EXHIBIT 10.1
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EXECUTION COPY
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PURCHASE AGREEMENT
among
METROMEDIA INTERNATIONAL GROUP, INC.,
METROMEDIA INTERNATIONAL TELECOMMUNICATIONS, INC.,
METROMEDIA INTERNATIONAL, INC.
INTERNATIONAL TELCELL, INC.
and
ADAMANT ADVISORY SERVICES, INC.
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Dated: as of April 24, 2003
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS..........................................................1
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1.1 Definitions..................................................1
1.2 Cross References.............................................3
1.3 Usage........................................................4
ARTICLE II PURCHASE AND SALE...................................................4
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2.1 Purchase and Sale of Interests...............................4
2.2 Allocation of the Purchase Price.............................6
ARTICLE III REPRESENTATIONS AND WARRANTIES.....................................6
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3.1 Representations and Warranties of the Sellers................6
3.2 Representations and Warranties of the Purchaser..............9
ARTICLE IV INDEMNIFICATION....................................................11
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4.1 Survival of Representations and Warranties..................11
4.2 Indemnification by MIG and MITI.............................11
4.3 Indemnification by the Purchaser and the
Purchaser Shareholders...................................11
4.4 Indemnification Amounts.....................................12
4.5 Notification of Third-Party Claims..........................12
4.6 Transfer Taxes..............................................13
4.7 Public Announcement.........................................13
4.8 Cooperation and Books and Records...........................13
4.9 Cooperation.................................................13
ARTICLE V MISCELLANEOUS.......................................................14
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5.1 Remedies....................................................14
5.2 Expenses....................................................14
5.3 Notices.....................................................14
5.4 Successors and Assigns; Third Party Beneficiaries...........15
5.5 Amendment and Waiver........................................15
5.6 Counterparts................................................16
5.7 Headings....................................................16
5.8 Schedules...................................................16
5.9 GOVERNING LAW...............................................16
5.10 Jurisdiction................................................16
5.11 WAIVER OF JURY TRIAL........................................17
5.12 Specific Performance........................................17
5.13 Severability................................................17
5.14 Rules of Construction.......................................17
5.15 Entire Agreement............................................17
5.16 Further Assurances..........................................17
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of April 24, 2003 (this "AGREEMENT"), by
and among Metromedia International Group, Inc., a Delaware corporation ("MIG"),
Metromedia International Telecommunications, Inc., a Delaware corporation
("MITI"), Metromedia International, Inc., a Delaware corporation ("MII"),
International Telcell, Inc., a Delaware corporation ("ITI" and, collectively
with MIG (other than for purposes of Section 2.1), MITI and MII, the "SELLERS"),
and Adamant Advisory Services, Inc., a British Virgin Islands company (the
"PURCHASER").
WHEREAS the Sellers hold Interests (as defined herein) in the
Companies;
WHEREAS, the Sellers desire to sell and the Purchaser desires to
purchase such Interests;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
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1.1 DEFINITIONS. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"AFFILIATE" shall mean any Person who is an "affiliate" as defined in
Rule 12b-2 of the General Rules and Regulations under the Securities and
Exchange Act of 1934, as amended.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day
on which commercial banks in the State of New York are authorized or required by
law or executive order to close.
"CLOSING DATE" means the date hereof.
"COMPANIES" means, collectively, CJSC "Comstar", CJSC "Kosmos-TV",
"SAC", "Radio Katusha", each of which are Russian closed joint stock companies,
and "Ekby", a Russian limited liability company; and each of which shall be
referred to herein as a "COMPANY".
"COMPANY SUBSIDIARY" means a Subsidiary of a Company, and all
Subsidiaries of such Company are referred to herein as "COMPANY SUBSIDIARIES."
"GOVERNMENTAL AUTHORITY" means the government of any nation, state,
city, locality or other political subdivision thereof, any entity, exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"INDENTURE" means the Indenture, dated as of September 30, 1999,
entered into between MIG and U.S. Bank Trust National Association, as Trustee,
relating to the Senior Notes, as amended, modified or supplemented from time to
time.
"LIEN" means any mortgage, security interest, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), or
other security agreement, option, warrant, attachment, right of first refusal,
preemptive, put, call or other claim or right, restriction on transfer (other
than restrictions imposed applicable securities laws) or preferential
arrangement of any kind or nature whatsoever (including any restriction on the
transfer of any assets, any conditional sale or other title retention agreement,
any financing lease involving substantially the same economic effect as any of
the foregoing and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction) or any other encumbrance
similar to the foregoing.
"LAWS" means any applicable law, statute, rule, regulation or code.
"ORDER" means any order, judgment, injunction, writ, ruling,
assessment, arbitration award or decree issued by a court or other
administrative body of competent jurisdiction applicable to a Person.
"PERMIT" means any license, franchise, permit, consent, concession,
order, approval, authorization, certificate or registration from, of or with a
Governmental Entity.
"PERSON" means any individual, firm, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
limited liability company, Governmental Authority or other entity of any kind,
and shall include any successor (by merger or otherwise) of such entity.
"SELLER MATERIAL ADVERSE EFFECT" means any event or circumstances that
results or is reasonably likely to result in a material adverse effect on the
business, condition (financial or otherwise), assets or results of operations of
the business of the Companies (taken as a whole) excluding any such effect
resulting from (i) the announcement or consummation of the sale of the Purchased
Interests or any other transactions contemplated by this Agreement, or any other
action by any of the Sellers or the Companies reasonably contemplated by or
required by this Agreement, including, to the extent directly resulting from the
foregoing, any cancellations of customer orders or subscriptions, any reduction
in sales, any disruption in partner, supplier, distributor or similar
relationships, any loss of employees or any litigation; (ii) changes or
conditions generally affecting the industries in which the Companies operate;
(iii) changes in the economy or financial markets in general; or (iv) changes in
general regulatory or political conditions, including any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, PROVIDED THAT, in the case of
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each of clauses (ii), (iii) and (iv), such change or condition does not
disproportionately affect the business, condition (financial or otherwise),
assets or results of operations of the Companies taken as a whole.
"SENIOR NOTES" means the 101/2% Senior Discount Notes due 2007, issued
by MIG under the Indenture.
"SUBSIDIARIES" means, as of the relevant date of determination, with
respect to any Person, a corporation or other Person of which 50% or more of the
voting power of the outstanding voting equity securities or 50% or more of the
outstanding economic equity interest is held, directly or indirectly, by the
first such Person. Unless otherwise qualified, or the context otherwise
requires, all references to a "SUBSIDIARY" or to "SUBSIDIARIES" in this
Agreement shall refer to a Subsidiary or Subsidiaries of any of the Companies.
"TAX" (including, with correlative meaning, the terms "TAXES" and
"TAXABLE") means all forms of taxation, whenever created or imposed, whether
imposed by a local, municipal, state, foreign, federal or other governmental
body or authority, and, without limiting the generality of the foregoing, shall
include income, gross receipts, ad valorem, excise, value-added, sales, use,
transfer, franchise, license, stamp, occupation, withholding, employment,
payroll, property and other taxes, together with any interest, penalty, addition
to tax or additional amount imposed by any governmental body or authority
responsible for the imposition of any such tax.
"TAX BENEFIT" means the amount of the reduction in an indemnified
party's liability for Taxes actually realized, as a result of the payment or
accrual of any loss, expense or Tax, for the Taxable period in which such
payment or accrual occurs.
1.2 CROSS REFERENCES. Each of the following terms shall have the
meaning assigned thereto in the Section of this Agreement set forth opposite
such term:
TERMS SECTION
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Agreement Preamble
Closing 2.1
Closing Date 2.1
Credit Agreement 3.1(n)
Indemnified Party 4.1(i)
Indemnifying Party 4.1(i)
Interest 2.1
ITI Preamble
Licenses 3.2(f)
Losses 4.2(a)
MIG Preamble
MIG Notes 2.1
MII Preamble
MITI Preamble
Permitted Liens 3.1(d)
Purchase Price 2.1
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TERMS SECTION
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Purchased Interests 2.1
Purchaser Preamble
Purchaser Indemnitee 4.1(h)
Purchaser Shareholders 4.3
Securities Act 3.3(e)
Sellers Preamble
Sellers Indemnitee 4.3
Third Party Claim 4.1(i)
1.3 USAGE. The definitions in Article I shall apply equally to
both the singular and plural forms of the terms defined. Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. All references herein to Articles, Sections, Exhibits and
Schedules shall be deemed to be references to Articles and Sections of, and
Schedules and Exhibits to, this Agreement unless the context shall otherwise
require. All Schedules attached hereto shall be deemed incorporated herein as if
set forth in full herein and, unless otherwise defined therein, all terms used
in any Schedule or Exhibit shall have the meaning ascribed to such term in this
Agreement. The words "include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation." Whenever any payment hereunder is
to be paid in "cash," payment shall be made in the legal tender of the United
States and the method for payment shall be by wire transfer of immediately
available funds. The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. Unless otherwise
expressly provided herein, any agreement, instrument or statute defined or
referred to herein or in any agreement or instrument that is referred to herein
means such agreement, instrument or statute as from time to time amended,
modified or supplemented, including (in the case of agreements or instruments)
by waiver or consent and (in the case of statutes) by succession of comparable
successor statutes and references to all attachments thereto and instruments
incorporated therein. This Agreement shall be deemed to have been drafted by
each party hereto and this Agreement shall not be construed against any party as
a principal draftsperson.
ARTICLE II
PURCHASE AND SALE
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2.1 PURCHASE AND SALE OF INTERESTS. Concurrently with the
execution hereof:
(a) The Sellers hereby do, effective from and after the
date hereof, convey, grant, sell, contribute, transfer, set over, assign,
bargain, release, deliver and confirm unto the Purchaser, its successors and
assigns forever, all of its and its Affiliates' rights, title and interests as
of the date hereof in the Companies, as set forth on SCHEDULE 2.1 hereto
(collectively, the "Purchased Interests" and all the
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interests owned by any of them in each such Company is referred to as an
"Interest"); and
(b) In consideration for the Purchased Interests, the
Purchaser hereby does, effective from and after the date hereof, convey, grant,
sell, contribute, transfer, set over, assign, bargain, release, deliver and
confirm unto the Sellers, and each of their successors and assigns forever, all
of its and its Affiliates' rights, title and interests as of the date hereof in
(i) Senior Notes having an aggregate principal amount of $58,605,000 plus any
and all accrued and unpaid interest thereon as of the date hereof (the "MIG
Notes"), and (ii) an amount in cash equal to $5,000,000 (the consideration
described in clause (i) and (ii) are referred to herein collectively as the
"Purchase Price").
(c) The closing of the sale and purchase of the Purchased
Interests (the "Closing") is taking place concurrently herewith at such place
that the parties have agreed.
(d) The Purchaser hereby agrees and represents that it
has caused the transfer of the Purchase Price described in clause (b)(i) above
to occur by irrevocable book entry transfer at DTC Corporation to an account
designated by MIG, on behalf of the Sellers, and will take such other actions
and execute such other instruments as are reasonably requested by Seller to
effectuate such transfer and has caused the transfer of the Purchase Price
described in clause (b)(ii) above to occur by wire transfer of immediately
available funds to an account(s) previously designated by MIG on behalf of
Sellers.
(e) Each of the Sellers hereby agrees and represents that
it has caused the transfer of the Purchased Interests described in clause (a)
above to be recorded (x) on the shareholder register of the applicable
Companies, with respect to Companies that are Russian joint stock corporations
(ZAO), (y) by a joint notification of MII and the Purchaser to "Ekby" of
transfer of the Interest in "Ekby" to the Purchaser; and will take such other
actions and execute such other instruments as are reasonably requested by Seller
to effectuate such transfer.
(f) Each of the Sellers hereby agrees and represents that
(x) it has caused all consulting, management or other service agreements
existing among the Sellers or their Affiliates, on the one hand, and any of the
Companies or any of the Company Subsidiaries, on the other hand, prior to the
Closing, to be terminated with respect to the Companies and the Company
Subsidiaries as of the date hereof, (y) it has caused the Sellers and their
Affiliates to release any such Companies from and against any obligation,
liability or claim arising from any such, management or other service
agreements, and (z) it has caused members of the board of directors (or similar
governing body) of each of the Companies or the Company Subsidiaries who are the
representatives designated by any of the Sellers or their Affiliates and who the
Sellers have the power to remove immediately, to tender to the Purchaser or its
designee undated letters of resignation from their position as directors (or
members of the governing body similar to that of a board of directors) of such
Companies or such Company Subsidiaries.
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2.2 ALLOCATION OF THE PURCHASE PRICE. The parties agree that the
Purchase Price being paid is to be allocated among the Interests and the Sellers
for all purposes as described on SCHEDULE 2.2.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
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3.1 REPRESENTATIONS AND WARRANTIES OF THE SELLERS. Each of the
Sellers, jointly and severally, represents and warrants as follows as of the
date hereof immediately prior to the purchase and sale described in Section 2.1:
(a) ORGANIZATION AND GOOD STANDING. Each Seller, Company
and Company Subsidiary is a corporation, limited liability company or other
business entity duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it is incorporated or organized and has the
requisite corporate, limited liability company or other business power and
authority to own, lease and operate its properties and to carry on its business
as now conducted. Each Seller, Company and Company Subsidiary is duly qualified
to transact business and is in good standing in each jurisdiction in which its
ownership of the Purchased Interests makes such qualification necessary.
(b) AUTHORIZATION OF AGREEMENT. Each Seller has the
requisite corporate power and authority to execute this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by each Seller and the consummation by such Seller of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of such Seller. This Agreement has been duly
executed and delivered by such Seller, and, assuming due execution and delivery
by the other parties hereto, constitute valid and binding obligations of such
Seller, enforceable against such Seller in accordance with its terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability, whether brought in a proceeding in equity
or at law.
(c) NO VIOLATION; CONSENTS. (I) Except as have been
obtained, the execution and delivery by each Seller of this Agreement and the
consummation of the transactions contemplated hereby by each Seller does not and
will not (A) violate any provision of any certificate of incorporation, bylaw or
other organizational document of such Seller, any Company or any Company
Subsidiary, (B) conflict with, require the consent of a third party under,
violate, result in the breach of, constitute a default under, or give rise to
any right of acceleration, cancellation or termination of any material right or
obligation of such Seller, any Company or any Company Subsidiary under, any
agreement or other instrument to which such Seller or any Company or any Company
Subsidiary is a party or by which such Seller or any Company or any Company
Subsidiary or any of their respective properties or assets are bound, in each
case other than such violations, breaches, defaults or rights that would not
have, individually or in the aggregate, a Seller Material Adverse Effect, (C)
violate any Order of any Governmental Authority to which such Seller or any
Company or any Company Subsidiary, or any of their respective properties or
assets, is bound or subject in any material respect, or
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(D) violate any Laws to which such Seller or any Company, or any Company
Subsidiary, or any of their respective properties or assets, is subject in any
material respect.
(ii) Except such as have been obtained, no Order
or Permit issued by, or declaration or filing with, or notification to, or
waiver from, any Governmental Authority is required on the part of each Seller
in connection with the execution and delivery of this Agreement, or the
compliance or performance by such Seller with any of the provisions contained
herein or therein, except for any such requirements, the failure of which to be
obtained or made would not have, individually or in the aggregate, a Seller
Material Adverse Effect.
(d) OWNERSHIP AND TRANSFER. Each Seller has good and
valid title to all of the Purchased Interests owned by it free and clear of all
Liens, except as set forth on SCHEDULE 3.1(D) (the "PERMITTED LIENS"). Each
Seller shall convey to the Purchaser at the Closing good and marketable title to
the Purchased Interests owned by it, free and clear of all Liens other than the
Permitted Liens.
(e) CAPITALIZATION. SCHEDULE 3.1(E) sets forth, with
respect to each Company, the composition of the authorized capital stock and the
number of shares of capital stock issued and outstanding as of the date hereof.
Except for this Agreement, or as set forth on SCHEDULE 3.1(E), neither Seller
nor any Company has created, authorized, granted, issued or agreed to create,
authorize, grant or issue any existing option, warrant, right, call, commitment
or other agreement which would require the issuance, sale or transfer of any
Purchased Interests, any shares of capital stock or other equity interests of
any Company or other securities convertible into, exchangeable for or evidencing
the right to subscribe for or purchase shares of capital stock or other equity
interests of any Company.
(f) SUFFICIENCY OF ASSETS. The Purchased Interests
constitute in all material respects all of the assets used by each Seller in
connection with its ownership and operation of the Companies and Company
Subsidiaries as of the date hereof in the ordinary course of business consistent
with past practice (other than general corporate assets of, and management
services provided by, MIG and its Affiliates).
(g) BROADCASTING LICENSES. SCHEDULE 3.1(G) lists all of
the broadcasting licenses, certificates, permits, consents, authorizations,
approvals and transmission agreements (collectively, the "LICENSES") from
Governmental Authorities to the Companies and their Subsidiaries. The
frequencies set forth on SCHEDULE 3.1(G) have been allocated to the radio and
television stations operated by the Companies or their Subsidiaries for the
zones specified thereon.
(h) FINANCIAL STATEMENTS. The financial statements
(including any notes thereto) and the interim financial statements as set forth
in Part I of SCHEDULE 3.1(H) have been prepared in accordance with Russian
accounting standards applied on a consistent basis throughout the periods
covered thereby and present fairly in all material respects the financial
condition of each of CJSC "Kosmos-TV", "SAC", "Radio Katusha", "XXX "AVA-press"
and "Ekby" as of such dates, and the results of operations of CJSC "Kosmos-TV",
"SAC", "Radio Katusha", "XXX "AVA-press" and "Ekby" for such periods. The
financial statements (including
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any notes thereto) as set forth in Part II of SCHEDULE 3.1(H) present fairly in
all material respects the financial position and results of operations of each
of CJSC "Kosmos-TV", "SAC", "Radio Katusha", "XXX "AVA-press" and "Ekby" for the
respective time periods, in conformity with U.S. generally accepted accounting
principles applied on a consistent basis throughout the periods covered thereby.
(i) LIMITATION OF REPRESENTATIONS AND WARRANTIES. (I)
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS SECTION 3.1, THE
SELLERS ARE NOT MAKING ANY OTHER REPRESENTATIONS OR WARRANTIES, WRITTEN OR ORAL,
STATUTORY, EXPRESS OR IMPLIED, CONCERNING THE PURCHASED INTERESTS, OR THE
BUSINESS, ASSETS OR LIABILITIES OF THE COMPANIES AND THE PURCHASER HEREBY
ACKNOWLEDGES AND AGREES THAT, EXCEPT TO THE EXTENT SPECIFICALLY SET FORTH IN
THIS SECTION 3.1, THE PURCHASER IS PURCHASING THE PURCHASED INTERESTS ON AN
"AS-IS, WHERE-IS" BASIS. THE PURCHASER ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY
PROVIDED IN THIS AGREEMENT, NEITHER MIG NOR THE SELLERS HAVE MADE, AND MIG AND
THE SELLERS HEREBY EXPRESSLY DISCLAIM AND NEGATE, AND THE PURCHASER HEREBY
EXPRESSLY WAIVES, ANY REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED, AT COMMON
LAW, BY STATUTE OR OTHERWISE RELATING TO, AND THE PURCHASER HEREBY EXPRESSLY
WAIVES AND RELINQUISHES ANY AND ALL RIGHTS, CLAIMS AND CAUSES OF ACTION (OTHER
THAN FOR, OR BASED UPON, FRAUD ON WILLFUL MISCONDUCT) AGAINST MIG AND THE
SELLERS AND THEIR REPRESENTATIVES IN CONNECTION WITH THE ACCURACY, COMPLETENESS
OR MATERIALITY OF ANY INFORMATION, DATA OR OTHER MATERIALS (WRITTEN OR ORAL)
HERETOFORE FURNISHED TO THE PURCHASER AND ITS REPRESENTATIVES BY OR ON BEHALF OF
MIG AND THE SELLERS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY.
(j) BROKERS. Except as set forth on SCHEDULE 3.1(J), no
Person has acted, directly or indirectly, as a broker, finder or investment
banker for the Seller or any Company in connection with the transactions
contemplated by this Agreement and neither the Purchaser nor any Company is or
will become obligated to pay any fee or commission or like payment to any
broker, finder or investment banker as a result of the consummation of the
transactions contemplated by this Agreement based upon any arrangement made by
or on behalf of the Seller or any of its Affiliates.
(k) COMSTAR. Notwithstanding anything herein to the
contrary, the representations and warranties of the Sellers regarding CJSC
"Comstar" and its Subsidiaries are limited to the representations and warranties
set forth in Sections 3.1(a) 3.1(b), 3.1(c) and 3.1(d).
(l) NO LITIGATION. Except as set forth on SCHEDULE
3.1(L), the Companies and Company Subsidiaries are not a party to any
litigation.
(m) MATERIAL CONTRACTS. Except as set forth on SCHEDULE
3.1(M), CJSC "Kosmos-TV", "SAC", "Radio Katusha" and "Ekby" and their
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Subsidiaries are not party to supplier, service or non-ordinary course business
contracts with annual liability exceeding $25,000.
(n) CREDIT AGREEMENT. ITI has no further funding
obligations pursuant to the Amended and Restated Credit Agreement, dated as of
April 1, 2000 (amending and restating the Credit Agreement dated May 29, 1992,
as further amended and restated in its entirety as of October 31, 1993 and,
thereafter, as of November 1, 1999), as amended by Amendment No. 1 dated March
30, 2001 and Amendment No.2, effective as of January 1, 2003 (as so amended and
restated, the "Credit Agreement") nor will ITI have any further funding
obligations pursuant to the Credit Agreement at the time of the assignment of
all of its rights, title and interest under the Credit Agreement. On the Closing
Date, ITI will deliver to the Purchaser or its designee any and all promissory
notes evidencing the indebtedness of CJSC "Kosmos-TV" to ITI, issued in its
favor under the Credit Agreement, together with an endorsement duly executed in
blank.
3.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
hereby represents and warrants to each of the Sellers as follows as of the date
hereof immediately prior to the purchase and sale described in Section 2.1:
(a) ORGANIZATION AND GOOD STANDING. The Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the British Virgin Islands and has the requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now conducted. Neither the Purchaser nor any Affiliate thereof beneficially
owns any capital stock or debt of MIG, the Sellers or any of the Companies other
than the MIG Notes.
(b) AUTHORIZATION OF AGREEMENT. The Purchaser has the
requisite corporate power and authority to execute this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by the Purchaser and the consummation by the
Purchaser of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of the Purchaser. This Agreement has
been duly executed and delivered by the Purchaser, and, assuming due execution
and delivery by the other parties hereto, constitutes valid and binding
obligations of the Purchaser enforceable against the Purchaser in accordance
with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability, whether
brought in a proceeding in equity or at law.
(c) NO VIOLATION; CONSENTS. (I) The execution and
delivery by the Purchaser of this Agreement and the consummation of the
transactions contemplated hereby do not and will not (A) violate any provision
of the charter, bylaws or similar constituent document of the Purchaser, (B)
conflict with, require the consent of a third party under, violate, result in
the breach of, constitute a default under, or give rise to any right of
acceleration, cancellation or termination of any material right or obligation of
the Purchaser under any material agreement or other instrument to which either
the Purchaser is a party or by which the Purchaser or any of its properties or
assets are bound, (C) violate any Order of any Governmental Authority to which
the Purchaser is bound or subject in any material respect,
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(D) violate any Laws to which the Purchaser is subject in any material respect,
or (E) except as provided for herein, result in the imposition or creation of
any Lien upon the Purchase Price.
(ii) Except such as have been obtained, no Order
or Permit issued by, or declaration or filing with, or notification to, or
waiver from, any Governmental Authority is required on the part of the Purchaser
in connection with the execution and delivery of this Agreement or the
compliance or performance by the Purchaser with any of the provisions contained
herein.
(iii) Any consent or waiver required to be granted
by or obtained from the Purchaser or any of its Affiliates in connection with
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby shall be deemed granted and or waived.
(d) OWNERSHIP AND TRANSFER. The Purchaser owns, free and
clear of any Liens, the MIG Notes to be tendered as part of the consideration
for the Purchased Interests, and the Purchaser is entitled to and has full power
and authority to sell, transfer, convey, assign and deliver such MIG Notes. The
Purchaser shall convey to MIG, acting on behalf of the Sellers, at the Closing
good and marketable title to the MIG Notes, free and clear of any and all Liens.
(e) INVESTMENT INTENTION. The Purchaser is acquiring the
Purchased Interests for investment purposes only and not with a view to the
distribution (as such term is used in Section 2(a)(11) of the Securities Act of
1933, as amended (the "Securities Act")) thereof in violation of the applicable
securities laws and regulations. The Purchaser understands that the Purchased
Interests have not been registered under the securities laws and regulations of
any jurisdiction and cannot be sold unless subsequently registered under any
applicable Laws and regulations or an exemption from such registration is
available.
(f) FINANCIAL ADVISORS. Except as set forth on SCHEDULE
3.2(F), no Person has acted, directly or indirectly, as a broker, finder or
investment banker for the Purchaser in connection with the transactions
contemplated by this Agreement and no Seller is or will become obligated to pay
any fee or commission or like payment to any broker, finder or investment banker
as a result of the consummation of the transactions contemplated by this
Agreement based upon any arrangement made by or on behalf of the Purchaser or
any of its Affiliates.
(g) NO LITIGATION. The Purchaser is not a party in any
litigation.
(h) COMMITMENTS OF PURCHASER'S SHAREHOLDERS. The
Purchaser's shareholders have each executed an undertaking substantially of the
form set forth in SCHEDULE 3.2(H) in which each shareholder agrees to accept the
obligations imposed on such shareholders by Section 4.3 hereof.
10
ARTICLE IV
INDEMNIFICATION
---------------
4.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained herein shall only survive for a period
which shall terminate on (a) the first anniversary of the Closing Date, with
respect to the representations and warranties contained in Sections 3.1(g)
(Broadcasting Licenses) and 3.1(h) (Financial Statements of the Companies) and
(b) the third anniversary of the Closing Date, with respect to all other the
representations and warranties contained in Article III. Notwithstanding the
foregoing, in the event a notice of claim for indemnification pursuant to
Section 4.2(b) is made in accordance herewith within the applicable survival
period described above, the representation and warranty that is the subject of
such indemnification claim shall survive until such time as such claim is
finally resolved.
4.2 INDEMNIFICATION BY MIG AND MITI.
(a) MIG and MITI shall, jointly and severally, indemnify,
defend and hold harmless the Purchaser, each of the Company and the Company
Subsidiaries and each of their officers, directors, stockholders, employees,
attorneys, representatives, agents and their respective Affiliates (each, an
"Purchaser Indemnitee") from and against, and shall reimburse each Purchaser
Indemnitee for, all demands, claims, actions or causes of action, assessments,
losses, damages, liabilities, costs and expenses, including, without limitation,
interest, court costs and reasonable attorneys' fees and expenses (including,
without limitation, reasonable expenses of investigation and reasonable
attorneys' and accountants' fees and expenses in connection with any action,
suit or proceeding) (collectively "Losses") arising or resulting from (x) any
misrepresentation or any breach of warranty, covenant or agreement contained in
this Agreement by any of the Sellers other than any such misrepresentation or
breach of which the Purchaser has written notice prior to the Closing, and (y)
any claim or demand for commission or other compensation by any broker, finder,
agent or similar intermediary claiming to have been employed by the Purchaser or
any of its controlled Affiliates and to bear the cost of legal expenses incurred
in defending any such claim or demand.
(b) Notwithstanding Section 4.2, (x) MIG and MITI shall
not have any liability under clause (a) hereof in respect of any claim for
indemnification arising or resulting from any misrepresentation or a breach of a
warranty made by the Sellers in Sections 3.1(g) or 3.1(h), until the aggregate
amount of such Losses otherwise subject to indemnification equals or exceeds
$200,000, at which time only those Losses in excess of $200,000 shall be
recoverable pursuant to this Section 4.2; and (y) in no event shall the
aggregate liability of MIG and MITI in respect of indemnification claims under
clause (a) hereof exceed $2,000,000.
4.3 INDEMNIFICATION BY THE PURCHASER AND THE PURCHASER
SHAREHOLDERS.
(a) The Purchaser and each of the shareholders of the
Purchaser, which are listed on SCHEDULE 4.3 (such shareholders, the "Purchaser
Shareholders") shall, jointly and severally, indemnify, defend and hold harmless
each
11
of the Sellers and each of their officers, directors, stockholders, employees,
attorneys, representatives, agents and their respective Affiliates (each, a
"Sellers Indemnitee") from and against, and shall reimburse each Sellers
Indemnitee for, all Losses arising or resulting from (x) any misrepresentation
or any breach of warranty, covenant or agreement contained in this Agreement by
the Purchaser other than any such misrepresentation or breach of which the
Sellers has written notice prior to the Closing, and (y) any claim or demand for
commission or other compensation by any broker, finder, agent or similar
intermediary claiming to have been employed by or on behalf of MIG or any of its
controlled Affiliates, and to bear the cost of legal expenses incurred in
defending any such claim or demand.
(b) Notwithstanding Section 4.3, (x) the Purchaser and
the Purchaser Shareholders shall not have any liability under clause (a) hereof
in respect of any claim for indemnification arising or resulting from any
misrepresentation or a breach of a warranty made by the Purchaser, until the
aggregate amount of such Losses otherwise subject to indemnification equals or
exceeds $200,000, at which time only those Losses in excess of $200,000 shall be
recoverable pursuant to this Section 4.3; and (y) in no event shall the
aggregate liability of the Purchaser and the Purchaser Shareholders in respect
of indemnification claims under clause (a) hereof exceed $2,000,000.
4.4 INDEMNIFICATION AMOUNTS. Any Losses for which indemnification
is provided under this Agreement shall be reduced to take account of (i) any net
Tax Benefit realized by a party entitled to indemnification hereunder arising
from the incurrence or payment of such amount, and (ii) any proceeds received or
awarded in connection with any Losses by such party under any insurance policy
in effect on the Closing Date.
4.5 NOTIFICATION OF THIRD-PARTY CLAIMS.
(a) If any third party shall notify any party hereto (the
"INDEMNIFIED PARTY") with respect to any matter (a "THIRD PARTY CLAIM") which
may give rise to a claim for indemnification against the other party hereto (the
"INDEMNIFYING PARTY") under this Article IV, then the Indemnified Party shall
promptly notify the Indemnifying Party thereof in writing and make available to
the Indemnifying Party all relevant information and documents with respect to
the defense of such Third Party Claim; provided that, the failure to deliver
such notice to the Indemnifying Party within a reasonable time following
commencement of any such action shall not relieve the Indemnifying Parties of
any liability hereunder unless such failure is materially prejudicial to the
Indemnifying Parties;
(b) The Indemnifying Party will have the right at any
time to assume and thereafter conduct the defense of the Third Party Claim with
counsel of its choice; provided, however, that the Indemnifying Party will not
consent to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim without the prior written consent of the Indemnified
Party (not to be withheld unreasonably) unless the judgment or proposed
settlement involves only the payment of money damages and does not impose an
injunction or other equitable relief upon the Indemnified Party; provided that
any such judgment or settlement includes a full release in favor of the
Indemnified Party of all liabilities in respect of such claim;
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(c) Unless and until the Indemnifying Party assumes the
defense of the Third Party Claim as provided in Section 4.5 above, however, the
Indemnified Party may defend against the Third Party Claim, in any manner it
reasonably may deem appropriate with counsel reasonably acceptable to the
Indemnifying Party, but the fees and expenses of such counsel will be at the
expense of the Indemnified Party unless (i) the Indemnifying Party has agreed to
pay such fees and expenses, (ii) any relief other than the payment of money
damages is sought against the Indemnified Party or (iii) the Indemnified Party
has been advised by its counsel that there may be one or more defenses available
to it which are different from or additional to those available to the
Indemnifying Party, and in any such case that portion of the fees and expenses
of such separate counsel that are reasonably related to matters covered by the
indemnity provided in this Section 4.5 will be paid by the Indemnifying Party;
provided that the Indemnifying Party shall not be obligated to pay the expenses
of more than one separate counsel in each jurisdiction for each Indemnified
Party so entitled to separate counsel; and
(d) In no event will the Indemnified Party consent to the
entry of any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Indemnifying Party, such
consent not to be unreasonably withheld or delayed.
4.6 TRANSFER TAXES. MIG shall pay and be responsible for all
applicable sales, transfer, recording, deed, stamp and other similar Taxes (and
any penalties, interest and additions to such Taxes) required to be paid in
connection with the purchase and sale contemplated hereby. The parties to this
Agreement shall cooperate in the timely making of all filings, returns, reports
and forms as may be required in connection therewith.
4.7 PUBLIC ANNOUNCEMENT. The Purchaser and MIG shall consult with
each other before issuing any press release or making any public statement with
respect to this Agreement and the transactions contemplated hereby and thereby
and, shall not issue any such press release or make any such public statement
with respect thereto unless the text of such statement shall first have been
agreed to by the parties hereto.
4.8 COOPERATION AND BOOKS AND RECORDS. After the Closing Date, the
Sellers and the Purchaser shall (i) provide, and shall cause their respective
controlled Affiliates to provide, to the other party and its Affiliates (at the
expense of the requesting party) such information relating to the Companies as
the other party may reasonably request with respect to Tax matters; and (ii)
retain or cause to be retained all books and records pertinent to any of the
Companies for all pre-closing periods until the expiration of the applicable
statute of limitations (giving effect to any and all extensions and waivers).
4.9 COOPERATION. After the Closing, upon prior written notice, the
Purchaser shall afford or cause to be afforded to the Sellers, and their
respective appointed representatives (including, without limitation, legal
counsel, financial advisors and accountants) access, during normal business
hours, to such information and assistance relating to any of the Companies and
their direct or indirect Subsidiaries as is reasonably necessary for financial
reporting, tax, and accounting
13
matters. The Purchaser shall use reasonable efforts to cause the employees of
the Companies to cooperate and assist the Sellers and their respective appointed
representatives in locating information and responding to any information
requests by any Governmental Entity.
ARTICLE V
MISCELLANEOUS
-------------
5.1 REMEDIES. The parties acknowledge and agree that the only
remedy for a breach of any representation or warranty made hereunder shall be
such parties' right to indemnification pursuant to and to the extent permitted
by Article IV or to seek specific performance pursuant to Section 5.12; PROVIDED
THAT the foregoing shall not affect a party's remedies for any claim or cause of
action for fraud or willful misconduct.
5.2 EXPENSES. Except as otherwise set forth in this Agreement, the
Sellers and the Purchaser shall each bear their own expenses incurred in
connection with the negotiation and execution of this Agreement or the other
Transaction Documents and the consummation of the transactions contemplated
hereby and thereby.
5.3 NOTICES. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first-class mail, return receipt requested, telecopier,
courier service or personal delivery:
if to any of the Sellers:
c/o Metromedia International Group, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx Xxxx, Chief Executive Officer
Xxxxx Xxxx, Chief Financial Officer
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
Xxxxxx X. Xxxxxx, Esq.
14
if to the Purchaser:
Adamant Advisory Services, Inc.
c/o A.J.K Bureau of Consultants, Ltd.
0 Xxxxxxx Xxxxxx, X.X. Xxx 00000
0000 Xxxxxxx
Xxxxxx
Telecopy: 357 24 66 88 66
Telephone: 000 00 00 00 00
with a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxxx, Esq.
All such notices, demands and other communications shall be
deemed to have been duly given (i) when delivered by hand, if personally
delivered; (ii) one or two Business Day(s) after being sent, if sent via a
reputable nationwide overnight courier service guaranteeing next or second,
respectively, business day delivery; (iii) 15 (fifteen) Business Days after
being sent, if sent by registered or certified mail, return receipt requested,
postage prepaid; and (iv) when receipt is mechanically acknowledged, if
telecopied. Any party may by notice given in accordance with this Section 5.3
designate another address or Person for receipt of notices hereunder. Any party
may give any notice, request, consent or other communication under this
Agreement using any other means (including, without limitation, personal
delivery, messenger service, first class mail or electronic mail), but no such
notice, request, consent or other communication shall be deemed to have been
duly given unless and until it is actually received by the party to whom it is
given.
5.4 SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES. This
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the parties hereto. Subject to applicable securities laws
and the terms and conditions thereof, the Purchaser may assign any of its rights
under this Agreement to any of its Affiliates or any transferee of Purchased
Interests hereunder. Except as set forth in the preceding sentence, no party may
assign any of its rights under this Agreement without the written consent of the
other party. No Person other than the parties hereto and their successors and
permitted assigns is intended to be a beneficiary of this Agreement.
5.5 AMENDMENT AND WAIVER.
(a) No failure or delay on the part of any of the Sellers
or the Purchaser in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy.
15
(b) Any amendment, supplement or modification of or to
any provision of this Agreement, any waiver of any provision of this Agreement,
and any consent to any departure by any of the Sellers or the Purchaser from the
terms of any provision of this Agreement, shall be effective only if it is made
or given in writing and signed by MIG and the Purchaser.
5.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
5.7 HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
5.8 SCHEDULES. (a) The disclosure of any item in the Schedules to
this Agreement shall be deemed to be a disclosure for all purposes of this
Agreement, but shall expressly not be deemed to constitute an admission by
either the Seller or the Purchaser, or to otherwise imply or concede that any
such item is material or would (or would be reasonably likely to) have a Seller
Material Adverse Effect for purposes of this Agreement.
(b) The exhibits and schedules identified in this
Agreement are incorporated herein by reference and made a part hereof. If any
schedule discloses an item or information in such a way as to make its relevance
to the disclosure required by another schedule readily apparent, the matter
shall be deemed to have been disclosed in such other schedule, notwithstanding
the omission of an appropriate cross-reference to such other schedule. Any
matter disclosed in any section of a schedule shall be deemed disclosed in each
section of such schedule.
5.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
5.10 JURISDICTION. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby shall be brought in
any federal court located in the State of New York or any New York state court,
and each of the parties hereby consents to the exclusive jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the fullest extent permitted by
Law, any objection that it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding in any such court or that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient form. Process in any such suit, action or proceeding may be served
on either party hereto anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
hereto agrees that service of process on such party as provided in Section 5.3
shall be deemed effective service of process on such party.
16
5.11 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
5.12 SPECIFIC PERFORMANCE. Each of the parties hereto acknowledges
and agrees that the other party will be damaged irreparably if any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the parties agrees that
the other party shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
parties and the matter, in addition to any other remedy to which it may be
entitled, in law or in equity. Each party's right to seek specific performance
shall be in addition to, and not in lieu of, any other rights and remedies that
may be available hereunder.
5.13 SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
5.14 RULES OF CONSTRUCTION. Unless the context otherwise requires,
references to sections or subsections refer to sections or subsections of this
Agreement.
5.15 ENTIRE AGREEMENT. This Agreement, together with the exhibits
and schedules hereto, is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein and therein. There are no restrictions, promises,
representations, warranties or undertakings, other than those set forth or
referred to herein or therein. This Agreement, together with the exhibits and
schedules hereto supercedes all prior agreements and understandings between the
parties with respect to such subject matter.
5.16 FURTHER ASSURANCES. Each of the parties shall execute such
documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations or other actions by, or
giving any notices to, or making any filings with, any Governmental Authority or
any other Person) as may be reasonably required or desirable to carry out or to
perform the provisions of this Agreement.
[Remainder of page intentionally left blank]
17
IN WITNESS WHEREOF, the undersigned have executed, or have
caused to be executed, this Purchase Agreement on the date first written above.
METROMEDIA INTERNATIONAL GROUP, INC.
By: /s/ Xxxx X. Xxxx
---------------------------------------
Name: Xxxx X. Xxxx
Title: Chief Executive Officer
METROMEDIA INTERNATIONAL
TELECOMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxx
---------------------------------------
Name: Xxxx X. Xxxx
Title: President
METROMEDIA INTERNATIONAL, INC.
By: /s/ Xxxx X. Xxxx
---------------------------------------
Name: Xxxx X. Xxxx
Title: President
INTERNATIONAL TELCELL, INC.
By: /s/ Xxxx X. Xxxx
---------------------------------------
Name: Xxxx X. Xxxx
Title: President
ADAMANT ADVISORY SERVICES, INC.
By: /s/ Andrei Volgin
---------------------------------------
Name: Andrei Volgin
Title: Authorized Signatory
18
LIST OF SCHEDULES
-----------------
Schedule 2.1 Purchased Interests
Schedule 2.2 Purchase Price Allocation
Schedule 3.1(d) Permitted Liens
Schedule 3.1(e) Capitalization of the Companies
Schedule 3.1(g) Broadcast Licenses
Schedule 3.1(h) Financial Statements
Schedule 3.1(j) Brokers
Schedule 3.1(l) Litigation
Schedule 3.1(m) Material Contracts
Schedule 3.2(f) Financial Advisors
Schedule 3.2(h) Form of Purchaser's Shareholders Undertaking
Schedule 4.3 Purchasers Shareholders
19
