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EXHIBIT 2.2.1
Purchase and Sale Agreement
between
CSX REALTY DEVELOPMENT CORPORATION,
THE THREE RIVERS RAILWAY COMPANY,
THE ATLANTIC LAND AND IMPROVEMENT COMPANY,
WINSTON-SALEM SOUTHBOUND RAILWAY COMPANY,
GAINESVILLE MIDLAND RAILROAD COMPANY, AND
RICHMOND, FREDERICKSBURG AND POTOMAC
RAILWAY COMPANY
and
RAILCOM, LTD.
Dated January 23, 1996
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Table of Contents
Paragraph Page
1. Definitions................................................... 1
2. Assets to be Conveyed......................................... 2
3. Sales Price................................................... 3
4. License Fees.................................................. 4
5. New Outdoor Advertising Facilities ........................... 5
6. Certain Post-Closing Obligations.............................. 6
7. Indemnifications by RailCom................................... 6
8. Insurance..................................................... 7
9. Representations............................................... 8
10. Breach........................................................ 8
11. Closing Costs................................................. 8
12. Surviving Provisions.......................................... 8
13. Irrevocable Easement.......................................... 8
14. Miscellaneous................................................. 9
Exhibits
Exhibit A List of Outdoor Advertising Facilities and License Agreements
Exhibit B Form of License Agreement
Exhibit C Management Agreement
Exhibit D Form of Grant of Easement and Agreement
Exhibit E Form of Assignment of Management Agreement
Exhibit F Form of Assignment of License Agreements
Exhibit G Revenue Report for the Period Ending December 31, 1995
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PURCHASE AND SALE AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into as of the
23rd day of January, 1996, between CSX REALTY DEVELOPMENT CORPORATION, a Georgia
corporation ("CRDC"), THE THREE RIVERS RAILWAY COMPANY, a Pennsylvania
corporation, THE ATLANTIC LAND AND IMPROVEMENT COMPANY, a Virginia corporation,
WINSTON-SALEM SOUTHBOUND RAILWAY COMPANY, a North Carolina corporation,
GAINESVILLE MIDLAND RAILROAD COMPANY, a Georgia corporation, and RICHMOND,
FREDERICKSBURG AND POTOMAC RAILWAY COMPANY, a Virginia and Delaware corporation
(collectively, "Seller") and RAILCOM, LTD., a Georgia corporation ("RailCom").
BACKGROUND
A. Seller owns, uses or occupies certain real property underlying
certain outdoor advertising facilities located in various states in the United
States. The outdoor advertising facilities consist of signboards, painted
bulletins, and poster panels, all of which are commonly known as billboards.
Each outdoor advertising facility which is the subject of this Agreement is
listed in Exhibit A attached to this Agreement. Seller is also a party to
numerous license agreements related to the outdoor advertising facilities, and a
management agreement related to the outdoor advertising facilities.
B. RailCom wishes to purchase from Seller (i) an easement (or such
lesser right to the greatest extent Seller's interest will support) in
connection with the use and occupancy of certain structures supporting the
outdoor advertising facilities, and (ii) an assignment of Seller's interest in
the license agreements and management agreement related to those outdoor
advertising facilities. Seller is willing to sell such assets upon the terms and
conditions set forth in this Agreement.
TERMS OF AGREEMENT
In consideration of the rights and obligations described in this
Agreement, Seller and RailCom hereby agree as follows:
1. Definitions. Terms capitalized in this Agreement are defined in
parentheses in the body of this Agreement, or as follows:
1.1 "Closing Date" means the date for closing this Agreement designated
by RailCom by notice to Seller (at least five [5] business days in advance), but
no later than March 31, 1996.
1.2 "Easement" means an easement (or such lesser right to the greatest
extent Seller's interest will support) on, over and across that portion of
Seller's interest, if any, in real property (whether owned, leased, licensed or
otherwise occupied) in direct contact with that portion of a structure
supporting an Outdoor Advertising Facility where such structure contacts the
ground or a bridge, together with the airspace occupied by the Outdoor
Advertising Facility (the "Easement Property"), in accordance with the Grant of
Easement (as defined in Paragraph 2.1 of this Agreement). For example, where
there is a billboard which is twenty five (25) feet wide supported by two (2)
poles connected to the ground, the easement related to such billboard shall not
include the space between the poles, regardless of the fact that the space lies
underneath the billboard supported by such poles, but shall include only the
real property which is directly beneath the two (2) supporting poles, and the
airspace occupied by the Outdoor Advertising Facility.
1.3 "Excess Cash Flow" means the annual gross revenue from all of the
Locations beginning on the first day of the calendar month which immediately
follows the calendar month of the Closing Date, less only the sum of (i) an
assumed annual ten percent (10%) management fee, and (ii) during the ten (10)
year period beginning on the first day of the calendar month which immediately
follows the calendar month of the Closing Date, the Hypothetical Annual
Amortization Costs. Any gross revenue generated by (i) the prepayment of future
years' rentals or (ii) condemnation
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proceeds, shall be prorated over and included in gross revenue during the period
to which such gross revenue is attributable for the purpose of calculating
Excess Cash Flow.
1.4 "Hypothetical Annual Amortization Costs" means the hypothetical
debt service on the Sales Price if the Sales Price was borrowed at an interest
rate of eleven percent (11%) per annum, with payments fully amortizing the debt
over a period of ten (10) years, payable in equal monthly installments of
principal and interest due on the last day of each month, in arrears, with the
first payment due on the last day of the calendar month which immediately
follows the calendar month of the Closing Date.
1.5 "License Agreements" means all of the various License Agreements,
dated on or before December 31, 1995, which have been executed by Peterson
Enterprises of Orlando, Inc. ("Peterson"), as exclusive agent for Seller and/or
its affiliates, in connection with licensing to third parties the right to
install, construct, maintain, and repair Outdoor Advertising Facilities and to
use the same for the display of advertising copy, which License Agreements are
listed on Exhibit A to this Agreement. The form of License Agreement is attached
as Exhibit B to this Agreement.
1.6 "Location" or "Locations" means the site of one or more,
respectively, of the Outdoor Advertising Facilities described on Exhibit A to
this Agreement.
1.7 "Location Sales Price" means the pro-rata portion of the Sales
Price applicable to a Location, determined by multiplying the Net Revenue for
the Location by 7.05.
1.8 "Management Agreement" means the Agreement between Seller and/or
its affiliates and Peterson dated June 11, 1993, a copy of which is attached as
Exhibit C to this Agreement.
1.9 "Net Revenue" means the actual revenue received by Seller and/or
its affiliates from Peterson as to any one or more Locations for the twelve (12)
month period ending December 31, 1995.
1.10 "Outdoor Advertising Facility" or "Outdoor Advertising Facilities"
means one or more, respectively, of the signboards, painted bulletins and poster
panels commonly known as billboards, including their supporting structures,
which are the subject of this Agreement, and which are described on Exhibit A
attached to this Agreement.
1.11 "Sales Price" means TWENTY MILLION ONE HUNDRED THOUSAND DOLLARS
($20,100,000).
2. Assets to be Conveyed.
At the closing of the transaction described in this Agreement, Seller
shall convey the following assets (the "Assets") to RailCom:
2.1 Easement. The Easement shall be conveyed by the execution and
delivery by both parties of the Grant of Easement and Agreement attached as
Exhibit D to this Agreement (the "Grant of Easement"). The parties understand
and agree that the descriptions of Locations attached to the Grant of Easement
(the "Original Description") may not be legally sufficient, and the Grant of
Easement shall not be recorded. A Short-Form Notice of the Grant of Easement, in
the form attached as Exhibit B to the Grant of Easement (the "Short-Form
Notice") may be recorded in accordance with the following procedures set forth
in this Paragraph 2.1:
2.1.1 A legal description for each Location for which RailCom
wishes to record a Short-Form Notice shall be prepared by RailCom at its sole
expense, which description does not necessarily have to be prepared by a
licensed surveyor (a "Proposed Description"), and such Proposed Description
shall be submitted to Seller for its approval, at Seller's reasonable
discretion. Seller must respond to a Proposed Description provided to it by
RailCom within thirty (30) days of Seller's receipt of such Proposed
Description.
2.1.2 Upon approval of such description (an "Approved
Description"), CRDC shall cause, if necessary,
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its affiliates (including CSX Transportation, Inc., a Virginia corporation
["CSXT"]) to convey by deed to CRDC such interests as are necessary for CRDC to
grant the Easement to RailCom (the "CSXT Deed"), which deed shall be recorded,
at CRDC's expense, and Seller and RailCom shall execute a Short-Form Notice for
such Location, which may be recorded at RailCom's sole expense. The Approved
Description shall also be attached to the Grant of Easement, in replacement of
the previous description for such Location which shall be deleted from the Grant
of Easement. RailCom, and its successors and assigns, shall reconvey to Seller
all of its right, title and interest in the Original Description for such
Location.
2.1.3 In the event Seller does not approve a Proposed
Description, and in the event RailCom and Seller, acting in a reasonable,
diligent and cooperative manner, cannot agree upon a legal description for a
Location within thirty (30) days after Seller's disapproval of a Proposed
Description, Seller shall provide to RailCom, if applicable, an original CSXT
Deed of the Location from CSXT to CRDC, containing a description acceptable to
Seller (the "Interim Description") along with a Short-Form Notice executed by
Seller using the Interim Description. RailCom may then execute the Short-Form
Notice, and record such Short-Form Notice (at its sole expense) and a CSXT Deed,
if any, and Seller agrees to cooperate, or cause its affiliates to cooperate, in
connection with same. Seller shall promptly reimburse RailCom for the cost of
recording the CSXT Deed and recording taxes related to the CSXT Deed. Such
documents shall state that they include an Interim Description and that it is
intended that such description shall be reconveyed within sixty (60) days and a
final description attached.
2.1.4 If documents containing the Interim Description are
delivered to RailCom, the matter shall then be submitted to binding arbitration.
Within twenty (20) days after providing such documents, Seller shall provide to
RailCom a list of three (3) independent (i.e., not employees of Seller)
surveyors licensed in the state where such Location is located, and RailCom
shall select one (1) of these three (3) surveyors to act as a binding arbitrator
concerning such Location. The Proposed Description shall be submitted to the
arbitrator, who, within thirty (30) days thereafter, shall determine whether the
Proposed Description is sufficient, meaning that a surveyor can reasonably
accurately locate the Easement Property for such Location. If the Proposed
Description meets this requirement, Seller shall pay the arbitrator's fees. If
the Proposed Description does not meet this requirement, the arbitrator shall,
within the same thirty (30) day period, prepare a sufficient description (the
"Sufficient Description"), and all fees of the arbitrator shall be paid by
RailCom. In either case, RailCom, and its successors and assigns, shall
reconvey, at its sole expense, all interest in the property described in the
Interim Description to Seller, and Seller shall execute and cause its affiliates
to execute appropriate documents to allow a CSXT Deed, if applicable, and the
Short-Form Notice to be executed and recorded as to such Location containing the
Sufficient Description. The Sufficient Description shall also be attached to the
Grant of Easement, in replacement of the previous description for such Location,
which shall be deleted from the Grant of Easement.
2.2 Management Agreement. The Management Agreement shall be conveyed by
the execution and delivery of the Assignment of Management Agreement attached as
Exhibit E to this Agreement, as well as the execution and delivery by RailCom of
the acceptance of the assignment included therein, subject to the execution and
delivery by Peterson of the consent to assignment attached thereto.
2.3 License Agreements. The License Agreements shall be conveyed by the
execution and delivery of the Assignment of License Agreements attached as
Exhibit F to this Agreement, as well as the execution and delivery by RailCom of
the acceptance of the assignment included therein. It is intended that only
Locations with an existing License Agreement shall be conveyed to RailCom.
RailCom recognizes that the License Agreements may be terminated by the
licensees after closing, and RailCom shall have no remedy against Seller upon
any such termination of License Agreements.
3. Sales Price.
3.1 Payment of Sales Price. The Sales Price shall be paid in the
following manner:
3.1.1 Upon the execution and delivery of this Agreement by
RailCom, RailCom shall deliver Fifty
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Thousand Dollars ($50,000) to Seller, as a deposit on this Agreement (the
"Deposit"). Such deposit shall be non-refundable, unless Seller breaches this
Agreement by failing to close in accordance with the terms hereof.
3.1.2 At closing, and prior to the delivery by Seller of the
closing documents referred to in Paragraph 2 hereof, RailCom shall deliver the
Sales Price, less the Deposit, to Seller.
3.1.3 Delivery of all sums due pursuant to this Paragraph 3.1
shall be evidenced by the receipt by Seller of such sums sent by Federal Reserve
wire to an account designated by Seller.
3.2 Proration of Payments from Licensees. Seller and RailCom agree that
Seller shall be entitled to all payments of whatever kind due from licensees
under the various License Agreements attributable to the period through and
including the Closing Date. Some of the License Agreements include percentage
clauses requiring payments based upon revenue generated by the licensee, which
payment is not due until the annual anniversary of the License Agreements. All
such amounts attributable to the period through and including the Closing Date
shall be the property of Seller, and shall upon receipt by RailCom immediately
be paid to Seller, even though such payments may be received a year or more
after the Closing Date. Similarly, any amounts prepaid to Seller (or its
predecessor-in-interest) under the License Agreements shall be paid by Seller to
RailCom, to the extent such amounts are attributable to the period after the
Closing Date, within sixty (60) days after the Closing Date. In addition to the
parties' other remedies, such amounts shall bear interest at the rate of twelve
percent (12%) per annum if not paid when due.
3.3 Ad Valorem Taxes. Since there is no separate ad valorem tax
assessment for the Assets, there shall be no proration of such taxes at closing.
To the extent the Easement granted pursuant to the Purchase Agreement or the
Outdoor Advertising Facilities located thereon are separately assessed or taxed,
or to the extent Seller's taxes reflect the existence of the Easement or the
Outdoor Advertising Facilities, RailCom shall pay or cause to be paid all
resulting taxes accruing after the Closing Date.
4. License Fees.
4.1 Computation of License Fees. In addition to the Sales Price, after
the Closing Date RailCom shall pay to Seller one-third (1/3) of any Excess Cash
Flow within forty-five (45) days after the end of each calendar year, as a
license fee (the "License Fee"), until the total License Fee payments equal TEN
MILLION FIFTY THOUSAND DOLLARS ($10,050,000). If any payment of License Fees is
not paid when due, in addition to Seller's other remedies, such payments shall
bear interest at the rate of twelve percent (12%) per annum.
4.2 Seller's Right to Audit. At all times prior to the payment in full
of the License Fees due pursuant to Paragraph 4.1 and until the expiration of
three (3) years thereafter, Seller shall have the right to audit all books and
records of RailCom related to the gross revenue generated by each Location, and
to also review all licenses and other documents and correspondence between
RailCom and any licensee or user of each Location. All such books and records
shall be kept by RailCom in accordance with generally accepted accounting
principles. In the event any such audit reflects additional License Fees are due
from RailCom to Seller, such amounts shall be immediately due and payable, and
in addition to Seller's other remedies, such additional License Fees shall bear
interest at the rate of twelve percent (12%) per annum if not paid in full
within thirty (30) days notice from Seller to RailCom that such sums are due. In
addition, if any such audit reflects that additional License Fees are due in
excess of five percent (5%) of the amount actually paid by RailCom for the
period in question (which period must be at least one [1] calendar year), the
cost of such audit shall be paid by RailCom, and such cost shall bear interest
at the rate of twelve percent (12%) per annum if not paid within thirty (30)
days after the invoice for such audit is mailed to RailCom.
4.3 Transfers of Locations. The rights of Seller set forth in this
Paragraph 4 shall specifically survive any transfer of a Location by RailCom and
shall be binding upon the transferee and any subsequent transferee. Upon any
transfer of an easement for a Location, and/or an interest in a Location and/or
any interest therein, the obligation to pay License Fees shall run with such
Location, and shall be binding upon RailCom and the new owner(s) of rights in
such Location. "Gross revenue" after such transfer shall include all advertising
revenue generated by such Location
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to the new owner(s) of rights in such Location, and any advertising revenue to
any subsequent owner(s) of rights in such Location. However, in all events
RailCom shall be responsible for making the initial calculation of the amount of
Excess Cash Flow from all of the Locations, including Locations sold or
transferred by RailCom, and in addition to its other obligations, RailCom shall
be responsible for collecting and paying such amounts to Seller.
4.4 In the event any one or more Locations are reconveyed to Seller
pursuant to Paragraph 10.1 hereof or Paragraphs 2.5 or 4.2 of the Grant of
Easement, the formula for computation of License Fees, including the amount of
the Sales Price and the total amount of License Fees to be paid, shall be
equitably adjusted to reflect the reduction in the number of Locations.
5. New Outdoor Advertising Facilities.
5.1 Seller's Right to Develop New Outdoor Advertising Facilities. This
Agreement reflects the sale of only the Assets from Seller to RailCom. Subject
to Railcom's right of first offer as provided in Paragraph 5.2 of this
Agreement, nothing herein shall prohibit Seller from owning, developing, or
licensing additional billboards or other outdoor advertising facilities.
5.2 RailCom's Right of First Offer. For a period of twenty (20) years
after the Closing Date, Seller hereby grants to RailCom the exclusive right of
first offer to purchase an easement for and assignment of license, if any,
related to any additional outdoor advertising facilities owned or licensed by
Seller after December 31, 1995 and located on real property interests owned,
leased, licensed or occupied by Seller or its affiliates in the continental
United States (the "New Assets"), on the terms and in accordance with the
procedures set forth below:
5.2.1 Notwithstanding anything to the contrary contained in
this Paragraph 5, Railcom's rights are limited as follows: (i) if Seller or its
affiliates sells real estate (as to which any outdoor advertising facilities
located thereon are merely incidental thereto) or a rail line to an unaffiliated
third party in a bona fide, arms-length transaction, Railcom's right of first
offer shall have no application to outdoor advertising facilities included in
such sale or later developed by that third party, (ii) if RailCom assigns its
rights under this Paragraph 5 to a third party as permitted by Paragraph 14.3,
only one person or entity shall be entitled to exercise such rights at any time
and RailCom (or its designee) shall designate such person or entity by notice to
Seller, and such person or entity must be the owner of the Easement for at least
one (1) Location, and (iii) Railcom's right of first offer shall only apply to
the real property owned by Seller and CSX Transportation, Inc. ("CSXT") as of
December 31, 1995. For example, if Seller purchases real property or an entity
owning real property after December 31, 1995 (in which it or CSXT or its
affiliates theretofore had no possessory interest), RailCom's right of first
offer shall have no application to outdoor advertising facilities located on
such real property or later added thereto.
5.2.2 RailCom shall have the exclusive right to purchase New
Assets, and Seller shall give RailCom written notice (the "Offering Notice") of
the New Assets which are available for purchase by RailCom within sixty (60)
days after Seller's or its affiliates receipt of license revenue for such New
Assets. The Offering Notice shall describe the New Assets in reasonable
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detail, by reference to the facilities comprising the New Assets, the
approximate location thereof, and the license revenue reasonably projected by
Seller (including percentage fees) attributable to the first twelve months of
operation of such facilities (the "Annual Revenue").
5.2.3 RailCom shall have a period of sixty (60) days from the
date of the Offering Notice to inform Seller in writing whether it wishes to
purchase such New Assets. If RailCom does wish to purchase such New Assets,
RailCom shall have thirty (30) days after it notifies Seller that it wishes to
purchase such New Assets to close such purchase.
5.2.4 If RailCom fails to notify Seller within sixty (60) days
after the date of the Offering Notice that RailCom wishes to purchase the New
Assets, or if RailCom has timely notified Seller it wishes to purchase the New
Assets but fails to close within thirty (30) days thereafter, all rights of
RailCom shall terminate as to such New Assets, and Seller may operate for its
own account or sell such New Assets to any third party at any price and on any
terms without any obligation whatsoever to RailCom.
5.2.5 If RailCom timely exercises its right of first offer,
the closing of the sale of such New Assets shall be substantially on the same
terms as the Assets are conveyed to RailCom in accordance with this Agreement,
with license payments prorated on an accrual basis as of the closing of the sale
of New Assets, and RailCom shall pay to Seller a sales price for the New Assets
equal to ten (10) times the Annual Revenue generated by such New Assets, less an
assumed ten percent (10%) annual management fee (the "New Assets Sales Price").
5.2.6 Upon the purchase of New Assets by RailCom pursuant to
Paragraph 5.2, the site of each facility comprising such New Assets shall
constitute a "Location" for the purposes of this Agreement, including Paragraphs
6, 7, and 8 hereof, except as otherwise provided by this Paragraph 5.2, but
excluding Paragraph 4.
5.2.7 The provisions of Paragraph 5.2 shall not apply to any
replacement Location obtained by RailCom pursuant to Paragraph 2.5 of the Grant
of Easement.
6. Certain Post-Closing Obligations.
6.1 Post-Closing Cooperation of Seller. Seller agrees to reasonably
assist and cooperate with RailCom, at RailCom's sole expense, and to timely
respond to RailCom, after the Closing Date with respect to any and all matters
affecting the Locations, including dealing with governmental authorities
(including contesting any legislative or other action that might impair
RailCom's use of, or interest or rights in, the Assets). Seller shall furnish to
RailCom, upon RailCom's request and after payment of reasonable copying and
similar costs by RailCom, copies of valuation maps ("Val Maps") which Seller
then possesses, for the property on which specific Locations are located
(giving, if provided on such Val Maps, dimensions of Seller's underlying real
property interests and other information to facilitate management of and access
to such Locations). Seller agrees to update, in the ordinary course of its
business, Val Maps to reflect any change to Seller's rights to such property
interests.
6.2 Post-Closing Drawings to be Provided by RailCom. RailCom agrees
that it shall provide to Seller, at no cost to Seller, "as-built" drawings of
all Outdoor Advertising Structures at each Location, if and when such drawings
are available, provided that RailCom shall have no obligation to prepare such
drawings.
7. Indemnification by RailCom. RailCom hereby agrees to protect,
indemnify, and save harmless Seller, its affiliates, and their directors,
shareholders, officers and employees, from and against any and all liability,
claims, demands, suits or liens, including reasonable attorneys' fees and
expenses, made or brought by reason of RailCom's or its contractors' or
licensees' acts or omissions, or the acts or omissions of RailCom's or its
contractors' or licensees' agents, servants, or employees, or arising from or
related to, in any way, the exercise by RailCom or its licensees of the rights
granted to RailCom in accordance with this Agreement. RailCom's indemnity shall
cover, by way of example and not limitation, the death of or an injury to any
person or persons, including the death of or an injury to an agent, servant, or
employee of RailCom, or its contractors or licensees or Seller, and damage to
any property.
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8. Insurance. RailCom agrees to maintain appropriate insurance policies
(including, but not limited to, commercial general liability insurance), having
limits reasonably acceptable to Seller (in its reasonable discretion), naming
Seller and its affiliates as additional insureds and subject to such other terms
and conditions as Seller may reasonably request from time to time in accordance
with its customary risk management practices. Seller shall have the right to
designate by written notice to RailCom the insurance policies required by
RailCom under this Agreement. At a minimum, the following policies of insurance
shall be required to be maintained by RailCom:
8.1 Commercial General Liability Insurance. Commercial General
Liability Insurance with a limit of no less than Three Million Dollars
($3,000,000) combined single limit per occurrence for all bodily injury and
property damage, which may be provided by one policy or a base policy with an
umbrella.
8.2 Railroad Protective Liability Insurance. RailCom shall provide, or
cause the applicable licensee to provide, Railroad Protective Liability
Insurance, in the event of and during the course of any construction and
demolition work done within fifty (50) feet of any railroad track, with a limit
of no less than Three Million Dollars ($3,000,000) combined single limit per
occurrence for all bodily injury and property damage.
8.3 Automotive Liability Insurance. RailCom shall provide, or cause the
applicable licensee to provide, automotive liability insurance with a limit no
less than One Million Dollars ($1,000,000) combined single limit per occurrence,
for all bodily injury and property damage.
All such policies shall name Seller and its affiliates as additional
insureds, and shall provide for at least thirty (30) days prior notice to Seller
of any cancellation or modification of such policies. The form of such policies
and the companies issuing such policies must be reasonably acceptable to Seller.
Upon request, RailCom shall provide Seller with a certified copy of all policies
of insurance maintained by RailCom pursuant to this Paragraph. In addition, at
all times RailCom and its contractors and licensees shall maintain workers
compensation insurance as required by law and such workers compensation
insurance shall contain a waiver of subrogation against Seller and its
affiliates. Securing such insurance shall not limit RailCom's liability to
Seller under this Agreement, but shall be additional security therefor.
9. Representations.
9.1 Representations of Seller.
9.1.1 Seller is comprised of corporations, duly existing and
in good standing, with full power and authority to consummate the transaction
contemplated in this Agreement.
9.1.2 The individuals executing this Agreement on behalf of
Seller are fully authorized to do so and thereby bind Seller.
9.1.3 The report attached as Exhibit G to this Agreement,
which lists the historical revenue (net of management fees only) received by
Seller (or its predecessor-in-interest) for the thirty-six (36) months ending
December 31, 1995 for the Locations which were active from time to time
(including the Locations active as of the Closing Date), is materially complete
and accurate.
9.1.4 To Seller's knowledge, Seller having made no
investigation or inquiry whatsoever, and without imputation to Seller of the
knowledge of Peterson, as of the Closing Date, Seller has not furnished to
RailCom any information that was untrue in any material respect, nor has Seller
omitted to disclose information known by Seller that would materially adversely
affect RailCom's rights as contemplated in this Agreement (including, without
limitation, materially adversely affect the longevity of the Easement). For the
purposes of this Paragraph 9.1.4, information known by RailCom or Peterson as of
the Closing Date shall be deemed to have been disclosed by Seller to RailCom.
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9.2 Representations of RailCom.
9.2.1 RailCom is a Georgia corporation, duly existing and in
good standing, with full power and authority to consummate the transaction
contemplated in this Agreement.
9.2.2 The individuals executing this Agreement on behalf of
RailCom are fully authorized to do so and thereby bind RailCom.
10. Breach.
10.1 Breach of Certain Representations by Seller. If Seller breaches
any of the representations set forth in Paragraphs 9.1.3 and 9.1.4 of this
Agreement, Seller's liability shall be limited to any Location which has its
revenue partially or entirely affected by such breach, and Seller's liability as
to such Location shall be the then hypothetical unamortized balance of the
Location Sales Price, assuming the Location Sales Price was financed at an
interest rate of eleven percent (11%) per annum, fully amortized over a period
of ten [10] years, payable in equal monthly payments of principal and interest
due on the last day of each month, in arrears, with the first payment due on the
last day of the calendar month which immediately follows the calendar month of
the Closing Date) (the "Hypothetical Unamortized Balance"). For example, if a
Location generated Net Revenue of $900, its Location Sales Price would be $6,345
($900 x 7.05). If that Location was terminated 50 months after the Closing Date
due to a breach of a representation by Seller, the Hypothetical Unamortized
Balance for the Location would be $4,501 ($6,345 amortized at an interest rate
of 11% per annum, providing equal monthly payments of principal and interest of
$87.40, with principal "paid" of $1,844). Prior to the payment by Seller of
damages related to any Location, RailCom and its successors and assigns shall
reconvey to Seller all of their right, title and interest in such Location and
the Easement therefor and assign to Seller any applicable license agreement
related to the Location (all free of any management agreement). Any advertising
revenues or license fees generated by any reconveyed Location shall be prorated
on an accrual basis as of the date of the reconveyance. RailCom agrees that the
remedy set forth in this Paragraph 10.1 is RailCom's sole remedy for Seller's
breach of any of the representations set forth in Paragraphs 9.1.3 and 9.1.4 of
this Agreement.
10.2 Other Breach. In the event of any breach of obligations under this
Agreement by a party, except as provided in Paragraphs 10.1 and 13, the other
party shall be entitled to all remedies available at law and at equity. However,
in no event shall either party be entitled to punitive, consequential,
incidental or special damages.
10.3 Prevailing Party. In the event of any litigation arising out of
this Agreement between Seller and RailCom, the prevailing party shall be
entitled to all costs and reasonable attorneys' and legal assistants' fees, at
all trial, appellate and bankruptcy levels.
11. Closing Costs. RailCom shall, at closing, pay all transfer and
recordation taxes and fees (however named or styled) and the cost of all
documentary stamp taxes and similar taxes concerning the transfer of the Assets
imposed by all jurisdictions in which the Assets are located, including, without
limitation, the Florida documentary stamp tax due on the Easement.
12. Surviving Provisions. All provisions of this Agreement shall survive
the closing of this Agreement.
13. Irrevocable Easement. Except as expressly provided in the Grant of
Easement, the Easement and any other easement granted pursuant to this Agreement
shall be irrevocable, it being understood that should RailCom default in the
performance of any obligation hereunder, Seller may not revoke the Easement or
any easement; provided, however, Seller's recourse and remedies shall not
otherwise be limited, and Seller shall be free to pursue any other recourse or
remedy available at law or in equity, including, without limitation, the right
to pursue a judgment for damages against RailCom and obtain satisfaction thereof
from any and all assets of RailCom (including, without limitation, the
Easement).
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14. Miscellaneous.
14.1 Entire Agreement. This Agreement sets forth and constitutes the
entire agreement and understanding between the parties with respect to the
subject matter hereof (other than any agreements executed concurrent herewith or
in connection with the closing), and supersedes any and all prior agreements,
understandings, promises and representations, whether oral or written, between
the parties with respect to the subject matter hereof. This Agreement may not be
released, discharged, amended or modified in any manner except by an instrument
in writing, making specific reference to this Agreement, and signed by the duly
authorized representatives of both parties.
14.2 Relationship of the Parties. This Agreement shall not create an
agency, partnership, joint venture, or employer/employee relationship between
the parties, and nothing in this Agreement shall be deemed to authorize either
party to act for, represent or bind the other.
14.3 Assignment. Seller may assign its rights and obligations under
this Agreement, provided that Seller shall remain liable for all obligations
hereunder unless expressly released by RailCom. RailCom may assign or pledge its
rights under this Agreement provided, in the case of such assignment or pledge
(including, without limitation, the conveyance of any interest in the Easement),
(i) the assignee expressly assumes by an instrument reasonably acceptable to
Seller, RailCom's obligations under this Agreement, (ii) Seller's rights under
this Agreement are not diminished thereby, and (iii) RailCom is not released
from its liabilities and obligations hereunder, and remains fully liable
therefor.
14.4 Choice of Law. This Agreement shall be deemed to have been entered
into in the State of Florida, and its interpretation, construction, and the
remedies for its enforcement and breach are to be applied pursuant to and in
accordance with the laws of the State of Florida without regard to its conflicts
of law rules. The venue for any litigation arising out of this Agreement shall
be Duval County, Florida.
14.5 No Waiver. No waiver of any right under this Agreement shall be
deemed effective unless contained in writing and signed on behalf of the party
charged with such waiver, and no waiver of any right shall be deemed to be a
waiver of any future right or any other right arising under this Agreement.
Except as expressly provided herein, all rights, remedies, undertaking,
obligations, and agreements contained in this Agreement shall be cumulative and
none of them shall be a limitation of any other remedy, right, undertaking,
obligation, or agreement.
14.6 Headings. Headings in this Agreement are included for ease of
reference only and shall have no legal effect.
14.7 No Interpretation Against Drafter. Each party has participated
fully in the negotiation and drafting of this Agreement, and any ambiguities in
this Agreement shall not be interpreted against either party.
14.8 Notices. Any notices permitted or required under this Agreement
shall be in writing and shall be deemed delivered upon personal delivery, or
upon the expiration of three (3) business days following sent by registered or
certified mail, postage pre-paid; or upon the expiration of one (1) business day
following deposit with overnight courier; to the addresses set forth below or to
such other address in the United States that the party may hereafter specify:
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(a) To Seller:
William P. Coffing, Jr.
Assistant Vice President
CSX Real Property, Inc.
Suite 100
6737 Southpoint Drive, S.
Jacksonville, Florida 32216
with a copy to:
Mark S. Hoffmann, Esquire
General Counsel
Law Department
CSX Transportation, Inc.
500 Water Street
Jacksonville, Florida 32202
(b) To RailCom:
Eugene Martini, Executive Vice President
RailCom, Ltd.
1819 Peachtree Road, Suite 315
Atlanta, Georgia 30309
with a copy to:
Kevin R. Armbruster, Esquire
Cushing, Morris, Armbruster & Jones
2110 Peachtree Center
Cain Tower
229 Peachtree Street Northeast
Atlanta, Georgia 30303
14.9 Counterparts. This Agreement may be executed in two (2) or more
counterpart originals, and will be deemed binding when each of the parties has
executed a counterpart original and delivered it to the other party. Signatures
transmitted by facsimile shall be deemed to be originals and binding upon the
party who has so executed this Agreement and all documents attached hereto or
given in connection with the closing.
14.10 Adjustment of Sales Price. It is intended that the Sales Price be
determined by multiplying the Net Revenue for all of the Locations by 7.05.
Seller and RailCom agree that Seller may delete Locations from Exhibit A prior
to closing if Seller determines it does not have good title to the Locations or
otherwise is constrained from conveying such Locations. Seller believes that
such deletions shall not exceed three percent (3%) of the total number of
Locations. In addition, Locations for which the applicable License Agreement is
terminated prior to closing shall be deleted from the conveyance to RailCom.
The Sales Price shall be adjusted, either before or after
closing, so that the Sales Price shall be the Net Revenue for all of the
Locations multiplied by 7.05. Furthermore, the dollar amount set forth in
Paragraph 4.1 of the Agreement ($10,050,000) shall be changed to fifty percent
(50%) of the actual Sales Price. Prorations of revenue for the Locations may be
finalized after the closing.
The parties have executed this Agreement as of the date first written
above.
CSX REALTY DEVELOPMENT CORPORATION, a Georgia
corporation
By: /S/ Stephen D. Beck
--------------------------------------
, President
--------------- ---------
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THE THREE RIVERS RAILWAY COMPANY, a Pennsylvania
corporation
By: /S/ Gerald L. Nichols
--------------------------------------
, President
--------------- ---------
THE ATLANTIC LAND AND IMPROVEMENT COMPANY, a Virginia
corporation
By: /S/ Gerald L. Nichols
--------------------------------------
, President
--------------- ---------
WINSTON-SALEM SOUTHBOUND RAILWAY COMPANY, a North
Carolina corporation
By: /S/ Gerald L. Nichols
--------------------------------------
, President
--------------- ---------
GAINESVILLE MIDLAND RAILROAD COMPANY, a Georgia
corporation
By: /S/ Gerald L. Nichols
--------------------------------------
, President
--------------- ---------
RICHMOND, FREDERICKSBURG AND POTOMAC RAILWAY COMPANY,
a Virginia and Delaware corporation
By: /S/ Gerald L. Nichols
--------------------------------------
, President
--------------- ---------
RAILCOM, LTD., a Georgia corporation
By: /S/ Wilds L. Pierce
--------------------------------------
, President
--------------- ---------
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JOINDER OF CSXT
CSX Transportation, Inc., a Virginia corporation, its successors and
assigns ("CSXT"), in consideration of the benefits to be derived by CSXT and its
affiliates pursuant to this Agreement, hereby agrees with RailCom as follows:
(a) CSXT (to the extent it owns the affected real property or any
rights therein) shall convey its interest, if any, by corrective and other deeds
to CRDC, and shall take such other actions as are required to assist and enable
Seller to convey the Assets and fulfill its obligations to RailCom in accordance
with Paragraph 2 of the Purchase Agreement.
(b) CSXT (to the extent CSXT owns the New Assets or any interest
therein) shall convey its interest, if any, in New Assets to CRDC and take such
other actions as are required to assist and enable Seller to meet its
obligations under Paragraph 5 of the Purchase Agreement.
(c) CSXT shall assist Seller and take such actions as are required to
enable Seller to perform its obligations under Paragraph 6.1 of the Purchase
Agreement.
(d) CSXT hereby makes the same representations that Seller makes in
Paragraph 9.1.3 and 9.1.4 of the Purchase Agreement, provided that the
representations by CSXT are limited to the knowledge of the Board of Directors
of CSXT, and William P. Coffing, Jr., as agent for CSXT.
(e) CSXT (to the extent CSXT owns the affected real property or any
interest therein) shall convey its rights, if any, to CRDC to assist and enable
Seller to comply with its obligations to provide access to the Easement Property
to RailCom, as provided in Paragraph 2.2.1 of the Grant of Easement.
(f) CSXT shall take no actions which cause Grantor to breach its
obligations under Paragraph 2.3 of the Grant of Easement.
(g) CSXT (to the extent CSXT owns the affected real property or any
interest therein) shall convey its interest, if any, to Grantor to assist and
enable Grantor to provide substitute locations to RailCom, as provided in
Paragraph 2.5 of the Grant of Easement.
(h) CSXT shall not take any actions which shall cause Grantor to
breach its obligations under Paragraphs 2.7 and 2.8 of the Grant of Easement or
Paragraph 13 of the Purchase and Sale Agreement.
(i) CSXT (to the extent CSXT owns the affected real property or any
interest therein) shall convey its interest, if any, to Grantor to assist and
enable Grantor to convey additional or replacement easement property to RailCom
due to an approved modification of an existing Outdoor Advertising Facility, as
provided in Paragraph 3.3 of the Grant of Easement.
(j) CSXT (to the extent CSXT owns the affected real property or any
interest therein) shall convey its rights, if any, to CRDC to assist and enable
Grantor to comply with its obligations to provide utility licenses for electric
utilities to the Outdoor Advertising Facilities.
For the purposes of this Joinder, "affected real property" means
CSXT's real property interests as of the date hereof to the same extent as if
owned by CRDC, and any obligation of CRDC involving its interests in real
property shall extend to CSXT's real property interests as of the date hereof,
to the same extent as if owned by CRDC.
Nothing herein shall increase the rights of RailCom as to Seller under
the Purchase and Sale Agreement or the Grant of Easement, but rather, CSXT's
intent is to assist Seller in meeting its obligations created in such
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agreements. Nothing herein shall require CSXT to acquire interests in real
property it does not have as of the date hereof, nor shall it require CSXT to
engage in litigation with third parties to secure the rights necessary to comply
with its obligations hereunder. If CSXT is required to convey any additional
real property interests pursuant to these provisions, it may do so directly or
through a subsidiary or an affiliate. RailCom shall have the right of specific
performance against CSXT if CSXT fails to perform its obligations under this
joinder. Paragraphs (a), (e), (f), (g), (h), (i), and (j) of this Joinder, but
only such paragraphs, shall be binding upon a transferee of real property by
CSXT in the immediate vicinity of Outdoor Advertising Facilities conveyed to
RailCom pursuant to the Purchase and Sale Agreement. CSXT represents that it is
in good standing under the laws of the state of Virginia. The individual
executing this Joinder on behalf of CSXT represents that he is authorized to do
so.
CSX TRANSPORTATION, INC., a Virginia corporation
By: /S/ Gerald L. Nichols
------------------------------------------------
__________________, Vice President
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