBITDA of $97.1 million and $49.5 million, respectively, which compare favorably
to the net revenues and EBITDA for the same period in 1996 of $26.2 million and
$13.6 million, respectively. The Company believes that its EBITDA Margin of
50.9% for the six months ended June 30, 1997 is among the highest in the
industry. There can be no assurance that the Company's future net revenues and
EBITDA Margins will equal or exceed those which have been achieved to date. In
addition, the Company has historically had net losses and has substantial
indebtedness. See "Risk Factors -- Substantial Indebtedness of the Company;
Potential Inability to Service Indebtedness" and "--Prior Period Losses."
3
<PAGE>
The Company has a significant presence in each of the regional markets in
which it operates. The following table sets forth, as of July 31, 1997, certain
information with respect to the Company's outdoor markets:
<TABLE>
<CAPTION>
TOTAL
30-SHEET 8-SHEET DISPLAY
BULLETINS POSTERS POSTERS TRANSIT FACES
----------- ----------- ----------- ----------- -----------
MIDWEST:
<S> <C> <C> <C> <C> <C>
Chicago...................................... 713 -- 3,515 -- 4,228
Indianapolis................................. 257 1,096 101 530 1,984
Minneapolis/St. Paul......................... 456 1,332 -- -- 1,788
Des Moines................................... 86 573 9 -- 668
Milwaukee.................................... 261 -- 338 -- 599
MIDSOUTH:
Evansville................................... 278 699 -- -- 977
Dallas....................................... 257 -- 1,224 -- 1,481
Memphis...................................... 705 1,229 129 529 2,592
Chattanooga.................................. 329 642 -- -- 971
Myrtle Beach................................. 738 468 -- -- 1,206
FLORIDA:
Orlando...................................... 820 1,087 -- -- 1,907
Ocala........................................ 864 198 -- -- 1,062
Atlantic Coast............................... 664 -- -- -- 664
Jacksonville................................. 448 780 -- -- 1,228
Gulf Coast................................... 457 -- -- -- 457
EAST:
Philadelphia................................. 355 2,080 -- 192 2,627
Washington................................... 86 586 -- -- 672
Salisbury.................................... 401 477 -- -- 878
Wilmington................................... 160 909 45 -- 1,114
Baltimore.................................... 209 1,234 -- 1,917 3,360
New York/New Jersey.......................... 440 553 33 -- 1,026
----- ----------- ----- ----- -----------
Total...................................... 8,984 13,943 5,394 3,168 33,071(1)
----- ----------- ----- ----- -----------
----- ----------- ----- ----- -----------
</TABLE>
- ------------------------
(1) Includes 1,582 kiosk displays in malls throughout the United States.
4
<PAGE>
OPERATING STRATEGY
The Company's objective is to remain the leading provider of outdoor
advertising services in each of its four regional operating areas and to expand
into attractive new markets. The Company believes that a regional operating
approach provides it with significant opportunities to increase revenue and
achieve cost savings by delivering to local and national advertisers efficient
access to multiple markets or highly targeted areas. Management intends to
continue to pursue the following operating strategy:
- ENHANCE EXISTING BUSINESS. The Company intends to expand its existing
business by maximizing rates and occupancy levels in each of its markets,
increasing market penetration, pursuing strategic acquisitions in and proximate
to its markets, capitalizing on technology advances, and maintaining a
decentralized low cost operating structure.
- DEVELOP OTHER OUT-OF-HOME MEDIA. The Company seeks to develop other
forms of out-of-home media that have potential for rapid growth, such as
displays in shopping malls, airports and bus shelters and transit advertising in
order to enhance revenues in existing markets and provide access to new markets.
- EXPAND INTO INTERNATIONAL MARKETS. The Company believes that an
additional area of substantial growth may come from the strategic expansion into
markets outside the United States. For example, the Company recently executed
letters of intent to enter into two joint venture agreements with companies in
Beijing, the capital of China, and in Dalian, a major port city in the Laoning
Province, to provide outdoor advertising services in areas of China undergoing
rapid growth and modernization.
The Company believes that its experienced senior management team is an
important asset in the successful implementation of its operating strategy.
Daniel L. Simon, President and Chief Executive Officer and the founder of the
Company, has spent his entire professional career of 23 years in the outdoor
advertising business. Brian T. Clingen, Vice President and Chief Financial
Officer, and Paul G. Simon, Vice President and General Counsel, together possess
over 24 years of experience in the industry.
The Company was incorporated in Delaware in 1991 and its principal executive
office is located at 311 S. Wacker Drive, Chicago, Illinois 60606, and its
telephone number is (312) 431-0822.
RECENT DEVELOPMENTS
Since the Company's initial public offering in July 1996, the Company has
completed the acquisition of 12 outdoor advertising businesses or assets for an
aggregate amount of approximately $600 million. In addition, the Company has
entered into letters of intent for the purchase of two additional outdoor
advertising businesses, all within existing markets, for an aggregate purchase
price of $27.0 million. The Company believes that these acquisitions will
significantly strengthen its market presence in the midwest and southeast
regions of the United States, create a substantial presence in the east coast
region and allow the Company to (i) continue to be a leading operator of outdoor
advertising services in each of its markets; (ii) capitalize on greater
operating efficiencies associated with operating in closely proximate markets;
and (iii) aggressively package its display inventory across its markets and
regions.
COMPLETED ACQUISITIONS
THE POA ACQUISITION. In October 1996, the Company acquired Outdoor
Advertising Holdings, Inc. for approximately $240.0 million in cash (the "POA
Acquisition"). As a result of the POA Acquisition, the Company acquired a total
of approximately 6,337 advertising display faces consisting of bulletins and
posters in five markets located in the southeast United States, including
Orlando, Ocala and Palm Beach, as well as the Atlantic Coast and Gulf Coast
areas of Florida, and Myrtle Beach and Chattanooga.
THE REVERE ACQUISITION. In December 1996, the Company acquired Revere
Holding Corp. for approximately $125.0 million in cash (the "Revere
Acquisition"). As a result of the Revere Acquisition, the Company acquired a
total of approximately 8,853 advertising display faces located in markets on the
5
<PAGE>
east coast of the United States, including Philadelphia, Washington D.C.,
Wilmington and Salisbury, as well as 1,917 transit display faces located in
Baltimore and 1,582 kiosk displays located in malls throughout the United
States.
THE MEMPHIS/TUNICA ACQUISITION. In January 1997, the Company acquired a
total of approximately 2,018 advertising display faces consisting of bulletins
and posters located in and around Memphis, Tennessee and Tunica County,
Mississippi for approximately $71.0 million plus 100,000 shares of the Company's
Common Stock.
THE MATTHEW ACQUISITION. In January 1997, the Company acquired certain of
the assets of Matthew Outdoor Advertising Acquisition Co. L.P. ("Matthew") for
approximately $40.0 million in cash and assumption by the Company of certain
liabilities of Matthew (the "Matthew Acquisition"). As a result of the Matthew
Acquisition, the Company acquired a total of approximately 1,035 advertising
display faces located in three markets, including metro New York, northern New
Jersey and Hudson Valley.
THE PENN ACQUISITION. In February 1997, the Company agreed to acquire the
stock of Penn-Baltimore, Inc. from Lamar Advertising Company for $46.5 million
in cash (the "Penn Acquisition"). The Penn Acquisition was consummated in June
1997 and the Company acquired approximately 1,450 advertising display faces in
the Baltimore metropolitan area.
THE ALLIED ACQUISITION. In April 1997, the Company agreed to acquire
certain assets of Allied Outdoor Advertising, Inc. for $51.2 million in cash
(the "Allied Acquisition"). The Allied Acquisition was consummated in July 1997
and the Company acquired approximately 90 advertising display faces in New York
City and New Jersey.
OTHER COMPLETED ACQUISITIONS. In September 1996, the Company purchased
certain assets of (i) Iowa Outdoor Displays for approximately $1.8 million in
cash and (ii) The Chase Company for approximately $5.8 million in cash. As a
result of these acquisitions, the Company acquired approximately 160 advertising
display faces consisting primarily of posters in and around Des Moines and
approximately 245 advertising display faces consisting primarily of bulletins in
and around Dallas.
In February 1997, the Company acquired a total of approximately 135
advertising display faces located in and around Evansville, Indiana from
Ad-Craft, Inc. for approximately $5.5 million in cash. The Company also acquired
12 existing advertising display faces and 35 in process display faces in New
Jersey from David Klein Outdoor Advertising, Inc. for approximately $5.3 million
in cash.
In March 1997, the Company acquired a total of approximately 600 bus
shelters and panels in and around Memphis, Tennessee for approximately $8.5
million in cash from TransAd, Inc.
In July 1997, the Company acquired a total of approximately 143 advertising
display faces in and around Memphis, Tennessee for approximately $2.5 million in
cash from Swaney Outdoor, Inc.
PENDING ACQUISITIONS
THE GAESS ACQUISITION. In July 1997, the Company entered into a letter of
intent to acquire substantially all of the outdoor advertising assets of Great
Outdoor, Inc., Media Outdoor Advertising and Media Displays, Inc., collectively
operating as Gaess Outdoor, for approximately $18 million (the "Gaess
Acquisition"). The Gaess Acquisition will further enhance the Company's position
in the metro New York and northern New Jersey market, adding 25 advertising
display faces, a number of which are located in high profile locations.
THE NEW YORK SIGN ACQUISITION. In July 1997, the Company entered into a
letter of intent to acquire substantially all of the outdoor advertising assets
of New York Signs for approximately $9 million. Such acquisition will further
enhance the Company's position in New York City, adding 17 advertising display
faces.
Each of the pending acquisitions is subject to numerous conditions including
the negotiation of final acquisition agreements and certain of the acquisitions
will be subject to clearance under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended. There can be no assurance that any of the pending
acquisitions will be consummated or that they will not be delayed due to
antitrust clearance or other factors.
6
<PAGE>
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered by the Company.................. 1,327,705 shares
Common Stock offered by the Selling Stockholders..... 3,472,295 shares
Common Stock to be outstanding after the Offering.... 25,564,035 shares(1)
Use of Proceeds to the Company....................... To repay existing indebtedness under
the Company's revolving credit
facility incurred in connection with
recent acquisitions. Such amounts
may be reborrowed in the future to
fund pending acquisitions. The
Company will not receive any
proceeds from the sale of Common
Stock by the Selling Stockholders.
Nasdaq National Market Symbol........................ UOUT
</TABLE>
- ------------------------
(1) Excludes 2,347,078 shares of Common Stock issuable pursuant to the 1996
Warrant Plan, and 387,200 shares issuable pursuant to outstanding on
Noteholder Warrants.
SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
---------------------------------------------------------------- --------------------
1991 1992 1993 1994 1995 1996 1996 1997(5)
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Gross revenues........................ $ 21,435 $ 27,896 $ 28,710 $ 33,180 $ 38,101 $ 84,939 $ 29,366 $ 106,177
Net revenues(1)....................... 18,835 24,681 25,847 29,766 34,148 76,138 26,239 97,113
Direct advertising expenses........... 7,638 10,383 10,901 11,806 12,864 26,468 9,520 38,104
General and administrative expenses... 3,515 3,530 3,357 3,873 4,645 10,648 3,086 9,549
Depreciation and amortization......... 5,530 7,817 8,000 7,310 7,402 18,286 4,674 27,088
Non cash compensation for common stock
warrants............................ 9,000 9,000 --
Operating income...................... 2,152 2,951 3,589 6,777 9,237 11,736 (41) 22,372
Interest expense...................... 6,599 9,591 9,299 11,809 12,894 19,567 8,441 21,958
Other (expense) income, net........... (53) 291 (351) (134) (46) (1,398) (1,674) 514
Income (loss) before extraordinary
item(2)............................. (4,500) (6,349) (6,061) (5,166) (3,703) (9,229) (10,156) 928
Income (loss) before income tax....... (4,500) (6,349) (9,321) (5,166) (3,703) (35,803) (10,156) 928
Net income (loss) per share........... (0.59) (0.83) (1.22) (0.67) (0.48) (2.27) (1.33) 0.04
Weighted average common and equivalent
shares outstanding.................. 7,654 7,654 7,654 7,654 7,654 15,787 7,654 25,864
OTHER DATA:
EBITDA(3)............................. $ 7,682 $ 10,768 $ 11,589 $ 14,087 $ 16,639 $ 39,022 $ 13,633 $ 49,460
EBITDA Margin(4)...................... 40.8% 43.6% 44.8% 47.3% 48.7% 51.3% 52.0% 50.9%
Capital expenditures.................. 2,047 2,352 2,004 4,668 5,620 7,178 2,943 8,631
</TABLE>
<TABLE>
<CAPTION>
JUNE 30,
--------------------
1996 1997
--------- ---------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital.......................................................................... $ 8,345 $ 16,704
Total assets............................................................................. 179,175 853,689
Total long-term debt..................................................................... 182,673 510,316
Common stockholders' equity (deficit).................................................... (9,667) 230,856
</TABLE>
- ----------------------------------
(1) Net revenues are gross revenues less agency commissions.
7
<PAGE>
(2) Extraordinary item represents loss on early extinguishment of debt.
(3) "EBITDA" is operating income before depreciation and amortization and other
non cash charges. Management believes that EBITDA, as presented, represents
a useful measure of assessing the performance of the Company's ongoing
operating activities as it reflects the earnings trends of the Company and
is a measure of net cash generated by the normal operating activity of the
business. EBITDA is not intended to represent net cash provided by operating
activities as defined by generally accepted accounting principles and should
not be considered as an alternative to net income (loss) as an indicator of
the Company's operating performance or to net cash provided by operating
activities as a measure of liquidity. The Company believes EBITDA is a
measure commonly reported and widely used by analysts, investors and other
interested parties in the media industry. Accordingly, this information has
been disclosed herein to permit a more complete comparative analysis of the
Company's operating performance relative to other companies in the media
industry.
(4) "EBITDA Margin" is EBITDA stated as a percentage of net revenues. Management
believes EBITDA Margin, as presented, represents a useful measure of the
percent of net revenues reflected in EBITDA, thereby addressing the cash
used in operations.
(5) Amounts include financial results beginning June 3, 1997 from operations
acquired pursuant to the Penn Acquisition.
8
<PAGE>
CAUTIONARY STATEMENTS FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Prospectus contains certain forward-looking statements that involve
substantial risks and uncertainties. When used in this Prospectus, the words
"anticipate," "believe," "estimate," and "expect" and similar expressions as
they relate to the Company or its management are intended to identify such
forward-looking statements. The Company's actual results, performance or
achievements could differ materially from the results expressed in, or implied
by, these forward-looking statements. Factors that could cause or contribute to
such differences include those discussed in "Risk Factors."
RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS, THE FOLLOWING
FACTORS SHOULD BE CONSIDERED CAREFULLY IN EVALUATING AN INVESTMENT IN THE
SECURITIES OFFERED BY THIS PROSPECTUS.
SUBSTANTIAL INDEBTEDNESS OF THE COMPANY; POTENTIAL INABILITY TO SERVICE
INDEBTEDNESS. The Company has substantial indebtedness. In October 1996 and
December 1996, UOI issued $225.0 million and $100.0 million, respectively, of
senior subordinated notes due 2006 (the "Notes"). As of June 30, 1997, the
Company's total long-term debt was approximately $510.3 million, and interest
expense was approximately $22.0 million, or 22.7% of net revenues, for the six
months ended June 30, 1997. The Company's level of consolidated indebtedness
could have important consequences to the holders of Common Stock, including the
following: (i) a substantial portion of the Company's cash flow from operations
must be dedicated to the payment of the principal of and interest on its
indebtedness and will not be available for other purposes; (ii) the ability of
the Company to obtain financing in the future for working capital needs, capital
expenditures, acquisitions, investments, general corporate purposes or other
purposes may be materially limited or impaired; and (iii) the Company's level of
indebtedness may reduce the Company's flexibility to respond to changing
business and economic conditions. Subject to certain limitations contained in
its outstanding debt instruments, credit agreement and the Notes, the Company or
its subsidiaries may incur additional indebtedness to finance working capital or
capital expenditures, investments or acquisitions or for other purposes. There
can be no assurance that the Company's EBITDA will continue to exceed its fixed
charges. A decline in EBITDA could impair the Company's ability to meet its
obligations, including for debt service, and to make scheduled principal
repayments.
PRIOR PERIOD LOSSES. The Company has historically had net losses which have
resulted in significant part from substantial depreciation and amortization
expenses relating to assets purchased in the Company's acquisitions, interest
expense associated with related indebtedness and deferred financing costs
charged to extraordinary losses. Moreover, additional acquisitions will result
in increased depreciation, amortization and interest expenses. There can be no
assurance that the Company will generate net income in the future.
RESTRICTIONS IMPOSED BY THE COMPANY'S INDEBTEDNESS. The banks under the
Company's credit facility (the "Credit Facility") have a lien on substantially
all of the assets of UOI, including the capital stock of its subsidiaries, to
secure the indebtedness of UOI under such credit facility. The Credit Facility
and indentures governing the Notes contain restrictions on UOI's ability to
incur additional indebtedness, create liens, pay dividends, sell assets and make
acquisitions. Furthermore, the Credit Facility contains certain maintenance
tests. There can be no assurance that UOI and its subsidiaries will be able to
comply with the provisions of their respective debt instruments, including
compliance by UOI with the financial ratios and tests contained in the Credit
Facility. Breach of any of these covenants or the failure to fulfill the
obligations thereunder and the lapse of any applicable grace periods would
result in an event of default under the applicable debt instruments, and the
holders of such indebtedness could declare all amounts outstanding under the
applicable instruments to be due and payable immediately. There can be no
assurance that the assets or cash flow of the Company or the Company's
subsidiaries, as the case may be, would be sufficient to repay in full
borrowings under their outstanding debt instruments whether upon maturity or
earlier if such indebtedness were to be accelerated upon an event of default or
certain
9
<PAGE>
repurchase events or that UOI would be able to refinance or restructure its
payments on such indebtedness or repurchase the Notes. If such indebtedness were
not so repaid, refinanced or restructured, the lenders could proceed to realize
on their collateral. In addition, any event of default or declaration of
acceleration under one debt instrument could also result in an event of default
under one or more of UOI's other debt instruments. See "-- Substantial
Indebtedness of the Company; Potential Inability to Service Indebtedness."
COMPANY'S DEPENDENCY ON UOI; HOLDING COMPANY STRUCTURE. The Company is a
holding company with no business operations of its own. The Company's only
material asset is all of the outstanding capital stock of UOI, through which the
Company conducts its business operations. Accordingly, the Company will be
dependent on the earnings and cash flow, and dividends and distributions, from
UOI to pay its expenses and to pay any cash dividends or distributions on the
Common Stock that may be authorized by the Board of Directors of the Company.
UOI has substantial cash interest expense due on the Notes. There can be no
assurance that UOI will generate sufficient cash flow to pay dividends or
distribute funds to the Company or that applicable state law and contractual
restrictions, including negative covenants contained in the debt instruments of
UOI, will permit such dividends or distributions. The terms of the Credit
Facility and the Notes currently restrict UOI from paying dividends or making
distributions except in very limited circumstances, including paying certain
expenses of the Company. See "-- Substantial Indebtedness of the Company;
Potential Inability to Service Indebtedness."
POTENTIAL INABILITY TO MAKE OR FINANCE ACQUISITIONS. The Company's growth
has been facilitated by strategic acquisitions that have substantially increased
the Company's inventory of advertising display faces. One element of the
Company's operating strategy is to make acquisitions in new and existing
markets. There can be no assurance that suitable acquisition candidates can be
found. The Company is likely to face competition from other outdoor advertising
and media companies for acquisition opportunities that are available. In
addition, if the prices sought by sellers of outdoor advertising display faces
and companies continue to rise, the Company may find fewer acceptable
acquisition opportunities. There can be no assurance that the Company will have
sufficient capital resources to complete acquisitions or that acquisitions can
be completed on terms acceptable to the Company. Also, in the Minneapolis/St.
Paul market, the Company is subject to a consent judgment that restricts the
Company's ability to purchase outdoor advertising display faces until February
1, 2001. As part of its regular on-going evaluation of strategic acquisition
opportunities, the Company is currently engaged in a number of separate and
unrelated discussions concerning possible acquisitions, some of which may be
material in size. The purchase price of such acquisitions may require additional
debt or equity financing on the part of the Company.
CHALLENGES OF INTEGRATION OF ACQUISITIONS. Since July 1996, the Company has
completed 12 acquisitions. The Company faces significant challenges in
integrating the operations acquired in connection with such acquisitions with
those of the Company, particularly in geographic regions where the Company had
not previously operated. Integration of acquired operations will require
substantial attention from the Company's management. Diversion of management
attention from the Company's existing business could have an adverse impact on
the revenues and operating results of the Company. There can be no assurance the
Company will be able to integrate such acquired operations successfully.
Furthermore, there can be no assurance that any pending acquisitions will be
consummated.
NEGATIVE IMPLICATIONS OF TOBACCO INDUSTRY REGULATION ON OUTDOOR ADVERTISING;
TOBACCO INDUSTRY SETTLEMENT. For the six months ended June 30, 1997,
approximately 10.6% of the Company's net revenues was derived from tobacco
advertising. The tobacco industry has recently engaged in negotiations to settle
litigation against such industry. The tobacco companies have reached a proposed
settlement that, upon the approval of Congress, will become final and binding.
Such proposed settlement would require a total ban of tobacco advertising on
outdoor billboards and signs. Any such ban may have a material adverse effect on
the Company's revenues at least in the immediate period following the imposition
of such ban while alternate sources of advertising are secured. The competition
in the outdoor advertising business for any such alternate sources of
advertising following the imposition of a total ban on tobacco advertising on
outdoor billboards and signs is expected to be intense. There can be
10
<PAGE>
no assurance that the Company will immediately replace such advertising revenue
currently attributed to the tobacco industry in the event of a total ban of
tobacco advertising on outdoor billboards and signs. Furthermore, even in the
event the advertising ban does not take place, state and local governments,
including state and local governments in areas where the Company does business,
have recently proposed and some have enacted regulations restricting or banning
outdoor advertising of tobacco in certain jurisdictions. Continued passage of
restrictions or bans on outdoor advertising in the Company's markets may
adversely affect the Company's revenues at least in the immediate period
following such regulation. Also, in August 1996, the U.S. Food and Drug
Administration issued final regulations governing certain marketing practices in
the tobacco industry. Among other things, the regulations prohibit tobacco
product billboard advertisements within 1,000 feet of schools and playgrounds
and require that tobacco product advertisements on billboards be in black and
white and contain only text. There can be no assurance as to the effect of these
regulations or this legislation on the Company's business and on its net
revenues, EBITDA and financial position. A reduction in billboard advertising by
the tobacco industry could cause an immediate reduction in the Company's direct
revenue from such advertisers and would simultaneously increase the available
space on the existing inventory of billboards in the outdoor advertising
industry. This could in turn result in a lowering of rates throughout the
industry or limit the ability of industry participants to increase rates for
some period of time. Any such consequence could have the effect of reducing the
Company's EBITDA, which could in turn reduce the Company's ability to meet its
financial obligations under the indentures governing the Notes and the Credit
Facility.
REGULATION OF OUTDOOR ADVERTISING. Outdoor advertising displays are subject
to governmental regulation at the federal, state and local levels. These
regulations, in some cases, limit the height, size, location and operation of
billboards and, in limited circumstances, regulate the content of the
advertising copy displayed on the billboards. Certain state and local
governments, including state and local governments in areas where the Company
does business, have recently proposed and some have enacted regulations
restricting or banning outdoor advertising of tobacco and liquor in certain
jurisdictions. Some governmental regulations prohibit the construction of new
billboards or the replacement, relocation, enlargement or upgrading of existing
structures. Some cities have adopted amortization ordinances under which, after
the expiration of a specified period of time, billboards must be removed at the
owner's expense and without the payment of compensation. Ordinances requiring
the removal of a billboard without compensation, whether through amortization or
otherwise, are being challenged in various state and federal courts with
conflicting results. Other than in the Company's Jacksonville market,
amortization ordinances have not materially affected operations in the Company's
markets. As a result of a settlement of litigation related to certain assets in
the Jacksonville market prior to their acquisition, the Company removed 165
outdoor advertising structures in 1995 and is required to remove an additional
546 (of its total of 1,493) outdoor advertising structures over the next 19
years with 317 of such structures to be removed between 1995 and 1998. There can
be no assurance that these removals will not adversely affect the Company's
results of operations. In addition, no assurance can be given as to the effect
on the Company of existing laws and regulations or of new laws and regulations
that may be adopted in the future. Continued restrictions and bans on outdoor
advertising in the Company's markets may adversely affect the Company's revenues
at least in the immediate period following such regulations. See "-- Negative
Implications of Tobacco Industry Regulation on Outdoor Advertising."
NEGATIVE EFFECTS OF A DECLINE IN GENERAL ECONOMIC CONDITIONS ON ADVERTISING
TRENDS. The Company relies on sales of advertising space for its revenues and
its operating results therefore are affected by general economic conditions as
well as trends in the advertising industry. A reduction in advertising
expenditures available for the Company's displays could result from a general
decline in economic conditions, a decline in economic conditions in particular
markets where the Company conducts business or a reallocation of advertising
expenditures to other available media by significant users of the Company's
displays.
COMPETITION. The Company faces competition for advertising revenues from
other outdoor advertising companies, as well as from other media such as radio,
television, print media and direct mail marketing. The Company also competes
with a wide variety of other out-of-home advertising media, the
11
<PAGE>
range and diversity of which has increased substantially over the past several
years, including advertising displays in shopping centers and malls, airports,
stadiums, movie theaters and supermarkets, and on taxis, trains, buses and
subways. Some of the Company's competitors are substantially larger, better
capitalized and have access to greater resources than the Company. There can be
no assurance that outdoor advertising media will be able to compete with other
types of media, or that the Company will be able to compete either within the
outdoor advertising industry or with other media.
POTENTIAL LITIGATION AGAINST THE COMPANY. From time to time, the Company is
involved in litigation in the ordinary course of business, including disputes
involving advertising contracts, site leases, employment claims and construction
matters. The Company is also involved in routine administrative and judicial
proceedings regarding permits and fees relating to outdoor advertising
structures and compensation for condemnations. None of those proceedings, in the
opinion of management, is likely to have a material adverse effect on the
Company.
RELIANCE ON KEY EXECUTIVES. The Company's success depends to a significant
extent upon the continued services of its executive officers and other key
management and sales personnel, in particular its President and Chief Executive
Officer, Daniel L. Simon. The Company has few employment contracts with its
employees, and very few of its employees are bound by non-competition
agreements. The Company maintains key man insurance on Daniel L. Simon. The
unavailability of the continuing services of its executive officers and other
key management and sales personnel could have a material adverse effect on the
Company's business.
CONTROL BY EXECUTIVE OFFICERS AND DIRECTORS. Upon consummation of the
Offering, certain of the Company's officers and directors will be beneficial
owners of (including for this purpose options exercisable within 60 days, and
warrants issued pursuant to the 1996 Warrant Plan) approximately 30.2% of the
outstanding shares of the Company's Common Stock. See "Principal and Selling
Stockholders." Such persons would have sufficient voting power to effectively
control the outcome of corporate actions submitted to the stockholders for
approval and to control the management and affairs of the Company, including the
election of the Board of Directors of the Company. As a result of such control,
certain transactions may not be possible without the approval of such
stockholders, including proxy contests, mergers involving the Company and tender
offers or other purchases of Common Stock that could give stockholders of the
Company the opportunity to realize a premium over the then-prevailing market
price for their shares of Common Stock. See "Principal and Selling
Stockholders."
DIFFICULTY IN ESTABLISHING A CHANGE OF CONTROL OR MANAGEMENT; ANTI-TAKEOVER
PROVISIONS. The level of stock ownership of the management of the Company, as
well as the provisions of Delaware corporation law and the Company's Certificate
of Incorporation and Bylaws, may have the effect of deterring hostile takeovers,
delaying or preventing changes in control or changes in management, or limiting
the ability of stockholders to approve transactions that they may deem to be in
their best interests. In addition, under the Company's Certificate of
Incorporation, the Board of Directors has the authority to issue shares of
Preferred Stock and establish the rights and preferences thereof without
obtaining stockholder approval. The Company has no present plans to issue any
shares of Preferred Stock.
SUBSTANTIAL PREVIOUSLY RESTRICTED COMMON STOCK ELIGIBLE FOR FUTURE
SALE. Approximately 90 days after the date of the Offering (upon expiration of
certain lockup agreements with the underwriters for the Offering), approximately
8.4 million shares of Common Stock outstanding as of the date of this
Prospectus, become eligible for sale immediately in reliance on Rule 144A and at
prescribed times, subject to volume and manner of sale restrictions, in reliance
on Rule 144, each promulgated under the Securities Act of 1993, as amended (the
"Securities Act"). Sales of substantial amounts of Common Stock (including
shares issued upon exercise of stock options), or the perception that such sales
could occur, could adversely affect prevailing market prices for the Common
Stock.
12
<PAGE>
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 1,327,705 shares of
Common Stock offered by the Company hereby, after deducting underwriting
discounts and commissions and the estimated expenses of the Offering, are
estimated to be $45,512,000 (at an assumed offering price of $36.25 per share).
The Company will use the net proceeds to repay indebtedness under the Company's
revolving credit facility incurred in connection with recent acquisitions. Such
amounts may be reborrowed in the future to fund pending acquisitions. The
revolving credit facility expires September 30, 2003 and borrowings under such
facility bear a variable rate of interest based on LIBOR and which rate is
currently 8.54%.
The Company will receive no proceeds from the sale by the Selling
Stockholders of the shares of Common Stock.
CAPITALIZATION
The following table sets forth the unaudited capitalization of the Company
at June 30, 1997 and as adjusted to give effect to the Offering. The table
should be read in conjunction with the consolidated financial statements and
related notes incorporated by reference herein.
<TABLE>
<CAPTION>
JUNE 30, 1997
-----------------------------
AS ADJUSTED (1)
---------------
ACTUAL
------------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Long-term debt:
Credit Facility:
Revolving Credit Loan.......................................................... $ 106,300 $ 60,788
Acquisition Term Loan.......................................................... 75,000 75,000
9 3/4% Senior Subordinated Notes due 2006........................................ 223,681 223,681
9 3/4% Series B Senior Subordinated Notes due 2006............................... 101,413 101,413
Other notes...................................................................... 3,922 3,922
Other obligations................................................................ -- --
------------ ---------------
Total long-term debt and other obligations................................... 510,316 464,804
Common stockholders' equity........................................................ 230,856 276,368
------------ ---------------
Total capitalization......................................................... $ 741,172 $ 741,172
------------ ---------------
------------ ---------------
</TABLE>
- ------------------------
(1) Represents actual amounts adjusted to give effect to the Offering.
13
<PAGE>
DILUTION
The net tangible deficit of the Company's Common Stock as of June 30, 1997
was approximately $6.2 million, or $0.26 per share. The net tangible deficit per
share of Common Stock represents the amount of the Company's common
stockholder's equity, less intangible assets divided by 24,112,800 shares of
Common Stock outstanding as of June 30, 1997.
Net tangible book value dilution per share of Common Stock represents the
difference between the amount per share paid by purchasers of shares of Common
Stock in this Offering and the net tangible book value per share of Common Stock
immediately after completion of the Offering. After giving effect to the sale of
1,327,705 shares of Common Stock by the Company in this Offering and the
exercise of warrants for an additional 123,530 shares and the application of the
estimated net proceeds therefrom, the net tangible book value of the Common
Stock as of June 30, 1997 would have been approximately $40.0 million, or $1.56
per share of Common Stock. This represents an immediate increase in the net
tangible book value of $1.82 per share of Common Stock to existing common
stockholders and an immediate dilution in net tangible book value of $34.69 per
share of Common Stock to purchasers of Common Stock in this Offering. The
following table illustrates the dilution in the net tangible book value per
share to new investors:
<TABLE>
<S> <C> <C>
Public offering price per share of Common Stock............................ $ 36.25
Net tangible deficit per share of Common Stock at June 30, 1997.......... $ 0.26
Increase in net tangible book value per share of Common Stock
attributable to new investors.......................................... 1.82
---------
Net tangible book value per share of Common Stock after the
Offering (1).............................................................. 1.56
---------
Dilution per share to new investors........................................ $ 34.69
---------
---------
</TABLE>
- ------------------------
(1) If the Underwriters' over-allotment option is exercised in full, the net
tangible book value would be approximately $2.47 per share, resulting in
dilution to new investors in this Offering of $33.78 per share.
14
<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS
The table below sets forth the number and percentage of outstanding shares
of Common Stock that will be beneficially owned by (i) each director of the
Company, (ii) each executive officer, (iii) all directors and executive officers
of the Company as a group, (iv) each person known by the Company to own
beneficially more than 5% of the Common Stock and (v) Selling Stockholders. The
Company believes that each individual or entity named has sole investment and
voting power with respect to shares of Common Stock indicated as beneficially
owned by them, except as otherwise noted.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP OF COMMON BENEFICIAL OWNERSHIP OF COMMON
STOCK PRIOR TO THE OFFERING STOCK AFTER THE OFFERING
------------------------------ ------------------------------
PERCENT OF SHARES PERCENT OF
NAME OF BENEFICIAL OWNER NUMBER OF SHARES CLASS BEING OFFERED NUMBER OF SHARES CLASS
- ---------------------------------------- ---------------- ------------ -------------- ---------------- ------------
<S> <C> <C> <C> <C> <C>
Daniel L. Simon ........................ 8,453,208(1) 32.3% -- 8,401,208 30.2%
311 S. Wacker Drive, Suite 6400
Chicago, Illinois 60606
Brian T. Clingen ....................... 1,279,938(2) 5.2 -- 1,279,938 5.0
311 S. Wacker Drive, Suite 6400
Chicago, Illinois 60606
Paul G. Simon .......................... 124,530(3) --(4) 52,000 72,530 --(4)
311 S. Wacker Drive, Suite 6400
Chicago, Illinois 60606
Michael J. Roche ....................... 2,000 --(4) 2,000 --(4)
333 Beverly Road, E5-312A
Hoffman Estates, Illinois 60179
Michael B. Goldberg (5)(7) ............. 3,055,110 12.7 46,960 8,500(11) --(4)
Director
Frank K. Bynum, Jr. (5)(7) ............. 3,040,338 12.6(4) 20,688 20,000(11) --(4)
Director
Kelso Investment Associates V, L.P. 2,847,871 11.8 2,847,871 -- --
("KIA V") (5)(6).......................
Kelso Equity Partners V, L.P. ("KEP 151,779 --(4) 151,779 -- --
V")(5)(6)..............................
Joseph S. Schuchert (5)(7).............. 2,999,650 12.4 --(11) --
Frank T. Nickell (5)(7)................. 3,134,879 13.0 135,229 --(11) --
George E. Matelich (5)(7)............... 3,063,293 12.9 63,643 --(11) --
Thomas R. Wall, IV (5)(7)............... 3,103,172 12.8 80,422 23,100(11) --(4)
David I. Wahrhaftig (5)(7).............. 3,046,509 12.9 24,859 2,200(11) --(4)
John F. McGillicuddy (9)................ 10,000 --(4) 10,000 -- --
Patricia Hetter Kelso (8)............... 15,000 --(4) 15,000 -- --
George L. Shinn (9)..................... 4,000 --(4) 4,000 -- --
William A. Marquard (9)................. 10,000 --(4) 10,000 -- --
Michael B. Lazar (5).................... 6,120 --(4) 4,120 2,000 --(4)
Frank J. Loverro (5).................... 8,724 --(4) 5,724 3,000 --(4)
All directors and executive officers as
a group (6 persons) ................... 8,551,086(10) 32.2
</TABLE>
- ------------------------
(1) Daniel L. Simon's beneficial ownership includes 4,933,220 shares that he
owns directly, 32,520 shares held by the Simon Family Foundation of which he
is a director, 88,000 shares held by The Simon Family Limited Partnership of
which he is a general partner, 1,995,000 shares issuable to him upon
exercise of the Management Warrants, 928,860 shares over which he has voting
control
15
<PAGE>
pursuant to certain voting trust agreements with Brian T. Clingen and Paul
G. Simon, and 475,608 shares issuable to Brian T. Clingen and Paul G. Simon
upon exercise of the Management Warrants over which Daniel L. Simon has
voting control pursuant to certain voting trust agreements.
(2) Brian T. Clingen owns 767,852 shares directly, 35,000 shares held by The
Clingen Family Foundation of which he is a director, 352,078 shares issuable
to him upon exercise of the Management Warrants, and 125,008 shares held by
The Clingen Family Limited Partnership of which he is a general partner. The
voting rights for such shares have been granted to Daniel L. Simon pursuant
to a voting trust agreement.
(3) Paul G. Simon owns 1,000 shares directly and will own 123,530 shares upon
exercise of the Management Warrants prior to the closing of the Offering and
which collectively represent less than 1% of the Common Stock, the voting
rights of which have been granted to Daniel L. Simon pursuant to a voting
trust agreement.
(4) Represents less than 1% of the Common Stock.
(5) The business address for such person(s) is c/o Kelso & Company, 320 Park
Avenue, 24th Floor, New York, New York 10022.
(6) KIA V and KEP V due to their common control, could be deemed to
beneficially own each other's shares, but each disclaims such beneficial
ownership.
(7) Messrs. Schuchert, Nickell, Matelich, Goldberg, Wall, Bynum and Wahrhaftig
may be deemed to share beneficial ownership of shares of Common Stock owned
of record by KIA V and KEP V, by virtue of their status as general partners
of the general partner of KIA V and as general partners of KEP V. Messrs.
Schuchert, Nickell, Matelich, Goldberg, Wall, Bynum and Wahrhaftig share
investment and voting power with respect to securities owned by KIA V and
KEP V, but disclaim beneficial ownership of such securities. Mr. Goldberg
has been a director of the Company since April 1996 and has informed the
Company that he intends to resign as a director upon consummation of the
Offering. Mr. Bynum became a director of the Company following consummation
of the Company's initial public offering.
(8) Patricia Kelso is the widow of one of the founders of Kelso & Company.
(9) Messrs. McGillicuddy, Shinn and Marquard are outside directors of Kelso &
Company.
(10) Excludes KIA V and KEP V shares as well as shares that may be deemed to be
beneficially owned by Messrs. Schuchert, Nickell, Matelich, Goldberg, Wall,
Bynum and Wahrhaftig.
(11) Because neither KIA V or KEP V will be the owner of record of any shares of
Common Stock of the Company after the completion of the Offering, none of
Messrs. Schuchert, Nickell, Goldberg, Wall, Bynum and Wahrhaftig will be
deemed to beneficially own such Common Stock solely by virtue of their
status as general partners of the general partner of KIA V and/or the
general partners of KEP V.
16
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
No prediction can be made as to the effect, if any, that market sales of
shares of Common Stock or the availability of shares of Common Stock for sale
will have on the market price prevailing from time to time. Nevertheless, sales
of substantial amounts of Common Stock of the Company in the public market after
the restrictions described below lapse could adversely affect the prevailing
market price of the Common Stock and the ability of the Company to raise equity
capital in the future.
Upon completion of the Offering, the Company will have outstanding
25,564,035 shares of Common Stock (excluding 2,734,278 shares of Common Stock
issuable pursuant to the 1996 Warrant Plan and Noteholder Warrants). See
"Capitalization" and "Description of Capital Stock." Of these shares, the
14,957,705 shares of Common Stock are freely tradable without restriction under
the Securities Act except for any shares purchased by "affiliates," as that term
is defined in the Securities Act, of the Company. The remaining shares are
"restricted securities" within the meaning of Rule 144 adopted under the
Securities Act (the "Restricted Shares"). The Restricted Shares generally may
not be sold unless they are registered under the Securities Act or are sold
pursuant to an exemption from registration, such as the exemption provided by
Rule 144 or Rule 144A under the Securities Act.
Certain of the Company's security holders and all of its executive officers
and directors have the power to dispose of approximately 8.4 million shares
(including 2,347,078 shares issuable upon exercise of the Management Warrants).
These shares will not be eligible for sale in the public market without
registration unless such sales meet the conditions and restrictions of Rule 144
as described below.
In general, under Rule 144 as currently in effect, any person (or persons
whose shares are aggregated), including an affiliate, who has beneficially owned
shares for a period of at least one year (as computed under Rule 144) is
entitled to sell, within any three-month period, a number of shares that does
not exceed the greater of (i) 1% of the then-outstanding shares of Common Stock
(approximately 256,000 shares as of the date of this Prospectus (including
shares issuable pursuant to the 1996 Warrant Plan and Noteholder Warrants)) and
(ii) the average weekly trading volume in the Company's Common Stock during the
four calendar weeks immediately preceding the date on which the notice of such
sale on Form 144 is filed with the Securities and Exchange Commission (the
"Commission"). Sales under Rule 144 are also subject to certain provisions
relating to notice and manner of sale and the availability of current public
information about the Company. In addition, a person (or persons whose shares
are aggregated) who has not been an affiliate of the Company at any time during
the 90 days immediately preceding a sale, and who has beneficially owned the
shares of at least two years (as computed under Rule 144), would be entitled to
sell such shares under Rule 144(k) without regard to the volume limitation and
other conditions described above. The foregoing summary of Rule 144 is not
intended to be a complete description thereof.
17
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement among the
Company, the Selling Stockholders and the Underwriters named below (the
"Underwriting Agreement"), Alex. Brown & Sons Incorporated, Bear, Stearns & Co.
Inc. and Donaldson, Lufkin & Jenrette Securities Corporation (the
"Underwriters") have severally agreed to purchase from the Company and the
Selling Stockholders, the following respective number of shares of Common Stock
at the public offering price less the underwriting discounts and commissions set
forth on the cover page of the Prospectus:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
- ----------------------------------------------------------------------------------------------------- -----------
<S> <C>
Alex. Brown & Sons Incorporated......................................................................
Bear, Stearns & Co. Inc..............................................................................
Donaldson, Lufkin & Jenrette Securities Corporation..................................................
-----------
Total.............................................................................................. 4,800,000
-----------
-----------
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will
purchase all shares of the Common Stock offered hereby if any of such shares are
purchased.
The Company has been advised by the underwriters that they propose to offer
the shares of Common Stock to the public at the public offering price set forth
on the cover page of this Prospectus and to certain dealers at such price less a
concession not in excess of per share. The Underwriters may allow, and such
dealers may reallow, a concession not in excess of per share to certain other
dealers. After the public offering, the offering price and other selling terms
may be changed by the Underwriters.
The Company, Daniel L. Simon and Brian T. Clingen have granted to the
Underwriters options, exercisable not later than 30 days after the date of this
Prospectus, to purchase up to 360,000, 180,000, and 180,000 additional shares of
Common Stock, respectively, at the public offering price less the underwriting
discounts and commissions set forth on the cover page of this Prospectus. To the
extent that the Underwriters exercise such option, each of the Underwriters will
have a firm commitment to purchase approximately the same percentage thereof
that the number of shares of Common Stock to be purchased by it shown in the
above table bears to 4,800,000, and the Company will be obligated, pursuant to
the option, to sell such shares to the Underwriters. The Underwriters may
exercise such option only to cover over-allotments made in connection with the
sale of Common Stock offered hereby. If purchased, the Underwriters will offer
such additional shares on the same terms as those on which the 4,800,000 shares
are being offered.
To facilitate the Offering, the Underwriters may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Common Stock.
Specifically, the Underwriters may over-allot shares of the Common Stock in
connection with the Offering, thereby creating a short position in the
Underwriters' account. Additionally, to cover such over-allotments or to
stabilize the market price of the Common Stock, the Underwriters may bid for,
and purchase, shares of the Common Stock at a level above that which might
otherwise prevail in the open market. The Underwriters are not required to
engage in these activities, and, if commenced, any such activities may be
discontinued at any time. The Underwriters also may reclaim selling concessions
allowed to an Underwriter or dealer, if the Underwriters repurchase shares
distributed by that Underwriter or dealer.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act.
Stockholders of the Company, holding approximately 8.4 million shares of
Common Stock have agreed not to offer, sell or otherwise dispose of any of such
Common Stock until approximately 90 days following the date of this Prospectus
without the prior consent of the Underwriters. Consent to sales within the
periods referred to in this paragraph may be provided without prior notice to
holders of the Common Stock or to the markets where such securities are traded.
See "Shares Eligible for Future Sale."
18
<PAGE>
The Underwriters have in the past provided and may continue to provide
investment banking services to the Company and Kelso & Company, L.P. and its
affiliates, including in connection with the future acquisitions.
CERTAIN LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered hereby
will be passed upon for the Company by Winston & Strawn, Chicago, Illinois.
Attorneys employed by Winston & Strawn participating in the representation of
the Company in this Offering own an aggregate of 3,800 shares of Common Stock.
Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York will pass on
certain legal matters for the Underwriters in connection with this Offering.
Skadden, Arps, Slate, Meagher & Flom LLP has from time to time represented Kelso
& Company, L.P., KIA V and KEP V, including with respect to the purchase by KIA
V and KEP V from the Company of Class B Common Stock and Class C Common Stock of
the Company in April 1996, and may continue to represent Kelso & Company, L.P.,
KIA V and KEP V. Skadden, Arps, Slate, Meagher & Flom LLP has been engaged by
the Company to represent it in connection with the certain acquisition
transactions.
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Annual Report on Form 10-K of Universal Outdoor Holdings, Inc. for the year
ended December 31, 1996 and the audited historical financial statements of (i)
Universal Outdoor Holdings, Inc. included as Exhibit 99.2, (ii) the Statement of
Revenues and Direct Expenses of Ad-Sign for the year ended December 31, 1995
included as Exhibit 99.4 and (iii) the Financial Statements of POA Acquisition
Corporation as of September 30, 1996 and December 31, 1995 and 1994 and for the
nine month period ended September 30, 1996 and for each of the two years in the
period ended December 31, 1995 included as Exhibit 99.5, of Universal Outdoor
Holdings, Inc. Form 8-K dated July 31, 1997 have been so incorporated in
reliance on the reports of Price Waterhouse LLP, independent accountants, given
on the authority of said firm as experts in auditing and accounting.
The Consolidated Financial Statements of NOA Holding Company as of May 31,
1995 and 1994, and for each of the three years in the period ended May 31, 1995,
incorporated in this Prospectus by reference to Universal Outdoor Holdings, Inc.
Report on Form 8-K filed on July 31, 1997 (File No. 000-20823) have been audited
by Ernst & Young LLP, independent auditors, as set forth in their report, which
is incorporated herein by reference, and have been so incorporated in reliance
upon such report given upon the authority of such firm as experts in accounting
and auditing.
The Consolidated Financial Statements of Revere Holding Corp. and its
subsidiaries as of December 31, 1995 incorporated in this Prospectus by
reference to Universal Outdoor Holdings, Inc. Report on Form 8-K filed on July
31, 1997 (File No. 000-20823) have been audited by Arthur Andersen LLP,
independent public accountants, as stated in their report, which is incorporated
herein by reference, and have been so incorporated in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
19
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"), and, in accordance therewith, files
periodic reports and other information with the Commission. The Company has
filed with the Commission a Registration Statement (which term shall include all
amendments thereto) under the Securities Act, with respect to the Securities
offered hereby. This Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. Statements contained in this Prospectus as to the
contents of any contract, agreement or other document referred to herein are not
necessarily complete.
With respect to each report or other information filed with the Commission
pursuant to the Exchange Act, and such contract, agreement or document filed as
an exhibit to the Registration Statement, reference is made to such exhibit for
a more complete description, and each such statement is deemed to be qualified
in all respects by such reference. The Registration Statement and reports and
other information filed by the Company may be inspected, without charge, 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 at prescribed rates from the Public Reference Section
of the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549.
The Commission maintains a World Wide Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission and the address of such site is
http://www.sec.gov.
The Common Stock of the Company is quoted on the Nasdaq National Market.
Reports, proxy and other information concerning the Company can be inspected at
the Nasdaq National Market.
The Company distributes to the holders of its shares of Common Stock annual
reports containing consolidated financial statements audited by an independent
accountant.
INCORPORATION OF CERTAIN INFORMATION 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 year ended December 31, 1996
(File No. 000-20823); (ii) Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997 and June 30, 1997 (File No. 000-20823); (iii) the Proxy Statement
for the 1997 Annual Meeting of Stockholders (File No. 000-20823); (iv) Reports
on Form 8-K filed February 18, 1997 and July 31, 1997 (File No. 000-20823); and
(v) the description of common stock contained in the Registration Statement on
Form 8-A filed on June 6, 1996 and amended by Amendment No. 1 on July 17, 1996.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and
prior to the termination of the Offering shall hereby be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date 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 which
also is or is 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 a part of this
Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, on the written or oral request of any such person,
a copy of any and all of the documents incorporated herein by reference (other
than exhibits not specifically incorporated herein by reference). Requests for
such copies should be directed to Paul Simon, Universal Outdoor Holdings, Inc.,
311 S. Wacker, Suite 6400, Chicago, Illinois 60606, telephone number (312)
431-0822.
20
<PAGE>
THE ART OF
ADVERTISING
IS UNIVERSAL
[PICTURE OF BILLBOARD]
[PICTURE OF BILLBOARD]
[PICTURE OF BILLBOARD]
[UNIVERSAL OUTDOOR LOGO]
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER
TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
--------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary............................. 3
Risk Factors................................... 9
Use of Proceeds................................ 13
Capitalization................................. 13
Dilution....................................... 14
Principal and Selling Stockholders............. 15
Shares Eligible for Future Sale................ 17
Underwriting................................... 18
Certain Legal Matters.......................... 19
Experts........................................ 19
Available Information.......................... 20
Incorporation of Certain Information by
Reference..................................... 20
</TABLE>
4,800,000 SHARES
[LOGO]
UNIVERSAL OUTDOOR
HOLDINGS, INC.
COMMON STOCK
------------
PROSPECTUS
------------
ALEX. BROWN & SONS
INCORPORATED
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses in connection with the
offering described in this Registration Statement. All amounts shown are
estimates, except the SEC registration fee and the NASD filing fee.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee.............. $ 57,500
NASD Filing Fee.................................................. 19,475
Printing and Engraving Expenses.................................. 130,000
Legal Fees and Expenses.......................................... 130,000
Accounting Fees and Expenses..................................... 80,000
Blue Sky Fees and Expenses....................................... 2,000
Transfer Agent Fees and Expenses................................. 15,000
Miscellaneous.................................................... 60,000
---------
Total.......................................................... $ 493,975
---------
---------
</TABLE>
* To be filed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law ("Delaware Law") and
Article XI of the Registrant's 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.
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 does not maintain directors' and officers' liability insurance.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits.
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement
2.1 Plan and Agreement of Merger, dated November 18, 1993, between the Company and
Universal Outdoor II, Inc. (filed as Exhibit 2 to UOI's Registration
Statement on Form S-1 (Commission File No. 33-72710) and incorporated herein
by reference)
2.2 Stock Purchase Agreement (Stock Purchase Agreement) between Wind Point
Partners II, L.P., Marquette Venture Partners, L.P., Chemical Equity
Associates, a California Limited Partnership, Banc One Venture Corporation
and Management Shareholders and UOI relating to the capital stock of NOA
Holding Company dated February 27, 1996 (filed as Exhibit 2.1 to the
Company's Current Report on Form 8-K dated April 5, 1996 (File No. 33-82582)
(the "Company 8-K") and incorporated herein by reference)
2.3 Amendment No. 1 to Stock Purchase Agreement (filed as Exhibit 2.2 to the
Company 8-K and incorporated herein by reference)
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S>
2.4 Agreement and Plan of Recapitalization between the Company, KIA V, KEP V and
certain stockholders of the Company (filed as Exhibit 2.4 to Amendment No. 2
to the Company's Registration Statement (File No. 333-12457) on Form S-1 (the
"Registration Statement") and incorporated herein by reference)
2.5 Agreement and Plan of Merger between UOI, Universal Acquisition Corp. and
Outdoor Advertising Holdings, Inc. dated August 27, 1996 (filed as Exhibit
2.5 to the Registration Statement and incorporated herein by reference)
2.6 Option and Asset Purchase Agreement between UOI and the Memphis/Tunica Sellers
dated September 12, 1996 (filed as Exhibit 2.6 to the Registration Statement
and incorporated herein by reference)
2.7 Asset Purchase Agreement among Mountain Media, Inc., d/b/a Iowa Outdoor
Displays, Robert H. Lambert and UOI dated September 12, 1996 (filed as
Exhibit 2.4 to UOI's Registration Statement on Form S-1, dated February 13,
1997 (File No. 333-21717) (the "UOI Registration Statement") and incorporated
herein by reference)
2.8 Asset Purchase Agreement between UOI and The Chase Company dated September 11,
1996 (filed as Exhibit 2.8 to the Registration Statement and incorporated
herein by reference)
2.9 Stock Purchase Agreement, dated as of November 22, 1996, among Revere, UOI and
the stockholders of Revere (filed as Exhibit 2.6 to the UOI Registration
Statement and incorporated herein by reference)
2.10 Asset Purchase Agreement, dated as of December 10, 1996, among Matthew,
Matthew Acquisition Corp. and UOI (filed as Exhibit 2.7 to the UOI
Registration Statement and incorporated herein by reference)
2.11 Stock Purchase Agreement, dated as of June 3, 1997, among Florida Logos, Inc.,
The Lamar Corporation, Lamar Advertising Company and UOI
2.12 Asset Purchase Agreement, dated as of June 30, 1997, among Allied Outdoor
Advertising, Inc., Universal Outdoor (NY) Advertising Acquisition Corporation
and UOI
4.1 Specimen Common Stock Certificate of the Company (filed as Exhibit 4.1 to the
Company's Registration Statement (File No. 333-5351) on Form S-1 and
incorporated herein by reference)
4.2 Indenture of Trust between United States Trust Company of New York as trustee,
and UOI, dated as of October 16, 1996, relating to the October Notes (filed
as Exhibit 10.3 to the UOI Registration Statement and incorporated herein by
reference)
4.3 Indenture of Trust between United States Trust Company of New York, as
trustee, and UOI dated as of December 16, 1996, relating to the December
Notes (filed as Exhibit 4.1 to the UOI Registration Statement and
incorporated herein by reference)
4.4 Warrant Agreement between the Registrant and United States Trust Company of
New York, as warrant agent, dated June 30, 1994 relating to the Noteholder
Warrants (filed as Exhibit 4(i) to Amendment No. 1 to the Company's
Registration Statement on Form S-1 (File No. 33-93852) and incorporated
herein by reference)
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <S>
4.5 Purchase Agreement, dated as of June 23, 1994, between the Company and Bear,
Stearns & Co. Inc. (the "Initial Purchaser") relating to the Company's 14%
Series A Senior Secured Discount Notes due 2004 (the "Old Notes") and
Noteholder Warrants to purchase Common Stock (filed as Exhibit 4(a) to the
Company's Registration Statement on Form S-1 (File No. 33-82582) and
incorporated herein by reference)
4.6 Exchange and Registration Rights Agreement, dated as of June 23, 1994, between
the Company and the Initial Purchaser (filed as Exhibit 4(d) to the Company's
Registration Statement on Form S-1 (File No. 33-82582) and incorporated
herein by reference)
5.1 Opinion of Winston & Strawn
23.1* Consent of Price Waterhouse LLP
23.2* Consent of Ernst & Young LLP
23.3* Consent of Arthur Anderson LLP
23.4 Consent of Winston & Strawn (contained in Exhibit 5.1)
24.1** Powers of Attorney
</TABLE>
- ------------------------
* Previously filed
** Previously filed on signature page to this registration statement.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes that:
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to Item 15 above, or otherwise, the Company has been
advised that, in the opinion of the 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.
(b) The undersigned Registrant hereby undertakes:
(1) To file during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the
II-3
<PAGE>
changes in volume and price represent no more than a 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3 and the information
required to be included in a post-effective amendment by these paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1933 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment 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.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(c) The undersigned Registrant hereby undertakes that:
For the purposes of determining any liability under the Securities Act of
1933, each filing of the Company's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in this 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.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois, on the 12th day of August, 1997.
UNIVERSAL OUTDOOR HOLDINGS, INC.
By: /s/ PAUL G. SIMON
-----------------------------------------
Paul G. Simon
VICE PRESIDENT, SECRETARY AND GENERAL
COUNSEL
Pursuant to the requirements of the Act, this Registration Statement has
been signed by the following persons in the capacities and on the date
indicated.
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
President and Chief
** Executive Officer
- ------------------------------ (Principal Executive August 12, 1997
Daniel L. Simon Officer) and Director
Vice President and Chief
** Financial Officer
- ------------------------------ (Principal Financial and August 12, 1997
Brian T. Clingen Accounting Officer) and
Director
**
- ------------------------------ Director August 12, 1997
Michael J. Roche
- ------------------------------ Director , 1997
Michael B. Goldberg
- ------------------------------ Director , 1997
Frank K. Bynum
<TABLE>
<S> <C> <C>
** /s/ PAUL G. SIMON
--------------------------------------
Paul G. Simon
ATTORNEY-IN-FACT
</TABLE>
II-5
<PAGE>
LIST OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
- --------- ------------------------------------------------------------------------------------------ ---------
<C> <S> <C>
1.1 Form of Underwriting Agreement
2.1 Plan and Agreement of Merger, dated November 18, 1993, between the Company and Universal
Outdoor II, Inc. (filed as Exhibit 2 to UOI's Registration Statement on Form S-1
(Commission File No. 33-72710) and incorporated herein by reference)
2.2 Stock Purchase Agreement (Stock Purchase Agreement) between Wind Point Partners II, L.P.,
Marquette Venture Partners, L.P., Chemical Equity Associates, a California Limited
Partnership, Banc One Venture Corporation and Management Shareholders and UOI relating to
the capital stock of NOA Holding Company dated February 27, 1996 (filed as Exhibit 2.1 to
the Company's Current Report on Form 8-K dated April 5, 1996 (File No. 33-82582) (the
"Company 8-K") and incorporated herein by reference)
2.3 Amendment No. 1 to Stock Purchase Agreement (filed as Exhibit 2.2 to the Company 8-K and
incorporated herein by reference)
2.4 Agreement and Plan of Recapitalization between the Company, KIA V, KEP V and certain
stockholders of the Company (filed as Exhibit 2.4 to Amendment No. 2 to the Company's
Registration Statement (File No. 333-12457) on Form S-1 (the "Registration Statement")
and incorporated herein by reference)
2.5 Agreement and Plan of Merger between UOI, Universal Acquisition Corp. and Outdoor
Advertising Holdings, Inc. dated August 27, 1996 (filed as Exhibit 2.5 to the
Registration Statement and incorporated herein by reference)
2.6 Option and Asset Purchase Agreement between UOI and the Memphis/Tunica Sellers dated
September 12, 1996 (filed as Exhibit 2.6 to the Registration Statement and incorporated
herein by reference)
2.7 Asset Purchase Agreement among Mountain Media, Inc., d/b/a Iowa Outdoor Displays, Robert
H. Lambert and UOI dated September 12, 1996 (filed as Exhibit 2.4 to UOI's Registration
Statement on Form S-1, dated February 13, 1997 (File No. 333-21717) (the "UOI
Registration Statement") and incorporated herein by reference)
2.8 Asset Purchase Agreement between UOI and The Chase Company dated September 11, 1996 (filed
as Exhibit 2.8 to the Registration Statement and incorporated herein by reference)
2.9 Stock Purchase Agreement, dated as of November 22, 1996, among Revere, UOI and the
stockholders of Revere (filed as Exhibit 2.6 to the UOI Registration Statement and
incorporated herein by reference)
2.10 Asset Purchase Agreement, dated as of December 10, 1996, among Matthew, Matthew
Acquisition Corp. and UOI (filed as Exhibit 2.7 to the UOI Registration Statement and
incorporated herein by reference)
2.11 Stock Purchase Agreement, dated as of June 3, 1997, among Florida Logos, Inc., The Lamar
Corporation, Lamar Advertising Company and UOI
2.12 Asset Purchase Agreement, dated as of June 30, 1997, among Allied Outdoor Advertising,
Inc., Universal Outdoor (NY) Advertising Acquisition Corporation and UOI
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C>
4.1 Specimen Common Stock Certificate of the Company (filed as Exhibit 4.1 to the Company's
Registration Statement (File No. 333-5351) on Form S-1 and incorporated herein by
reference)
4.2 Indenture of Trust between United States Trust Company of New York as trustee, and UOI,
dated as of October 16, 1996, relating to the October Notes (filed as Exhibit 10.3 to the
UOI Registration Statement and incorporated herein by reference)
4.3 Indenture of Trust between United States Trust Company of New York, as trustee, and UOI
dated as of December 16, 1996, relating to the December Notes (filed as Exhibit 4.1 to
the UOI Registration Statement and incorporated herein by reference)
4.4 Warrant Agreement between the Registrant and United States Trust Company of New York, as
warrant agent, dated June 30, 1994 relating to the Noteholder Warrants (filed as Exhibit
4(i) to Amendment No. 1 to the Company's Registration Statement on Form S-1 (File No.
33-93852) and incorporated herein by reference)
4.5 Purchase Agreement, dated as of June 23, 1994, between the Company and Bear, Stearns & Co.
Inc. (the "Initial Purchaser") relating to the Company's 14% Series A Senior Secured
Discount Notes due 2004 (the "Old Notes") and Noteholder Warrants to purchase Common
Stock (filed as Exhibit 4(a) to the Company's Registration Statement on Form S-1 (File
No. 33-82582) and incorporated herein by reference)
4.6 Exchange and Registration Rights Agreement, dated as of June 23, 1994, between the Company
and the Initial Purchaser (filed as Exhibit 4(d) to the Company's Registration Statement
on Form S-1 (File No. 33-82582) and incorporated herein by reference)
5.1 Opinion of Winston & Strawn
23.1* Consent of Price Waterhouse LLP
23.2* Consent of Ernst & Young LLP
23.3* Consent of Arthur Anderson LLP
23.4 Consent of Winston & Strawn (contained in Exhibit 5.1)
24.1** Powers of Attorney
</TABLE>
- ------------------------
* Previously filed
** Previously filed on signature page to this registration statement
<PAGE>
4,800,000 Shares
Universal Outdoor Holdings, Inc.
Common Stock
($.01 Par Value)
UNDERWRITING AGREEMENT
August __, 1997
Alex. Brown & Sons Incorporated
Bear, Stearns & Co. Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
c/o Alex. Brown & Sons Incorporated
135 East Baltimore Street
Baltimore, Maryland 21202
Ladies and Gentlemen:
Universal Outdoor Holdings, Inc., a Delaware corporation (the "Company")
and Kelso Investment Associates V, L.P. ("KIA V"), Kelso Equity Partners V,
L.P. ("KEP V", and together with KIA V, the "Institutional Selling
Shareholders"), Michael B. Goldberg, Frank K. Bynum, Jr., Frank T. Nickell,
George E. Matelich, Thomas R. Wall, IV, David I. Wahrhaftig, John F.
McGillicuddy, Patricia Hetter Kelso, George L. Shinn, William A. Marquard,
Michael B. Lazar, Frank J. Loverro (the "Individual Selling Shareholders")
and Paul G. Simon (collectively, the "Firm Share Selling Shareholders")
propose to sell to you (the "Underwriters") an aggregate of 4,800,000 shares
of the Company's Common Stock, $.01 par value (the "Firm Shares"), of which
1,327,705 shares will be sold by the Company and 3,472,295 shares will be
sold by the Selling Shareholders. The respective amounts of the Firm Shares
to be so purchased by the several Underwriters are set forth opposite their
names in Schedule I hereto, and the respective amounts to be sold by the
Selling Shareholders are set forth opposite their names in Schedule II
hereto. Daniel L. Simon and Brian T. Clingen (the "Option Share Selling
Shareholders" and, together with the Firm Share Selling
<PAGE>
Shareholders, the "Selling Shareholders") and the Company also propose to
sell at the Underwriters' option an aggregate of up to 720,000 additional
shares of the Company's Common Stock (the "Option Shares") as set forth
below. The Company and the Selling Shareholders are sometimes referred to
herein collectively as the "Sellers."
You have advised the Company and the Selling Shareholders (a) that you
are authorized to enter into this Agreement on behalf of the several
Underwriters, and (b) that the several Underwriters are willing, acting
severally and not jointly, to purchase the numbers of Firm Shares set forth
opposite their respective names in Schedule I, plus their pro rata portion of
the Option Shares if you elect to exercise the over-allotment option in whole
or in part for the accounts of the several Underwriters. The Firm Shares and
the Option Shares (to the extent the aforementioned option is exercised) are
herein collectively called the "Shares."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
SHAREHOLDERS.
(a) The Company represents and warrants to each of the
Underwriters as follows:
(i) A registration statement on Form S-3 (File No. 333-____) with
respect to the Shares has been prepared by the Company in conformity with
the requirements of the Securities Act of 1933, as amended (the "Act"), and
the Rules and Regulations (the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") thereunder and has been filed
with the Commission. The Company has complied with the conditions for the
use of Form S-3. Copies of such registration statement, including any
amendments thereto, the preliminary prospectuses (meeting the requirements
of the Rules and Regulations) contained therein and the exhibits, financial
statements and schedules, as finally amended and revised, have heretofore
been delivered by the Company to you. Such registration statement,
together with any registration statement filed by the Company pursuant to
Rule 462(b) of the Act, herein referred to as the "Registration Statement,"
which shall be deemed to include all information omitted therefrom in
reliance upon Rule 430A and contained in the Prospectus referred to below,
has become effective under the Act and no post-effective amendment to the
Registration Statement has been filed as of the
2
<PAGE>
date of this Agreement. "Prospectus" means (A) the form of prospectus
first filed with the Commission pursuant to Rule 424(b) or (B) the last
preliminary prospectus included in the Registration Statement filed prior
to the time it becomes effective or filed pursuant to Rule 424(a) under
the Act that is delivered by the Company to the Underwriters for delivery
to purchasers of the Shares, together with the term sheet or abbreviated
term sheet filed with the Commission pursuant to Rule 424(b)(7) under the
Act. Each preliminary prospectus included in the Registration Statement
prior to the time it becomes effective is herein referred to as a
"Preliminary Prospectus." Any reference herein to the Registration
Statement, any Preliminary Prospectus or to the Prospectus shall be deemed
to refer to and include any documents incorporated by reference therein,
and, in the case of any reference herein to any Prospectus, also shall be
deemed to include any documents incorporated by reference therein, and any
supplements or amendments thereto, filed with the Commission after the date
of filing of the Prospectus under Rules 424(b) or 430A, and prior to the
termination of the offering of the Shares by the Underwriters.
(ii) The Company has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own or lease its properties and
conduct its business as described in the Registration Statement. Each of
the subsidiaries of the Company (collectively, the "Subsidiaries") has been
duly organized and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, with corporate
power and authority to own or lease its properties and conduct its business
as described in the Registration Statement. The Subsidiaries are the only
subsidiaries, direct or indirect, of the Company. The Company and each of
the Subsidiaries are duly qualified to transact business in all
jurisdictions in which the conduct of their business requires such
qualification. The outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid
and non-assessable and are owned by the Company or another Subsidiary free
and clear of all liens, encumbrances and equities and claims, except for
the pledge of the issued and outstanding common stock of Universal Outdoor,
Inc. ("UOI") and each subsidiary of UOI pursuant to the Consolidated Credit
Agreement (the "Credit Facility"), among the Company, LaSalle National
Bank and Bankers Trust Company (collectively, the "Existing Stock
Pledges"); and no options, warrants or other rights to purchase, agreements
or other obligations to issue or other rights to convert any obligations
into shares of capital stock or ownership interests in the Subsidiaries are
outstanding.
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(iii) The outstanding shares of Common Stock of the Company,
including all shares to be sold by the Selling Shareholders, have been duly
authorized and validly issued and are fully paid and non-assessable; the
portion of the Shares to be issued and sold by the Company have been duly
authorized and when issued and paid for as contemplated herein will be
validly issued, fully paid and non-assessable; and no preemptive rights of
stockholders exist with respect to any of the Shares or the issue and sale
thereof. Neither the filing of the Registration Statement nor the offering
or sale of the Shares as contemplated by this Agreement gives rise to any
rights, other than those which have been waived or satisfied, for or
relating to the registration of any shares of Common Stock.
(iv) The information set forth under the caption "Capitalization"
in the Prospectus is true and correct. All of the Shares conform to the
description thereof contained in the Registration Statement. The form of
certificates for the Shares conforms to the corporate law of the
jurisdiction of the Company's incorporation.
(v) The Commission has not issued an order preventing or
suspending the use of any Prospectus relating to the proposed offering of
the Shares nor instituted proceedings for that purpose. The Registration
Statement contains, and the Prospectus and any amendments or supplements
thereto will contain, all statements which are required to be stated
therein by, and will conform, to the requirements of the Act and the Rules
and Regulations. The documents incorporated by reference in the
Prospectus, at the time filed with the Commission, conformed, in all
respects to the requirements of the Securities Exchange Act of 1934 and the
rules and regulations of the Commission thereunder. The Registration
Statement and any amendment thereto do not contain, and will not contain,
any untrue statement of a material fact and do not omit, and will not omit,
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectus and any
amendments and supplements thereto do not contain, and will not contain,
any untrue statement of material fact; and do not omit, and will not omit,
to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Company makes
no representations or warranties as to information contained in or omitted
from the Registration Statement or the Prospectus, or any such amendment or
supplement, in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of any Underwriter, specifically
for use in the preparation thereof.
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(vi) The consolidated financial statements of the Company and the
Subsidiaries, together with related notes and schedules as set forth or
incorporated by reference in the Registration Statement, present fairly the
financial position and the results of operations and cash flows of the
Company and the consolidated Subsidiaries, at the indicated dates and for
the indicated periods. Such financial statements and related schedules
have been prepared in accordance with generally accepted principles of
accounting, consistently applied throughout the periods involved, except as
disclosed therein, and all adjustments necessary for a fair presentation of
results for such periods have been made. The summary financial and
statistical data included in the Registration Statement presents fairly the
information shown therein and such data has been compiled on a basis
consistent with the financial statements presented therein and the books
and records of the Company. The pro forma financial statements and other
pro forma financial information included or incorporated by reference in
the Registration Statement and the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements, have been properly compiled on the pro forma bases described
therein, and, in the opinion of the Company, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein.
(vii) Price Waterhouse LLP, who have certified certain of the
financial statements filed with the Commission as part of, or incorporated
by reference in, the Registration Statement, are independent public
accountants as required by the Act and the Rules and Regulations.
(viii) Except as set forth in the Registration Statement, there is
neither (i) any action, suit, claim or proceeding pending or, to the
knowledge of the Company, threatened against the Company or any of the
Subsidiaries before any court or administrative agency or otherwise which,
if determined adversely to the Company or any of its Subsidiaries, might
result in, nor (ii) any legislation, statute, regulation, rule or ordinance
to the knowledge of the Company proposed or pending before any legislative
body or administrative agency, which, if enacted or promulgated, might
result in, any material adverse change in the earnings, business,
management, properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company and of the Subsidiaries taken as a
whole or to prevent the consummation of the transactions contemplated
hereby,
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(ix) The Company and the Subsidiaries have good and marketable
title to all of the properties and assets reflected in the financial
statements (or as described in the Registration Statement) hereinabove
described, subject to no lien, mortgage, pledge, charge or encumbrance of
any kind except those reflected in such financial statements (or as
described in the Registration Statement) or which are not material in
amount. The Company and the Subsidiaries occupy their leased properties or
properties subject to easement under valid and binding leases or easements,
respectively.
(x) The Company and the Subsidiaries have filed all Federal,
state, local and foreign income tax returns which have been required to be
filed and have paid all taxes indicated by said returns and all assessments
received by them or any of them to the extent that such taxes have become
due and are not being contested in good faith. All tax liabilities have
been adequately provided for in the financial statements of the Company.
(xi) Since the respective dates as of which information is given in
the Registration Statement, as it may be amended or supplemented, there has
not been any material adverse change or any development involving a
prospective material adverse change in or affecting the earnings, business,
management, properties, assets, rights, operations, condition (financial or
otherwise), or prospects of the Company and its Subsidiaries taken as a
whole, whether or not occurring in the ordinary course of business, and
there has not been any material transaction entered into or any material
transaction that is probable of being entered into by the Company or the
Subsidiaries, other than transactions in the ordinary course of business
and changes and transactions described in the Registration Statement, as it
may be amended or supplemented. The Company and the Subsidiaries have no
material contingent obligations which are not disclosed in the Company's
financial statements which are included in the Registration Statement.
(xii) Neither the Company nor any of the Subsidiaries is or, with
the giving of notice or lapse of time or both, will be, in violation of or
in default under its Certificate of Incorporation or By-Laws as presently
in effect or under any agreement, lease, contract, indenture or other
instrument or obligation (including, but not limited to, the Credit
Facility) to which it is a party or by which it, or any of its properties,
is bound and which default is of material significance in respect of the
condition, financial or otherwise of the Company and its Subsidiaries taken
as a whole or the business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the Company
and the Subsidiaries taken as a whole. The execution and delivery of this
Agree-
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ment and the consummation of the transactions herein contemplated and
the fulfillment of the terms hereof will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust or other agreement or instrument to
which the Company or any Subsidiary is a party (including, but not limited
to, the Credit Facility), or of the Certificate of Incorporation or By-laws
of the Company as presently in effect or any Subsidiary or any order, rule
or regulation applicable to the Company or any Subsidiary of any court or
of any regulatory body or administrative agency or other governmental body
having jurisdiction.
(xiii) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery
by the Company of this Agreement and the consummation of the transactions
herein contemplated (except such additional steps as may be required by the
Commission, the National Association of Securities Dealers, Inc. (the
"NASD") or such additional steps as may be necessary to qualify the Shares
for public offering by the Underwriters under state securities or Blue Sky
laws) has been obtained or made and is in full force and effect.
(xiv) The Company and each of the Subsidiaries hold all material
licenses, consents, authorizations, approvals, orders, certificates and
permits (collectively, "Licenses") of and from, and have made all
declarations and filings with and satisfied all eligibility and other
similar requirements imposed by, all Federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts
and other tribunals, in each case as required for the conduct of the
business in which it is engaged, and each such License is in full force and
effect, except to the extent that the failure to obtain any such License or
to make any such declaration or filing or satisfy any such requirement
would not have a material adverse effect on the earnings, business,
management, properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries, taken as a
whole.
(xv) The Company and its Subsidiaries are in compliance with all
applicable Federal, state and local laws and regulations relating to (i)
zoning, land use, protection of the environment, human health and safety or
hazardous or toxic substances, wastes, pollutants or contaminants and (ii)
employee or occupational safety, discrimination in hiring, promotion or pay
of employees, employee hours and wages or employee benefits, except where
such noncompliance would not, singly or in the aggregate, have a
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<PAGE>
material adverse effect on the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects
of the Company and its Subsidiaries taken as a whole.
(xvi) Neither the Company nor any of the Subsidiaries has infringed
any patents, patent rights, trade names, trademarks or copyrights, which
infringement is material to the business of the Company and the
Subsidiaries taken as a whole. The Company knows of no material
infringement by others of patents, patent rights, trade names, trademarks
or copyrights owned by or licensed to the Company.
(xvii) Neither the Company, nor to the Company's best knowledge, any
of its affiliates, has taken or may take, directly or indirectly, any
action designed to cause or result in, or which has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate the
sale or resale of the Shares.
(xviii) Neither the Company nor any Subsidiary is an "investment
company" within the meaning of such term under the Investment Company Act
of 1940 (the "1940 Act") and the rules and regulations of the Commission
thereunder.
(xix) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (A) transactions are
executed in accordance with management's general or specific authorization;
(B) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (C) access to assets
is permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(xx) The Company and each of its Subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in similar
industries.
(xxi) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income
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Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (A) Title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan" or
(B) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"Code"); and each "pension plan" for which the Company would have any
liability that is intended to be qualified under Section 401(a) of the Code
is so qualified in all material respects and nothing has occurred, whether
by action or by failure to act, which would cause the loss of such
qualification.
(xxii) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter 92-
198, AN ACT RELATING TO DISCLOSURE OF DOING BUSINESS WITH CUBA, and the
Company further agrees that if it commences engaging in business with the
government of Cuba or with any person or affiliate located in Cuba after
the date the Registration Statement becomes or has become effective with
the Commission or with the Florida Department of Banking and Finance (the
"Department"), whichever date is later, or if the information reported or
incorporated by reference in the Prospectus, if any, concerning the
Company's business with Cuba or with any person or affiliate located in
Cuba changes in any material way, the Company will provide the Department
notice of such business or change, as appropriate, in a form acceptable to
the Department.
(b) Each of the Selling Shareholders severally represents and
warrants as follows:
(i) Such Selling Shareholder now has and at the Closing Date and
the Option Closing Date, as the case may be (as such dates are hereinafter
defined) will have good and marketable title to the Firm Shares and the
Option Shares to be sold by such Selling Shareholder, free and clear of any
liens, encumbrances, equities and claims, and full right, power and
authority to effect the sale and delivery of such Firm Shares and Option
Shares; and upon the delivery of, against payment for, such Firm Shares and
Option Shares pursuant to this Agreement, the Underwriters will acquire
good and marketable title thereto, free and clear of any liens,
encumbrances, equities and claims.
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<PAGE>
(ii) Such Selling Shareholder has full right, power and authority
to execute and deliver this Agreement and to perform its obligations under
such Agreement. The execution and delivery of this Agreement and the
consummation by such Selling Shareholder of the transactions herein
contemplated and the fulfillment by such Selling Shareholder of the terms
hereof will not require any consent, approval, authorization, or other
order of any court, regulatory body, administrative agency or other
governmental body (except as may be required under the Act, state
securities laws or Blue Sky laws) and will not result in a breach of any of
the terms and provisions of, or constitute a default under any indenture,
mortgage, deed of trust or other agreement or instrument to which such
Selling Shareholder is a party, or of any order, rule or regulation
applicable to such Selling Shareholder of any court or of any regulatory
body or administrative agency or other governmental body having
jurisdiction.
(iii) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to, or which has constituted,
or which might reasonably be expected to cause or result in the
stabilization or manipulation of the price of the Common Stock of the
Company and, other than as permitted by the Act, the Selling Shareholder
will not distribute any prospectus or other offering material in connection
with the offering of the Shares.
(iv) The information pertaining to such Selling Shareholder under
the caption "Principal and Selling Stockholders" in the Prospectus does 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, in light of the circumstances in which they were made, not
misleading.
2. PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES.
(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the
Sellers selling Firm Shares agree to sell to the Underwriters and each
Underwriter agrees, severally and not jointly, to purchase, at a price of
$_____________ per share, the number of Firm Shares set forth opposite
the name of each Underwriter in Schedule I hereof, subject to adjustments
in accordance with Section 9 hereof. The number of Firm Shares to be
purchased by each Underwriter from each Seller selling Firm Shares shall be
as nearly as practicable in the same proportion to the total number of Firm
Shares being sold by each such Seller as the number of Firm Shares being
purchased by
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<PAGE>
each Underwriter bears to the total number of Firm Shares to be sold
hereunder. The obligations of the Company and of each of the Selling
Shareholders shall be several and not joint.
(b) Certificates in negotiable form for the total number of the
Shares to be sold hereunder by the Individual Selling Shareholders have
been placed in custody with James J. Connors, II as custodian (the
"Custodian") pursuant to the Custody Agreement executed by each Individual
Selling Shareholder for delivery of all Firm Shares to be sold hereunder by
the Individual Selling Shareholders. Each of the Individual Selling
Shareholders specifically agrees that the Firm Shares represented by the
certificates held in custody for the Individual Selling Shareholders under
the Custody Agreement are subject to the interests of the Underwriters
hereunder, that the arrangements made by the Individual Selling
Shareholders for such custody are to that extent irrevocable, and that the
obligations of the Individual Selling Shareholders hereunder shall not be
terminable by any act or deed of the Individual Selling Shareholders (or by
any other person, firm or corporation including the Company, the Custodian
or the Underwriters) or by operation of law (including the death of an
Individual Selling Shareholder) or by the occurrence of any other event or
events, except as set forth in the Custody Agreement. If any such event
should occur prior to the delivery to the Underwriters of the Firm Shares
hereunder, certificates for the Firm Shares shall be delivered by the
Custodian in accordance with the terms and conditions of this Agreement as
if such event has not occurred.
(c) Payment for the Firm Shares to be sold hereunder is to be made
by wire transfer of same day funds to the Company for the shares to be sold
by it and by wire transfer of same day funds to each of the Selling
Shareholders for the shares to be sold by the Selling Shareholders, in each
case against delivery of certificates therefor to the Underwriters. Such
payment and delivery are to be made at the offices of Alex. Brown & Sons
Incorporated, 135 East Baltimore Street, Baltimore, Maryland, at 10:00
a.m., Baltimore time, on the third business day after the date of this
Agreement or at such other time and date not later than five business days
thereafter as you and the Company shall agree upon, such time and date
being herein referred to as the "Closing Date." (As used herein, "business
day" means a day on which the New York Stock Exchange is open for trading
and on which banks in New York are open for business and not permitted by
law or executive order to be closed.) The certificates for the Firm Shares
will be delivered in such denominations and in such registrations as the
Underwriters request in writing not later than the second
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<PAGE>
full business day prior to the Closing Date, and will be made available
for inspection by the Underwriters at least one business day prior to
the Closing Date.
(d) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein
set forth, the Company and the Option Share Selling Shareholders hereby
grant an option to the several Underwriters to purchase the Option Shares
at the price per share as set forth in paragraph (a) of this Section 2.
The maximum number of Option Shares to be sold by the Company and the
Option Share Selling Shareholders is set forth opposite their respective
names on Schedule III. The option granted hereby may be exercised in whole
or in part by giving written notice (i) at any time before the Closing Date
and (ii) only once thereafter within 30 days after the date of this
Agreement, by you, to the Company and the Option Share Selling
Shareholders, setting forth the number of Option Shares as to which the
several Underwriters are exercising the option, the names and denominations
in which the Option Shares are to be registered and the time and date at
which such certificates are to be delivered. If the option granted hereby
is exercised in part, the respective number of Option Shares to be sold by
the Company and each of the Selling Shareholders listed in Schedule III
hereto shall be as nearly as practicable in the same proportion as the
maximum number of Option Shares to be sold by each Seller bears to the
maximum total number of Option Shares, adjusted by you in such manner as to
avoid fractional shares. The time and date at which certificates for
Option Shares are to be delivered shall be determined by the Underwriters
but shall not be earlier than three nor later than 10 full business days
after the exercise of such option, nor in any event prior to the Closing
Date (such time and date being herein referred to as the "Option Closing
Date"). If the date of exercise of the option is three or more days before
the Closing Date, the notice of exercise shall set the Closing Date as the
Option Closing Date. The number of Option Shares to be purchased by each
Underwriter shall be in the same proportion to the total number of Option
Shares being purchased as the number of Firm Shares being purchased by such
Underwriter bears to the total number of Firm Shares, adjusted by you in
such manner as to avoid fractional shares. The option with respect to the
Option Shares granted hereunder may be exercised only to cover over-
allotments in the sale of the Firm Shares by the Underwriters. You may
cancel such option at any time prior to its expiration by giving written
notice of such cancellation to the Company. To the extent, if any, that
the option is exercised, payment for the Option Shares shall be made on the
Option Closing Date by wire transfer of same day funds to the Company for
the Option
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Shares sold by it and to the Option Share Selling Shareholders
for the Option Shares sold by them against delivery of certificates
therefor at the offices of Alex. Brown & Sons Incorporated, 135 East
Baltimore Street, Baltimore, Maryland. The Company shall promptly
reimburse the Underwriters for the cost of same day funds.
(e) If on the Closing Date or Option Closing Date, as the case may
be, any Selling Shareholder fails to sell the Firm Shares or Option Shares
which such Selling Shareholder has agreed to sell on such date, the Company
agrees that it will sell or arrange for the sale of that number of shares
of Common Stock to the Underwriters which represents Firm Shares or Option
Shares which such Selling Shareholder has failed to sell, or such lesser
number as may be requested by the Underwriters.
3. OFFERING BY THE UNDERWRITERS.
It is understood that the several Underwriters are to make a public
offering of the Firm Shares as soon as the Underwriters deem it advisable
to do so. The Firm Shares are to be initially offered to the public at the
initial public offering price set forth in the Prospectus. The
Underwriters may from time to time thereafter change the public offering
price and other selling terms. To the extent, if at all, that any Option
Shares are purchased pursuant to Section 2 hereof, the Underwriters will
offer them to the public on the foregoing terms.
4. COVENANTS OF THE COMPANY AND THE SELLING SHAREHOLDERS.
(a) The Company covenants and agrees with the several Underwriters
that:
(i) The Company will (A) use its best efforts to cause the
Registration Statement to become effective or, if the procedure in Rule
430A of the Rules and Regulations is followed, to prepare and timely file
with the Commission under Rule 424(b) of the Rules and Regulations a
Prospectus in a form approved by the Underwriters containing information
previously omitted at the time of effectiveness of the Registration
Statement in reliance on Rule 430A of the Rules and Regulations, (B) not
file any amendment to the Registration Statement or supplement to the
Prospectus or document incorporated by reference therein of which the
Underwriters shall not previously have been advised and furnished with a
copy or to which the Underwriters shall have reasonably objected in writing
or which is not in compliance with the Rules and Regulations and (C) file
on a timely basis all
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reports and any definitive proxy or information statements required to be
filed by the Company with the Commission subsequent to the date of the
Prospectus and prior to the termination of the offering of the Shares by
the Underwriters.
(ii) The Company will advise the Underwriters promptly (A) when the
Registration Statement or any post-effective amendment thereto shall have
become effective, (B) of receipt of any comments from the Commission, (C)
of any request of the Commission for amendment of the Registration
Statement or for supplement to the Prospectus or for any additional
information, and (D) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the use of
the Prospectus or of the institution of any proceedings for that purpose.
The Company will use its best efforts to prevent the issuance of any such
stop order preventing or suspending the use of the Prospectus and to obtain
as soon as possible the lifting thereof, if issued.
(iii) The Company will cooperate with the Underwriters in
endeavoring to qualify the Shares for sale under the securities laws of
such jurisdictions as the Underwriters may reasonably have designated in
writing and will make such applications, file such documents, and furnish
such information as may be reasonably required for that purpose, provided
the Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction where it
is not now so qualified or required to file such a consent. The Company
will, from time to time, prepare and file such statements, reports, and
other documents, as are or may be required to continue such qualifications
in effect for so long a period as the Underwriters may reasonably request
for distribution of the Shares.
(iv) The Company will deliver to, or upon the order of, the
Underwriters, from time to time, as many copies of any Preliminary
Prospectus as the Underwriters may reasonably request. The Company will
deliver to, or upon the order of, the Underwriters during the period when
delivery of a Prospectus is required under the Act, as many copies of the
Prospectus in final form, or as thereafter amended or supplemented, as the
Underwriters may reasonably request. The Company will deliver to the
Underwriters at or before the Closing Date, four signed copies of the
Registration Statement and all amendments thereto including all exhibits
filed therewith, and will deliver to the Underwriters such number of copies
of the Registration Statement (including such number of copies of the
exhibits filed therewith that may reasonably be requested), including
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<PAGE>
documents incorporated by reference therein, and of all amendments thereto,
as the Underwriters may reasonably request.
(v) The Company will comply with the Act and the Rules and
Regulations, and the Securities Exchange Act of 1934 (the "Exchange Act"),
and the rules and regulations of the Commission thereunder, so as to permit
the completion of the distribution of the Shares as contemplated in this
Agreement and the Prospectus. If during the period in which a prospectus
is required by law to be delivered by an Underwriter or dealer, any event
shall occur as a result of which, in the judgment of the Company or in the
reasonable opinion of the Underwriters, it becomes necessary to amend or
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances existing at the time the Prospectus is delivered
to a purchaser, not misleading, or, if it is necessary at any time to amend
or supplement the Prospectus to comply with any law, the Company promptly
will prepare and file with the Commission an appropriate amendment to the
Registration Statement or supplement to the Prospectus so that the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when it is so delivered, be misleading, or so that the
Prospectus will comply with the law.
(vi) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not later
than 15 months after the effective date of the Registration Statement, an
earnings statement (which need not be audited) in reasonable detail,
covering a period of at least 12 consecutive months beginning after the
effective date of the Registration Statement, which earning statement shall
satisfy the requirements of Section 11(a) of the Act and Rule 158 of the
Rules and Regulations and will advise you in writing when such statement
has been so made available.
(vii) The Company will, for a period of five years from the Closing
Date, deliver to the Underwriters copies of annual reports and copies of
all other documents, reports and information furnished by the Company to
its stockholders or filed with any securities exchange pursuant to the
requirements of such exchange or with the Commission pursuant to the Act or
the Exchange Act. The Company will deliver to the Underwriters similar
reports with respect to significant subsidiaries, as that term is defined
in the Rules and Regulations, which are not consolidated in the Company's
financial statements.
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(viii) Except in connection with the issuance of shares of Common
Stock (A) hereunder, (B) to holders of the Noteholder Warrants (as defined
in the Registration Statement) upon the exercise of such Noteholder
Warrants and (C) to Daniel L. Simon, Brian T. Clingen and Paul G. Simon
pursuant to the Company's 1996 Warrant Plan, no offering, sale, short sale
or other disposition of any shares of Common Stock of the Company or other
securities convertible into or exchangeable or exercisable for shares of
Common Stock or derivative of Common Stock (or agreement for such) will be
made for a period of 90 days after the date of this Agreement, directly or
indirectly, by the Company or the Selling Shareholders otherwise than
hereunder or with the prior written consent of Alex. Brown & Sons
Incorporated.
(ix) The Company will use its best efforts to list, subject to
notice of issuance, the Shares on The Nasdaq Stock Market.
(x) The Company shall apply the net proceeds of its sale of the
Shares as set forth in the Prospectus.
(xi) The Company shall not invest, or otherwise use the proceeds
received by the Company from its sale of the Shares in such a manner as
would require the Company or any of the Subsidiaries to register as an
investment company under the 1940 Act or the rules and regulations
thereunder.
(xii) The Company will maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company, a registrar for the
Common Stock.
(xiii) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or might reasonably
be expected to constitute, the stabilization or manipulation of the price
of any securities of the Company.
(b) Each of the Selling Shareholders covenants and agrees with the
several Underwriters that:
(i) No offering, sale, short sale or other disposition of any
shares of Common Stock of the Company or other capital stock of the
Company or other securities convertible, exchangeable or exercisable for
Common Stock or derivative of Common Stock owned by such Selling
Shareholder or request for the registration for the offer or sale of any of
the
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foregoing (or as to which the Selling Shareholder has the right to
direct the disposition of) will be made for a period of 90 days after the
date of this Agreement, directly or indirectly, by such Selling Shareholder
otherwise than (A) hereunder or (B) with the prior written consent of Alex.
Brown & Sons Incorporated.
(ii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 and the Interest and Dividend Tax Compliance Act
of 1983 with respect to the transactions herein contemplated, each of the
Selling Shareholders agrees to deliver to you prior to or at the Closing
Date a properly completed and executed United States Treasury Department
Form W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
(iii) Such Selling Shareholder will not take, directly or
indirectly, any action designed to cause or result in, or that has
constituted or might reasonably be expected to constitute, the
stabilization or manipulation of the price of any securities of the
Company.
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5. COSTS AND EXPENSES.
The Company will pay all costs, expenses and fees incident to the
performance of the obligations of the Sellers under this Agreement,
including, without limiting the generality of the foregoing, the following:
accounting fees of the Company; the fees and disbursements of counsel for
the Company; the cost of printing and delivering to, or as requested by,
the Underwriters copies of the Registration Statement, Preliminary
Prospectuses, the Prospectus, this Agreement, the Underwriters' Selling
Memorandum, the Underwriters' Invitation Letter, the Supplemental Listing
Application, the Blue Sky Survey and any supplements or amendments thereto;
the filing fees of the Commission; the filing fees and expenses (including
legal fees and disbursements) incident to securing any required review by
the National Association of Securities Dealers, Inc. (the "NASD") of the
terms of the sale of the Shares; the Listing Fee of the Nasdaq Stock
Market; and the expenses, including the fees and disbursements of counsel
for the Underwriters, incurred in connection with the qualification of the
Shares under state securities or Blue Sky laws. The Company shall not,
however, be required to pay for any of the Underwriters expenses (other
than those related to qualification under NASD regulation and state
securities or Blue Sky laws) except that, if this Agreement shall not be
consummated because the conditions in Section 6 hereof are not satisfied,
or because this Agreement is terminated by the Underwriters pursuant to
Section 11 hereof, or by reason of any failure, refusal or inability on the
part of the Company or the Selling Shareholders to perform any undertaking
or satisfy any condition of this Agreement or to comply with any of the
terms hereof on their part to be performed, unless such failure to satisfy
said condition or to comply with said terms be due to the default or
omission of any Underwriter, then the Company shall reimburse the several
Underwriters for reasonable out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred in connection with
investigating, marketing and proposing to market the Shares or in
contemplation of performing their obligations hereunder; but the Company
and the Selling Shareholders shall not in any event be liable to any of the
several Underwriters for damages on account of loss of anticipated profits
from the sale by them of the Shares.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The several obligations of the Underwriters to purchase the Firm
Shares on the Closing Date and the Option Shares, if any, on the Option
Closing Date are subject to the accuracy, as of the Closing Date or the
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Option Closing Date, as the case may be, of the representations and
warranties of the Company and the Selling Shareholders contained herein,
and to the performance by the Company and the Selling Shareholders of their
covenants and obligations hereunder and to the following additional
conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings required by
Rule 424 and Rule 430A of the Rules and Regulations shall have been made,
and any request of the Commission for additional information (to be
included in the Registration Statement or otherwise) shall have been
disclosed to the Underwriters and complied with to their reasonable
satisfaction. No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have been
issued and no proceedings for that purpose shall have been taken or, to the
knowledge of the Company or the Selling Shareholders, shall be contemplated
by the Commission and no injunction, restraining order, or order of any
nature by a Federal or state court of competent jurisdiction shall have
been issued as of the Closing Date which would prevent the issuance of the
Shares.
(b) The Underwriters shall have received on the Closing Date or
the Option Closing Date, as the case may be, the opinion of Winston &
Strawn, counsel for the Company, Paul G. Simon and the Option Share Selling
Shareholders, dated the Closing Date or the Option Closing Date, as the
case may be, addressed to the Underwriters to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own or lease its
properties and conduct its business as described in the Registration
Statement; each of the Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, with corporate power and
authority to own or lease its properties and conduct its business as
described in the Registration Statement; the Company and each of the
Subsidiaries are duly qualified to transact business in all
jurisdictions in which the failure to qualify would have a materially
adverse effect upon the business of the Company taken as a whole; and
the outstanding shares of capital stock of each of the Subsidiaries
have been duly authorized and validly issued and are fully paid and
non-assessable and are owned by the Company or a Subsidiary; and, to
the best of such counsel's knowledge, the
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<PAGE>
outstanding shares of capital stock of each of the Subsidiaries is
owned free and clear of all liens, encumbrances and equities and
claims except for the Existing Stock Pledges, and no options, warrants
or other rights to purchase, agreements or other obligations to issue
or other rights to convert any obligations into any shares of capital
stock or of ownership interests in the Subsidiaries are outstanding.
(ii) The Company has authorized and outstanding capital
stock as set forth in the Prospectus; the authorized shares of the
Company's Common Stock have been duly authorized; the outstanding
shares of the Company's Common Stock, including the Shares to be sold
by the Selling Shareholders, have been duly authorized and validly
issued and are fully paid and non-assessable; all of the Shares
conform to the description thereof contained in the Prospectus; the
certificates for the Shares, assuming they are in the form filed with
the Commission, are in due and proper form; the shares of Common
Stock, including the Option Shares, if any, to be sold by the Company
pursuant to this Agreement have been duly authorized and, when issued
and delivered pursuant to this Agreement, will be validly issued,
fully paid and non-assessable; and the issuance or sale of such Shares
is not subject to any preemptive or similar rights.
(iii) Except as described in or contemplated by the
Prospectus, to the knowledge of such counsel, there are no outstanding
securities of the Company convertible or exchangeable into or
evidencing the right to purchase or subscribe for any shares of
capital stock of the Company and there are no outstanding or
authorized options, warrants or rights of any character obligating the
Company to issue any shares of its capital stock or any securities
convertible or exchangeable into or evidencing the right to purchase
or subscribe for any shares of such stock; and except as described in
the Prospectus, to the knowledge of such counsel, no holder of any
securities of the Company or any other person has the right,
contractual or otherwise, which has not been satisfied or effectively
waived, to cause the Company to sell or otherwise issue to them, or
to permit them to underwrite the sale of, any of the Shares or the
right to have any shares of Common Stock or other securities of the
Company included in the Registration Statement or the right, as a
result of the filing of the Registration Statement, to require
20
<PAGE>
registration under the Act of any shares of Common Stock or other
securities of the Company.
(iv) The Registration Statement has become effective under
the Act and, to the best of the knowledge of such counsel, no stop
order proceedings with respect thereto have been instituted or are
pending or threatened under the Act.
(v) The Registration Statement, the Prospectus and each
amendment or supplement thereto and document incorporated by reference
therein appear on their face to be appropriately responsive in all
material respects with the requirements of the Act or the Securities
Exchange Act of 1934, as applicable, and the applicable rules and
regulations thereunder (except that such counsel need express no
opinion as to the financial or statistical data therein or
incorporated by reference). The conditions for the use of Form S-3,
set forth in the General Instructions thereto, have been satisfied.
(vi) The statements in the Prospectus under the caption
"Shares Eligible for Future Sale," as such statements constitute a
summary of the legal matters or documents referred to therein or
matters of law, fairly summarize in all material respects the
information required to be shown.
(vii) Such counsel does not know of any contracts or other
documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement or the Prospectus which are not so described or
filed as required, and such contracts and documents as are summarized
in the Registration Statement or the Prospectus are fairly summarized
in all material respects.
(viii) Such counsel knows of no material legal or governmental
proceedings pending or threatened against the Company or any of the
Subsidiaries except as set forth in the Prospectus.
(ix) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not and will
not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, the Certificate of
Incorporation or By-laws of the Company, or any material agreement or
21
<PAGE>
instrument to which the Company or any of the Subsidiaries is a
party or by which the Company or any of the Subsidiaries is bound.
(x) This Agreement has been duly authorized, executed and
delivered by the Company.
(xi) No approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other governmental body which has not been received
or granted is required in connection with the execution and delivery
of this Agreement and the consummation of the transactions herein
contemplated (other than as may be required by the NASD or as required
by state securities and Blue Sky laws as to which such counsel need
express no opinion).
(xii) The Company is not, and will not become, as a result of
the consummation of the transactions contemplated by this Agreement,
and application of the net proceeds therefrom as described in the
Prospectus, required to register as an investment company under the
1940 Act.
(xiii) To the knowledge of such counsel, the execution and
delivery of this Agreement and the consummation of the sale of Shares
by Paul G. Simon and each Option Share Selling Shareholder as herein
contemplated does not conflict with or result in a breach of any terms
or provisions of, or constitute a default under, any agreement or
instrument to which such Option Share Selling Shareholder is a party
or by which such Selling Shareholder may be bound.
(xiv) No approval, consent, order or permit by or with any
regulatory, administrative or other governmental body is necessary in
connection with the execution and delivery of this Agreement and the
consummation of the sale of Shares by Paul G. Simon and any Option
Share Selling Shareholder as herein contemplated (other than as may be
required by Federal or state securities and Blue Sky laws or for
clearance of the offering with the NASD, as to which counsel need
express no opinion).
(xv) Paul G. Simon and each Option Share Selling Shareholder
have the full legal right, power and authority to sell, assign,
transfer and deliver the Shares to be sold by such Selling
Shareholder.
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<PAGE>
(xvi) This Agreement has been duly executed and delivered by
Paul G. Simon and each Option Share Selling Shareholder.
(xvii) Upon delivery of certificates indorsed in blank
representing the Shares to be sold by Paul G. Simon and the Option
Share Selling Shareholders and payment for such Shares at the Closing
Date as provided for herein, the Underwriters will have acquired good
and valid title to the Shares so transferred, free and clear of all
liens, encumbrances, equities and claims (assuming that the
Underwriters are without notice of adverse claims, as defined in the
Uniform Commercial Code, and have acquired their interest in good
faith for purposes of the Uniform Commercial Code, and that such
Underwriters' rights are not limited by subsection (4) of Section 8-
302 of the Uniform Commercial Code).
The opinion contained in paragraph (xvii) above need only be delivered
on the Option Closing Date.
In addition to the matters set forth above, such opinion shall also
include a statement to the effect that no facts have come to the attention
of such counsel which led them to believe that (i) the Registration
Statement, at the time it became effective under the Act (but after giving
effect to any modifications incorporated therein pursuant to Rule 430A
under the Act) and as of the Closing Date or the Option Closing Date, as
the case may be, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, and (ii) the Prospectus, or
any supplement thereto, on the date it was filed pursuant to the Rules and
Regulations and as of the Closing Date or the Option Closing Date, as the
case may be, contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements, in the
light of the circumstances under which they are made, not misleading
(except that such counsel need express no view as to financial statements,
schedules and statistical information therein). With respect to such
statement, Winston & Strawn may state that their belief is based upon the
procedures set forth therein, but is without independent check and
verification.
(c) The Underwriters shall have received on the Closing Date the
opinion of James J. Connors, II, counsel for the Institutional and
Individual Selling Shareholders, dated the Closing Date, addressed to the
Underwriters to the effect that:
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<PAGE>
(i) Each Institutional Selling Shareholder has been duly
formed and is validly existing as a limited partnership under the laws
of the State of Delaware.
(ii) The execution and delivery of this Agreement and the
consummation of the sale of Shares by each Institutional Selling
Shareholder as herein contemplated do not conflict with or result in a
breach of any terms or provisions of, or constitute a default under,
the partnership agreement of such Institutional Selling Shareholder,
or any agreement or instrument to which such Institutional Selling
Shareholder is a party or by which such Institutional Selling
Shareholder may be bound.
(iii) No approval, consent, order or permit by or with any
regulatory, administrative or other governmental body is necessary in
connection with the execution and delivery of this Agreement and the
consummation of the sale of Shares by any Institutional Selling
Shareholder as herein contemplated (other than as may be required by
Federal or state securities and Blue Sky laws or for clearance of the
offering with the NASD, as to which counsel need express no opinion).
(iv) Each Institutional Selling Shareholder has the power
under the Delaware Revised Uniform Limited Partnership Act and its
partnership agreement to sell, assign, transfer and deliver the Shares
to be sold by such Institutional Selling Shareholder and such sale,
assignment, transfer and delivery has been duly authorized by all
necessary actions under the Delaware Revised Uniform Limited
Partnership Act and its partnership agreement.
(v) This Agreement has been duly executed and delivered by
each Institutional Selling Shareholder.
(vi) Upon delivery of certificates indorsed in blank
representing the Shares to be sold by the Institutional and Individual
Selling Shareholders and payment for such Shares at the Closing Date
as provided for herein, the Underwriters will have acquired good and
valid title to the Shares so transferred, free and clear of all liens,
encumbrances, equities and claims (assuming that the Underwriters are
without notice of adverse claims, as defined in the Uniform Commercial
Code, and have acquired their interest in good
24
<PAGE>
faith for purposes of the Uniform Commercial Code, and that such
Underwriters' rights are not limited by subsection (4) of Section
8-302 of the Uniform Commercial Code).
(d) The Underwriters shall have received from Skadden, Arps,
Slate, Meagher & Flom, counsel for the Underwriters, an opinion dated the
Closing Date or the Option Closing Date, as the case may be, as to such
matters as the Underwriters may reasonably require. In addition to the
matters set forth above, such opinion shall also include a statement to the
effect that nothing has come to the attention of such counsel which leads
them to believe that (i) the Registration Statement, or any amendment
thereto, as of the time it became effective under the Act (but after giving
effect to any modifications incorporated therein pursuant to Rule 430A
under the Act) as of the Closing Date or the Option Closing Date, as the
case may be, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading, and (ii) the Prospectus, or any
supplement thereto, on the date it was filed pursuant to the Rules and
Regulations and as of the Closing Date or the Option Closing Date, as the
case may be, contained an untrue statement of a material fact or omitted to
state a material fact, necessary in order to make the statements, in the
light of the circumstances under which they are made, not misleading
(except that such counsel need express no view as to financial statements,
schedules and statistical information therein). With respect to such
statement, Skadden, Arps, Slate, Meagher & Flom may state that their belief
is based upon the procedures set forth therein, but is without independent
check and verification.
(e) The Underwriters shall have received at or prior to the
Closing Date from Skadden, Arps, Slate, Meagher & Flom a memorandum or
summary, in form and substance satisfactory to the Underwriters, with
respect to the qualification for offering and sale by the Underwriters of
the Shares under the state securities or Blue Sky laws of such
jurisdictions as the Underwriters may reasonably have designated to the
Company.
(f) The Underwriters shall have received, on each of the dates
hereof, the Closing Date and the Option Closing Date, as the case may be,
letters dated the date hereof, the Closing Date or the Option Closing Date,
as the case may be, in form and substance satisfactory to you, of Price
Waterhouse LLP, Ernst & Young LLP and Arthur Andersen LLP confirming that
they are independent public accountants within the meaning of the Act and
the applicable published Rules and Regulations thereunder and
25
<PAGE>
stating that in their opinion the financial statements and schedules
examined by them and included or incorporated by reference in the
Registration Statement comply in form in all material respects with the
applicable accounting requirements of the Act and the related published
Rules and Regulations; and containing such other statements and information
as is ordinarily included in accountants' "comfort letters" to Underwriters
with respect to the financial statements and certain financial and
statistical information contained or incorporated by reference in the
Registration Statement and Prospectus.
(g) The Underwriters shall have received on the Closing Date or
the Option Closing Date, as the case may be, a certificate or certificates
of the President and Chief Executive Officer and the Chief Financial
Officer of the Company to the effect that, as of the Closing Date or the
Option Closing Date, as the case may be, each of them severally represents
as follows:
(i) The Registration Statement has become effective under
the Act and no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for such
purpose have been taken or are, to his knowledge, contemplated by the
Commission;
(ii) The representations and warranties of the Company
contained in Section 1 hereof are true and correct as of the Closing
Date or the Option Closing Date, as the case may be;
(iii) All filings required to have been made pursuant to
Rules 424 or 430A under the Act have been made;
(iv) He has carefully examined the Registration Statement
and the Prospectus and, in his opinion, as of the effective date of
the Registration Statement, the statements contained in the
Registration Statement were true and correct, and such Registration
Statement and Prospectus did not omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading, and since the effective date of the
Registration Statement, no event has occurred which should have been
set forth in a supplement to or an amendment of the Prospectus which
has not been so set forth in such supplement or amendment; and
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<PAGE>
(v) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, there has not been
any material adverse change or any development involving a prospective
material adverse change in or affecting the condition, financial or
otherwise, of the Company and its Subsidiaries taken as a whole or the
earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the
Company and the Subsidiaries taken as a whole, whether or not arising
in the ordinary course of business.
(h) The Company and the Selling Shareholders shall have furnished
to the Underwriters such further certificates and documents confirming the
representations and warranties, covenants and conditions contained herein
and related matters as the Underwriters may reasonably have requested.
(i) The Firm Shares and Option Shares, if any, have been approved
for designation upon notice of issuance on the Nasdaq Stock Market.
The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in
all material respects satisfactory to the Underwriters and to Skadden,
Arps, Slate, Meagher & Flom, counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriters hereunder may be terminated
by the Underwriters by notifying the Company and the Selling Shareholders
of such termination in writing or by telegram at or prior to the Closing
Date or the Option Closing Date, as the case may be.
In such event, the Selling Shareholders, the Company and the
Underwriters shall not be under any obligation to each other (except to the
extent provided in Sections 5 and 8 hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE SELLERS.
The obligations of the Sellers to sell and deliver the portion of the
Shares required to be delivered as and when specified in this Agreement are
subject to the conditions that at the Closing Date or the Option Closing
Date, as the case may be, no stop order suspending the effectiveness of the
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<PAGE>
Registration Statement shall have been issued and in effect or proceedings
therefor initiated or threatened.
8. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of the Act, against any losses, claims, damages or liabilities
to which such Underwriter or any such controlling person may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or (ii)
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and will reimburse each Underwriter and each such controlling
person upon demand for any legal or other expenses reasonably incurred by
such Underwriter or such controlling person in connection with
investigating or defending any such loss, claim, damage or liability,
action or proceeding or in responding to a subpoena or governmental inquiry
related to the offering of the Shares, whether or not such Underwriter or
controlling person is a party to any action or proceeding; provided,
however, that the Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement, or omission or
alleged omission made in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or such amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company by
or through the Underwriters specifically for use in the preparation
thereof. This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
(b) Each Selling Shareholder severally agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the Act against any losses, claims,
damages or liabilities to which such Underwriter or such controlling person
may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement
28
<PAGE>
thereto, or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter
and each such controlling person upon demand for any legal or other
expenses reasonably incurred by such Underwriter or such controlling person
in connection with investigating or defending any such loss, claim, damage,
liability, action or proceeding or in response to a subpoena or
governmental inquiry relating to the offering of the Shares, whether or not
such Underwriter or controlling person is a party to any action or
proceeding; provided, however, that the Selling Shareholder (i) will be
liable in each such case to the extent, but only to the extent, any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement, or omission or alleged omission made
in the Registration Statement, any Preliminary Prospectus, the Prospectus,
or such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company or the Underwriters by or on
behalf of such Selling Shareholder specifically for use in the preparation
thereof and (ii) will not be liable for any amount in excess of the
proceeds received by such Selling Shareholder from the Underwriters in the
offering net of underwriting discounts and commissions. This indemnity
agreement will be in addition to any liability which such Selling
Shareholder may otherwise have.
(c) Each Underwriter severally and not jointly will indemnify and
hold harmless the Company, each of its directors, each of its officers who
have signed the Registration Statement, the Selling Shareholders, and each
person, if any, who controls the Company within the meaning of the Act,
against any losses, claims, damages or liabilities to which the Company or
any such director, officer, Selling Shareholder or controlling person may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto, or (ii) the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under
which they were made; and will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, Selling
Shareholder or controlling person in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding;
provided, however, that each Underwriter will be liable in each case to the
extent, but only to the extent, that such untrue
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<PAGE>
statement or alleged untrue statement or omission or alleged omission has
been made in the Registration Statement, any Preliminary Prospectus, the
Prospectus or such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by or through
the Underwriters specifically for use in the preparation thereof. This
indemnity agreement will be in addition to any liability which such
Underwriter may otherwise have.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 8, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 8(a), (b) or (c) shall be available
to any party who shall fail to give notice as provided in this Section 8(d)
if the party to whom notice was not given was unaware of the proceeding to
which such notice would have related and was materially prejudiced by the
failure to give such notice, but the failure to give such notice shall not
relieve the indemnifying party or parties from any liability which it or
they may have to the indemnified party for contribution or otherwise than
on account of the provisions of Section 8(a), (b) or (c). In case any such
proceeding shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such
indemnified party and shall pay as incurred the fees and disbursements of
such counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel at its own
expense. Notwithstanding the foregoing, the indemnifying party shall pay
as incurred (or within 30 days of presentation) the fees and expenses of
the counsel retained by the indemnified party in the event (i) the
indemnifying party and the indemnified party shall have mutually agreed to
the retention of such counsel, (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them or (iii) the indemnifying party shall have failed to
assume the defense and employ counsel acceptable to the indemnified party
within a reasonable period of time after notice of commencement of the
action. It is understood that the indemnifying party shall not, in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more
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<PAGE>
than one separate firm for all such indemnified parties. Such firm shall be
designated in writing by you in the case of parties indemnified pursuant to
Section 8(a) or (b) and by the Company and the Selling Shareholders in the
case of parties indemnified pursuant to Section 8(c). The indemnifying
party shall not be liable for any settlement of any proceeding effected
without its written consent but if settled with such consent or if there be
a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. In addition, the indemnifying party
will not, without the prior written consent of the indemnified party,
settle or compromise or consent to the entry of any judgment in any pending
or threatened claim, action or proceeding of which indemnification may be
sought hereunder (whether or not any indemnified party is an actual or
potential party to such claim, action or proceeding) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action or
proceeding.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) in
such proportion as is appropriate to reflect the relative benefits received
by the Company and the Selling Shareholders on the one hand and the
Underwriters on the other from the offering of the Shares. If, however,
the allocation provided by the immediately preceding sentence is not
permitted by applicable law then each indemnifying party shall contribute
to such amount paid or payable by such indemnified party in such proportion
as is appropriate to reflect not only such relative benefits but also the
relative fault of the Company and the Selling Shareholders on the one hand
and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities,
(or actions or proceedings in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Selling Shareholders on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the
Company and the Selling Shareholders bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on
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<PAGE>
the cover page of the Prospectus. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the Selling
Shareholders on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. Notwithstanding the
foregoing, no Selling Shareholder shall be obligated to make contributions
hereunder which in the aggregate exceed the amount for which it would have
been liable pursuant to Section 8(b) had indemnification been available
thereunder.
The Company, the Selling Shareholders and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this
Section 8(e) were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this Section 8(e). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) referred to
above in this Section 8(e) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (e), (i) no Underwriter shall be required to
contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriter, (ii) no
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation, and (iii) no
Selling Shareholder shall be required to contribute any amount in excess of
the proceeds received by such Selling Shareholder from the Underwriters in
the offering. The Underwriters' obligations in this Section 8(e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment
thereto, each party against whom contribution may be sought under this
Section 8 hereby consents to the jurisdiction of any court having
jurisdiction over any other contributing party, agrees that process issuing
from such court may be served upon him or it by any other contributing
party and consents to the service of such process and agrees that any other
32
<PAGE>
contributing party may join him or it as an additional defendant in any
such proceeding in which such other contributing party is a party.
(g) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under
this Section 8 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are
incurred. The indemnity and contribution agreements contained in this
Section 8 and the representations and warranties of the Company set forth
in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter
or any person controlling any Underwriter, the Company, its directors or
officers or any persons controlling the Company, (ii) acceptance of any
Shares and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to any Underwriter, to the Selling Shareholders or
to the Company, its directors or officers, or any person controlling the
Company, shall be entitled to the benefits of the indemnity, contribution
and reimbursement agreements contained in this Section 8.
9. DEFAULT BY UNDERWRITERS.
If on the Closing Date or the Option Closing Date, as the case may be,
any Underwriter shall fail to purchase and pay for the portion of the
Shares which such Underwriter has agreed to purchase and pay for on such
date (otherwise than by reason of any default on the part of the Company or
a Selling Shareholder), you shall use your reasonable efforts to procure
within 36 hours thereafter one or more of the other Underwriters, or any
others, to purchase from the Company and the Selling Shareholders such
amounts as may be agreed upon and upon the terms set forth herein, the Firm
Shares or Option Shares, as the case may be, which the defaulting
Underwriter or Underwriters failed to purchase. If during such 36 hours
you shall not have procured such other Underwriters, or any others, to
purchase the Firm Shares or Option Shares, as the case may be, agreed to be
purchased by the defaulting Underwriter or Underwriters, then (a) if the
aggregate number of shares with respect to which such default shall occur
does not exceed 10% of the Firm Shares or Option Shares, as the case may
be, covered hereby, the other Underwriters shall be obligated, severally,
in proportion to the respective numbers of Firm Shares or Option Shares, as
the case may be, which they are obligated to purchase hereunder, to
purchase the Firm Shares or Option Shares, as the case may be, which such
defaulting Underwriter or Underwriters failed to purchase, or (b) if the
aggregate number of shares of Firm Shares or Option Shares, as the case
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<PAGE>
may be, with respect to which such default shall occur exceeds 10% of the
Firm Shares or Option Shares, as the case may be, covered hereby, the
Company and the Selling Shareholders or you will have the right, by written
notice given within the next 36-hour period to the parties to this
Agreement, to terminate this Agreement without liability on the part of the
non-defaulting Underwriters or of the Company or of the Selling
Shareholders except to the extent provided in Section 8 hereof. In the
event of a default by any Underwriter or Underwriters, as set forth in this
Section 9, the Closing Date or Option Closing Date, as the case may be, may
be postponed for such period, not exceeding seven days, as you may
determine in order that the required changes in the Registration Statement
or in the Prospectus or in any other documents or arrangements may be
effected. The term "Underwriter" includes any person substituted for a
defaulting Underwriter. Any action taken under this Section 9 shall not
relieve any defaulting Underwriter from liability in respect of any default
of such Underwriter under this Agreement.
10. NOTICES.
All communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered, telecopied or
telegraphed and confirmed as follows: if to the Underwriters, to Alex.
Brown & Sons Incorporated, 135 East Baltimore Street, Baltimore, Maryland
21202, Attention: Alexander T. Daignault; with a copy to Alex. Brown & Sons
Incorporated, 135 East Baltimore Street, Baltimore, Maryland 21202.
Attention: General Counsel; if to the Company, to Universal Outdoor
Holdings, Inc., 311 South Wacker Drive, Suite 6400, Chicago, Illinois
60606, Attention: General Counsel; if to Paul G. Simon or the Option Share
Selling Shareholders, c/o Universal Outdoor Holdings, Inc., 311 South
Wacker Drive, Suite 6400, Chicago, Illinois 60606, Attention: Paul J.
Simon; and if to the Institutional and Individual Selling Shareholders, c/o
Kelso & Company, 350 Park Avenue, 21st Floor, New York, New York 10022,
Attention: General Counsel.
11. TERMINATION.
This Agreement may be terminated by you by notice to the Sellers as
follows:
(a) at any time prior to the earlier of (i) the time the Shares
are released by you for sale by notice to the Underwriters, or (ii) 11:30
a.m. on the first business day following the date of this Agreement;
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<PAGE>
(b) at any time prior to the Closing Date if any of the following
has occurred: (i) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, any material
adverse change or any development involving a prospective material adverse
change in or affecting the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects
of the Company and its Subsidiaries taken as a whole, whether or not
arising in the ordinary course of business, (ii) any outbreak or escalation
of hostilities or declaration of war or national emergency or other
national or international calamity or crisis or change in economic or
political conditions if the effect of such outbreak, escalation,
declaration, emergency, calamity, crisis or change on the financial markets
of the United States would, in your reasonable judgment, make it
impracticable to market the Shares or to enforce contracts for the sale of
the Shares, or (iii) suspension of trading in securities generally on the
New York Stock Exchange or the American Stock Exchange or limitation on
prices (other than limitations on hours or numbers of days of trading) for
securities on either such Exchange, (iv) the enactment, publication, decree
or other promulgation of any statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects or may materially and adversely affect the business or
operations of the Company, (v) declaration of a banking moratorium by
United States or New York State authorities, (vi) any downgrading in the
rating of the Company's debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the Exchange Act); (vii) the suspension of trading of the Company's
Common Stock by the Commission on the Nasdaq National Market or (viii) the
taking of any action by any governmental body or agency in respect of its
monetary or fiscal affairs which in your reasonable opinion has a material
adverse effect on the securities markets in the United States; or
(c) as provided in Sections 6 and 9 of this Agreement.
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<PAGE>
12. SUCCESSORS.
This Agreement has been and is made solely for the benefit of the
Underwriters, the Company and the Selling Shareholders and their respective
successors, executors, administrators, heirs and assigns, and the officers,
directors and controlling persons referred to herein, and no other person
will have any right or obligation hereunder. No purchaser of any of the
Shares from any Underwriter shall be deemed a successor or assign merely
because of such purchase.
13. INFORMATION PROVIDED BY UNDERWRITERS AND SELLING SHAREHOLDERS.
The Company, the Selling Shareholders and the Underwriters acknowledge
and agree that the only information furnished or to be furnished by any
Underwriter to the Company for inclusion in any Prospectus or the
Registration Statement consists of the information set forth in the last
paragraph on the front cover page (insofar as such information relates to
the Underwriters), legends required by Item 502(d) of Regulation S-K under
the Act and the information under the caption "Underwriting" in the
Prospectus and that the only information furnished or to be furnished by
any Selling Shareholder to the Company for inclusion in any Prospectus or
Registration Statement consists of the information set forth with respect
to such Selling Shareholder under the caption "Principal and Selling
Stockholders" in the Prospectus.
14. MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect
regardless of (a) any termination of this Agreement, (b) any investigation
made by or on behalf of any Underwriter or controlling person thereof, or
by or on behalf of the Company or its directors or officers and (c)
delivery of and payment for the Shares under this Agreement.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
36
<PAGE>
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Maryland.
37
<PAGE>
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Selling Shareholders, the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
UNIVERSAL OUTDOOR HOLDINGS, INC.
By:
-----------------------------------------
Vice President and Chief Financial Officer
KELSO INVESTMENT ASSOCIATES V, L.P.
By:
-----------------------------------------
General Partner
KELSO EQUITY PARTNERS V, L.P.
By:
-----------------------------------------
General Partner
38
<PAGE>
Michael B. Goldberg
Frank K. Bynum, Jr.
Frank T. Nickell
George E. Matelich
Thomas R. Wall, IV
David I. Wahrhaftig
John F. McGillicuddy
Patricia Hetter Kelso
George L. Shinn
William A. Marquard
Michael B. Lazar
Frank J. Loverro
By:
----------------------------------
Attorney-in-Fact
-------------------------------------
Paul G. Simon
-------------------------------------
Daniel L. Simon
-------------------------------------
Brian T. Clingen
39
<PAGE>
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the
date first above written.
ALEX. BROWN & SONS
INCORPORATED
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: ALEX. BROWN & SONS INCORPORATED
By:
----------------------------------
Authorized Officer
40
<PAGE>
SCHEDULE I
SCHEDULE OF UNDERWRITERS
UNDERWRITER NUMBER OF FIRM SHARES TO BE PURCHASED
----------- -------------------------------------
Alex. Brown & Sons Incorporated. . . . . . . . . . . . . . . . . . .
Bear, Stearns & Co. Inc. . . . . . . . . . . . . . . . . . . . . . .
Donaldson, Lufkin & Jenrette Securities Corporation. . . . . . . . .
----------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,800,000
41
<PAGE>
SCHEDULE II
SCHEDULE OF SELLING SHAREHOLDERS
SELLING SHAREHOLDER NUMBER OF FIRM SHARES TO BE SOLD
- ------------------- --------------------------------
Kelso Investment Associates V, L.P. 2,847,871
Kelso Equity Partners, V, L.P. 151,779
Paul G. Simon 52,000
Michael B. Goldberg 46,960
Frank K. Bynum, Jr. 20,688
Frank T. Nickell 135,229
George E. Matelich 63,643
Thomas R. Wall, IV 80,422
David L. Wahrhaftig 24,859
John F. McGillicuddy 10,000
Patricia Hetter Kelso 15,000
George L. Shinn 4,000
William A. Marquard 10,000
Michael B. Lazar 4,120
Frank J. Loverro 5,724
---------
Total 3,472,295
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SCHEDULE III
SCHEDULE OF OPTION SHARES
NUMBER OF OPTION SHARES TO BE SOLD
----------------------------------
The Company 360,000
Daniel L. Simon 180,000
Brian T. Clingen 180,000
-------
Total 720,000
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<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STOCK PURCHASE AGREEMENT
DATED AS OF JUNE 3, 1997
BETWEEN
FLORIDA LOGOS, INC.
AS SELLER
THE LAMAR CORPORATION
LAMAR ADVERTISING COMPANY
AS GUARANTOR
AND
UNIVERSAL OUTDOOR, INC.
AS BUYER
RELATING TO
PENN ADVERTISING OF BALTIMORE, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS/PURCHASE & SALE/CLOSING . . . . . . . 2
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Transfer of Purchased Stock. . . . . . . . . . . . . . . . . . 7
1.3 Purchase of the Purchased Stock by Buyer / Purchase Price. . . 8
1.4 The Closing. . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.5 Purchase Price Adjustment. . . . . . . . . . . . . . . . . . . 8
1.6 June 1st Through 3rd . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE II
REPRESENTATIONS AND WARRANTIES REGARDING SELLER, LAMAR,
GUARANTOR, THE COMPANY AND THE PURCHASED STOCK . . . . 10
2.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . 10
2.3 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.4 Title to Purchased Stock . . . . . . . . . . . . . . . . . . . 12
2.5 Company Debt . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.6 No Brokers or Finders. . . . . . . . . . . . . . . . . . . . . 13
2.7 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . 13
2.8 Accuracy of Information. . . . . . . . . . . . . . . . . . . . 13
ARTICLE III
ADDITIONAL REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY . . 14
3.1 Organization and Good Standing . . . . . . . . . . . . . . . . 14
3.2 Company Stock. . . . . . . . . . . . . . . . . . . . . . . . . 14
3.3 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.4 Financial Statements; Changes; Contingencies . . . . . . . . . 15
3.5 Taxes and Tax Returns. . . . . . . . . . . . . . . . . . . . . 16
3.6 Material Contracts . . . . . . . . . . . . . . . . . . . . . . 16
3.7 Real and Personal Property; Title to Property; Leases. . . . . 17
3.8 Intangible Property. . . . . . . . . . . . . . . . . . . . . . 17
3.9 Legal Proceedings and Certain Labor Matters. . . . . . . . . . 18
3.10 Minute Books . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.11 Permits. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.12 Compliance with Law. . . . . . . . . . . . . . . . . . . . . . 18
3.13 Dividends and Other Distributions. . . . . . . . . . . . . . . 19
3.14 Employee Benefits. . . . . . . . . . . . . . . . . . . . . . . 19
3.15 Environmental Matters. . . . . . . . . . . . . . . . . . . . . 21
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3.16 Certain Interests. . . . . . . . . . . . . . . . . . . . . . . 21
3.17 Intercompany Transactions. . . . . . . . . . . . . . . . . . . 22
3.18 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.19 No Brokers or Finders. . . . . . . . . . . . . . . . . . . . . 22
3.20 Accuracy of Information. . . . . . . . . . . . . . . . . . . . 22
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . 22
4.1 Organization and Related Matters . . . . . . . . . . . . . . . 22
4.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . 23
4.3 No Conflicts; Consents . . . . . . . . . . . . . . . . . . . . 23
4.4 No Brokers or Finders. . . . . . . . . . . . . . . . . . . . . 23
4.5 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . 23
4.6 Investment Representation. . . . . . . . . . . . . . . . . . . 24
4.7 Accuracy of Information. . . . . . . . . . . . . . . . . . . . 24
ARTICLE V
ADDITIONAL CONTINUING COVENANTS . . . . . . . . 24
5.1 Nondisclosure of Proprietary Data. . . . . . . . . . . . . . . 24
5.2 Tax Cooperation. . . . . . . . . . . . . . . . . . . . . . . . 25
5.3 Vesting in Certain Pension Plans . . . . . . . . . . . . . . . 25
ARTICLE VI
ITEMS TO BE DELIVERED AT CLOSING. . . . . . . . 25
6.1 By Seller. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.2 By Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE VII
INDEMNIFICATION . . . . . . . . . . . . 27
7.1 Obligations of Seller. . . . . . . . . . . . . . . . . . . . . 27
7.2 Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . 28
7.3 Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.4 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.5 Limitations on Indemnification . . . . . . . . . . . . . . . . 34
7.6 Sharing of Amounts Recovered from Working Capital and Claims
Escrow Account . . . . . . . . . . . . . . . . . . . . . . . . 34
7.7 Exclusive Remedy . . . . . . . . . . . . . . . . . . . . . . . 36
7.8 Actual Damages . . . . . . . . . . . . . . . . . . . . . . . . 36
7.9 Treatment of Payments. . . . . . . . . . . . . . . . . . . . . 37
7.10 Assignment of Claim for Breach . . . . . . . . . . . . . . . . 37
ARTICLE VIII
GENERAL . . . . . . . . . . . . . . 37
8.1 Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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8.2 Amendments; Waivers. . . . . . . . . . . . . . . . . . . . . . 37
8.3 Schedules; Exhibits; Integration . . . . . . . . . . . . . . . 38
8.4 Best Efforts; Further Assurances . . . . . . . . . . . . . . . 38
8.5 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 38
8.6 No Assignment. . . . . . . . . . . . . . . . . . . . . . . . . 38
8.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.9 Publicity and Reports. . . . . . . . . . . . . . . . . . . . . 39
8.10 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . 39
8.11 Parties in Interest. . . . . . . . . . . . . . . . . . . . . . 40
8.12 Performance by Subsidiary. . . . . . . . . . . . . . . . . . . 40
8.13 Notices and Payment Instructions . . . . . . . . . . . . . . . 40
8.14 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.15 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.16 Attorney's Fees. . . . . . . . . . . . . . . . . . . . . . . . 41
8.17 Representation By Counsel . . . . . . . . . . . . . . . . . . 41
8.18 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . 41
8.19 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.20 Knowledge Convention . . . . . . . . . . . . . . . . . . . . . 42
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SCHEDULES
Schedule 1.5A [Reserved]
Schedule 1.5B Net Working Capital Calculation
Schedule 3.1 Organization and Good Standing
Schedule 3.2 Company Stock
Schedule 3.3 No Conflicts
Schedule 3.4 Financial Statements; Changes; Contingencies
Schedule 3.5 Taxes and Tax Returns
Schedule 3.6 Material Contracts
Schedule 3.7 Real and Personal Property; Title to Property; Leases
Schedule 3.9 Legal Proceedings and Certain Labor Matters
Schedule 3.11 Permits
Schedule 3.13 Dividends and Other Distributions
Schedule 3.14 Employee Benefits
Schedule 3.14A Employee Pension Benefit Plans
Schedule 3.14B Employee Pension Benefit Plans Subject to Title IV Plans
Schedule 3.14C Multiemployer Plans
Schedule 3.15 Environmental Matters
Schedule 3.16 Certain Interests
Schedule 3.18 Insurance
EXHIBITS
Exhibit D Secondary Escrow Agreement
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement is entered into as of June 3, 1997, by
and among Florida Logos, Inc., a Florida corporation ("SELLER"), Universal
Outdoor, Inc., an Illinois corporation ("BUYER"); The Lamar Corporation, a
Louisiana Corporation ("LAMAR"), a party hereto for the limited purpose of
making certain warranties, representations, agreements and indemnities and
Lamar Advertising Company, a Delaware Corporation as Guarantor ("GUARANTOR").
R E C I T A L S
WHEREAS, an Affiliate of Seller, Lamar, pursuant to a Stock Purchase
Agreement (the "Penn Agreement") dated as of February 7, 1996 by and among Lamar
Advertising Company and (i) the owners of all of the capital stock of Appleton,
Inc., a Delaware corporation ("Appleton"); and (ii) the owners of all of the
capital stock of Penn Advertising, Inc. ("Penn") other than Appleton, purchased
of all of the issued and outstanding capital stock of Penn and Appleton.
Hereinafter the owners prior to the purchase by Lamar of all of the capital
stock of Appleton are referred to as the "Appleton Sellers" and the owners prior
to the purchase by Lamar of all of the capital stock of Penn except for Appleton
are referred to as the "Penn Sellers" (Collectively the Penn Sellers and the
Appleton Sellers are referred to as the "Penn Agreement Sellers"). A copy of the
Penn Agreement has previously been provided to Buyer.
WHEREAS, as a result of the closing of the Penn Agreement, Penn
Advertising of Baltimore, Inc. (the "COMPANY") became a wholly-owned
second-tier subsidiary of Lamar, whose direct parent was Penn.
WHEREAS, as a result of an Act of Exchange dated May 1, 1997 by and
between Lamar Advertising of Penn, Inc. (the current name of Penn) and Seller,
Company became a wholly-owned subsidiary of Seller.
WHEREAS, Seller desires to sell, and Buyer desires to buy, all of the
issued and outstanding capital stock of the Company (the "Purchased Stock") for
the consideration described herein.
WHEREAS, Seller and Lamar intend to pass-through to Buyer first charge
on a portion of certain Escrow Accounts created pursuant to the Penn Agreement;
and
WHEREAS, Buyer has performed certain due diligence and business
investigations with respect to the Company, with the intention that Buyer form
its own conclusions regarding the condition and value of the business, property,
liabilities, contracts and related matters of the Company pursuant to the
parties' express intention that the transactions contemplated hereunder be with
the limited representations and warranties by Seller as specifically set forth
herein.
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AGREEMENT
In consideration of the mutual promises contained herein and intending
to be legally bound the parties agree as follows:
ARTICLE I
DEFINITIONS/PURCHASE & SALE/CLOSING
1.1 DEFINITIONS.
As used in this Agreement and the Exhibits and Schedules delivered
pursuant to this Agreement, the following definitions shall apply.
"ACTION" means any action, complaint, petition, investigation, suit
or other proceeding, whether civil or criminal, in law or in equity, or
before any arbitrator or Governmental Entity.
"ADVERTISER EFFECT" means any and all legal, financial, or other
effects, on or to this Agreement, the Transactions, the Company, the Business,
the Seller, Lamar, the Guarantor, the Buyer or any of their shareholders,
Affiliates or Associates, that may arise from or are in any way related to any
public or non-public discussion, announcement, development, settlement, Order or
change in status of any nature or type regarding or relating to any Action or
potential Action, or negotiation concerning any such Actions, which discusses,
relates to, concerns, or actually results in any voluntary or non-voluntary
cessation of or a legal ban on the use of the outdoor advertising services of
any Person, including Seller or Company, by any Person or group of Persons.
"AFFILIATE" means a Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, a specified Person.
"AGREEMENT" means this Stock Purchase Agreement by and among Buyer and
Seller as amended or supplemented together with all Exhibits and Schedules
attached or incorporated by reference.
"APPLETON" means Appleton, Inc.
"APPROVAL" means any approval, authorization, consent, qualification
or registration, or any waiver of any of the foregoing, required to be obtained
from, or any notice, statement or other communication required to be filed with
or delivered to, any Governmental Entity or any other Person.
"AREA" means the area in which the Business is conducted on the
Closing Date.
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"ASSOCIATE" of a Person means:
(i) a corporation or organization (other than the Company or a
party to this Agreement) of which such person is an officer or partner or is,
directly or indirectly, the beneficial owner of 10% or more of any class of
equity securities;
(ii) any trust or other estate in which such person has a
substantial beneficial interest or as to which such person serves as trustee or
in a similar capacity; and
(iii) any relative or spouse of such person or any relative of
such spouse who has the same home as such person or who is a director or officer
of the Company or any of its Affiliates.
"BUSINESS" means the business of the Company, and shall be deemed to
include all of the following aspects of such business: income, operations,
condition (financial or other), and assets and properties (including without
limitation goodwill).
"BUYER" has the meaning set forth in the Preamble hereto.
"BUYER 11.5(b) CLAIMS" has the meaning as set forth in Section 7.6(a)
hereof.
"BUYER'S AUDITORS" means Price Waterhouse, independent public
accountants to Buyer.
"BUYER CLAIMS ESCROW ACCOUNT PORTION" is defined in section 7.6(b).
"BUYER NET WORKING CAPITAL" is defined in section 1.5(a).
"BUYER TARGET WORKING CAPITAL" means $1,250,000.00.
"CLOSING" means the consummation of the purchase and sale of the
Purchased Stock under this Agreement as described in Section 1.4.
"CLOSING DATE" means the date of the Closing.
"CLOSING DATE BALANCE SHEET" has the meaning set forth in Section
1.5(a).
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY" has the meaning set forth in the Recitals to this Agreement.
"COMPANY'S AUDITORS" means, independent accountants to Company.
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"CONTRACT" means any agreement, arrangement, bond, commitment,
franchise, indemnity, indenture, instrument, lease, license or understanding,
whether or not in writing.
"CURRENT ASSETS" means those categories of items identified as current
assets in Schedule 1.5B to the Penn Agreement, determined in accordance with
GAAP, consistently applied with past practices of the Company, EXCEPT THAT,
Working Capital, may, at Seller's option, not include any cash or marketable
securities.
"CURRENT LIABILITIES" means those categories of items identified as
current liabilities in Schedule 1.5B to the Penn Agreement, determined in
accordance with GAAP, consistently applied with past practices of the Company.
"DISCLOSURE SCHEDULES" means the Disclosure Schedules pursuant to the
Penn Agreement.
"ENCUMBRANCE" means mortgages, pledges, liens, claims, charges,
security interests, options, hypothecations, easements, restrictions (on
transfer, voting or otherwise) or conditional sale or other restriction
agreements, or other encumbrances.
"ENVIRONMENTAL LAWS" has the meaning set forth in Section 3.15.
"EQUITY SECURITIES" means any capital stock or other equity interest
or any securities convertible into or exchangeable for capital stock or any
other rights, warrants or options to acquire any of the foregoing securities.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the related regulations and published interpretations.
"ERISA AFFILIATE" has the meaning set forth in Section 3.14(c).
"ESCROW ACCOUNTS" means the Escrow Accounts as defined in the Penn
Agreement.
"ESCROW AGENT" means the Escrow Agent as defined in the Penn
Agreement.
"ESCROW AGREEMENT" means that certain Escrow Agreement executed and
delivered pursuant to the Penn Agreement.
"ESCROW FUND" means the Escrow Fund as defined in the Penn Agreement.
"FINANCIAL STATEMENTS" has the meaning set forth in Section 3.4(a).
"FIRST REPRESENTATIVE" has the meaning set forth in Section 12.13 of
the Penn Agreement.
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"GAAP" means generally accepted accounting principles as in effect from
time to time.
"GOVERNMENTAL ENTITY" means any government or any agency, bureau,
board, commission, court, department, official,, political subdivision, tribunal
or other instrumentality of any government, whether federal, state or local,
domestic or foreign.
"HSR APPROVAL" means the final expiration of any applicable waiting
period, or the early termination by the appropriate governmental authorities of
any such waiting period, pursuant to the Hart-Scott-Rodino Act.
"HART-SCOTT-RODINO ACT" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the related regulations and published
interpretations.
"INDEMNIFIABLE CLAIM" means any Loss for or against which any party is
entitled to indemnification under this Agreement; "INDEMNIFIED PARTY" means the
party entitled to indemnity hereunder; and "INDEMNIFYING PARTY" means the party
obligated to provide indemnification hereunder.
"INTANGIBLE PROPERTY" means any trade secret, secret process or other
confidential information or know-how and any and all Marks.
"IRS" means the Internal Revenue Service or any successor entity.
"LAW" means any constitutional provision, statute or other law, rule,
regulation, or interpretation of any Governmental Entity and any Order.
"LOSS" means any action, cost, damage, disbursement, expense,
liability, loss, deficiency, diminution in value, obligation, penalty or
settlement of any kind or nature, whether foreseeable or unforeseeable,
including but not limited to, interest or other carrying costs, penalties,
legal, accounting and other professional fees and expenses incurred in the
investigation, collection, prosecution and defense of claims and amounts paid in
settlement, that may be imposed on or otherwise incurred or suffered by the
specified person.
"MARK" means any brand name, copyright, patent, service mark,
trademark, tradename, and all registrations or application for registration of
any of the foregoing.
"MATERIAL ADVERSE EFFECT" means a fact, circumstance or event which
has had or would reasonably be expected to have, directly or indirectly, a
material adverse effect on the Business; PROVIDED, HOWEVER, any Advertiser
Effect shall not for any purpose hereunder be considered a Material Adverse
Effect.
"MATERIAL CONTRACT" has the meaning set forth in Section 3.6.
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"NET TAX BENEFIT" has the meaning set forth in Section 7.3(m).
"NET WORKING CAPITAL" means Current Assets less Current Liabilities.
"ORDER" means any decree, injunction, judgment, order, ruling,
assessment or writ.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PENN" means Penn Advertising, Inc.
"PENN AGREEMENT SELLERS" means all of the Penn Sellers and the
Appleton Sellers collectively.
"PERMIT" means any license, permit, franchise, certificate of
authority, or order, or any waiver of the foregoing, required to be issued by
any Governmental Entity.
"PRE-CLOSING TAXES" has the meaning set forth in Section 7.3(h).
"PERSON" means an association, a corporation, an individual, a
partnership, a trust, a limited liability company or any other entity or
organization, including a Governmental Entity.
"PURCHASE PRICE" has the meaning set forth in Section 1.3.
"PURCHASED STOCK" means the shares of stock being sold hereunder,
comprised of all of the issued and outstanding shares of the capital stock of
the Company.
"SECOND REPRESENTATIVE" has the meaning set forth in Section 12.13
of the Penn Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLER" has the meaning set forth in the Preamble hereto.
"SELLER 11.5(b) CLAIMS" has the meaning as set forth in Section 7.6(a)
hereof.
"SELLER CLAIMS ESCROW ACCOUNT PORTION" is defined in Section 7.6(c).
"SELLER NET RECOVERY" is defined in Section 7.1(b).
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"SELLER REPRESENTATIVES" has the meaning set forth in Section 12.13
of the Penn Agreement.
"SUBSIDIARY" means, with respect to Penn, any Person in which Penn has
a direct or indirect voting equity or voting ownership interest equal to or in
excess of 50%.
"TAX" means any foreign, federal, state, county or local income, sales
and use, excise, franchise, real and personal property, transfer, gross receipt,
capital stock, production, business and occupation, disability, employment,
payroll, severance or withholding tax or charge imposed by any Governmental
Entity, any interest and penalties (civil or criminal) related thereto or to the
nonpayment thereof, and any Loss in connection with the determination,
settlement or litigation of any Tax liability.
"TAX BENEFIT" has the meaning set forth in Section 7.3.
"TAX REIMBURSEMENT AMOUNT" has the meaning set forth in Section 7.3.
"TAX RETURN" means a report, return or other information required to
be supplied to a Governmental Entity with respect to Taxes including, where
permitted or required, combined or consolidated returns for any group of
entities that includes the Company or its Subsidiary.
"TRANSACTIONS" means any and all of the transactions, including
without limitation the conveyance of the Purchased Stock by Seller in return for
the payment of the Purchase Price by Buyer, contemplated by or arising from this
Agreement.
"WARN ACT" means the Worker Adjustment and Retraining Notification Act
of 1988, 29 U.S.C 2101 et seq., as amended.
"WORKING CAPITAL AND CLAIMS ESCROW ACCOUNT" means the Working Capital
and Claims Escrow Account as defined in the Penn Agreement.
"WORKING CAPITAL ESCROW ACCOUNT" means the Working Capital Escrow
Account as defined in the Penn Agreement.
1.2 TRANSFER OF PURCHASED STOCK.
Seller covenants and agrees with Buyer that, subject to the terms and
conditions of this Agreement, on the Closing Date, Seller shall sell and deliver
to Buyer, and Buyer shall purchase, all right, title, and interest, legal and
equitable, in and to the Purchase Stock then owned by Seller in exchange for
payment of the Purchase Price in accordance with Section 1.3 hereof. Seller
shall deliver the certificates evidencing the Purchased Stock owned by Seller to
Buyer at the Closing. The certificates will be properly endorsed for transfer to
or accompanied by a duly executed stock power in favor of Buyer or its nominee
as Buyer may have directed
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prior to the date hereof, otherwise in a form acceptable for transfer on the
books of the Company, as the case may be. Seller will pay any Taxes payable with
respect to the transfer of the Purchased Stock.
1.3 PURCHASE OF THE PURCHASED STOCK BY BUYER/PURCHASE PRICE.
Subject to the terms and conditions of this Agreement, Buyer agrees to
(i) acquire the Purchased Stock for an aggregate amount of $46,500,000 (the
"PURCHASE PRICE") and (ii) pay to Seller or its assigns in immediately available
funds the Purchase Price at the Closing.
1.4 THE CLOSING.
Delivery of the Purchased Stock and payment of the Purchase Price (the
"CLOSING") shall take place by wire transfer, by fax and by overnight courier.
The Closing shall be effective at 5:00 pm, central time, on the Closing Date.
Unless the parties otherwise mutually agree in writing, the Closing shall occur
on June 3, 1997.
1.5 PURCHASE PRICE ADJUSTMENT.
Following the Closing, the Purchase Price shall be adjusted as
provided herein to reflect changes in Buyer Net Working Capital from Buyer
Target Working Capital.
(a) Within thirty 30 days following the closing of the this
Agreement, Seller shall cause to be prepared and delivered to Buyer a balance
sheet for Company as of May 31, 1997 (the "CLOSING DATE BALANCE SHEET") along
with a statement setting forth the Net Working Capital as calculated based on
the Closing Date Balance Sheet ("Buyer Net Working Capital"), and the amount, if
any, owing by either Seller or Buyer as a result of the Buyer Net Working
Capital as calculated based on the Closing Date Balance Sheet being either less
or more, respectively than Buyer Target Working Capital. The Closing Date
Balance Sheet shall be prepared in accordance with GAAP, consistently applied
with past practices of the Company. Buyer shall cause the Company and its
employees and agents to assist the Seller in the preparation of the Closing Date
Balance Sheet.
(b) Within 20 days after receipt of the Closing Date Balance Sheet,
Buyer shall, in a written notice to Seller, either accept the Closing Date
Balance Sheet or describe in reasonable detail any proposed adjustments and the
reasons therefor. Buyer agrees that the proposed adjustments, if any, will not
involve changes in the methodology of the practices of the Company which have
been consistently applied in determining the carrying value of the assets and
liabilities (including valuation accounts, pools and reserves and recognition of
contingent liabilities) as set forth in the balance sheet included in the
December 31, 1996 unaudited financial statements of the Company. Any such notice
of proposed adjustment shall be effective only if the Company receives a letter
from Buyer's Auditors to the effect that such proposed adjustments are requried
in order to state the recorded assets and liabilities in accordance with GAAP,
consistently applied with past practices of Company, in accordance with
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the provisions of this Agreement, and shall include copies of all detailed
calculations and supporting work papers for such proposed adjustments. If Seller
has not received such notice of proposed adjustments within such 20 day period,
Buyer will be deemed irrevocably to have accepted the Closing Date Balance
Sheet.
(c) Buyer and Seller shall negotiate in good faith to resolve any
disputes over any proposed adjustments to the Closing Date Balance Sheet,
provided, that if any such dispute is not resolved within 10 days following
Seller's receipt of the proposed adjustments: (i) if an accounting firm has been
or will be engaged to resolve any disputes pursuant to Section 1.5 of the Penn
Agreement, subject to the consent of Buyer, which consent may be withheld in its
sole discretion, such accounting firm shall be engaged to resolve such disputes;
or (ii) if no accounting firm has been or will be engaged pursuant to Section
1.5 of the Penn Agreement, or if Buyer has not consented to such engagement as
required by clause (i) above, Buyer and Seller shall jointly select and engage
within 5 days a national independent public accounting firm to resolve such
disputes. The resolution of such disputes by such accounting firm, however
selected, shall be final and binding and not subject to review or challenge of
any kind. Such accounting firm shall conduct an audit of those items in the
Closing Date Balance Sheet subject to dispute and deliver written notice to each
of Buyer and Seller within 30 days after its engagement, setting forth what
adjustments, if any, to the Closing Date Balance Sheet are required in
accordance with GAAP, consistently applied with past practices of the Company,
to resolve any such disputes; provided that no such report shall require any
adjustments if all such adjustments would result in an aggregate increase or
decrease in Buyer Net Working Capital of less than $25,000. If the aggregate
amount of the adjustments required by such report results in any reduction in
Buyer Net Working Capital, Seller shall pay a portion of the fees and expenses
of such accounting firm based on the ratio that the aggregate amount of such
reduction in Buyer Net Working Capital bears to the aggregate amount of all
disputed items. Buyer shall be responsible for all other fees and expenses of
such accounting firm.
(d) Upon acceptance of the Closing Date Balance Sheet by Buyer or the
resolution of any disputes, (i) if the Buyer Net Working Capital as calculated
based on the Company Closing Date Balance Sheet is greater than Buyer Target
Working Capital by more than $125,000.00, Buyer promptly, but no later than 5
days after such acceptance, shall pay to Seller the amount by which the
difference between Buyer Net Working Capital and Buyer Target Working Capital
exceeds $125,000.00, together with interest thereon from the Closing Date to the
date of payment thereof as determined below, and (ii) if the Buyer Net Working
Capital as calculated based on the Company Closing Date Balance Sheet is less
than Buyer Target Working Capital by more than $125,000, Seller promptly, but no
later than 5 days after such acceptance, shall pay to Buyer the amount by which
the difference between Buyer Target Working Capital and Buyer Net Working
Capital exceeds $125,000.00, together with interest thereon from the Closing
Date to the date of payment thereof as determined below.
(e) For the purposes of this Section 1.5, interest will be payable at
the "prime" rate, as announced by The Chase Manhattan Bank from time to time to
be in effect, or, if that rate is no longer established or published, a
comparable interest rate. For purposes
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of this Section 1.5, interest shall be calculated based on a 365 day year and
the actual number of days elapsed.
1.6 JUNE 1ST THROUGH 3RD. Beginning on June 1, 1997, all income and
expense of the Company shall be for the benefit or obligation of the Buyer.
ARTICLE II
REPRESENTATIONS AND WARRANTIES REGARDING SELLER, LAMAR,
GUARANTOR, THE COMPANY AND THE PURCHASED STOCK
2.1 ORGANIZATION.
Seller represents and warrants that: (i) Seller is a corporation,
duly organized, validly existing and in good standing under the laws of
Florida; and (ii) Seller has all requisite corporate power and authority and
legal right to own its properties and to carry on its business. Lamar
represents and warrants that: (i) Lamar is a corporation, duly organized,
validly existing and in good standing under the laws of Louisiana; and (ii)
Lamar has all requisite corporate power and authority and legal right to own
its properties and to carry on its business. Guarantor represents and
warrants that: (i) Guarantor is a corporation, duly organized, validly
existing and in good standing under the laws of Delaware; and (ii) Guarantor
has all requisite corporate power and authority and legal right to own its
properties and to carry on its business.
2.2 AUTHORIZATION.
(a) Seller represents and warrants:
The execution, delivery and performance of this Agreement by Seller,
and the transactions contemplated hereby, have been duly and validly authorized
by all necessary corporate action on the part of Seller. This Agreement has been
duly and validly executed and delivered by Seller and constitutes the legally
valid and binding obligation of Seller, enforceable against it in accordance
with its terms except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws and equitable
principles relating to or limiting creditors rights generally. Seller has all
power and authority necessary to transfer the Purchased Stock.
(a) Lamar represents and warrants:
The execution, delivery and performance of this Agreement by Lamar,
and the transactions contemplated hereby, have been duly and validly
authorized by all necessary corporate action on the part of Lamar. This
Agreement has been duly and validly executed and delivered by Lamar and
constitutes the legally valid and binding obligation of Lamar, enforceable
against it in accordance with its terms except as such enforceability may be
limited
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by bankruptcy, insolvency, reorganization, moratorium and other similar laws and
equitable principles relating to or limiting creditors rights generally.
(c) Guarantor represents and warrants:
The execution, delivery and performance of this Agreement by
Guarantor, and the transactions contemplated hereby, have been duly and validly
authorized by all necessary corporate action on the part of Guarantor. This
Agreement has been duly and validly executed and delivered by Guarantor and
constitutes the legally valid and binding obligation of Guarantor, enforceable
against it in accordance with its terms except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other similar
laws and equitable principles relating to or limiting creditors rights
generally.
2.3 NO CONFLICTS; CONSENTS.
(a) Seller represents and warrants that:
The execution, delivery and performance of this Agreement by Seller,
and the performance of the transactions contemplated hereby, will not (a)
violate, accelerate, terminate or conflict with the provisions of, or constitute
a breach or default (whether upon lapse of time and/or the occurrence of any act
or event or otherwise) under, the charter documents or by-laws of Seller or any
of its Subsidiaries, or any Contract of Seller, or any of its Subsidiaries,
relating to its investment in the Company or to which the Purchased Stock is
bound, (b) result in the imposition of any Encumbrance against the Purchased
Stock, any asset or property of Seller, or any of its Subsidiaries, or (c)
violate or conflict with any Law, order, judgment, injunction or decree
applicable to Seller, or any of its Subsidiaries, where such violation would
have a material adverse effect on the business condition and results of
operations of Seller, or any of its Subsidiaries, or the ability of Seller, or
any of its Subsidiaries, to perform its obligations hereunder. No registrations,
filings, applications, notices, consents, approvals, orders, qualifications,
authorizations or waivers are required to be made, filed, given or obtained by
the Seller or any of its Subsidiaries (or, by reason of facts pertaining to
Seller, any of its Subsidiaries or the Company, on the part of Buyer) with, to
or from any Persons (including Governmental Entities) in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for filings under the Hart-Scott-Rodino Act.
(b) Lamar represents and warrants that:
The execution, delivery and performance of this Agreement by Lamar,
and the performance of the transactions contemplated hereby, will not (a)
violate, accelerate, terminate or conflict with the provisions of, or constitute
a breach or default (whether upon lapse of time and/or the occurrence of any act
or event or otherwise) under, the charter documents or by-laws of Lamar or any
of its Subsidiaries, or any Contract of Lamar, or any of its Subsidiaries,
relating to its investment in the Company or to which the Purchased Stock is
bound, (b) result
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in the imposition of any Encumbrance against the Purchased Stock, any asset
or property of Lamar, or any of its Subsidiaries, or (c) violate or conflict
with any Law, order, judgment, injunction or decree applicable to Lamar, or
any of its Subsidiaries, where such violation would have a material adverse
effect on the business condition and results of operations of Lamar, or any
of its Subsidiaries, or the ability of Lamar, or any of its Subsidiaries, to
perform its obligations hereunder. No registrations, filings, applications,
notices, consents, approvals, orders, qualifications, authorizations or
waivers are required to be made, filed, given or obtained by Lamar or any of
its Subsidiaries (or, by reason of facts pertaining to Lamar, any of its
Subsidiaries or the Company, on the part of Buyer) with, to or from any
Persons (including Governmental Entities) in connection with the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for filings under the Hart-Scott-Rodino Act.
(a) Guarantor represents and warrants that:
The execution, delivery and performance of this Agreement by
Guarantor, and the performance of the transactions contemplated hereby, will not
(a) violate, accelerate, terminate or conflict with the provisions of, or
constitute a breach or default (whether upon lapse of time and/or the occurrence
of any act or event or otherwise) under, the charter documents or by-laws of
Guarantor or any of its Subsidiaries, or any Contract of Guarantor, or any of
its Subsidiaries, relating to its investment in the Company or to which the
Purchased Stock is bound, (b) result in the imposition of any Encumbrance
against the Purchased Stock, any asset or property of Guarantor, or any of its
Subsidiaries, or (c) violate or conflict with any Law, order, judgment,
injunction or decree applicable to Guarantor, or any of its Subsidiaries, where
such violation would have a material adverse effect on the business condition
and results of operations of Guarantor, or any of its Subsidiaries, or the
ability of Guarantor, or any of its Subsidiaries, to perform its obligations
hereunder. No registrations, filings, applications, notices, consents,
approvals, orders, qualifications, authorizations or waivers are required to be
made, filed, given or obtained by the Guarantor or any of its Subsidiaries (or,
by reason of facts pertaining to Guarantor, any of its Subsidiaries or the
Company, on the part of Buyer) with, to or from any Persons (including
Governmental Entities) in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby, except
for filings under the Hart-Scott-Rodino Act.
2.4 TITLE TO PURCHASED STOCK.
Seller represents and warrants that:
At the Closing, the Seller shall be the sole owner of the Purchased
Stock and shall own the Purchased Stock beneficially and of record, free and
clear of any Encumbrance. As of the Closing, the Purchased Stock will constitute
all of the issued and outstanding Equity Securities of the Company. As of the
Closing Date, the authorized capital stock of the Company will consist of 3,000
shares of Voting Common Stock, $1.00 par value, of which 1,000 shares will be
issued and outstanding. As of the Closing, there will be no outstanding
Contracts or
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other rights to subscribe for or purchase, or Contracts or other obligations to
issue or grant any rights to acquire, any Equity Securities of Company, or to
restructure or recapitalize Company. As of the Closing, there will be no
outstanding Contracts of Company to repurchase, redeem or otherwise acquire any
Equity Securities of the Company. All Equity Securities of Company are duly
authorized, validly issued and are fully paid and nonassessable and issued in
accordance with all applicable federal and state securities laws. As of the
Closing, there will be no preemptive rights in respect of any Equity Securities
of Company. Any Equity Securities of Company which were issued and reacquired by
the Company were so acquired (and, if reissued, so reissued) in compliance with
all applicable Laws, and Company has no outstanding obligation or liability with
respect thereto. Other than as contemplated by this Agreement and, except for
the Penn Agreement, the Seller and Penn are not parties to, or bound by, voting
trusts, stockholder agreements, proxies or other agreements and understandings
in effect with respect to the voting or the transfer of the Purchased Stock. At
the Closing, Buyer will acquire good and marketable title to and complete
ownership of such Purchased Stock to be sold hereunder, free of any
Encumbrance.
2.5 COMPANY DEBT.
Seller warrants to Buyer that Company shall be free of any
indebtedness that is not taken into account in calculating Buyer Net Working
Capital pursuant to Section 1.5 above.
2.6 NO BROKERS OR FINDERS.
Each of Seller, Lamar, and Guarantor represents and warrants that no
agent, broker, finder or investment or commercial banker, or other Person or
firms engaged by or acting on behalf of Seller, Lamar, Guarantor or the Company
or their Affiliates in connection with the negotiation, execution or performance
of this Agreement or the transactions contemplated by this Agreement, is or will
be entitled to any broker's or finder's or similar fees or other commissions as
a result of this Agreement or such transactions.
2.7 LEGAL PROCEEDINGS.
Seller represents and warrants that:
There is no Order or Action pending or to Seller's knowledge,
threatened against or affecting Seller or the Purchased Stock that individually
or when aggregated with one or more other Orders or Actions has had, or if
adversely determined could have, or might reasonably be expected to have a
material adverse effect on Seller's ability to perform this Agreement or any
other aspect of the transactions contemplated by this Agreement except for the
pre-merger investigation of the U.S. Department of Justice concerning the
transactions contemplated by this Agreement opened as a result of Buyer and
Seller's Hart-Scott-Rodino Act filings. Notwithstanding anything to the contrary
in this Section, Buyer agrees that Seller, Lamar and Guarantor shall have no
obligation or liability whatsoever to Buyer pursuant to this Section for any
existing or threatened Order or Action related to any Advertiser Effect.
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2.8 ACCURACY OF INFORMATION.
To Seller's knowledge, none of the written information supplied by or
on behalf of Seller to any Person for inclusion in, and included in, any
document or application filed with any Governmental Entity in connection with
the transactions contemplated by this Agreement contained any untrue statement
of a material fact, or omitted any material fact required to be stated therein,
in light of the circumstances under which they were made, not misleading. All
documents required to be filed by Seller with any Governmental Entity in
connection with this Agreement or the transactions contemplated by this
Agreement will comply in all material respects with the provisions of applicable
law.
2.9 REPRESENTATIONS ON TAXES.
Seller represents that all taxes related to items 4 and 5 on Schedule
3.5 hereto have been timely paid in full.
ARTICLE III
ADDITIONAL REPRESENTATIONS AND WARRANTIES REGARDING THE
COMPANY
Except as otherwise indicated in the Disclosure Schedules (such
particular schedules referred to in this Article being those original schedules
and updates attached to the Penn Agreement, and also attached hereto and made
part hereof) Seller and Lamar represent, warrant, and agree as follows, each
severally and not jointly, as to itself and to Company, as of April 1, 1997
(except as of some other date specifically set forth below).
3.1 ORGANIZATION AND GOOD STANDING.
Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Company has all requisite
corporate power and authority and legal right to own its properties and to carry
on its Business as the same is now being conducted and as the same will be
conducted upon the consummation of the Closing. Company is duly licensed,
qualified to do business and in good standing in each jurisdiction except where
the failure to be so licensed or qualified would not have a Material Adverse
Effect.
3.2 COMPANY STOCK.
As of the Closing Date, the Purchased Stock will constitute all of the
issued and outstanding Equity Securities of Company. As of the Closing Date, the
authorized capital stock of Company will consist of 3000 shares of Voting Common
Stock, $1.00 par value, of which 1,000 shares will be issued and outstanding. As
of the Closing Date, there will be no outstanding Contracts or other rights to
subscribe for or purchase, or Contracts or other obligations to issue or grant
any rights to acquire, any Equity Securities of Company, or to restructure or
recapitalize Company. As of the Closing Date, there will be no outstanding
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Contracts of Penn or Company to repurchase, redeem or otherwise acquire any
Equity Securities of the Company. All Equity Securities of Company are duly
authorized, validly issued and are fully paid and nonassessable and issued in
accordance with all applicable federal and state securities laws. As of the
Closing Date, there will be no preemptive rights in respect of any Equity
Securities of Company. Any Equity Securities of Company which were issued and
reacquired by Penn or the Company were so reacquired (and, if reissued, so
reissued) in compliance with all applicable Laws, and Company has no outstanding
obligation or liability with respect thereto.
3.3 NO CONFLICTS.
The execution, delivery and performance of this Agreement by Seller
will not violate, or constitute a breach or default (whether upon lapse of time
and/or the occurrence of any act or event or otherwise) under, the charter
documents or by-laws of Company, result in the imposition of any material
Encumbrance against any material asset or properties of Company, or violate any
Law applicable to the Company or the Business where such violation would have a
Material Adverse Effect. Except as set forth in Schedule 3.3, the execution,
delivery and performance of this Agreement by Seller will not require any
consent, waiver, authorization or approval of, or the making of any filing with
or giving of notice to, any Person or Governmental Entity (other than as
required under the Hart-Scott-Rodino Act), except for such consents, waivers,
authorizations or approvals which the failure to obtain would not reasonably be
expected to have a Material Adverse Effect.
3.4 FINANCIAL STATEMENTS; CHANGES; CONTINGENCIES.
(a) AUDITED FINANCIAL STATEMENTS. Seller has delivered to Buyer the
consolidated balance sheets for Penn and its Subsidiary at December 31, 1994 and
December 31, 1995 and the related consolidated statements of income and cash
flow for the years then ended. Such balance sheets and statements of income and
cash flow (collectively, the "FINANCIAL STATEMENTS") have been examined by the
Penn Auditors whose reports thereon are included with the Financial Statements.
The Financial Statements have been prepared in conformity with GAAP consistently
applied, and present fairly, in all material respects, the information set forth
therein. Since December 31, 1995, there has been no material change in any of
the significant accounting policies, practices or procedures of Penn and its
Subsidiary.
(b) UNAUDITED FINANCIAL STATEMENTS. Seller has provided to Buyer
copies of the unaudited consolidated and consolidating balance sheet for Penn
and its Subsidiary as of December 31, 1996 and the consolidated and
consolidating statements of income and the consolidated statement of cash flows
for the year then ended. Such financial statements have been prepared in
conformity with GAAP consistently applied with past practices of Penn, provided
that such financial statements do not include footnotes, and present fairly, in
all material respects, the consolidated financial position of Penn and its
Subsidiary as of such date and the consolidated results of operations of Penn
and its Subsidiary for such period.
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(c) NO MATERIAL ADVERSE CHANGES. Except as set forth in Schedule
3.4, since December 31, 1996, there has not been, occurred or arisen:
(i) any change in or event affecting Penn or its Subsidiary
that has had or would have a Material Adverse Effect, other than any
change or event affecting economic conditions generally or changes
affecting generally the industry in which the Company operates,
(ii) any strike or other labor dispute, or
(iii) any casualty, loss, damage or destruction (whether or not
covered by insurance) of any material property of Penn that has
involved or may involve a loss to Penn of more than $100,000 in excess
of applicable insurance coverage.
(d) NO OTHER LIABILITIES OR CONTINGENCIES. Neither Penn nor its
Subsidiary has any material liabilities required to be disclosed in
accordance with GAAP which have not been disclosed in such December 31, 1996
financial statements set forth in clause (b) above, except for liabilities
that were incurred after December 31, 1996 in the ordinary course of business
or as set forth in Schedule 3.4; PROVIDED that such liabilities incurred in
the ordinary course of business have not had a Material Adverse Effect.
(e) NO REPRESENTATIONS REGARDING PROJECTIONS. Notwithstanding
anything to the contrary herein, Seller makes no representation or warranty with
respect to any projections contained in any materials provided to Buyer.
3.5 TAXES AND TAX RETURNS.
Except as set forth on Schedule 3.5, Penn or the Company has timely
filed or will file all required Tax Returns and have paid all Taxes due for
ail periods ending on or before the date hereof. All required Tax Returns,
including amendments to date, have been prepared in good faith without
negligence or willful misrepresentation and are complete and accurate in all
material respects. Adequate provision has been made in the books and records
of Penn or the Company, and to the extent required by GAAP consistently
applied with past practices of Penn and the Company, in the financial
statements referred to in Section 3.4 above or delivered or to be delivered
to Buyer, for all Taxes whether or not due and payable and whether or not
disputed. Company has not elected to be treated as a consenting corporation
under Section 341(f) of the Code. Except as set forth in Schedule 3.5, no
Governmental Entity has, during the past three years, examined or is in the
process of examining any Tax Return of Penn or the Company. Except as set
forth in Schedule 3.5, no Governmental Entity has proposed, asserted or
assessed or, to the best knowledge of such Seller, threatened to propose or
assert, any deficiency, assessment or claim for Taxes.
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3.6 MATERIAL CONTRACTS.
Schedule 3.6 lists each Contract to which Company is a party or to
which Company, or any of its properties is subject or by which any are bound,
that (a) after December 31, 1996 obligates Company to pay an amount of $100,000
or more, (b) represents a contract which is material to the Business, (c)
provides for an extension of credit other than consistent with normal credit
terms, (d) limits or restricts the ability of Company to compete or otherwise to
conduct its business in any manner or place or (e) provides for a guaranty or
indemnity by Company (each such Contract shall be deemed to be a "MATERIAL
CONTRACT"). True copies of the written agreements identified in Schedule 3.6
have been made available to Buyer. Each Material Contract is valid and
subsisting; Company has duly performed all its material obligations thereunder
to the extent that such obligations to perform have accrued; and except as set
forth in Schedule 3.6, no material breach or default, alleged material breach or
default, or event which would (with the passage of time, notice or both)
constitute a material breach or default thereunder by Company, or to Seller's
knowledge, any other party or obligor with respect thereto, has occurred or as a
result of the execution, delivery or performance of this Agreement will occur.
3.7 REAL AND PERSONAL PROPERTY; TITLE TO PROPERTY; LEASES.
Company has title to or other right to use, free of Encumbrances, all
items of real property, including fees (for which properties Company has good,
valid and merchantable title), leaseholds, easements and all other interests in
real property, and such other assets and properties that are material to the
Business, except for (a) Encumbrances consisting of liens for Taxes not yet due,
(b) other Encumbrances, defects or disputes with respect to leaseholds not
accounting, in the aggregate, for more than 2.5% of the gross revenue of Penn
and its Subsidiary for fiscal year 1996, and (c) other makers disclosed in
Schedule 3.7. All material tangible properties of Company are in a good state of
maintenance and repair (except for ordinary wear and tear) and are adequate for
the Business. All leasehold properties held by Company as lessee are held under
valid, binding and enforceable leases, subject only to such exceptions as are
not, in the aggregate, reasonably expected to have a Material Adverse Effect.
All of Company's outdoor advertising structures, panels and faces, and all
appurtenances thereto (a) are in existence, as is all other tangible property,
(b) meet the requirements of all existing applicable outdoor advertising
Contracts (including number of boards and illumination) and (c) to the knowledge
of Seller, were built and at such time were in conformity in all material
respects with all applicable Laws. All of the panels are legal and conforming,
or legal and non-conforming, and have valid state, county and city permits and
tags (if required).
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3.8 INTANGIBLE PROPERTY.
Company has complete rights to and ownership of all Intangible
Property required for use in connection with the Business, the absence of which
would have a Material Adverse Effect. Company has in all material respects
performed all obligations required to be performed by it, and is not in default
in any material respect under any Material Contract relating to any of the
foregoing. Neither such Seller nor Company has received any written notice to
the effect that the Intangible Property or any use by Company of any such
property conflicts with or allegedly conflicts with or infringes or allegedly
infringes the rights of any Person or that any such Intangible Property is owned
or alleged to be owned by any other Person.
3.9 LEGAL PROCEEDINGS AND CERTAIN LABOR MATTERS.
(a) LEGAL PROCEEDINGS. Except as set forth on Schedule 3.9, as of
the date hereof there is no Order or Action pending, or, to such Seller's
knowledge, threatened, against or affecting Company or any of its respective
properties or assets. Except as otherwise indicated on Schedule 3.9, no Order or
Action which is listed thereon if adversely determined is reasonably expected to
have a Material Adverse Effect.
(b) LABOR MATTERS. There is no organized labor strike, dispute,
slowdown or stoppage, or collective bargaining or unfair labor practice claim
(collectively, "LABOR MATTERS"), pending or to the best knowledge of Seller
threatened, against or affecting Company or the Business that if so determined
would reasonably be expected to have a Material Adverse Effect.
3.10 MINUTE BOOKS.
The minute books of Company accurately reflect all material actions
and proceedings taken to date by the respective shareholders and boards of
directors and committees of Company and its Subsidiary, and such minute books
contain true and complete copies of the charter documents of Company and all
related amendments. The stock record books of Company reflect accurately all
transactions in their respective capital stock of all classes.
3.11 PERMITS.
Except as set forth in Schedule 3.11, Company holds all Permits that
are required by any Governmental Entity to permit it to conduct its business as
now conducted, and all such Permits are valid and in full force and effect and
will remain so upon consummation of the transactions contemplated by this
Agreement in each case except where the failure to so hold or to be valid and in
full force and effect would not have a Material Adverse Effect. To Seller's
knowledge, no suspension, cancellation or
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termination of any of such Permits is threatened or imminent that could
reasonably be expected to have a Material Adverse Effect.
3.12 COMPLIANCE WITH LAW.
Company is organized and has conducted its business in accordance
with applicable Laws, and the forms, procedures and practices of Company are
in compliance with all such Laws, to the extent applicable, the failure to so
conduct or the violation of which could reasonably be expected to have a
Material Adverse Effect (it being agreed that "legal non-conforming" signs
shall not be in violation of Law for purposes of this Section 3.12). Seller
neither has any information nor is aware of any facts indicating that any
Governmental Authority in the Area has declared a moratorium on the
construction of outdoor advertising displays.
3.13 DIVIDENDS AND OTHER DISTRIBUTIONS.
Except as set forth on Schedule 3.13, there has been no dividend or
other distribution of assets or securities whether consisting of money, property
or any other thing of value, declared, issued or paid to or for the benefit of
Penn or the Seller subsequent to December 31, 1996.
3.14 EMPLOYEE BENEFITS.
(a) EMPLOYEE BENEFIT PLANS, COLLECTIVE BARGAINING AND EMPLOYEE
AGREEMENTS AND SIMILAR ARRANGEMENTS.
(1) Schedule 3.14 lists all employee benefit plans and
collective bargaining, employment or severance agreements or other similar
arrangements to which Penn or its Subsidiary is a party or by which either of
them is bound, legally or otherwise, including, without limitation, (a) any
profit-sharing, deferred compensation, bonus, stock option, stock purchase,
pension, retainer, consulting, retirement, severance, welfare or incentive
plan, agreement or arrangement, (b) any plan, agreement or arrangement
providing for "fringe benefits" or perquisites to employees, officers,
directors or agents, including but not limited to benefits relating to
Company automobiles, clubs, vacation, child care, parenting, sabbatical, sick
leave, medical, dental, hospitalization, life insurance and other types of
insurance, (c) any employment agreement not terminable on 30 days (or less)
written notice, or (d) any other "employee benefit plan" (within the meaning
of Section 3(3) of ERISA).
(2) Seller has delivered to Buyer true and complete copies of
all documents and summary plan descriptions with respect to such plans,
agreements and arrangements, or summary descriptions of any such plans,
agreements or arrangements not otherwise in writing.
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(3) Penn and its Subsidiary are in material compliance with
the applicable provisions of ERISA (as amended through the date of this
Agreement), the regulations and published authorities thereunder, and all other
Laws applicable with respect to all such employee benefit plans, agreements and
arrangements. To the Penn Agreement Sellers' and the Seller's knowledge, there
are no Actions (other than routine claims for benefits) pending or threatened
against such plans or their assets, or arising out of such plans, agreements or
arrangements, and, to the Penn Agreement Sellers' and the Seller's knowledge, no
facts exist which could give rise to any such Actions that might have a material
adverse effect on such plans, agreements, or arrangements or a Material Adverse
Effect.
(4) Except as specified in Schedule 3.14, each of the plans,
agreements or arrangements can be terminated by Penn or by its Subsidiary within
a period of 30 days following the Closing Date, without payment of any
additional compensation or amount or the additional vesting or acceleration of
any such benefits.
(b) QUALIFIED PLANS.
(1) Schedule 3.14A itemizes all "employee pension benefit
plans" (within the meaning of Section 3(2) of ERISA) required to be scheduled
which are also stock bonus, pension or profit-sharing plans within the meaning
of Section 401(a) of the Code.
(2) Each such plan is qualified in form and operation under
Section 401(a) of the Code and each trust under each such plan is exempt from
tax under Section 501(a) of the Code. No event has occurred that will or could
give rise to disqualification or loss of tax-exempt status of any such plan or
trust under such sections. No event has occurred that will or could subject any
such plans to tax under Section 511 of the Code. No prohibited transaction
(within the meaning of Section 4975 of the Code) or party-in-interest
transaction (within the meaning of Section 406 of ERISA) that could give rise to
liability to the Penn, its Subsidiary or such plan has occurred with respect to
any of such plans.
(3) Seller has delivered to Buyer for each such plan copies
of the following documents: (i) the Form 5500 filed in the most recent plan
year, (ii) the most recent determination letter from the IRS, (iii) the
consolidated statement of assets and liabilities of such plan as of its most
recent valuation date, and (iv) the statement of changes in fund balance and in
financial position or the statement of changes in net assets available for
benefits under such plan for the most recently ended plan year. The financial
statements so delivered fairly present in all material respects the financial
condition and the results of operations of each such plan as of such dates.
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(c) TITLE IV PLANS
(1) Schedule 3.14B itemizes all plans required to be
scheduled which are also subject to Title IV of ERISA.
(2) With respect to each such plan in which Penn, its
Subsidiary or any trade or business (whether or not incorporated) that is a
member of a group of which Company is a member and which is under common control
within the meaning of Section 414 (b) and (c) of the Code ("ERISA AFFILIATE")
participates or has participated, (i) neither Penn not its Subsidiary nor any
ERISA Affiliate has withdrawn from such plan during a plan year in which it was
a "substantial employer" (as defined in Section 4001(a) (2) of ERISA), (ii)
neither Penn nor its Subsidiary nor any ERISA affiliate has filed a notice of
intent to terminate any such plan or adopted any amendment to treat any such
plan as terminated, (iii) the PBGC has not instituted proceedings to terminate
any such plan, (iv) no accumulated funding deficiency, whether or not waived,
exists with respect to any such plan on an accumulated benefit obligation basis,
and (v) no reportable event, as described in Section 4043 of ERISA, has occurred
with respect to any such plan.
(d) MULTI-EMPLOYER PLANS.
(1) Schedule 3.14C itemized all plans required to be
scheduled that are also multi-employer plans within the meaning of Section 3(37)
of ERISA.
(2) With respect to each such multi-employer plan in which
Penn, its Subsidiary or any ERISA Affiliate participates or has Participated,
neither Penn nor its Subsidiary not any ERISA Affiliate has withdrawn, partially
withdrawn, or to Seller's knowledge received any notice of any claim or demand
for withdrawal liability or partial withdrawal liability.
3.15 ENVIRONMENTAL MATTERS.
Except as set forth in Schedule 3.15, to either the Penn Agreement
Sellers' or Seller's knowledge, (a) Company is in compliance in all material
respects with all applicable federal, state, foreign and local laws and
regulations relating to pollution or protection of human health or the
environment (including, without limitation, ambient au, surface water, ground
water, land surface or sub surface strata (collectively, "ENVIRONMENTAL LAWS");
(b) Company has not received written notice and is not the subject of any
actions, causes of actions, claims,. investigations, demand or notices by any
person or entity alleging liability or non-compliance with any Environmental
Law; (c) there are no conditions existing which would reasonably be expected to
form the basis of a claim against Company for the violation or non-compliance
with any Environmental Law; and (d) there are no circumstances which would
reasonably be expected to prevent
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or interfere in the future with Company's compliance in all material respects
with all Environmental Laws.
3.16 CERTAIN INTERESTS.
Except as set forth on Schedule 3.16, as of the Closing Date, no
Affiliate of Seller or any Penn Agreement Seller, or to Seller's knowledge no
Affiliate of Penn or its Subsidiary nor any officer or director of any thereof,
nor Associate of any such individual, will have any material interest in any
property used in or pertaining to the Business; to Seller's knowledge no such
Person will be indebted or otherwise obligated to Company or its Subsidiary; and
to Seller's knowledge Company will not be indebted or otherwise obligated to any
such Person, except for amounts DUE UNDER NORMAL arrangements applicable to all
employees generally as to salary or reimbursement of ordinary business expenses
not unusual in amount or significance.
3.17 INTERCOMPANY TRANSACTIONS.
Except as set forth on Schedule 3.16, the consummation of the
transactions contemplated by this Agreement will not (either alone, or upon the
occurrence of any act or event, or with the lapse of tune, or both) result in
any payment arising or becoming due from Company or the successor or assign of
any thereof to Penn, Seller, any Penn Agreement Seller or any Affiliate thereof.
3.18 INSURANCE.
Schedule 3.18 lists all insurance policies and bonds that are material
to the Business. Neither Penn nor its Subsidiary is in default under any such
policy or bond.
3,19 NO BROKERS OR FINDERS.
Neither Seller nor Company has employed any broker, finder, consultant
or intermediary in connection with the transactions contemplated by this
Agreement who would be entitled to a broker's, finder's or similar fee or
commission in connection therewith or upon the consummation thereof.
3.20 ACCURACY OF INFORMATION.
To the knowledge of Seller or any Penn Agreement Sellers, none of the
written information supplied by or on behalf of Seller to any Person for
inclusion in, and included in, any document or application filed with any
Governmental Entity in connection with the transactions contemplated by this
Agreement contained any untrue statement of a material fact, or omitted any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
BUYER
Except as otherwise indicated in the Disclosure Schedules, Buyer
represents, warrants and agrees as follows, as of the date hereof:
4.1 ORGANIZATION AND RELATED MATTERS.
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of Illinois. Buyer has all necessary corporate power and
authority to carry on its business as now being conducted. Buyer has the
necessary corporate power and authority to execute. deliver and perform this
Agreement
4.2 AUTHORIZATION.
The execution, delivery and performance of this Agreement by Buyer,
and the transactions contemplated hereby, have been duly and validly authorized
by the Board of Directors of Buyer and by all other necessary corporate action
on the part of Buyer. This Agreement constitutes the legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws and equitable principles
relating to or limiting creditors' rights generally.
4.3 NO CONFLICTS; CONSENTS.
The execution, delivery and performance of this Agreement by Buyer,
and the performance of the transactions contemplated hereby, will not (a)
violate, accelerate, terminate or conflict with the provisions of, or constitute
a breach or default (whether upon lapse of tune and/or the occurrence of any act
or event or otherwise) under, the charter documents or by-laws of Buyer or any
of its Subsidiaries, or any Contract of Buyer, or any of its Subsidiaries, (b)
result In the imposition of any Encumbrance against any asset or property of
Buyer, or any of its Subsidiaries, or (c) violate or conflict with any Law,
order, judgment, injunction or decree applicable to Buyer, or any of its
Subsidiaries, where such violation would have a material adverse effect on the
business condition and results of operations of Buyer, or any of its
Subsidiaries, or the ability of Buyer, or any of its Subsidiaries, to perform
its obligations hereunder. No registrations. filings, applications, notices,
consents, approvals, orders, qualifications, authorizations or waivers are
required to be made, filed, given or obtained by the Buyer or any of its
Subsidiaries (or, by reason of facts pertaining to Buyer, or any of its
Subsidiaries or the Company, on the part of Buyer) with, to or from any Persons
(including Governmental Entities) in connection with the execution and delivery
of this Agreement or the
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consummation of the transactions contemplated hereby, except for filings
under the Hart-Scott-Rodino Act.
4.4 NO BROKERS OR FINDERS.
No agent, broker, finder or investment or commercial banker, or other
Person or firms engaged by or acting on behalf of Buyer or its Affiliates in
connection with the negotiation, execution or performance of this Agreement or
the transactions contemplated by this Agreement, is or will be entitled to any
broker's or finder's or similar fees or other commissions as a result of this
Agreement or such transactions.
4.5 LEGAL PROCEEDINGS.
There is no Order or Action pending or to Buyer's knowledge,
threatened against or affecting Buyer that individually or when aggregated with
one or more other Actions has had, or if adversely determined could have, or
might reasonably be expected to have a material adverse effect on Buyer's
ability to perform this Agreement or any other aspect of the transactions
contemplated by this Agreement.
4.6 INVESTMENT REPRESENTATION.
Buyer is acquiring the Purchased Stock from the Seller for Buyer's own
account, for investment purposes only and not with a view to or for sale in
connection with any distribution thereof in violation of the Securities Act.
4.7 ACCURACY OF INFORMATION.
To Buyer's knowledge, none of the written information supplied by or
on behalf of Buyer to any Person for inclusion in, and included in, any document
or application filed with any Governmental Entity in connection with the
transactions contemplated by this Agreement contained any untrue statement of a
material fact, or omitted any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. All documents required to be filed
by Buyer with any Governmental Entity in connection with this Agreement or the
transactions contemplated by this Agreement will comply in all material respects
with the provisions of applicable Law.
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ARTICLE V
ADDITIONAL CONTINUING COVENANTS
5.1 NONDISCLOSURE OF PROPRIETARY DATA.
After the Closing, Each of Seller and Lamar agrees with respect to
itself that neither it nor any of its representatives shall, at any time, make
use of, divulge or otherwise disclose, directly or indirectly, any trade secret
or other proprietary data (including, but not limited to, any customer list,
record or financial information constituting a trade secret) concerning the
business or policies of the Company that Seller or Lamar or any representative
of Seller or Lamar may have learned as a shareholder, employee, officer or
director of the Company unless such information has become generally available
and known to the public other than as a result of a prohibited disclosure by
Seller or Lamar or their representatives. Buyer acknowledges that it remains
subject to the Confidentiality Agreement dated September 11, 1996 between it and
Donaldson, Lufkin & Jenrette Securities Corporation, as the Company's
representatives.
5.2 TAX COOPERATION.
COMPANY TAXES. After the Closing, each of Guarantor, Lamar and Seller
agrees with respect to itself that it shall, and shall use its best efforts to
cause the Penn Sellers, Appleton Sellers, and their Affiliates to, cooperate
fully with Buyer and the Company in the preparation of all Tax Returns and shall
provide, or use its best efforts to cause to be provided at Buyer's sole cost
and expense, to Buyer and the Company any records and other information
requested by such parties in connection therewith as well as access to, and the
cooperation of, the auditors of such Guarantor, Lamar, Seller, Penn Sellers and
its Affiliates. Each of Guarantor, Lamar and Seller shall, and shall use its
best efforts to cause the Penn Sellers, Appleton Sellers, and their Affiliates
to, cooperate fully with Buyer and the Company in connection with any Tax
investigation, audit or other proceeding. Any information obtained pursuant to
this Section 5.2 or pursuant to any other Section hereof providing for the
sharing of information or the review of any Tax Return or other Schedule
relating to Taxes shall be subject to Section 8.10.
5.3 VESTING IN CERTAIN PENSION PLANS
As of the Closing, Penn or Seller shall cause each Company employee
who is an employee of the Company immediately prior to the Closing to become
fully vested in such employee's accrued benefit, if any, under the Penn
Advertising, Inc. Pension Plan for Salaried Employees and in such employee's
account balance under the Penn Advertising, Inc. Employee Savings Plan. Seller
represents that there are no employees or retirees of Company included in the
Penn Advertising, Inc. Pension Plan for Hourly Employees. The costs and expenses
of terminating any employee benefit or pension plan common to Penn and Company
shall be allocated between Penn and Company pro-rata
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based upon the gross amount of vested benefits due the employees of each of Penn
and Company as a result of such termination.
ARTICLE VI
ITEMS TO BE DELIVERED AT CLOSING
6.1 BY SELLER.
The Seller shall deliver to Buyer at Closing:
(a) OPINION OF COUNSEL. Buyer shall receive at the Closing,
dated the date thereof the opinion of Kean, Miller, Hawthorne, D'Armond,
McCowan & Jarman, L.L.P., special counsel to Seller, Lamar and Guarantor,
and the supplementary opinion of Satterlee, Stephens Burke & Burke, LLP,
special New York counsel to Seller, in a form and substance mutually
agreeable to Buyer and Seller.
(b) NON-COMPETITION. Buyer shall receive at the Closing partial
assignment (based upon geographical area) of all non-competition
agreements received by Guarantor pursuant to Section 9.2(e) of the Penn
Agreement.
(c) FIRPTA AFFIDAVIT. Seller shall deliver an affidavit to the
Buyer, dated as of the Closing Date, that is satisfactory to the Buyer
and which satisfies the requirements of Section 1445(b)(2) of the Code
and Treas. Reg. Section 1.1445-2(b)(2).
(d) CERTIFIED RESOLUTIONS. Each of Seller, Guarantor or Lamar
shall deliver to Buyer a copy of its corporate resolutions authorizing
this Agreement and the Transactions.
(e) RESIGNATIONS OF OFFICERS AND DIRECTORS. Seller shall deliver
to Buyer written resignations of the Officers and Directors of Company.
(f) SHARE CERTIFICATES. Seller shall deliver the share
certificates representing the Purchased Shares, appropriately endorsed or
with a blank stock power attached.
6.2 BY BUYER.
The Buyer shall deliver to Seller at Closing:
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(a) THE PURCHASE PRICE. The Buyer shall pay to Seller or its
assigns the Purchase Price in immediately available funds .
(b) OPINION OF COUNSEL. Seller shall receive at the Closing from
Skadden, Arps, Slate, Meagher & Flom, L.L.P. and Paul Simon, General Counsel to
Buyer reasonably acceptable to Seller, an opinion letter dated the Closing Date,
in form and substance mutually agreeable to Buyer and Seller.
(c) CERTIFIED RESOLUTIONS. Seller shall deliver to Buyer a copy of
its corporate resolutions authorizing this Agreement and the Transactions.
ARTICLE VII
INDEMNIFICATION
7.1 OBLIGATIONS OF SELLER.
Effective as of the Closing:
(a) Seller agrees to indemnify and hold harmless Buyer, Company,
and their respective directors, officers, employees, affiliates, agents and
assigns from and against any and all Losses of Buyer or Company, directly or
indirectly, as a result of, or based upon or arising from any material
inaccuracy in or breach or nonperformance of any of the representations or
warranties, covenants or agreements made by Seller in or pursuant to any
provision of this Agreement other than pursuant to Article III. In addition,
Guarantor, Lamar and Seller agree to indemnify and hold harmless Buyer and
the Company for Taxes imposed on the Company with respect to any Person other
than the Company pursuant to any agreement or Treas. Reg. Section 1.1502-6
(or any similar provision of state or local law)
(b) Seller and Lamar, severally and not jointly, to the extent
provided below, agree to indemnify and hold harmless, Buyer, Company, and their
respective directors, officers, employees, affiliates, agents and assigns from
and against any and all Losses of Buyer or Company, directly or indirectly, as a
result of, or based upon or arising from any material inaccuracy in or breach or
nonperformance of any of the representations or warranties made by Seller or
Lamar in this Agreement pursuant to Article III, EXCEPT THAT Seller's and
Lamar's obligation to indemnify and hold harmless Buyer, Company, and their
respective directors, officers, employees, affiliates, agents and assigns
pursuant to this Subsection shall: (i) be limited to the amount of Seller Net
Recovery for any claim of Buyer pursuant to this Subsection ("Seller Net
Recovery" being defined as the funds recovered by Lamar from the Penn Agreement
Sellers based upon a claim made by Buyer against Seller or Lamar pursuant to
this Subsection, net of all reasonable costs and expenses of Seller or Lamar
incurred in pursuing such claim, including without limitation reasonable
attorney's fees and costs); and (ii) (x) such Seller Net Recovery shall be paid
to Buyer pursuant to Section 7.5 below, to the extent that
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such Section 7.5 is applicable; or (y) such Seller Net Recovery shall be paid to
Buyer within 5 days of receipt by Seller if Section 7.5 is not applicable.
(c) Notwithstanding anything to the contrary in this Agreement,
Seller, Lamar, nor Guarantor make no warranty or representation of any nature or
kind concerning any Advertiser Effect and the same do not have any obligation to
indemnify Buyer concerning any Advertiser Effect, PROVIDED, HOWEVER, this
sub-section is not intended to, and does not, affect in any way any warranty or
representation made to Lamar by any Penn Agreement Seller in the Penn Agreement,
the benefit of which is passed through herein to Buyer pursuant to the
representations and warranties made in Article III and the indemnity provisions
of this Article.
7.2 OBLIGATIONS OF BUYER.
Buyer agrees to indemnify and hold harmless Seller from and against
any Losses of Seller and its respective directors, officers, employers,
affiliates, partners, agents and assigns, directly or indirectly, as a result
of, or based upon or arising from (a) any material inaccuracy in or breach or
nonperformance of any of the representations, warranties, covenants or
agreements made by Buyer in this Agreement; or (b) any Order or Action arising
out of operation of the Business on or after the Closing Date.
7.3 PROCEDURE.
(a) NOTICE OF THIRD PARTY CLAIMS BY BUYER. If Buyer should seek
from Seller or Lamar indemnification of any Loss or potential Loss arising from
a claim asserted by a third party (including but not limited to a notice of Tax
audit or request to waive or extend a statute of limitations applicable to any
Tax), Buyer shall give written notice to the Seller or Lamar, as the case may
be. Written notice to the Indemnifying Party of the existence of a third-party
Indemnifiable Claim shall be given by the Indemnified Party within 30 days after
its receipt of a written assertion of liability from the third party, including
in the case of tax matters, written notice of any tax audit that might result in
such a claim.
(b) NOTICE OF THIRD PARTY CLAIMS BY SELLER. If Seller should
seek from Buyer indemnification of any Loss or potential Loss arising from a
claim asserted by a third party (including but not limited to a notice of Tax
audit or request to waive or extend a statute of limitations applicable to
any Tax), Seller shall give written notice to the Buyer. Written notice to
the Indemnifying Party of the existence of a third-party Indemnifiable Claim
shall be given by the Indemnified Party within 30 days after its receipt of a
written assertion of liability from the third party, including in the case of
tax matters, written notice of any tax audit that might result in such a
claim.
(c) DEFENSE OF BUYER. If Buyer's claim for indemnification by
Seller is made pursuant to Section 7.1(a) above, if Buyer so requests, Seller,
as an
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Indemnifying Party hereunder, shall promptly assume the costs of defense of
an Indemnifiable Claim. The Indemnifying Party shall retain experienced
counsel reasonably satisfactory to the Indemnified Party and thereafter shall
control defense of the claim. If the Indemnifying Party does not assume such
defense or the Indemnified Party has the right to control the defense of the
Indemnifiable Claim, the Indemnified Party may compromise or settle the
Indemnifiable Claim on behalf of and for the account and risk of the
Indemnifying Party with the prior written consent of the Indemnifying Party,
which consent shall not be unreasonably withheld. In all cases, the party
without the right to control the defense of the Indemnifiable Claim may
participate in the defense at its own expense.
(d) DEFENSE OF SELLER. If Seller so requests, Buyer, as an
Indemnifying Party hereunder, shall promptly assume the costs of defense of an
Indemnifiable Claim. The Indemnifying Party shall retain experienced counsel
reasonably satisfactory to the Indemnified Party and thereafter shall control
defense of the claim. If the Indemnifying Party does not assume such defense or
the Indemnified Party has the right to control the defense of the Indemnifiable
Claim, the Indemnified Party may compromise or settle the Indemnifiable Claim on
behalf of and for the account and risk of the Indemnifying Party with the prior
written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld. In all cases, the party without the right to control the
defense of the Indemnifiable Claim may participate in the defense at its own
expense.
(e) SELLER'S AND LAMAR'S OBLIGATION TO PURSUE CERTAIN CLAIMS. To
the extent that Buyer seeks indemnification from Seller or Lamar pursuant to
Subsection 7.1(b) above, Seller or Lamar shall promptly, and in no event more
than five (5) business days, following receipt of written notice of such
claim by Buyer, pursue its rights against the Penn Agreement Sellers with
respect to corresponding claims of Lamar against the Penn Agreement Sellers
and the Escrow Fund at the direction of and for the account of Buyer. Seller
or Lamar shall use its best efforts to obtain recovery upon such claim. If
Seller or Lamar fails to promptly pursue such corresponding claims pursuant
to this subsection, Seller shall indemnify Buyer with respect to such claims
pursuant to subsection 7.1(a) hereof. Seller or Lamar shall pay the
reasonable costs of pursuing such claim against the Penn Agreement Sellers
and shall provide Buyer with details of such costs and expenses, including
receipts and invoices. Seller or Lamar shall seek prior approval from Buyer,
which approval shall not be unreasonably withheld, of any costs or expenses
which are anticipated to exceed $10,000.00. Seller and Buyer shall consult on
the decisions concerning such claims of Lamar against the Penn Agreement
Sellers that are based upon a claim by Buyer against Seller or Lamar,
PROVIDED, HOWEVER, all decisions concerning such claims of Lamar against the
Penn Agreement Sellers shall be made ultimately in the reasonable discretion
of Seller or Lamar. If at any time Seller or Lamar is unwilling to continue
to pursue any claim against the Penn Agreement Sellers that is based upon a
claim against it by Buyer, and Buyer wishes Seller or Lamar to continue to
pursue such claim, Seller or Lamar shall continue to pursue such claim
against the Penn Agreement Sellers, PROVIDED, HOWEVER, Buyer shall have the
obligation
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to advance to Seller or Lamar funds sufficient to cover all of Seller or
Lamar's reasonable and pre-approved costs and expenses, including without
limitation reasonable attorney's fees and costs which if the Buyer so elects
shall be counsel chosen by the Buyer, of continuing to pursue such claim, as
such costs and expenses are incurred. To the extent there is a recovery from
the Penn Agreement Sellers on such claim as Buyer has advanced costs, Buyer,
Seller and Lamar shall recover such costs paid on account of such claim
pro-rata from the amount recovered prior to any distribution of the net
recovery.
(f) SETTLEMENT LIMITATIONS ON CERTAIN CLAIMS. Notwithstanding
anything in this Section 7.3 to the contrary, neither Buyer, Seller nor Lamar
shall, without the written consent of the other Party, settle or compromise
any Indemnifiable Claim of Seller or of Buyer pursuant to Section 7.1 or 7.2
above or permit a default or consent to entry of any judgment unless the
claimant and such party provide to such other Party an unqualified release
from all liability in respect of such Indemnifiable Claim. Notwithstanding
the foregoing, if a settlement offer solely for money damages is made by the
applicable third party claimant, and the Indemnifying Party notifies the
Indemnified Party in writing of the Indemnifying Party's willingness to
accept the settlement offer and, subject to the limitations of Section 7.5,
pay the amount called for by such offer, and the Indemnified Party declines
to accept such offer, the Indemnified Party may continue to contest such
Indemnifiable Claim, free of any participation by the Indemnifying Party, and
the amount of any ultimate liability with respect to such Indemnifiable Claim
that the Indemnifying Party has an obligation to pay hereunder shall be
limited to the lesser of (A) the amount of the settlement offer that the
Indemnified Party declined to accept plus the Losses of the Indemnified Party
relating to such Indemnifiable Claim through the date of its rejection of the
settlement offer or (B) the aggregate Losses of the Indemnified Party with
respect to such Indemnifiable Claim. If the Indemnifying Party makes any
payment on any Indemnifiable Claim, the Indemnifying Party shall be
subrogated, to the extent of such payment, to all rights and remedies of the
Indemnified Party to any insurance benefits or other claims of the
Indemnified Party with respect to such Indemnifiable Claim.
(g) TAX MATTERS. Notwithstanding anything to the contrary in
paragraphs (c) through (f) above, the provisions of Sections 5.2, and 7.3(a),
7.3(b) and this Section 7.3(g) through 7.3(m) below shall govern all Tax
matters relating to Indemnifiable Claims or Tax matters relating to the
Business, Seller, Buyer or this transaction
(h) TAX AUDITS. (i) The Seller or its assigns, have the sole right
to represent Buyer's interest in any audit or administrative or court
proceeding relating to income, sales, use or value added Taxes, whether
imposed on the Company, or any holder of the Penn Shares, with respect to the
business, operations or activities of the Company during periods (or portions
thereof) ending on or before the Closing Date ("PRE-CLOSING TAXES) and to
employ counsel of its choice at its expense.
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Notwithstanding the foregoing, Seller, Lamar, or their assigns shall not be
entitled to settle, either administratively or after the commencement of
litigation, any claim for income, sales, use or value added Taxes which would
materially adversely affect the liability for income, sales, use or value
added Taxes of Buyer for any period (or portion thereof) beginning after the
Closing Date without the prior written consent of Buyer. Such consent shall
not be unreasonably withheld, and shall not he necessary to the extent that
(A) the settlement is consistent with the positions previously taken by the
Company or (B) Seller has agreed to indemnify Buyer against the effects of
any such settlement.
(ii) To the extent permitted by the Penn Agreement, Buyer
shall have the right to represent the interest of the Company in any audit or
administrative or court proceeding relating to Taxes other than Pre-Closing
Taxes. Notwithstanding the foregoing, Buyer shall not be entitled to settle,
either administratively or after the commencement of litigation, any claim
for Taxes which could adversely affect Seller's, Lamar's, Lamar Advertising
of Penn, Inc.'s, any Penn Seller's or Appleton Seller's liability for
Pre-Closing Taxes or Pre-Closing Appleton Taxes or its indemnification
obligations under this Agreement without the prior consent of the Seller.
Such consent shall not be unreasonably withheld, and shall not be necessary
to the extent that (A) the settlement is consistent with the positions
previously taken by the Company, as the case may be or (B) Buyer has agreed
to indemnify the Seller against the effects of any such settlement.
(iii) Seller shall have no liability under this Agreement for,
and Buyer will indemnify Seller against any liability for any Tax of any Penn
Agreement of Seller, the payment of which was made without Seller's prior
written consent, which may not be unreasonably withheld, or any settlements
effected without the consent of Seller, as required by paragraph (ii), or
resulting from any claim, suit, action, litigation or proceeding in which the
Seller or its assigns were not permitted an opportunity to assume the defense
as required under paragraph (i).
(i) TAX COVENANTS. Buyer covenants that it will not, and will not
permit the Company to, (i) make or change any Tax election, or amend any Tax
Return or take any Tax position on any Tax Return filed by or on behalf of
the Company, take any action or omit to take any action that results in any
increased Tax liability of Seller, Lamar, Lamar Advertising of Penn, Inc.,
the Penn Agreement Sellers, Penn, or Appleton with respect to any Tax period
(or portion thereof) ending on or before the close of business on the Closing
Date.
(j) REFUNDS. (i) Any refund of Taxes with respect to the business,
operations or activities of the Company, whether received before or after the
Closing, pertaining to periods (or portions thereof) ending on or before the
Closing, except to the extent such refund is an asset on the books of the
Company on the Closing Date, shall be paid to the Seller upon receipt by
Buyer or its Affiliate, after deducting any Losses for Taxes with respect to
the business, operations or activities of the Company during
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periods (or portions thereof) ending on or before the Closing Date to the
extent a claim for indemnification therefor would be available under Section
7.1 hereof but for the limitations contained in Section 7.5(b) hereof. Buyer
agrees that, upon the reasonable request and at the sole expense of the
Seller, Buyer shall file an amended return or a claim for refund relating to
such pre-Closing period Taxes.
(k) TAX BENEFITS. (i) If any adjustment shall be made to any Tax
Return of the Company relating to any taxable period of the Company ending
prior to or on or including the Closing Date which results in any Tax
detriment to any Penn Agreement Seller and results in any deduction,
exclusion from income or other allowance (a "TAX BENEFIT") to Buyer or any of
its Affiliates a taxable period (or portion thereof) beginning after the
Closing Date, Buyer shall pay to the affected Penn Agreement Sellers the
amount of the Tax reduction attributable to such Tax Benefit at such time or
times as, and to the extent that, the Company or Buyer realizes such Tax
reduction.
(ii) If any adjustment shall be made to any Tax Return relating to
Buyer for any taxable period ending after the Closing Date which results in
any Tax detriment to Buyer or any of its Affiliates and results in any Tax
Benefit to Seller Guarantor, Lamar, Penn or the Penn Agreement Sellers for
any taxable period of the Company ending on or prior to the Closing Date,
the Seller, Lamar, Guarantor and Penn shall (to the extent that they
received such Tax Benefit) and the Seller, Guarantor, Lamar and Penn
shall use its best efforts to cause the Seller, Guarantor, Lamar or Penn
Agreement Sellers, as the case may be, to pay to Buyer the amount of the Tax
reduction attributable to such Tax Benefit at such time or times as and to
the extent that Guarantor, Seller or Lamar, such Penn Agreement Seller, or
Penn realize such Tax reduction.
(l) RETURNS AND REPORTS. (i) Seller or Lamar shall or shall use its
best efforts to cause the Seller Representatives to cause to be filed (or
provided to Buyer for filing, if appropriate) when due all Tax Returns with
respect to income Taxes that are required to be filed by or with respect to
the Company for taxable periods ending on or before the Closing Date. Seller
or Lamar shall use its best efforts to insure that without Buyer's consent,
no position may be taken in such Tax Returns inconsistent with prior reporting
practice if such position could increase the Buyer's Tax liabilities for any
period after the Closing Date.
(ii) Subject to paragraph (h) above, Buyer shall file or cause to
be filed when due all other Tax Returns that are required to be filed by or
with respect to the Company after the Closing Date. The Seller and the Seller
Representatives shall have the right to approve (which approval shall not
unreasonably be withheld) such Tax Return prior to the filing thereof to the
extent it could affect any Penn Agreement Sellers' or Seller's liability for
Pre-Closing Taxes or its indemnification obligations under this Agreement.
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(m) TAX ADJUSTMENTS. Any amounts payable by the Indemnifying Party
to or on behalf of an Indemnified Party in respect of a Loss shall be
adjusted as follows:
(i) If such Indemnified Party is liable for any additional Taxes
as a result of the payment of amounts in respect of an Indemnifiable Claim,
the Indemnifying Party will pay to the Indemnified Party in addition to
such amounts in respect of the Loss within 10 days after being notified by
the Indemnified Party of the payment of such liability (x) an amount equal
to such additional Taxes (the "TAX REIMBURSEMENT AMOUNT") plus (y) any
additional amounts required to pay additional Taxes imposed with respect to
the Tax Reimbursement Amount and with respect to amounts payable under this
clause (y), with the result that the Indemnified Party shall have received
from the Indemnifying Party, net of the payment of Taxes, an amount equal
to the Loss.
(ii) The Indemnified Party shall reimburse the Indemnifying
Party an amount equal to the net reduction in any year in the liability for
Taxes (that are based upon or measured by income) of the Indemnified Party
or any member of a consolidated or combined tax group of which the
Indemnified Party is, or was at any time, part, which reduction is actually
realized with respect to any period after the Closing Date and which
reduction would not have been realized but for the amounts paid (or any
audit adjustment or deficiency with respect thereto, if applicable) in
respect of a Loss, or amounts paid by the Indemnified Party pursuant to
this paragraph (a "NET TAX BENEFIT"). The amount of any Net Tax Benefit
shall be paid not later than 15 days after the date on which such Net Tax
Benefit shall be realized. For purposes of this clause (ii), the Net Tax
Benefit shall be deemed to be actually realized on the date on which such
Net Tax Benefit is used to compute an obligation to pay installments of
estimated tax or, if earlier, reported earnings; PROVIDED, HOWEVER, that if
the amount of any Net Tax Benefit is subsequently affected by reason of any
event or events, including, without limitation, any payment of Taxes by
such Indemnified Party with respect to the loss of such Net Tax Benefit
upon audit or litigation, appropriate adjustments and payments to take into
account the increase or decrease in such Net Tax Benefit shall be made
between the Indemnified Party and the Indemnifying Party within 15 days
after such event or events. Any expenses associated with the realization of
a Net Tax benefit or any contest or proceeding with respect to a Net Tax
Benefit shall be deemed to reduce such Net Tax Benefit. Buyer agrees to
provide Seller or its designated representatives with such assistance and
such documents and records reasonably requested by them that are relevant
to their ability to determine whether a Net Tax Benefit has been realized,
including but not limited to copies of any Tax Returns, estimated tax
payments, schedules, and related supporting documents.
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7.4 SURVIVAL.
The representations and warranties and agreements contained in or
made pursuant to this Agreement shall expire on the first anniversary of the
Closing, except that (i) the representations and warranties contained in
Sections 2.1 [Organization], 2.2 [Authorization], 2.4
[Title to Purchased Stock], 2.5 [Company Debt], 2.6 [No Brokers or Finders],
3.1 [Organization and Good Standing], 3.2 [Company Stock], 4.1
[Organization and Related Matters], and 4.2 [Authorization] shall survive the
Closing and shall remain in full force and effect indefinitely, (ii) the
representations and warranties contained in Section 3.5
[Taxes and Tax Returns] shall survive the Closing and remain in full force
and effect for the period of the applicable statute of limitations with
respect to such claims, (iii) the agreements contained in Article VI, and in
Sections 7.3(g)-(m) shall survive the Closing and remain in full force and
effect indefinitely and (iv) if a claim or notice is given under this Article
VII with respect to any representation or warranty or agreement prior to the
applicable expiration date set forth in this Section 7.4, such representation
or warranty or agreement shall continue indefinitely only for the purposes of
such claim until such claim is finally resolved. The indemnification set
forth in this Article VII shall survive the Closing and shall remain in
effect for a period of one year after the Closing Date, except for any
indemnification for a breach of a representation or warranty or agreement
which survives indefinitely in accordance with the terms of this Section 7.4.
Any matter as to which a claim has been asserted by notice to the other party
that is pending or unresolved at the end of any applicable limitation period
shall continue to be covered by this Article VII notwithstanding any
applicable statute of limitations (which the parties hereby waive) until such
matter is finally terminated or otherwise resolved by the parties under this
Agreement or by a court of competent jurisdiction and any amounts payable
hereunder are finally determined and paid.
7.5 LIMITATIONS ON INDEMNIFICATION.
(a) DOLLAR LIMITATION. Notwithstanding anything to the contrary
herein, in no event shall the aggregate amount payable by Seller or Lamar
under this Article VII exceed an amount equal to the Purchase Price.
(b) BREACH REGARDING BUYER. Buyer shall not be required to
indemnify any other Person under or pursuant to Section 7.2 unless the
aggregate of all amounts for which indemnity would otherwise be payable by
Buyer under Section 7.2 exceeds $25,000 and, in such event, the Indemnifying
Party shall be responsible only for the amount in excess of such $25,000.
7.6 SHARING OF AMOUNTS RECOVERED FROM WORKING CAPITAL AND CLAIMS
ESCROW ACCOUNT.
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Any amount paid to Seller or Lamar by the Penn Agreement Sellers
from the Escrow Accounts pursuant to Article XI of the Penn Agreement shall
be shared by Buyer, Seller and Lamar according to this Section.
(a) LIMITATION ON CLAIMS REGARDING COMPANY. Claims made by Buyer
against Seller or Lamar pursuant to Section 7.1(b) which result in claims of
Lamar against the Penn Agreement Sellers that are permissible and limited
pursuant to Section 11.5(b) of the Penn Agreement are referred to hereinafter
as "Buyer 11.5(b) Claims." Claims made by Lamar against the Penn Agreement
Sellers that are permissible and limited pursuant to Section 11.5(b)) of the
Penn Agreement and are unrelated to any claim of Buyer are referred to
hereinafter as "Seller 11.5(b) Claims." Notwithstanding anything to the
contrary herein, no payment shall be required to be made to Buyer by Seller
or Lamar with respect to Buyer 11.5(b) Claims if: (i) Buyer 11.5(b) Claims do
not exceed $187,500, AND (ii) the sum of Buyer 11.5(b) Claims and Seller
11.5(b) Claims does not exceed $750,000.
(b) AMOUNTS RECOVERABLE BY BUYER. If Seller or Lamar receives funds
from the Working Capital and Claims Escrow Account as a result of any claim
against the Penn Sellers, and if such amount received by Seller or Lamar
includes any amount that is the result of one or more Buyer 11.5(b) Claims,
Seller or Lamar shall immediately pay to Buyer (i) the amount of the included
Buyer 11.5(b) Claims less $187,500, up to the aggregate amount of $750,000
for all of Buyer 11.5(b) Claims recovered from the Working Capital and Claims
Escrow Account; less (ii) the reasonable costs and expenses incurred by
Seller or Lamar in collecting such Buyer 11.5(b) claims as provided herein
from the Penn Agreement Sellers, including without limitation reasonable
attorney's fees and costs.
(c) AMOUNTS RECOVERABLE BY SELLER OR LAMAR. If Seller or Lamar
receives funds from the Working Capital and Claims Escrow Account as a result
of any Seller 11.5(b) Claim, Seller or Lamar shall retain without any
obligation to Buyer (i) the amount of its included 11.5(b) Claims less the
aggregate sum of $562,500, up to the aggregate amount of $2,250,000 for all
Seller 11.5(b) Claims recovered from the Working Capital and Claims Escrow
Account.
(d) ESCROW OF ADDITIONAL AMOUNT RECOVERABLE BY BUYER. To the extent
that total Buyer 11.5(b) Claims are in excess of $937,5OO, and as a result of
such excess Buyer 11.5(b) Claims funds are recovered by Seller or Lamar from
the Working Capital and Claims Escrow Account, (recognizing that Seller's or
Lamar's right to retain any funds recovered pursuant to Subsection (c) above
shall be superior to any right granted Buyer pursuant to this Subsection)
such funds, net of Seller's or Lamar's reasonable costs and expenses incurred
by Seller or Lamar in collecting such Buyer 11.5(b), as provided herein,
claims from the Penn Agreement Sellers, including without limitation
reasonable attorney's fees and costs, shall be promptly paid to Trust Company
of Louisiana, as escrow agent for Buyer, Seller and Lamar pursuant to an
escrow agreement substantially
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in the form of Exhibit D attached hereto by and among Buyer, Seller, Lamar
and such escrow agent. (hereinafter the escrow account established pursuant
to this provision is referred to as the Secondary Escrow Account and the
escrow agent is referred to as the "Secondary Escrow Agent"). The term of
such escrow arrangement shall extend twenty days past the term of the Escrow
Agreement.
(e) ESCROW OF ADDITIONAL AMOUNTS RECOVERABLE BY SELLER. To the
extent total Seller 11.5(b) Claims are in excess of $2,812,500 and as a
result of such excess Seller 11.5(b) Claims funds are recovered by Seller or
Lamar from the Working Capital and Claims Escrow Account (recognizing that
Buyer's right to be paid any funds recovered pursuant to Subsection (b) above
shall be superior to any right granted Seller or Lamar pursuant to this
Subsection), such funds, net of Seller's or Lamar's reasonable costs and
expenses incurred by Seller or Lamar in collecting such Buyer 11.5(b) claims
from the Penn Agreement Sellers, including without limitation reasonable
attorney's fees and costs, shall be promptly paid to the Secondary Escrow
Agent for deposit in the Secondary Escrow Account.
(f) PAYMENTS FROM ESCROW. If, after the Secondary Escrow Account has
been established, should Buyer determine that it has additional Buyer 11.5(b)
Claims, Buyer shall make such claims and Seller or Lamar shall take such
actions as are provided for in this Article VII. To the extent that the
Working Capital and Claims Escrow Account has not been exhausted, Seller or
Lamar shall pursue Buyer 11.5(b) Claims and Seller 11.5(b) Claims against the
Penn Agreement Sellers and the Working Capital and Claims Escrow Account as
provided for in this Article VII. To the extent that the Working Capital and
Claims Escrow Account has been exhausted by the combined claims of Buyer,
Seller and Lamar pursuant to this Agreement and/or the Penn Agreement, Buyer,
Seller, or Lamar shall have the right to be paid any such additional
reasonable and valid Buyer 11.5(b) Claims or Seller 11.5(b) Claims made in
good faith from the funds in the Secondary Escrow Account, (i) for Buyer up
to the positive difference between $750,000 and the amount collected by
Seller and Lamar on behalf of Buyer from the Working Capital and Claims
Escrow Account pursuant to Subsection 7.6(b) hereof; or (ii) for Seller and
Lamar combined, up to the positive difference between $2,250,000 and the
amount collected by Seller and Lamar from the Working Capital and Claims
Escrow Account pursuant to Subsection 7.6(c) hereof.
(g) FINAL SETTLEMENT. At the expiration of the Secondary Escrow
Account agreement, the amount remaining in the Secondary Escrow Account shall
be distributed to the party whose 11.5(b) claim resulted in the payment from
the Working Capital and Claims Escrow Account to the Secondary Escrow
Account, PROVIDED HOWEVER, if there are not enough funds in the Secondary
Escrow Account to satisfy the established and paid 11.5(b) Claims of both
Buyer, Seller and Lamar, the remaining funds shall be shared by Buyer, Seller
and Lamar in the ratio of their respective established and paid 11.5(b)
claims that were deposited into the Secondary Escrow Account.
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7.7 EXCLUSIVE REMEDY.
Notwithstanding anything to the contrary herein, the indemnity
provided in this Article VII, as it relates to a breach of a representation
or warranty or a failure to perform any covenant or agreement in any case
contained in this Agreement, shall be the exclusive contractual remedy with
respect to matters addressed by such covenant, agreement, representation or
warranty other than any rights to specific performance available for a breach
of a covenant hereunder.
7.8 ACTUAL DAMAGES.
Any Indemnifiable Claim, whether with respect to any breach or
nonperformance by either party of a representation, warranty, covenant or
agreement or otherwise, shall be limited to the amount of actual Losses
sustained by the Indemnified Party by reason of such breach or nonperformance
and shall be net of any insurance proceeds received from insurance companies,
including affiliated insurance companies. Notwithstanding anything to the
contrary herein, no party (or its Affiliates) shall, in any event, be liable
to any other party (or its Affiliates) for any punitive, incidental or
consequential damages, including, but not limited to, loss of revenue or
income, or loss of business reputation or opportunity relating to the breach
or alleged breach of this Agreement.
7.9 TREATMENT OF PAYMENTS.
All payments made pursuant to this Article VII shall be treated as
adjustments to the Purchase Price for the Purchased Stock.
7.10 ASSIGNMENT OF CLAIM FOR BREACH. To the extent allowed by law
and the Penn Purchase Agreement, Seller and Lamar shall partially assign any
claim or Action against the Penn Agreement Sellers for breach of any
warranty, representation, covenant, or indemnity to Buyer at the time such
claim or Action arises, to the extent such claim or Action relates to the
Company or the Purchased Stock.
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ARTICLE VIII
GENERAL
8.1 GUARANTY.
In consideration of the benefits to Seller and Lamar under this
Agreement, Guarantor does hereby guarantee, jointly and severally, with
Seller and Lamar, all of the agreements (including but not limited to
agreements to indemnify), representations, warranties, covenants of Seller or
of Lamar under this Agreement and under all documents to be executed pursuant
to this Agreement.
8.2 AMENDMENTS; WAIVERS.
This Agreement and any schedule or exhibit attached hereto may be
amended only by agreement in writing of all parties. Except as otherwise
provided herein, no waiver of any provision nor consent to any exception to
the terms of this Agreement shall be effective unless in writing and signed
by the party to be bound and then only to the specific purpose, extent and
instance so provided. No failure on the part of any party to exercise or
delay in exercising any right hereunder shall be deemed a waiver thereof, nor
shall any single or partial exercise preclude any further or over exercise of
such or any other right.
8.3 SCHEDULES; EXHIBITS; INTEGRATION.
Each schedule and exhibit delivered pursuant to the terms of this
Agreement shall be in writing and shall constitute a part of this Agreement
and is deemed incorporated herein by this reference, although schedules need
not be attached to each copy of this Agreement. This Agreement, together with
such schedules and exhibits, constitutes the entire agreement among the
parties pertaining to the subject matter hereof and supersedes all prior
agreements and understandings of the parties in connection therewith.
8.4 BEST EFFORTS; FURTHER ASSURANCES.
(a) STANDARD. Each party will use its best efforts to cause all
conditions to its obligations to be timely satisfied. The parties shall
cooperate with each other in such actions and in securing requisite
Approvals. Each party shall deliver such further certificates, agreements and
other documents and take such other actions as the other party may reasonably
request to consummate or implement the transactions contemplated hereby or to
evidence such events or matters.
(b) LIMITATION. As used in this Agreement, the term "best efforts"
shall not mean efforts which require the performing party to do any act that
is unreasonable under the circumstances, to make any capital contribution or
to expend any
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funds other than reasonable out-of-pocket expenses incurred in satisfying its
obligations hereunder, including but not limited to the fees, expenses and
disbursements of its accountants, actuaries, counsel and other professionals.
8.5 GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, without regard to conflicts of law
principles.
8.6 NO ASSIGNMENT.
Neither this Agreement nor any rights or obligations under it are
assignable except that: (i) Buyer may assign its rights hereunder (including
but not limited to its rights under Article VII ) to any wholly-owned
subsidiary of Buyer and (ii) Seller may assign its rights here under to any
of its Affiliates. Buyer shall remain liable to Seller and/or to Penn for the
payment of the Purchase Price and other obligations of Buyer hereunder
notwithstanding a permitted assignment, and Seller shall remain liable to
Buyer for its obligations to Buyer hereunder notwithstanding a permitted
assignment.
8.7 HEADINGS.
The descriptive headings of the Articles, Sections and Subsections of
this Agreement are for convenience only and do not constitute a part of this
Agreement.
8.8 COUNTERPARTS.
This Agreement and any amendment hereto or any other agreement (or
document) delivered pursuant hereto may be executed in one or more
counterparts and by different parties in separate counterparts. All of such
counterparts shall constitute one and the same agreement (or other document)
and shall become effective (unless otherwise provided therein) when one or
more counterparts have been signed by each party and delivered to the other
party.
8.9 PUBLICITY AND REPORTS.
Seller and Buyer shall coordinate all publicity relating to the
transactions contemplated by this Agreement and no party shall issue any
press release, publicity statement or other public notice relating to this
Agreement, or the transactions contemplated by this Agreement, without
consulting with the other party, and in no event may any such public
disclosure refer to the purchase price payable to Seller hereunder, except to
the extent that independent legal counsel to Seller or Buyer, as the case may
be, shall deliver a written opinion to the other party that a particular
action is required by applicable law.
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8.10 CONFIDENTIALITY.
All information disclosed in writing, whether before or after the
date hereof, in connection with the transactions contemplated by, or the
discussions and negotiations preceding, this Agreement to any other party (or
its representatives) shall be kept confidential by such other party and its
representatives and shall nor be used by any such Persons other than as
contemplated by this Agreement, except to the extent that (i) such
information was known by the recipient when received, (ii) such information
is or hereafter becomes lawfully obtainable from other sources, (iii) such
information is necessary or appropriate to disclose to a Governmental Entity
having jurisdiction over the parties, (iv) may otherwise be required by law
or (v) such duty as to confidentiality is waived in writing by the other
party. If this Agreement is terminated, each party shall use all reasonable
efforts to return upon written request from the other party all documents
(and reproductions thereof) received by it or its representatives from such
other party (and, in the case of reproductions, all such reproductions made
by the receiving party) that include information not within the exceptions
contained in the first sentence of this Section 8.10, unless the recipients
provide assurances reasonably satisfactory to the requesting party that such
documents have been destroyed.
8.11 PARTIES IN INTEREST.
This Agreement shall be binding upon and inure to the benefit of
each party, and nothing in this Agreement, express or implied, is intended to
confer upon any other person any rights or remedies of any nature whatsoever
under or by reason of this Agreement. Nothing in this Agreement is intended
to relieve or discharge the obligation of any third person to (or to confer
any right of subrogation or action over against) any party to this Agreement.
8.12 PERFORMANCE BY SUBSIDIARY.
Each party agrees to cause its subsidiaries to comply with any
obligations hereunder relating to such subsidiaries and to cause its
subsidiaries to take any other action which may be necessary or reasonably
requested by the other party in order to consummate the transactions
contemplated by this Agreement.
8.13 NOTICES AND PAYMENT INSTRUCTIONS
Any notice or other communication hereunder must be given in writing
and (a) delivered in person, (b) transmitted by telex, telefax or
telecommunications mechanism provided that any notice so given is also mailed
as provided in clause (c) or (c) mailed by certified or registered mail,
postage prepaid), receipt requested (A) if to Buyer to Universal Outdoor,
Inc., 321 N. Clark Street, Suite 1010, Chicago, IL 60610, ATTENTION: Mr.
Brian Clingen, with a copy to Skadden, Arps, Meagher, Slate & Flom LLP, 919
Third Avenue, New York, NY 10022, ATTENTION: Howard A. Ellin; (B) if to
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Seller to 5551 Corporate Boulevard, Suite 2A, Baton Rouge, LA 70808,
ATTENTION: Keith A. Istre, with a copy to Kean, Miller, Hawthorne, D'Armond,
McCowan & Jarman. L.L.P., One American Place, 22nd Floor, Baton Rouge, LA
70825, ATTENTION: Ben R Miller, Jr.; (C) if to Lamar to 5551 Corporate
Boulevard, Suite 2A, Baton Rouge, LA 70808, ATTENTION: Keith A. Istre, with a
copy to Kean, Miller, Hawthorne, D'Armond, McCowan & Jarman, L.L.P., One
American Place, 22nd Floor, Baton Rouge, LA 70825, ATTENTION: Ben R. Miller,
Jr., and (D) if to Guarantor to 5551 Corporate Boulevard, Suite 2A, Baton
Rouge, LA 70808, ATTENTION: Keith A. Istre, with a copy to Kean, Miller,
Hawthorne, D'Armond, McCowan & Jarman, L.L.P., One American Place, 22nd
Floor, Baton Rouge, LA 70825, ATTENTION: Ben R. Miller, Jr.; or, in each
case, to such other address or to such other person as either party shall
have last designated by such notice to the other party. Each such notice or
other communication shall be effective (i) if given by telecommunication,
when transmitted to the applicable number so specified in (or pursuant to)
this Section 8.13 and an appropriate answer-back is received, (ii) if given
by mail, three days after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid or (iii) if given by any
other means, when actually received at such address.
With respect to any payments to be made hereunder to any party, such
payment shall be made by wire transfer in immediately available funds to the
account of such party designated in writing to the other parties hereto.
8.14 EXPENSES.
Seller and Buyer shall each pay their own expenses incident to the
negotiation, preparation and performance of this Agreement and the
transactions contemplated hereby, including but not limited to the fees,
expenses and disbursements of their respective investment bankers,
accountants and counsel.
8.15 LITIGATION.
All litigation relating to or arising under or in connection with
this Agreement shall be brought only in the federal or state courts located
in the State of Delaware and County of Wilmington, which shall have exclusive
jurisdiction to resolve any disputes with respect to this Agreement, with
each party irrevocably consenting to the jurisdiction thereof for any
actions, suits or proceedings arising out of or relating to this Agreement.
The parties hereto irrevocably waive trial by jury. Subject to Sections 7.5
and 7.7, in the event of any breach of the provisions of this Agreement, the
nonbreaching party shall be entitled to equitable relief, including in the
form of injunctions and orders for specific performance, where the applicable
legal standards for such relief in such courts are met, in addition to all
other remedies available to the non-breaching party with respect thereto at
law or in equity.
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8.16 ATTORNEY'S FEE'S.
In the event of any Action for the breach of this Agreement or
misrepresentation by any party, the prevailing party shall be entitled to
reasonable attorney's fees, costs and expenses incurred in such Action.
8.17 REPRESENTATION BY COUNSEL.
Seller and Buyer each acknowledge that each party to this Agreement
has been represented by counsel in connection with this Agreement and the
transactions contemplated by this Agreement. Accordingly, any rule of Law or
any legal decision that would require interpretation of any claimed
ambiguities in this Agreement against the party that drafted it has no
application and is expressly waived.
8.18 INTERPRETATION.
The provisions of this Agreement shall be interpreted in a
reasonable manner to effect the intent of Buyer and Seller. Further,
"hereof," "herein," "hereunder," "hereto," "this Agreement" and comparable
terms refer to the entire instrument, including any exhibits or schedules to
the instrument, and not to any particular article, section or other
subdivision of the instrument.
8.19 SEVERABILITY.
If any provision of this Agreement is determined to be invalid,
illegal or unenforceable by any Governmental Entity, the remaining provisions
of this Agreement to the extent permitted by Law shall remain in full force
and effect provided that the essential terms and conditions of this Agreement
for all parties remain valid, binding and enforceable; provided that the
economic and legal substance of the transactions contemplated is not affected
in any manner materially adverse to any party. In event of any such
determination, the parties agree to negotiate in good faith to modify this
Agreement to fulfill as closely as possible the original intents and purposes
hereof. To the extent permitted by Law, the parties hereby to the same extent
waive any provision of Law that renders any provision hereof prohibited or
unenforceable in any respect.
8.20 KNOWLEDGE CONVENTION.
Whenever any statement herein or in any schedule, exhibit, certificate or
other documents delivered to any party pursuant to this Agreement is made "to
[its] knowledge" or "to [its] best knowledge" or words of similar intent or
effect of any party or its representative, each statement shall be deemed to
include a representation that a reasonable investigation has been conducted.
A reasonable investigation shall mean that the senior representatives of the
party have reviewed the relevant statement and have consulted with the
appropriate management individuals as to whether they have
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knowledge of any fact or circumstance that would make any such statement
untrue and have reviewed documents in the possession of such representatives.
Knowledge of an individual shall be limited to the actual knowledge of such
individual after giving effect to the investigation described above and shall
not include any matter, fact or circumstance which such individual otherwise
should have known.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officers as of the day and
year first above written.
SELLER FLORIDA LOGOS, INC.
By:
-----------------------------------------
Keith A. Istre
Vice President & Chief Financial Officer
LAMAR THE LAMAR CORPORATION
By:
-----------------------------------------
Keith A. Istre
Vice President & Chief Financial Officer
GUARANTOR LAMAR ADVERTISING COMPANY
By:
-----------------------------------------
Keith A. Istre,
Vice President & Chief Financial Officer
BUYER UNIVERSAL OUTDOOR, INC.
By:
-----------------------------------------
Brian T. Clingen
Vice President & Chief Financial Officer
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EXECUTION COPY
AGREEMENT
THIS AGREEMENT is made on June ___, 1997, by and among AMELIA NEWMAN and
MARILYN COLE, the sole members of an unincorporated joint venture whose F.E.I.N.
is 11-6137748 (collectively, the "SELLER"), UNIVERSAL OUTDOOR (N.Y.) ADVERTISING
ACQUISITION CORPORATION, a Delaware corporation whose F.E.I.N is _______________
("BUYER"), UNIVERSAL OUTDOOR, INC., an Illinois corporation whose F.E.I.N. is
36-3951893 ("PARENT"), and ALLIED OUTDOOR ADVERTISING, INC., a New York
corporation ("GUARANTOR"). In consideration of the mutual promises and
undertakings contained in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
SELLER agrees to sell and BUYER agrees to buy certain specified assets of
SELLER, upon the following terms and conditions:
1.0 EFFECTIVE DATE. The effective date of the transfer of the assets to
be conveyed shall be the date of Closing.
2.0 ASSETS TO BE SOLD. At Closing, SELLER agrees to convey to BUYER all
of SELLER'S rights, title and interests in and to the following property
("Assets") at the locations listed on Exhibit 2.0 free and clear of all liens
and encumbrances that are caused by any action, inaction or omission by Seller,
by a Bill of Sale and Assignment and Assumption Agreements:
2.1 OUTDOOR ADVERTISING DISPLAYS. All personal property owned by
Seller and used in the operation of the existing bulletin, painted walls or any
other outdoor advertising displays ("Displays") as are more fully described by
location in Exhibit 2.0, which property shall be conveyed pursuant to the
original Bill of Sale, which is attached as Exhibit 2.1;
2.2 GROUND LEASES. The title, leases, licenses or agreements for the
rights of use ("Leases"), for the locations listed on Exhibit 2.0, which Leases
shall be conveyed pursuant to the original Assignment and Assumption of Leases,
which is attached as Exhibit 2.2;
2.3 ADVERTISING CONTRACTS. The advertising contracts ("Contracts")
for the locations listed on Exhibit 2.0, which
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Contracts shall be conveyed pursuant to the original Assignment and Assumption
of Advertising Contracts, which is attached as Exhibit 2.3;
2.4 PERMITS. All permits and governmental approvals ("Permits") for
the purposes of erecting, operating, illuminating and maintaining the Displays
at the locations listed on Exhibit 2.0, which Permits shall be conveyed pursuant
to the original Assignment and Assumption of Permits, which is attached as
Exhibit 2.4; and
2.5 [Intentionally Omitted]
3.0 PURCHASE PRICE. BUYER agrees to purchase the Assets for the sum of
$2,303,040 (plus or minus prorations as specified below)("Purchase Price")
payable to SELLER and PARENT agrees to assume the Assumed Liabilities (as
defined below) pursuant to an original undertaking in the form attached as
Exhibit 3.0(b)("Undertaking"). The Purchase Price shall be paid by wire
transfer to an account designated by Seller on Exhibit 3.0(a).
3.1 ASSUMED LIABILITIES. Assumed Liabilities means all obligations
of the Seller pursuant to the Leases, Permits and Contracts.
3.2 ALLOCATION OF PURCHASE PRICE. Prior to the Closing Date, the
BUYER and the SELLER shall mutually agree to (and shall each deliver at Closing)
the allocation of the Purchase Price as provided below (the "Allocation
Schedule"). Prior to Closing, the SELLER shall make available to the BUYER, or
provide the BUYER with access to, all information necessary for the preparation
of the Allocation Schedule. The BUYER and the SELLER shall cooperate and use
their best efforts to prepare and to agree to the Allocation Schedule prior to
Closing. The Allocation Schedule shall allocate the Purchase Price (which in
the parties joint discretion constitutes the amount paid to acquire the separate
Assets for federal, state or local income tax purposes) among the Assets
provided for in Section 2.0 hereof in accordance with the fair market value of
such Assets. The BUYER and SELLER shall each report the transactions
contemplated under this Agreement for all federal, state and local income tax
and other purposes (including, without limitation, for purposes of Section 1060
of the Code) as set forth on the Allocation Schedule.
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4.0 CLOSING. This transaction shall be closed ("Closing") simultaneously
with the Closing under that certain Asset Purchase Agreement, by and between
BUYER, PARENT and Allied Outdoor Advertising, Inc., a New York corporation,
dated June , 1997 ("Closing Date").
5.0 TRANSFER OF ASSETS.
5.1 SELLER shall convey the Assets referred to in Paragraphs 2.0 -
2.4 to BUYER by delivering to BUYER a Bill of Sale and Assignment and Assumption
Agreements in the form set forth on Exhibits 2.1, 2.2, 2.3 and 2.4. PARENT
shall assume the Assumed Liabilities referred to in paragraph 3.1 by delivering
to SELLER the Undertaking in the form set forth in Exhibit 3.0(b).
5.2 BUYER shall be entitled to all payments due under the Contracts
beginning on the Closing Date and thereafter. In the event the SELLER receives
any such payments after Closing, the same shall be immediately transferred to
the BUYER. In the event the SELLER receives, after Closing, any checks for any
such payments payable to the SELLER, the SELLER shall endorse the same, payable
to the order of the BUYER, and shall immediately deliver the said checks to the
BUYER. It is understood, however, that any sums due under the Contracts for any
time period before the Closing shall remain the property of the SELLER and shall
continue to be a receivable of the SELLER, even after Closing. If there shall
be any check received pertaining to both time periods (before and after the
Closing) BUYER and SELLER agree to distribute the proceeds in a manner
consistent with this paragraph. At Closing, SELLER shall deliver executed
Notices from SELLER to advertisers directing payment to BUYER after the Closing
of payments for advertising services dated on and after the Closing on Contracts
conveyed. At Closing BUYER shall deliver executed notices from BUYER to lessors
of the Leases advising the lessors that the SELLER's obligations under the
Leases have been assigned to and assumed by the PARENT effective the Closing.
5.3 SELLER will, on or after Closing, execute and deliver any other
documents as may be reasonably necessary to transfer or further perfect title to
the Assets transferred to BUYER including, without limitation, bills of sale,
assignments, permits and any other documents and send letters and notices to
advertisers, lessors and appropriate government officials
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notifying them of the date of transfer and that future payments, notices, etc.,
are to be directed to BUYER or its nominee.
6.0 CLOSING STATEMENT. At the time of Closing, the parties shall prepare
a Closing Statement which shall be signed by each of the parties and shall
indicate appropriate debits and credits on account of the Purchase Price,
prorations, security deposits and other adjustments as more fully described in
this Agreement.
7.0 BOOKS AND RECORDS. At the time of Closing, SELLER shall deliver to
BUYER all books, records, and other documents in SELLER's possession or control,
relating to the Assets, including but not limited to the following: (1) all
Leases, Contracts and Permits (2) all communications from lessors, advertisers,
government authorities or third-parties relating to the Assets or the operation
of Assets, and (3) all documents and computer-generated reports of the last
twelve (12) months relating to the Assets to the extent they exist and are
conveniently available, including a complete list of all ground lease lessors,
advertising customers and their respective mailing addresses and phone numbers,
all photographs of Displays under contract and all art work, sketches, pounce
patterns, diagrams, schematics and related materials.
7.1 SELLER may retain copies of and shall continue after the Closing
Date to have access to any books, records or other documents transferred:
7.1.1 which are or may be relevant to any claim or defense
SELLER may have against third persons, including any governmental body, in any
action or proceeding concerning the Assets, or
7.1.2 which are or may be relevant to any liability of Seller
in connection with or arising out of the conduct or ownership of the Assets.
7.2 This provision shall not constitute a covenant by or requirement
that the BUYER preserve or retain for more than one year from the Closing Date
any books, records, or other documents delivered under this provision.
8.0 NO LIENS AT CLOSING. SELLER will, prior to or at the time of Closing,
take such steps necessary to deliver title to the
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Assets free of any liens or encumbrances that are caused by any action, inaction
or omission by SELLER and as otherwise warranted.
9.0 PRORATIONS. The Purchase Price set forth in Paragraph 3.0 is subject
to the following adjustments and prorations:
9.1 Plus an amount which will credit SELLER for lease payments which
have been paid in advance for time periods on and after Closing ("Prepaid
Leases"). Attached as Exhibit 9.1 is a list of Prepaid Leases which Buyer and
Seller agree shall be added to the Purchase Price.
9.2 Minus the amounts which will credit Buyer for the following:
9.2.1 Any lease payments for which Buyer becomes obligated
relating to any period of time prior to Closing.
9.2.2 Any advertising services delivered by Parent or Buyer
on and after Closing for which Seller has already billed or otherwise receives
payment.
9.2.3 All items of income and expense listed below relating
to the Assets will be prorated as of the Closing Date, with Seller liable to the
extent such items relate to any time period up to and including the Closing
Date, and Buyer liable to the extent such items relate to periods on or
subsequent to the Closing Date; including without limitation (a) personal
property, real estate, occupancy and water taxes, if any, on or with respect to
the Assets; (b) rents, taxes and other items payable by Seller under any
contract to be assigned to or assumed by Buyer; (c) the amount of sewer rents
and charges for water, telephone, electricity and other utilities and fuel; (d)
all rentals that are or would be payable or have accrued pursuant to "percentage
rental" lease provisions with respect to periods after the Closing Date; and (e)
all items paid or payable on or after the Closing Date under any obligation
specifically assumed to the extent not specifically referenced in clauses (a) -
(d) above which are normally prorated in connection with similar transactions.
A list of percentage leases with the date of expiration is attached hereto as
Exhibit 9.2.3;
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9.2.4 If current payments with respect to items to be
prorated pursuant to this Section 9.2 are not ascertainable on or before the
Closing Date, such payments shall be prorated on the basis of the most recently
ascertainable bill therefor and shall be reprobated between Seller and Buyer
when the current bills with respect to such items have been issued and a cash
settlement shall be made within thirty (30) days thereafter.
10.0 SELLER'S AND GUARANTOR'S WARRANTIES. SELLER represents, warrants and
agrees that the following are true and correct on the date of this Agreement and
will continue to be true and correct on each day until and including the Closing
as though made on and as of each day:
10.1 CAPACITY. Amelia Newman and Marilyn Cole have the legal
capacity to execute this Agreement and to consummate the transactions
contemplated hereby. Seller is an unincorporated joint venture whose sole
members are Amelia Newman and Marilyn Cole.
10.2 AUTHORIZATION. SELLER is duly authorized to execute, deliver and
complete this Agreement.
10.3 [Intentionally Omitted]
10.4 LIABILITIES. Except as set forth in Exhibit 10.5, SELLER has
not received written notice nor has any knowledge of any liability, absolute or
contingent, arising from or in any way connected with the Assets.
10.5 LITIGATION. Except as set forth in Exhibit 10.5, Seller has not
received written notice nor has any knowledge of any action, proceeding, or
investigation pending or threatened against SELLER or involving any of the
Assets before any court or before any governmental department, commission,
board, agency, or instrumentality, nor does SELLER know of any basis for any
such action, proceeding or investigation which could result in any order,
injunction or decree against SELLER or involve any of the Assets.
10.6 AGREEMENTS. This Agreement will not conflict with, result in a
breach of the terms and conditions of, accelerate any provision of, or
constitute any default under any
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contract or agreement to which SELLER is now, or may become a party.
10.7 TITLE OF ASSETS. As of the Closing, in the case of the Leases,
Seller has, and will deliver to Buyer a leasehold interest in each of the real
properties described on Exhibit 2.0, free and clear of all liens and
encumbrances that are caused by any action, inaction or omission by Seller. As
of Closing, the Seller will have, and will deliver to the Buyer, good and
marketable title to all of the other Assets.
10.8 CONDITION OF DISPLAYS. The Displays and all related equipment
to be sold to BUYER are in good working order and repair and are fit for their
intended purpose in accordance with industry standards. SELLER has not received
any written notice nor has any knowledge that any Display fails to comply with
all applicable building codes, zoning or other promulgations of entities having
jurisdiction over the construction and maintenance of the Displays, except as
set forth on Exhibit 10.8.
10.9 COMPLIANCE WITH APPLICABLE LAWS. The SELLER has not been
threatened to be charged with, nor has been given written notice of, any
violation of, or to the best of SELLER's knowledge, is under investigation with
respect to, any applicable laws, ordinances, rules and regulations of any
federal, state, local or foreign governmental authority, except as set forth on
Exhibit 10.9(a). The SELLER (i) has timely filed or will timely file all tax
returns required to be filed by the SELLER on or prior to the Closing Date, (ii)
has timely paid in full all taxes that are due or claimed to be due with respect
to any periods ending on or before the Closing Date, (iii) is not required to
file any state tax returns other than as set forth on Exhibit 10.9(b), (iv) has
not received any written notice nor has any knowledge that any deficiency for
any taxes has been proposed, asserted or assessed against the SELLER which has
not been resolved and paid in full and (v) has not received any notice of
deficiency or assessment from any tax authority with respect to liabilities for
taxes which has not been resolved and paid in full. In addition, there are no
liens, security interests or other encumbrances for taxes upon any of the Assets
other than liens, security interests or other encumbrances for taxes not yet due
or payable. The GUARANTOR shall also deliver to BUYER proper certified copies
of resolutions authorizing the GUARANTOR's guarantee of the SELLER's obligations
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under this Agreement and the grant of a non-exclusive royalty-free license to
BUYER and PARENT to use the GUARANTOR's name and marks.
10.10 LEASES. The Leases are in full force and effect and permit the
continued presence of the Displays as stated in the Leases. SELLER has not
received written notice nor has any knowledge that either SELLER or any lessor
is in default of any Lease. The Leases are freely assignable to BUYER without
consent of the lessors or any other party. Contractual lease payments will be
made by SELLER for all periods up to the Closing.
10.11 CONTRACTS. The Contracts are in full force and effect and
enforceable in accordance with their terms. Neither SELLER nor to SELLER's
knowledge is any advertiser in default of any Contract.
10.12 PERMITS. Including as set forth in Exhibit 10.5, SELLER has
disclosed to BUYER and PARENT all information it possesses with respect to all
permits and other federal, state and local authorizations which permit the
continued presence of the Displays (where located); all applicable fees for such
Permits have been paid; to SELLER's knowledge, all such Permits are fully
transferable to BUYER; and neither the execution nor the consummation of this
Agreement will terminate any Permit. SELLER agrees to cooperate fully with
BUYER in renewing any Permit after Closing, PROVIDED, THAT, any such renewal
shall be at the sole expense of BUYER.
10.13 BROKERS. SELLER is not a party to or in any way obligated
under any contract for payment of fees and expenses to any broker or finder in
connection with the origin, negotiation, execution or consummation of this
Agreement, and notwithstanding Paragraph 15, SELLER agrees to indemnify and hold
BUYER harmless from any liability arising from this transaction from any loss,
liability or obligation incurred by BUYER by reason of a breach of this
representation.
10.14 DISCLOSURE. No representation or warranty made by SELLER in
this Agreement nor any statement or certificate already furnished or to be
furnished by SELLER in connection with the transactions contemplated herein,
contain any known untrue statement of or fails to state a known material fact.
8
<PAGE>
10.15 NO CONTINUING INTEREST. Following Closing, neither SELLER nor
any officer, director or shareholder of SELLER will have any direct, indirect or
beneficial ownership or other financial interest in any real or personal
property which is in any way involved with or related to the operation of the
Assets being purchased by BUYER.
11.0 PARENT'S AND BUYER'S WARRANTIES. PARENT and BUYER represent, warrant
and agree that the following are true and correct on the date of this Agreement
and will continue to be true and correct on each day until and including the
Closing as though remade each day.
11.1 ORGANIZATION. Each of PARENT and BUYER is a corporation formed
under the laws of its state of incorporation, it has complied with all laws
concerning the right of the corporation to conduct its business and is legally
qualified to transact such business. Each of PARENT and BUYER has the full
power and authority to own, lease and operate its properties and conduct its
business as conducted in the places where the properties are now owned, leased
or operated, by SELLER.
11.2 AUTHORIZATION. Each of PARENT and BUYER is duly authorized to
execute, deliver and complete this Agreement.
11.3 COMPLIANCE WITH STATES' CORPORATE LAWS. Each of PARENT and
BUYER will comply with all the requirements and conditions of the applicable
corporation law of its state of incorporation relative to the sale of the assets
by the date of Closing and will deliver to SELLER an Officer's Certificate
attesting to its authority to negotiate and consummate this transaction whether
or not required by the applicable state corporate law.
11.4 BROKERS. Neither PARENT nor BUYER is a party to or in any way
obligated under any contract for payment of fees and expenses to any broker or
finder in connection with the origin, negotiation, execution or consummation of
this Agreement, and notwithstanding Paragraph 15, each of PARENT and BUYER
agrees to indemnify and hold SELLER harmless from any liability arising from
this transaction from any loss, liability or obligation incurred by SELLER by
reason of a breach of this representation.
9
<PAGE>
12.0 CONDITIONS TO OBLIGATIONS OF BUYER. The obligation of BUYER to
close or perform is subject to the satisfaction of the following conditions, any
of which the BUYER may at its election enforce or waive:
12.1 [Intentionally Omitted]
12.2 All representations and warranties of SELLER hereunder shall be
true and correct as of the date of this Agreement and shall be true and correct
in all respects on the Closing Date with the same force as if such
representations and warranties had been made on the Closing Date, all agreements
to be performed by SELLER on or prior to the Closing Date shall have been fully
performed, and BUYER shall have received a certificate dated the Closing Date
signed by Amelia Newman and Marilyn Cole to that effect.
12.3 There shall not have been any material adverse change in the
Assets or SELLER's condition, financial or otherwise, including without
limitation its relationships with customers, landlords or others, between the
date of this Agreement and the date of Closing. SELLER agrees to operate and
maintain its business in its regular course from the date of this Agreement to
Closing.
12.4 SELLER shall have maintained the Assets to be conveyed,
including the Displays, in at least as good condition and repair as on the date
of this Agreement and will not voluntarily suffer anything to be done that will
decrease the value of the Assets, ordinary wear and tear excepted.
12.5 Counsel for BUYER shall have approved the form, substance and
sufficiency of all instruments to be delivered by SELLER at or before Closing.
Approval will not be unreasonably withheld.
12.6 If SELLER cannot timely cure any defect which prevents Closing
after its best efforts, then either party may rescind this Agreement.
13.0 CONDITIONS TO OBLIGATIONS OF SELLER. The obligation of SELLER to
close or perform is subject to the satisfaction of the following conditions, any
of which the SELLER may at its election enforce or waive:
10
<PAGE>
13.1 All representations and warranties of BUYER and PARENT hereunder
shall be true and correct as of the date of this Agreement and shall be true and
correct in all respects on the Closing Date with the same force as if such
representations and warranties had been made on the Closing Date, all agreements
to be performed by BUYER and PARENT on or prior to the Closing Date shall have
been fully performed, and SELLER shall have received a certificate dated the
Closing Date signed by the duly authorized President or Vice President of BUYER
and PARENT to that effect.
13.2 Counsel for SELLER shall have approved the form, substance and
sufficiency of all instruments to be delivered by BUYER and PARENT at or before
Closing. Approval will not be unreasonably withheld.
13.3 If BUYER cannot timely cure any defect which prevents Closing
after its best efforts, then either party may rescind this Agreement.
14.0 GENERAL CONDITIONS.
14.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations and warranties made by the Parties to this Agreement shall
survive until fourteen (14) months following the Closing of this Agreement. The
covenants and agreements contained herein shall survive without limitation.
14.2 SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of the successors and assigns of SELLER PARENT and BUYER.
14.3 NOTICES. All notices shall be in writing and delivered in person
or sent by certified, registered or express mail or by facsimile:
IF FOR PARENT OR BUYER, Universal Outdoor, Inc.
ADDRESSED TO: 321 North Clark Street
Suite 1010
Chicago, Illinois 60601
Attn: Paul G. Simon
Telecopy: (312) 664-8071
Kelso & Company
11
<PAGE>
320 Park Avenue
24th Floor
New York, New York 10022
Attn: James J. Connors III
Telecopy: (212) 223-2379
WITH A COPY TO: Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attn: Lou R. Kling, Esq.
Howard L. Ellin, Esq.
Telecopy: (212) 735-2000
IF FOR SELLER, ADDRESSED TO: Amelia Newman and Marilyn Cole c/o
Allied Outdoor Advertising Inc.
34 Florence Street
South Hackensack, New Jersey 07606
Attn: Marc Joseph
Senior Vice President for
Legal Affairs, General Counsel
Telecopy: (201) 646-1956
WITH A COPY TO: Allied Outdoor Advertising Inc.
34 Florence Street
South Hackensack, New Jersey 07606
Attn: George W. Newman
Telecopy: (201) 646-1956
Joseph & Feldman
One Parker Plaza
Fort Lee, New Jersey 07024
Attn: Fred Feldman, Esq.
Telecopy: (201) 592-1906
or such other address for either or both as is stated in a written notice given
in compliance under this clause.
14.4 HEADINGS. The various headings used in this Agreement as
headings for sections or otherwise are for convenience only and shall not be
used in interpreting the text of the section in which they appear.
12
<PAGE>
14.5 PRESS RELEASES. Prior to the Closing, any press releases or
other public announcement of this transaction, other than any filing that may be
required by law, shall be first approved by the BUYER and the SELLER.
14.6 GOVERNING LAW. This Agreement shall be construed and interpreted
in accordance with the law of the State of New York, without regard to the
conflict of laws principles thereof.
14.7 SEVERABILITY. The invalidity of any provision of this Agreement
shall not impair the validity of any other provision. If any provision of this
Agreement is determined by a court of competent jurisdiction to be
unenforceable, that provision will be deemed severable and the Agreement shall
be enforced with that provision severed or as modified by the court to the
extent necessary to carry out the present manifest intentions of the parties.
14.8 ENTIRE AGREEMENT AND MODIFICATION. This Agreement sets forth the
entire understanding of the parties. It may be amended, modified or terminated
only by instruments signed by the parties.
14.9 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be and shall constitute one and the same
instrument.
14.10 FEES AND COSTS. PARENT, BUYER and SELLER agree that each party
shall bear its own costs and expenses, including attorneys fees, in connection
with this transaction.
15.0 INDEMNIFICATION.
15.1 SELLER shall defend, indemnify and hold PARENT and BUYER
harmless against and in respect of:
15.1.1 Any and all loss, damage, deficiency, or liability from
(i) any misrepresentation, breach of representation, warranty or covenant, or
nonfulfillment of any agreement on the part of SELLER under this Agreement and
(ii) any liability or obligation incurred by SELLER or arising out of any event
or circumstances occurring prior to the Closing Date which is not an Assumed
Liability by BUYER (including, without limitation, the Excluded Liabilities (as
defined in the Undertaking)); and
13
<PAGE>
15.1.2 Any and all actions, suits, proceedings, demands,
assessments, judgments, costs and expenses, including reasonable attorneys'
fees, incident to Sub-Paragraph 15.1.1.
15.1.3 The SELLER's obligation to indemnify the PARENT and
BUYER for damages pursuant to this Section 15.1 is subject to the following
limitations: (i) no indemnification shall be made by the SELLER for damages
arising solely from clause (i) of Sub-Paragraph 15.1.1 unless the aggregate
amount of such damages exceeds $47,000 and then to the full extent of all such
damages; and (ii) in no event shall the Seller's aggregate obligation to
indemnify the PARENT and BUYER hereunder exceed the Purchase Price.
15.2 PARENT or BUYER shall within reasonable time of its receiving
notice of a claim give written notice to the other party of any claim for which
that party seeks indemnification under Paragraphs 15.1, and the indemnitor shall
have the right to contest, defend, or litigate any matter in respect of which
indemnification is claimed. Any delay in or failure to give notice of a claim
for indemnification shall not relieve the indemnitor's obligation except to the
extent that indemnitor can demonstrate prejudice by such delay or failure. The
indemnitor shall have the exclusive right to settle, either before or after the
initiation of litigation, any matter in respect of which indemnification is
claimed, but, prior to any such settlement, written notice of its intention to
do so shall be given to the other party. In the event the indemnitor fails
promptly to defend any such claim as provided in Paragraphs 15.1, the other
party may do so and shall then have the right, in its sole discretion, exercised
in good faith and upon the advice of counsel, to settle, either before or after
the initiation of litigation, any matter in respect of which indemnification is
claimed.
16.0 CONTINUING COVENANTS. [Intentionally Omitted]
17.0 CORPORATE NAME. GUARANTOR hereby grants to BUYER and PARENT a
non-exclusive royalty-free license to use the names and marks set forth on
Exhibit 17.0 in connection with the operation of the Assets following the
Closing Date for a term of six months following the Closing Date in a manner
consistent with the use of such licensed marks by the SELLER in connection with
the SELLER's business prior to the Closing Date, such grant of rights to BUYER
and PARENT being subject to BUYER's and PARENT's obligation not to use the
licensed marks in any manner which would materially degrade the
14
<PAGE>
quality or value of such licensed marks. Following such period, such license
shall continue thereafter, on the same terms and conditions as provided above,
until such time as GUARANTOR shall have notified BUYER and PARENT of its intent
to terminate the license; PROVIDED, HOWEVER, that such notification shall be in
writing and shall be given at least sixty (60) days prior to the intended date
of termination.
18.0 GUARANTEE. In consideration of the benefits to SELLER under this
Agreement, GUARANTOR does hereby guarantee, jointly and severally, with SELLER,
all of the agreements (including but not limited to agreements to indemnify),
representations, warranties and covenants of SELLER under this Agreement and
under all documents to be executed pursuant to this Agreement.
15
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
AMELIA NEWMAN
-------------------------------
MARILYN COLE
-------------------------------
UNIVERSAL OUTDOOR (N.Y) ADVERTISING
ACQUISITION CORPORATION
By:
----------------------------
Name:
Title:
UNIVERSAL OUTDOOR, INC.
By:
----------------------------
Name:
Title:
As to Sections 10.9, 17.0 and 18.0,
ALLIED OUTDOOR ADVERTISING, INC.
By:
----------------------------
Name:
Title:
<PAGE>
INDEX TO EXHIBITS
Exhibit
- -------
2.0 - List of Displays
2.1 - Bill of Sale
2.2 - Assignment and Assumption of Leases
2.3 - Assignment and Assumption of Contracts
2.4 - Assignment and Assumption of Permits
3.0(a) - Seller's Account Information
3.0(b) - Form of Undertaking
9.1 - Prepaid Leases
9.2.3 - Percentage Leases
10.5 - Litigation
10.8 - Condition of Displays
10.9(a) - Compliance With Applicable Laws
10.9(b) - Taxes
17.0 - Use of Name
<PAGE>
EXHIBIT 2.0
DISPLAYS
<PAGE>
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS, that AMELIA NEWMAN and MARILYN COLE
(together, the "Seller") pursuant to that certain Agreement, dated June 30, 1997
(the "Agreement") for and in consideration of the sum of $ ___________ and other
valuable consideration to them in hand paid by UNIVERSAL OUTDOOR (N.Y)
ADVERTISING ACQUISITION CORPORATION ("Buyer"), the receipt of which is hereby
acknowledged, do hereby grant, bargain, sell and convey to Buyer, its successors
and assigns, forever, the structures, light and electrical fixtures, aprons,
catwalks, panels and such other fixtures and appurtenances as now exist on the
outdoor advertising displays at the locations more fully described on Exhibit
2.0 to the Agreement attached hereto, subject to the terms and conditions of the
Agreement.
TO HAVE AND TO HOLD THE SAME, unto the Buyer, its successors and assigns
forever. The Seller for itself and its successors and assigns, does hereby
covenant and agree to and with said Buyer, its successors and assigns that
Seller is the lawful owner of the Assets (as defined in the Agreement), and has
good right to sell the same as aforesaid; that the same are free from all
encumbrances that are caused by any action, inaction or omission by Seller, and
the Seller will warrant and defend the sale of the Assets hereby made unto the
Buyer, its successors and assigns, against all and every person and persons
whomever, lawfully claiming or to claim the same, subject to encumbrances, if
any, hereinbefore mentioned.
IT WITNESS WHEREOF, the Seller executed this Bill of Sale this ___ day of
July, 1997.
AMELIA NEWMAN
------------------------------
MARILYN COLE
------------------------------
<PAGE>
ASSIGNMENT AND ASSUMPTION OF LEASES
KNOW ALL MEN BY THESE PRESENTS, that AMELIA NEWMAN and MARILYN COLE
(together, the "Assignor") pursuant to the terms of that certain Agreement dated
June 30, 1997 (the "Agreement"), and on behalf of itself for and in
consideration of the sum of $ _____________ and other good and valuable
consideration to them in hand paid by UNIVERSAL OUTDOOR (N.Y.) ADVERTISING
ACQUISITION CORPORATION, the receipt of which is hereby acknowledged, hereby
assign, transfer, and convey to UNIVERSAL OUTDOOR, INC. ("Assignee"), all of
Assignor's right, title and interest in and to the Leases, for the locations
listed on Exhibit 2.0 to the Agreement, subject to the terms and conditions of
the Agreement.
ASSIGNOR REPRESENTS AND WARRANTS that it owns free and clear of all liens
and encumbrances that are caused by any action, inaction or omission by Assignor
the interest set forth in the attached Leases and that such Leases are freely
assignable without the consent of any other party.
TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns,
with respect to each of the foregoing Leases for and during the remainder of the
respective terms thereof, subject to the performance and observance of all other
covenants, conditions and stipulations set forth respectively therein. By its
acceptance of this assignment, Assignee hereby assumes all of the obligations of
Assignor provided for under each Lease arising from and after the date hereof.
IN WITNESS WHEREOF, Assignor has executed, and Assignee has accepted, this
assignment this ___ day of July, 1997.
AMELIA NEWMAN
------------------------------
MARILYN COLE
------------------------------
<PAGE>
ACCEPTED AND AGREED:
UNIVERSAL OUTDOOR, INC.
By:
--------------------------------
Name:
Title:
ASSIGNMENT AND ASSUMPTION OF ADVERTISING CONTRACTS
KNOW ALL MEN BY THESE PRESENTS, that AMELIA NEWMAN and MARILYN COLE
(together, the "Assignor") pursuant to the terms of that certain Agreement dated
June 30, 1997 (the "Agreement"), and on behalf of itself for and in
consideration of the sum of $ ______________ and other good and valuable
consideration to them in hand paid by UNIVERSAL OUTDOOR (N.Y.) ADVERTISING
ACQUISITION CORPORATION, the receipt of which is hereby acknowledged, hereby
assign, transfer, and convey to UNIVERSAL OUTDOOR, INC. ("Assignee"), all of
Assignor's right, title and interest in and to the Advertising Contracts, for
the locations listed on Exhibit 2.0 to the Agreement, subject to the terms and
conditions of the Agreement.
ASSIGNOR REPRESENTS AND WARRANTS that it owns free and clear of all liens
and encumbrances that are caused by any action, inaction or omission of Assignor
the interest set forth in the attached Advertising Contracts and that such
Advertising Contracts are freely assignable without the consent of any other
party.
TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns,
with respect to each of the foregoing agreements for and during the remainder of
the respective terms thereof, subject to the performance and observance of all
other covenants, conditions and stipulations set forth respectively therein. By
its acceptance of
<PAGE>
this assignment, Assignee hereby assumes all of the
obligations of Assignor provided for under each Advertising Contract arising
from and after the date hereof.
IN WITNESS WHEREOF, Assignor has executed, and Assignee has accepted, this
assignment this ___ day of July, 1997.
AMELIA NEWMAN
------------------------------
MARILYN COLE
------------------------------
ACCEPTED AND AGREED:
UNIVERSAL OUTDOOR, INC.
By:
--------------------------------
Name:
Title:
<PAGE>
ASSIGNMENT AND ASSUMPTION OF PERMITS
KNOW ALL MEN BY THESE PRESENTS, that AMELIA NEWMAN and MARILYN COLE
(together, the "Assignor") pursuant to the terms of that certain Agreement dated
June 30, 1997 (the "Agreement"), and on behalf of itself for and in
consideration of the sum of $ ______________ and other good and valuable
consideration to them in hand paid by UNIVERSAL OUTDOOR (N.Y.) ADVERTISING
ACQUISITION CORPORATION, the receipt of which is hereby acknowledged, hereby
assign, transfer, and convey to UNIVERSAL OUTDOOR, INC. ("Assignee"), all of
Assignor's right, title and interest in and to the Permits, for the locations
listed on Exhibit 2.0 of the Agreement, subject to the terms and conditions of
the Agreement.
ASSIGNOR REPRESENTS AND WARRANTS that it owns free and clear of all liens
and encumbrances that are caused by any action, inaction or omission of Assignor
the interest set forth in the attached Permits and that such Permits are freely
assignable without the consent of any other party.
TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns,
with respect to each of the foregoing Permits for and during the remainder of
the respective terms thereof, subject to the performance and observance of all
other covenants, conditions and stipulations set forth respectively therein. By
its acceptance of this assignment, Assignee hereby assumes all of the
obligations of Assignor provided for under each Permit arising from and after
the date hereof.
IN WITNESS WHEREOF, Assignor has executed, and Assignee has accepted, this
assignment this ___ day of July, 1997.
AMELIA NEWMAN
------------------------------
MARILYN COLE
------------------------------
<PAGE>
ACCEPTED AND AGREED:
UNIVERSAL OUTDOOR, INC.
By:
--------------------------------
Name:
Title:
EXHIBIT 3.0 (a)
SELLER'S ACCOUNT INFORMATION
FOR WIRE TRANSFER
<PAGE>
UNDERTAKING
UNDERTAKING executed and delivered on July , 1997 (the "Undertaking"), by
Universal Outdoor, Inc., an Illinois corporation (the "Parent"), in favor of
Amelia Newman and Marilyn Cole (together, the "Seller").
W I T N E S S E T H:
WHEREAS, pursuant to that certain agreement, dated as of
June 30, 1997 (the "Agreement"), between the Seller, Parent and Universal
Outdoor (N.Y.) Advertising Acquisition Corporation, a Delaware corporation (the
"Buyer"), the Seller has agreed to sell, convey, assign, transfer and deliver
all of its right, title and interest in and to the Assets to the Buyer and the
Parent, and the Buyer and the Parent have agreed to purchase, acquire and accept
such Assets from the Seller, all as more fully described in the Agreement; and
WHEREAS, pursuant to the Agreement, the Parent has agreed to enter into
this Undertaking, pursuant to which the Parent shall assume and agree to pay,
perform, and discharge or cause to be performed and discharged the liabilities
and obligations expressly set forth in Section 2, as more fully provided herein.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. DEFINED TERMS. Capitalized terms which are used but not defined herein
shall have the meaning ascribed to such terms in the Agreement.
2. UNDERTAKING. Except as provided in Section 3 below and subject to the
terms and conditions of the Agreement, the Parent hereby undertakes, assumes and
agrees to pay, perform or discharge, the obligations and liabilities of the
Seller pursuant to the Leases, Permits and Advertising Contracts (collectively,
the "Assumed Liabilities").
<PAGE>
3. EXCLUDED LIABILITIES. Notwithstanding anything contained herein to
the contrary, it is expressly understood and agreed by the parties hereto that
(i) the Assumed Liabilities shall not include any other liabilities or
obligations of the Seller, whether known or unknown, disclosed or undisclosed,
matured or unmatured, accrued, absolute, contingent or otherwise, not
specifically identified in Section 2 hereof and (ii) the Parent shall not
assume, or agree to perform, pay or discharge, and the Parent has not assumed,
any liabilities, obligations or commitments not expressly assumed pursuant to
Section 2 hereof, including, without limitation, liabilities or obligations
relating to or arising out of the following:
(a) any obligation of the Seller to indemnify any person or entity by
reason of the fact that such person or entity was a director, officer, employee,
shareholder or agent of the Seller or was serving at the request of the Seller
as a partner, trustee, director, officer, employee, shareholder or agent of
another entity (whether such indemnification is for judgments, damages,
penalties, fines, costs, amounts paid in settlement, losses, expenses, or
otherwise and whether such indemnification is pursuant to any statute, charter
document, bylaw, agreement, or otherwise);
(b) any liability of the Seller for costs and expenses incurred in
connection with the Agreement; and
(c) any obligation of the Seller under the Agreement.
4. BINDING EFFECT. This Undertaking shall inure to the benefit of the
Seller and its successors and permitted assigns and be binding upon and
enforceable against the Parent and its respective successors and permitted
assigns. In the event of a conflict between the terms hereof and the Agreement,
the terms of the Agreement shall control.
5. COUNTERPARTS. This Undertaking may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
6. Governing Law. This Undertaking shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflict of law principles thereof.
<PAGE>
7. INDEMNIFICATION. Seller, Parent and Buyer hereby agree that the
provisions of Section 15.0 of the Purchase Agreement with respect to
indemnification shall govern all obligations of the parties with respect to the
Assumed Liabilities and the Excluded Liabilities and such other matters
contemplated by this Undertaking as applicable.
<PAGE>
IN WITNESS WHEREOF, this undertaking has been duly executed and delivered
by the duly authorized officers of the parties hereto as of the date first above
written
AMELIA NEWMAN
------------------------------
MARILYN COLE
------------------------------
UNIVERSAL OUTDOOR, INC.
By:
---------------------------
Name:
Title
<PAGE>
EXHIBIT 3.2
ALLOCATION OF PURCHASE PRICE
<PAGE>
EXHIBIT 9.1
PREPAID LEASES
<PAGE>
EXHIBIT 9.2.3
PERCENTAGE LEASES
<PAGE>
EXHIBIT 10.5
LITIGATION
1. City of New York v. Moen Electric, Thomas Magliaccio, Ace Sign & Rigging
(Allied Outdoor Advertising)(1), Supreme Court Kings County, Docket
# 8852/96 (Judge Goldberg); on appeal
- ---------------------
(1) Buyer acknowledges full responsibility for the indicated lawsuit including
liabilities growing out of the same and all costs and expenses related
thereto, but with respect to costs and expenses, only to the extent such
costs and expenses arise after the Closing.
<PAGE>
EXHIBIT 10.8
CONDITION OF DISPLAYS
<PAGE>
EXHIBIT 10.9(a)
COMPLIANCE WITH APPLICABLE LAWS
SEE EXHIBIT 10.5
<PAGE>
EXHIBIT 10.9(b)
TAXES
<PAGE>
EXHIBIT 17.0
USE OF NAME
With regard to the use of the name, Seller grants to the Buyer and
Parent a non-exclusive royalty-free license to use the following names and mark
and no other:
The word "Allied" contained on an elliptical shape as shown hereon.
Such use shall be solely and exclusively limited in connection with the
identification on existing displays.
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF WINSTON & STRAWN]
August 12, 1997
Universal Outdoor Holdings, Inc.
311 S. Wacker Drive
Suite 6400
Chicago, Illinois 60606
Re: 4,800,000 Shares of Common Stock, $0.01 par
value, of Universal Outdoor Holdings, Inc.
--------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Universal Outdoor Holdings, Inc.
(the "Company") in connection with the preparation of the Registration
Statement on Form S-3, Registration No. 333-32607 (together with any
registration statement filed pursuant to Rule 462(b) of the Securities Act of
1933, as amended, the "Registration Statement"), filed by the Company with
the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act"), relating to the
registration of 4,800,000 shares of Common Stock $0.01 par value (the
"Shares"), of the Company. Up to 1,327,705 of the Shares are being offered
by the Company (the "Company Shares") and up to 3,472,295 of the Shares are
being offered by the Selling Stockholders (the "Seller Shares"). This
opinion also relates to any registration statement prepared in connection
with the offering of the Company Shares that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act and the term "Company
Shares" and "Shares" as used herein includes any additional shares of the
Common Stock registered pursuant to such subsequently filed registration
statement.
This opinion letter is delivered in accordance with the requirements
of Item 601(b)(5) of Regulation S-K under the Securities Act.
In connection with this opinion, we have examined and are familiar
with originals or copies, certified or otherwise identified to our
satisfaction, of (i) the Registration Statement, in the form filed with the
Commission and as amended through the date hereof; (ii) the Certificate of
Incorporation of the Company, as currently in effect; (iii) the By-laws of
the Company, as currently in effect; and (iv) the form of resolutions of the
Board of Directors of the Company relating to the
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Universal Outdoor Holdings, Inc.
August 12, 1997
Page 2
filing of the Registration Statement and the issuance and sale of Shares in
connection therewith (the "Resolutions"). We also have examined such other
documents as we have deemed necessary or appropriate as a basis for the
opinions set forth below.
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents
of all documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents. As to certain facts
material to this opinion, we have relied without independent verification
upon oral or written statements and representations of officers and other
representatives of the Company.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company is duly incorporated and validly existing in
Delaware.
2. Assuming that all required actions of directors and
stockholders to accomplish the offering of the Shares are taken (including
without limitation, the adoption of the Resolutions), (i) the Company Shares
will be legally issued, fully paid, and non-assessable when the Company
Shares shall have been delivered to the purchasers thereof against payment of
the agreed consideration therefore, and (ii) the Seller Shares are legally
issued, fully paid, and non-assessable.
The foregoing opinions are limited to the laws of the United States,
the State of Illinois and the General Corporation Law of the State of
Delaware. We express no opinion as to the application of the securities or
blue sky laws of the various states to the issuance or sale of the Shares.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to all references to our firm included in or made
a part of the Registration Statement. In giving such consent, we do not
concede that we are "experts" within the meaning of the Securities Act or the
rules and regulations thereunder or that this consent is required by Section
7 of the Securities Act.
Very truly yours,
/s/ Winston & Strawn
