Exhibit 10.1
STOCK PURCHASE AGREEMENT, dated October 19, 2000, by and
between Genesee & Wyoming Inc., a corporation organized under the laws of
Delaware (the "Company"), and The 1818 Fund III, L.P., a Delaware limited
partnership (the "Purchaser").
The Company proposes that the Company issue to the
Purchaser, and the Purchaser purchase, up to 25,000 shares of the Company's
4.0% Senior Redeemable Convertible Preferred Stock, Series A, par value $.01
per share (the "Preferred Stock"), upon the terms and subject to the
conditions set forth in this Agreement.
An amendment to the Company's Restated Certificate of
Incorporation in the form attached hereto as Exhibit A (the "Charter
Amendment") authorizing 1,000,000 shares of Preferred Stock, par value $.01
per share, has been approved by the Board of Directors of the Company and the
holders of a majority of the voting power of the outstanding shares of Common
Stock but not yet filed with the Secretary of State of the State of Delaware.
The Charter Amendment will be so filed on or about November
13, 2000 and, prior to Closing, the Certificate of Designation will be filed
with the Secretary of State of the State of Delaware.
In consideration of the mutual covenants and agreements set
forth herein and for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. As used in this Agreement, and unless
the context requires a different meaning, the following terms have the
meanings indicated:
"1998 Audited Financials" has the meaning assigned to that
term in Section 5.10.
"1999 Audited Financials" has the meaning assigned to that
term in Section
"Acquisition Threshold" means the expenditure of $25,000,000
or more (whether by means of cash payment, issuance of capital stock,
assumption of indebtedness or, in the case of an asset acquisition only,
assumption of Capitalized Lease Obligations) by the Company or its
Subsidiaries to acquire (x) the assets or capital stock of any railway
company or (y) concessions from any Governmental Authority to operate a
railway; provided, however, that expenditures made (whether by means of cash
payment, issuance of capital stock or assumption of indebtedness or
Capitalized Lease Obligations) in connection with the acquisition of capital
stock or assets of Bolivia. and Westrail shall not be included when
calculating whether the Acquisition Threshold has been reached.
"Additional Closing Date" has the meaning assigned that term
in Section 2.1(b)(iii).
"Additional Option Shares" has the meaning assigned to that
term in Section 2.1(b)(i).
"Additional Purchase Price" has the meaning assigned that
term in Section 2.1(b)(iii).
"Additional Shares" has the meaning assigned to that term in
Section 2.1(b)(ii).
"Affiliate" has the meaning assigned that term in Rule 12b-2
of the General Rules and Regulations under the Exchange Act; provided that
"Affiliate" shall not, unless the context requires otherwise, include the
Purchaser or any Affiliate of the Purchaser; provided further, that, ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ III shall be deemed to be an Affiliate of the Company.
"Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"Benefit Plans" has the meaning assigned that term in
Section 5.21(a).
"Bolivia" means Empresa Ferroviaria Oriental, S.A.
"Business Day" means any day other than a Saturday, Sunday
or other day on which commercial banks in the City of New York, New York are
authorized or required by law or executive order to close.
"Capitalized Lease" means any lease of property, real or
personal, the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on the balance sheet of the lessee.
"Capitalized Lease Obligations" means as to any Person, the
obligations of such Person to pay rent or other amounts under any Capitalized
Leases; the amount of such obligations at any time shall be the capitalized
amount thereof at such time determined in accordance with GAAP.
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"Certificate of Designation" means the Certificate of
Designation with respect to the Preferred Stock (the form of which is
attached hereto as Exhibit B) to be adopted by the Board of Directors of the
Company and filed with the Secretary of State of the State of Delaware.
"Claims" has the meaning assigned to that term in Section
5.13(b).
"Class A Common Stock" means the Class A Common Stock of the
Company, par value $.01 per share, and having one vote per share.
"Class B Common Stock" means the Class B Common Stock of the
Company, par value $.01 per share, and having ten votes per share.
"Closing" means the Initial Closing or an Additional
Closing, as the case may be.
"Closing Date" means either the Initial Closing Date or any
Additional Closing Date, as the case may be.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission or
any similar agency then having jurisdiction to enforce the Securities Act.
"Commission Documents" has the meaning assigned to that term
in Section 5.12.
"Common Stock" means and includes the Class A Common Stock
and the Class B Common Stock and each other class of capital stock of the
Company that does not have a preference over any other class of capital stock
of the Company as to dividends or upon liquidation, dissolution or winding up
of the Company and, in each case, shall include any other class of capital
stock of the Company into which such stock is reclassified or reconstituted.
"Company Indemnified Party" has the meaning assigned that
term in Section 7.2.
"Condition of the Company" means the assets, business,
properties or financial condition of the Company and its Subsidiaries taken
as a whole.
"Contractual Obligations" means as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other instrument
to which such Person is a party or by which it or any of its property is
bound.
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"Credit Agreement" means the Third Amended and Restated
Revolving Credit and Term Loan Agreement of the Company dated as of August
17, 1999, among the Company, Australia Southern Railroad Pty. Limited, Quebec
Gatineau Railway Inc., Compania de Ferrocarriles Chiapas-Mayab, S.A. de C.V.,
The Guarantors, the Lending Institutions listed on Schedule II thereto, Fleet
National Bank (formerly known as Bank Boston, N.A.) and The First National
Bank of Chicago, as amended, modified, supplemented, restated or replaced and
in effect from time to time.
"Disclosure Schedules" has the meaning assigned to that term
in the preamble to Article 5.
"Documents" has the meaning assigned to that term in Section
5.20.
"Environmental Claims" means any written notification
pursuant to Environmental Laws asserting that any of the current or past
operations of the Company or any of its Subsidiaries, or any hazardous
substance generated as a result of such operations or any of the property
currently or formerly owned, leased or operated by the Company or any of its
Subsidiaries, or the operations or property of any predecessor of the Company
or any of its Subsidiaries, is or may be subject to any Claim, Requirements
of Law, hearing, notice, agreement or evaluation by any Governmental
Authority or any other person.
"Environmental Compliance Costs" means any expenditures,
costs, assessments or expenses (including any expenditures, costs,
assessments or expenses in connection with the conduct of any Remedial
Action, as well as reasonable fees, disbursements and expenses of attorneys,
experts, personnel and consultants), whether direct or indirect, necessary to
cause the operations, real property, assets, equipment or facilities owned,
leased, operated or used by the Company or any of its Subsidiaries to be in
compliance with any and all requirements of Environmental Laws, or Permits
issued pursuant to Environmental Laws; provided, however, that Environmental
Compliance Costs do not include expenditures, costs, assessments or expenses
necessary in connection with normal operation or maintenance of such real
property, assets, equipment or facilities or the replacement of equipment in
the normal course of events due to ordinary wear and tear.
"Environmental Laws" means any federal, state, territorial,
provincial or local law, common law doctrine, rule, order, decree, judgment,
injunction, license, permit or regulation relating to environmental matters,
including those pertaining to land use, air, soil, surface water, ground
water (including the protection, cleanup, removal, remediation or damage
thereof), or any other environmental matter, together with any other laws
(federal, state, territorial, provincial or local) relating to emissions,
discharges, releases or threatened releases of or human exposure to any
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pollutant, hazardous substance or contaminant including, without limitation,
medical, biological, biohazardous or radioactive waste and materials, into
ambient air, land, surface water, groundwater, personal property or
structures, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transportation, discharge or
handling of any pollutant, hazardous substance or contaminant, including,
without limitation, the Comprehensive Environmental Response, Compensation,
and Liability Act (42 U.S.C. Section 9601 et seq.), the Hazardous Material
Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the Federal
Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the Clean Air
Act (42 U.S.C. Section 1251 et seq.), the Toxic Substances Control Act (15
U.S.C. Section 2601 et seq.), the Federal Insecticide, Fungicide and
Rodenticide Act (7 U.S.C. Section 121 et seq.), the Asbestos Hazard Emergency
Response Act (15 U.S.C. Section et seq.); the Safe Drinking Water Act (42
U.S.C. Section 300F et seq.); and the Oil Pollution Act of 1990 (33 U.S.C.
Section 2701 et seq.), as such laws have been amended or supplemented and any
analogous state or local laws, statutes and regulations promulgated
thereunder.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.
"Financial Liabilities" has the meaning assigned that term
in Section 5.28.
"GAAP" means generally accepted accounting principles in the
United States in effect from time to time.
"Governmental Authority" means the government of any nation,
state 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 controlled,
through stock or capital ownership or otherwise, by any of the foregoing.
"Hazardous Substance" means any toxic waste, pollutant,
contaminant, hazardous substance, toxic substance, hazardous waste, special
waste, industrial substance or waste, petroleum or petroleum-derived
substance or waste, radioactive substance or waste, or any other substance
regulated under any Environmental Law.
"Holder", with respect to Preferred Shares or Class A Common
Stock issued upon conversion of the Preferred Shares, means the Purchaser and
any subsequent direct or indirect transferee of such security; provided that
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the term Holder shall not include any Person who owns such security if it has
been registered under the Securities Act or if it has been transferred to
such Person after such security has been the subject of a distribution to the
public pursuant to Rule 144 (or any successor provision) under the Securities
Act or otherwise distributed under circumstances not requiring a restrictive
legend.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended, and the rules and regulations of the Federal Trade
Commission thereunder.
"HSR Filing" has the meaning assigned to that term in
Section 2.4.
"Indemnified party" has the meaning assigned to that term in
Section 7.1.
"Initial Closing" has the meaning assigned to that term in
Section 2.4.
"Initial Closing Date" means the date specified in Section
2.4.
"Initial Preferred Shares" has the meaning assigned to that
term in Section 2.1(a).
"Initial Purchase Price" has the meaning assigned to that
term in Section 2.1(a).
"Interim Financials" has the meaning assigned to that term
in Section 5.10.
"Liabilities" has the meaning assigned to that term in
Section 7.1.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other) or
preference, priority or other security interest or preferential arrangement
of any kind or nature whatsoever (including, without limitation, those
created by, arising under or evidenced by any conditional sale or other title
retention agreement, the interest of a lessor under a capitalized lease
obligation, or any financing lease having substantially the same economic
effect as any of the foregoing).
"NASDAQ" means the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotations System.
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"NYSE" means the New York Stock Exchange, Inc.
"Permits" means any licenses, franchises, permits and
authorizations of any Governmental Authority as are necessary for the lawful
conduct of the Company and its Subsidiaries.
"Person" means any individual, firm, corporation,
partnership, limited liability company, trust, incorporated or unincorporated
association, joint venture, joint stock company, Governmental Authority or
other entity of any kind, and shall include any successor (by merger or
otherwise) of such entity.
"PORTAL" means Private Offerings, Resales and Trading
through Automated Linkages.
"Preferred Shares" means the Initial Preferred Shares and
the Additional Shares.
"Projections" has the meaning assigned to that term in
Section 5.27.
"Purchase Price" means the Initial Purchase Price and any
Additional Purchase Price.
"Purchaser Option" has the meaning assigned that term in
Section 2.1(b)(ii).
"Purchaser's Representative" has the meaning assigned that
term in Section 8.2.
"Registration Rights Agreement" means the Registration
Rights Agreement in the form attached hereto as Exhibit D.
"Release" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into or through the indoor or outdoor environment or into, through
or out of any property, including the movement of Hazardous Substances
through or in the air, soil, surface water, ground water or property.
"Remedial Action" means all actions, whether voluntary or
involuntary, reasonably necessary to comply with, or discharge any obligation
under, Environmental Laws to (i) clean up, remove, treat or cover Hazardous
Substances in the indoor or outdoor environment; (ii) prevent or control the
Release of Hazardous Substances so that they do not migrate or endanger or
threaten to endanger public health or welfare or the environment; or (iii)
perform remedial studies, investigations, restoration and post-remedial
studies, investigations and monitoring on, about or in any real property.
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"Requirements of Law" means as to any Person, the
Certificate of Incorporation and By-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder.
"Solvent" means, with respect to any Person, that the fair
saleable value on a going concern basis of the assets and property of such
Person is, on the date of determination, greater than the total amount of
liabilities (including contingent and unliquidated liabilities) of such
Person as of such date and that, as of such date, such Person is able to pay
all liabilities of such Person as such liabilities mature. In computing the
amount of contingent or liquidated liabilities at any time, such liabilities
will be computed as the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that is probable
to become an actual or matured liability.
"Stockholders Agreement" means the Letter Agreement in the
form attached hereto as Exhibit E.
"Subsidiary" means, with respect to any Person, another
Person of which 50% or more of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such
first-mentioned Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Company.
"USTs" means any underground or aboveground storage tanks or
related piping or dispensers.
"Westrail" means Westrail Freight, which is owned by the
government of Western Australia.
1.2 Accounting Terms; Financial Covenants. All
accounting terms used herein not expressly defined in this Agreement shall
have the respective meanings given to them in accordance with sound
accounting practice. The term "sound accounting practice" shall mean such
accounting practice as, in the opinion of the independent accountants
regularly retained by the Company, conforms at the time to GAAP applied on a
consistent basis except for changes with which such accountants concur. If
any changes in accounting principles are hereafter occasioned by promulgation
of rules, regulations, pronouncements or opinions by or are otherwise
required by the Financial Accounting Standards Board or the American
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Institute of Certified Public Accountants (or successors thereto or agencies
with similar functions), and any of such changes results in a change in the
method of calculation of, or affects the results of such calculation of, any
of the financial covenants, standards or terms found herein, then the parties
hereto agree to enter into and diligently pursue negotiations in order to
amend such financial covenants, standards or terms so as to reflect fairly
and equitably such changes, with the desired result that the criteria for
evaluating the Company's financial condition and results of operations shall
be the same after such changes as if such changes had not been made.
ARTICLE 2
PURCHASE AND SALE OF PREFERRED STOCK
2.1 Purchase and Sale of Preferred Stock.
(a) Subject to the terms and conditions herein set
forth, the Company agrees that it will issue to the Purchaser, and the
Purchaser agrees that it will acquire from the Company, at the Initial
Closing, 10,000 shares of Preferred Stock (the "Initial Preferred Shares")
for an aggregate purchase price of $10,000,000 (the "Initial Purchase
Price"), in cash, by wire transfer of immediately available funds to an
account designated by the Company in a notice delivered to the Purchaser no
less than one day prior to the Closing Date.
(b) (i) The Company has the option of requiring the
Purchaser (or, at the Purchaser's option, an Affiliate thereof) to acquire
from time to time (in multiples of $5,000,000) before January 15, 2001 up to
15,000 additional shares of Preferred Stock (the "Additional Option Shares")
at a price of $1,000 per share.
(ii) If the Company has equaled or exceeded the
Acquisition Threshold on or before the first anniversary of the Initial
Closing Date, the Purchaser shall have the one-time option (the "Purchaser
Option") to elect, on or before the first anniversary of the Initial Closing,
to acquire an additional 10,000 shares of Preferred Stock (such shares,
together with the Additional Option Shares, the "Additional Shares") at a
price of $1,000 per share; provided, however, that the total number of shares
of Preferred Stock to be acquired by the Purchaser upon exercise of the
Purchaser Option shall be reduced to the extent necessary so that the
aggregate purchase price of the Initial Preferred Shares and the Additional
Shares does not exceed $25,000,000; provided, further, that if the Company
has not equaled or exceeded the Acquisition Threshold on or before the first
anniversary of the Initial Closing Date, the Purchaser Option shall be
extended until the second anniversary of the Initial Closing and may be
exercised by the Purchaser until that time if the Acquisition Threshold is
then equaled or exceeded. In addition, the Company shall give the Purchaser
notice within 10 days of the closing of any acquisition occurring prior to
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the expiration of the Purchaser Option that is to be included when
determining if the Acquisition Threshold has been equaled or exceeded.
(iii) The Company shall give the Purchaser
written notice of its election to sell Additional Shares pursuant to clause
(b)(i) and the Purchaser shall give the Company written notice of its
election to purchase Additional Shares pursuant to clause (b)(ii), as the
case may be, on a date specified in such notice (which date shall be a
Business Day occurring at least 10 Business Days after the date of such
notice). Such notice shall specify the number of Preferred Shares to be sold
or purchased, as the case may be, and, if applicable, the name or names (with
address) in which a certificate or certificates for the Additional Shares are
to be issued. The purchase and sale of the Additional Shares shall, subject
to the provisions contained in Section 2.4 in the event an HSR Filing is
required, occur on the date specified in such notice (each, an "Additional
Closing Date"). On each Additional Closing Date, the Company will issue to
the Purchaser (or its Affiliate) the number of shares of Preferred Shares to
be purchased on such date and the Purchaser shall deliver the purchase price
therefore (the "Additional Purchase Price") in cash, by wire transfer of
immediately available funds to an account designated by the Company in a
notice delivered to the Purchaser. On each Additional Closing Date, the
Purchaser shall deliver to the Company a certificate signed by a General
Partner stating that the representations and warranties contained in Article
6 are true and correct as if made as of such Additional Closing Date (unless
such representations and warranties relate to matters only as of a particular
date, in which case such representations and warranties shall be true and
correct in all material respects as of such date) and the President or a Vice
President of the Company shall deliver to the Purchaser a certificate stating
that the representations and warranties contained in Article 5 are true and
correct in all material respects as of such Additional Closing Date as if
made as of such date (unless such representations and warranties relate to
matters only as of a particular date in which case such representations and
warranties shall be true and correct in all material respects as of such
date) and the Company is in compliance in all material respects with its
obligations in Article 8 or 9; provided, that, (x) the references in Section
5.10 to the 1998 Audited Financials and the 1999 Audited Financials shall
instead be to the audited consolidated financial statements of the Company
for the two most recently completed fiscal years (which have been included in
the Company's Commission Documents), (y) references in Section 5.10 to the
Interim Financials shall be deemed to also include a reference to the
unaudited consolidated financial statements of the Company for each completed
fiscal quarter ending September 30, March 31 and September 30 since the
Initial Closing for which the Company has filed a quarterly report on Form
10-Q and (z) the Company shall deliver a supplemental schedule to the
Purchaser updating the capitalization and material contracts (as to the first
sentence thereof only) representations and warranties contained in Sections
5.16 and 5.26; provided, further, that the Company shall also satisfy and
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certify that the conditions contained in Sections 3.6, 3.8, 3.9, 3.10, 3.17
and 3.18 shall be satisfied as of the Closing Date in respect of the purchase
of the Additional Shares.
2.2 Certificate of Designation. The Preferred Shares
shall have the rights and preferences set forth in the Certificate of
Designation.
2.3 Fees. The Company agrees it will pay to the
Purchaser at each Closing, a facility fee of 3.75% of the Purchase Price of
the Preferred Shares to be purchased by the Purchaser at such Closing in
cash, by wire transfer of immediately available funds to an account
designated by the Purchaser in a notice delivered to the Company at least one
day prior to such Closing. Such facility fee may be paid by the Purchaser by
deducting such amount from the Purchase Price.
2.4 Closing. The purchase and issuance of the Initial
Preferred Shares shall take place at the closing (the "Initial Closing") to
be held at the offices of ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, 1285
Avenue of the Americas, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ on the second Business
Day following the fulfillment of all conditions to the Initial Closing (other
than those conditions contemplated to be fulfilled concurrently with the
Initial Closing), or such later date on or prior to January 31, 2001 as the
parties may agree (the "Initial Closing Date"), at 10:00 a.m., New York City
time. The location and time of each purchase and issuance of Additional
Shares (each an "Additional Closing" and, together with the Initial Closing,
the "Closings") shall be set forth in the written notice from the Company or
the Purchaser, as the case may be, referred to in Section 2.1(b); provided,
however, that in the event that the Purchaser's purchase of Preferred Shares
at an Additional Closing would result in a premerger notification filing
requirement (an "HSR Filing") pursuant to the HSR Act, the Purchaser shall
not be required to purchase and the Company shall not be required to sell
such Preferred Shares at such Additional Closing until expiration or
termination of the HSR Act waiting period, and; provided, further, that such
purchase shall instead close on the second Business Day after expiration or
termination of the HSR Act waiting period. At each Closing, subject to the
terms and conditions set forth herein, the Company shall sell the Preferred
Shares to be purchased at such Closing to the Purchaser by delivering to the
Purchaser Preferred Shares registered in the name of the Purchaser or its
designees, with appropriate issue stamps, if any, affixed at the expense of
the Company, free and clear of any Lien, and the Purchaser shall purchase the
Preferred Shares by depositing the purchase price therefor, in cash or by
wire transfer of immediately available funds to an account designated by the
Company in a notice delivered to the Purchaser no less than one day prior to
the Additional Closing Date.
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ARTICLE 3
CONDITIONS TO THE OBLIGATION
OF THE PURCHASER TO CLOSE
The obligation of the Purchaser to purchase the Initial
Preferred Shares, to pay the Initial Purchase Price at the Initial Closing
and to perform any obligations hereunder shall be subject to the satisfaction
or waiver of the following conditions on or before the Closing Date:
3.1 Representations and Warranties True. The
representations and warranties of the Company contained in Section 5 hereof
shall be true and correct in all material respects at and as of the Closing
Date as if made at and as of such date (unless such representations and
warranties relate to matters only as of a particular date, in which case such
representations and warranties shall be true and correct in all material
respects as of such date).
3.2 Compliance with this Agreement. The Company shall
have performed and complied in all material respects with all of its
agreements and conditions set forth or contemplated herein that are required
to be performed or complied with by the Company on or before the Closing
Date.
3.3 Officer's Certificate. The Purchaser shall have
received a certificate, dated the Closing Date and signed by the President or
a Vice President of the Company, certifying that the conditions set forth in
Sections 3.1 and 3.2 hereof have been satisfied on and as of such date.
3.4 Secretary's Certificate. The Purchaser shall have
received a certificate, dated the Closing Date and signed by the Secretary or
an Assistant Secretary of the Company, certifying the truth and correctness
of attached copies of the Certificate of Incorporation and By-laws of the
Company and resolutions of the Board of Directors of the Company approving
this Agreement and the transactions contemplated hereby.
3.5 Documents. The Purchaser shall have received copies
of such documents as it reasonably may request in connection with the sale of
the Initial Preferred Shares and the transactions contemplated hereby, all in
form and substance reasonably satisfactory to the Purchaser.
3.6 Purchase Permitted by Applicable Laws; Legal
Investment. The acquisition of and payment for the Initial Preferred Shares
to be acquired by the Purchaser hereunder and the consummation of the
transactions contemplated hereby (a) shall not be prohibited by any
applicable law or governmental regulation, (b) shall not subject the
Purchaser to any penalty or, in its reasonable judgment, other onerous
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condition under or pursuant to any applicable law or governmental regulation
and (c) shall be permitted by the laws and regulations of the jurisdictions
to which it is subject.
3.7 Intentionally omitted.
3.8 Opinion of Counsel. The Purchaser shall have
received the opinion of Simpson, Thacher & ▇▇▇▇▇▇▇▇, counsel to the Company,
dated the Closing Date, with respect to the matters set forth in Exhibit C
hereto.
3.9 Consents and Approvals. All consents, exemptions,
authorizations, or other actions by, or notices to, or filings with,
Governmental Authorities and other Persons, including with respect to
Contractual Obligations of the Company, necessary or required in connection
with the execution, delivery or performance (including, without limitation,
the payment of dividends on the Preferred Stock and the issuance of Class A
Common Stock upon the conversion of the Preferred Stock) by the Company or
enforcement against the Company of this Agreement, the Preferred Shares, the
Registration Rights Agreement or the Stockholders Agreement shall have been
obtained and be in full force and effect (and the Purchaser shall have been
furnished with appropriate evidence thereof), other than those that would not
impair the ability of the Company to perform its obligations under this
Agreement,
3.10 No Material Adverse Change. Since December 31,
1999, there shall have been no material adverse change, nor shall any event
occur which is reasonably likely to cause any such change in the Condition of
the Company since that date; provided, however, that such change shall not
include changes arising out of (i) changes in U.S. general economic or
securities markets conditions; (ii) any changes that affect the railroad
industry in general; or (iii) changes resulting from the announcement of the
transactions contemplated by this Agreement.
3.11 Bolivia or Westrail Closing. The proposed
investment by the Company in either Bolivia or Westrail shall have been
consummated on terms and conditions satisfactory to the Purchaser in its
reasonable judgment.
3.12 Conduct of Business. The Company shall not have
from the date hereof to the Closing Date (i) taken any action or proposed to
take any action that would require the vote of the Preferred Stock as
contemplated by Section 3(b) of the Certificate of Designation if such
Certificate of Designation were in effect as of the date hereof or (ii)
allowed or agreed to allow a Change of Control (as defined in the Certificate
of Designation) to occur, in each case without the prior written consent of
the Purchasers.
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3.13 Registration Rights Agreement. The Company shall
have duly executed and delivered to the Purchaser the Registration Rights
Agreement.
3.14 Stockholders Agreement. The Company and the other
parties thereto (other than the Purchaser) shall have duly executed and
delivered to the Purchaser the Stockholders Agreement.
3.15 Charter of the Company. The Charter Amendment and
the Certificate of Designation shall each have been filed with the Secretary
of State of the State of Delaware and each such filing shall have become
effective and neither the Charter Amendment nor the Certificate of
Designation shall have been amended or modified.
3.16 Market Conditions. Prior to the Closing Date, (a)
trading in the Common Stock shall not have been suspended by the Commission
or by the NASDAQ, (b) trading in securities generally on the NYSE or NASDAQ
shall not have been suspended or limited for two consecutive Business Days or
minimum or maximum prices shall not have been generally established on such
exchange for two consecutive Business Days, or additional material
governmental restrictions, not in force on the date of this Agreement, shall
not have been imposed upon trading in securities generally by such exchange
or by order of the Commission or any court or other Governmental Authority
for two consecutive Business Days and (c) a general banking moratorium shall
not have been declared by either Federal or New York State authorities and
continued for two (2) consecutive Business Days.
3.17 No Litigation. Except as set forth in Schedule 5.6,
no action, suit, proceeding, claim or dispute shall have been brought or
otherwise arisen at law, in equity, in arbitration or before any Governmental
Authority against the Company or any of its Subsidiaries which is reasonably
likely to be successful against the Company and would, if adversely
determined, (i) have a material adverse effect on the Condition of the
Company or (ii) have a material adverse effect on the ability of the Company
to perform its obligations under this Agreement, the Preferred Shares, the
Registration Rights Agreement or the Stockholders Agreement.
3.18 No Default or Breach. Neither the Company nor any
of its Subsidiaries shall be in default under or with respect to any
Contractual Obligation in any respect, which, individually or together with
all such defaults, would be materially adverse to the Condition of the
Company or which could materially adversely affect the ability of the Company
to perform its obligations under this Agreement, the Preferred Shares, the
Registration Rights Agreement or the Stockholders Agreement.
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3.19 Credit Agreement. The parties to the Credit
Agreement shall have duly executed and delivered an amendment thereto in
respect of the issuance of the Preferred Stock and the payment of the
dividends thereon in form and substance acceptable to the Purchaser in its
reasonable judgment.
ARTICLE 4
CONDITIONS TO THE OBLIGATION
OF THE COMPANY TO CLOSE
The obligations of the Company to issue and sell the Initial
Preferred Shares, and to consummate the transactions contemplated herein on
the Initial Closing Date, shall be subject to the satisfaction or waiver of
the following conditions on or before the Initial Closing Date:
4.1 Representations and Warranties True. The
representations and warranties of the Purchaser contained in Section 6 hereof
shall be true and correct in all material respects at and as of the Closing
Date as if made at and as of such date (unless such representations and
warranties relate to matters only as of a particular date, in which case such
representations and warranties shall be true and correct in all material
respects as of such date).
4.2 Compliance with this Agreement. The Purchaser shall
have performed and complied with in all material respects all of its
agreements and conditions set forth or contemplated herein that are required
to be performed or complied with by the Purchaser on or before the Closing
Date.
4.3 Issuance Permitted by Applicable Laws. The issuance
of the Preferred Shares and the consummation of the transactions contemplated
hereby by the Company (a) shall not be prohibited by any applicable law or
governmental regulation, (b) shall not subject the Company to any penalty or,
in its reasonable judgment, other onerous condition under or pursuant to any
applicable law or governmental regulation and (c) shall be permitted by the
laws and regulations of the jurisdictions in which is it subject.
4.4 Consents and Approvals. All consents, exemptions,
authorizations, or other actions by, or notices to, or filings with,
Governmental Authorities and other Persons, including with respect to
Contractual Obligations of the Purchaser, necessary or required in connection
with the execution, delivery or performance by the Purchaser or enforcement
against the Purchaser of this Agreement shall have been obtained and be in
full force and effect, and the Company shall have been furnished with
appropriate evidence thereof.
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4.5 Charter of the Company. The Charter Amendment and
the Certificate of Designation shall each have been filed with the Secretary
of State of the State of Delaware and each such filing shall have become
effective.
4.6 Credit Agreement. The parties to the Credit
Agreement shall have duly executed and delivered an amendment thereto in
respect of the issuance of the Preferred Stock in form and substance
acceptable to the Company in its reasonable judgment.
4.7 Bolivia and Westrail Closings. The proposed
investment by the Company in either Bolivia or Westrail shall have been
consummated on terms and conditions satisfactory to the Company in its
reasonable judgment.
ARTICLE 5
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
The Company has delivered a disclosure letter relating to
this Agreement (the "Disclosure Schedules") to the Purchaser prior to the
execution of this Agreement. The Company hereby represents and warrants to
the Purchaser as follows:
5.1 Corporate Existence and Power. The Company, and
each of its Subsidiaries:
(a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization;
(b) has (i) full corporate (or other
organizational) power and authority and (ii) all governmental licenses,
authorizations, consents and approvals to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which
it is currently engaged;
(c) is duly qualified as a foreign person,
licensed and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification; and
(d) is in compliance with all Requirements of
Law;
except, in the case of (b)(ii), (c) or (d) of this Section 5.1, to the extent
that the failure to do so would not have a material adverse effect on the
Condition of the Company.
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5.2 Corporate Authorization; No Contravention. The
execution, delivery and performance by the Company of this Agreement, the
Registration Rights Agreement, the Stockholders Agreement and the
transactions contemplated hereby and thereby, including without limitation
the issuance of the Preferred Shares and the Class A Common Stock issuable
upon the conversion of the Preferred Shares:
(a) is within the Company's corporate power and
authority and has been duly authorized by all necessary corporate action; and
(b) will not violate, conflict with or result
in any breach or contravention of or the creation of any Lien under, any
Contractual Obligation of the Company or any of its Subsidiaries, or any
order or decree directly relating to the Company or any of its Subsidiaries,
other than any such violations, conflicts, contraventions or Liens that,
individually or in the aggregate, could not reasonably be expected to (i)
impair the ability of the Company to perform its obligations under this
Agreement, the Registration Rights Agreement or the Stockholders Agreement or
(ii) prevent or materially delay consummation of the transactions
contemplated by this Agreement, the Registration Rights Agreement or the
Stockholders Agreement.
5.3 Governmental Authorization; Third Party Consents.
Other than with respect to compliance with the HSR Act or as set forth in
Schedule 5.3 of the Disclosure Schedules, no approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person, is necessary or required in
connection with the execution, delivery or performance by the Company or
enforcement against the Company of this Agreement, the Preferred Shares, the
Registration Rights Agreement, the Stockholders Agreement or the transactions
contemplated hereby or thereby. As of the Closing Date, the issuance of and
payment of dividends on the Preferred Stock will not be prohibited by the
terms of the Credit Agreement
5.4 Binding Effect. This Agreement has been duly
executed and delivered by the Company, and at the Initial Closing the
Registration Rights Agreement, the Stockholders Agreement and the Initial
Preferred Shares will be duly executed and delivered by the Company. This
Agreement constitutes the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as
enforcement may be limited by any implied covenant of good faith and fair
dealing, by applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable principles
relating to enforceability or as the enforcement may be limited by
considerations of public policy. At the Closing, the Registration Rights
Agreement, the Stockholders Agreement and the Preferred Shares will
constitute the legal, valid and binding obligations of the Company
-17-
enforceable against the Company in accordance with their respective terms,
except as enforcement may be limited by any implied consent of good faith and
fair dealing, by applicable bankruptcy, insolvency, or similar laws affecting
the enforcement of creditors' rights generally or by equitable principles
relating to enforceability or as the enforcement may be limited by
considerations of public policy.
5.5 No Legal Bar. Neither the execution, delivery and
performance of this Agreement, the Registration Rights Agreement and the
Stockholders Agreement nor the issuance or performance of the terms of the
Preferred Shares will violate any Requirement of Law in any material respect
or any of its Subsidiaries or any rule or regulation of NASDAQ.
5.6 Litigation.
(a) Except as set forth in Schedule 5.6 of the
Disclosure Schedules, there are no actions, suits, proceedings, claims or
disputes pending, or to the best knowledge of the Company, threatened, at
law, in equity, in arbitration or before any Governmental Authority against
the Company or any of its Subsidiaries:
(i) with respect to this Agreement, the
Preferred Shares, the Registration Rights Agreement or the Stockholders
Agreement or any of the transactions contemplated hereby or thereby; or
(ii) which is reasonably likely to be
successful against the Company and would, if adversely determined, (i) have a
material adverse effect on the Condition of the Company or (ii) have a
material adverse effect on the ability of the Company to perform its
obligations under this Agreement, the Preferred Shares, the Registration
Rights Agreement or the Stockholders Agreement.
(b) No injunction, writ, temporary restraining
order, decree or any order of any nature has been issued by any court or
other Governmental Authority purporting to enjoin or restrain the execution,
delivery and performance of this Agreement, the Preferred Shares, the
Registration Rights Agreement or the Stockholders Agreement.
5.7 No Default or Breach. No event has occurred and is
continuing or would result from incurring the obligations by the Company
under this Agreement, the Preferred Shares or under the Registration Rights
Agreement which would constitute a default under or breach of any of the
provisions of Article 8 or 9. Neither the Company nor any of its
Subsidiaries is (or would be as a result the issuance of the Preferred Shares
and the conversion of such shares into Class A Common Stock) in default under
or with respect to any Contractual Obligation in any respect, which,
individually or together with all such defaults, would be materially adverse
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to the Condition of the Company or which could reasonably be expected to
materially adversely affect the ability of the Company to perform its
obligations under this Agreement, the Preferred Shares, the Registration
Rights Agreement or the Stockholders Agreement.
5.8 Title to Properties. The Company and each of its
Subsidiaries have good and defensible title to, or hold leases in full force
and effect in all their real property, except for such defects in title as
could not reasonably be expected to, individually or in the aggregate, have a
materially adverse effect on the Condition of the Company or the ability of
the Company to perform its obligations under this Agreement, the Preferred
Shares, the Registration Rights Agreement or the Stockholders Agreement.
5.9 Taxes. The Company and its Subsidiaries have filed
or caused to be filed, or have properly filed extensions for, all material
income tax returns which are required to be filed and have paid or caused to
be paid all material taxes as shown on said returns and on all assessments
received by it to the extent that such taxes have become due, except taxes
the validity or amount of which is being contested in good faith by
appropriate proceedings and with respect to which adequate reserves have been
set aside. The Company and its Subsidiaries have paid or caused to be paid,
or have established reserves that the Company reasonably believes to be
adequate for all material income tax liabilities applicable to the Company
and its Subsidiaries for all fiscal years which have not been examined and
reported on by the taxing authorities (or closed by applicable statutes).
5.10 Financial Condition. The Company heretofore has
delivered or made available to the Purchaser true and correct copies of
audited consolidated financial statements of the Company and its Subsidiaries
dated as of December 31, 1998 (the "1998 Audited Financials") and December
31, 1999 (the "1999 Audited Financials"), and the unaudited consolidated
financial statements of the Company and its Subsidiaries dated as of March
31, 2000 and June 30, 2000 (the "Interim Financials"). The 1998 Audited
Financials, 1999 Audited Financials and the Interim Financials have been
prepared in accordance with GAAP applied consistently and present fairly the
consolidated financial condition of the Company as of the dates thereof and
the consolidated results of operations and cash flows of the Company for the
period, or portion thereof, then ended (except in the case of the Interim
Financials, for normal year-end adjustment or the absence of footnotes).
5.11 No Material Adverse Change. Except as expressly
disclosed in the Commission Documents (excluding the financial statements)
filed prior to the date hereof that describe the event, since December 31,
1999, there has not been any material adverse change, nor to the knowledge of
the Company has any event occurred which is reasonably likely to result in
such a change, in the Condition of the Company.
-19-
5.12 Commission Documents. The Company has filed all
registration statements, proxy statements, reports and other documents
required to be filed by them under the Securities Act or the Exchange Act,
and all amendments thereto (collectively, the "Commission Documents") since
January 1, 1998. The Company has furnished or made available to the Purchaser
copies of all Commission Documents, each as filed with the Commission, since
January 1, 1998. Each Commission Document when filed with the Commission was
true and accurate in all material respects and in compliance in all material
respects with the requirements of its respective report form.
5.13 Environmental Matters. Except as set forth in
Schedule 5.13 of the Disclosure Schedules and except for instances that would
not adversely affect the Condition of the Company in any material respect.
(a) Neither the Company nor any of its
Subsidiaries is or has been in violation of any applicable Environmental Law;
(b) (i) The Company and its Subsidiaries have
all Permits required pursuant to applicable Environmental Laws for the
conduct of the business of the Company or its Subsidiaries, (ii) all such
Permits are in full force and effect, (iii) neither the Company nor any of
its Subsidiaries has received written notice or has knowledge that any
action, cause of action, suit, claim, complaint, demand, litigation or legal,
administrative or arbitral proceeding or investigation (collectively,
"Claims") to revoke, limit or modify any of such Permits is pending and (iv)
the Company and each of its Subsidiaries is in compliance with all terms and
conditions thereof;
(c) Neither the Company or any of its
Subsidiaries has received any Environmental Claim, and none of them is
subject, due to the consummation of the transactions contemplated by this
Agreement, to any obligation to investigate or remediate any property under
any applicable Environmental Law;
(d) Neither the Company or any of its
Subsidiaries has entered into any written agreement with any Governmental
Body or any other Person by which the Company or any of the Subsidiaries
agreed to undertake, or assume responsibility for, or guaranteed, any other
Person's agreement to undertake, for the remediation of any condition arising
from or relating to a Release or threatened Release of Hazardous Substances
into the environment;
(e) To the knowledge of the Company or any of
its Subsidiaries, there is not a Release or threatened Release of Hazardous
Substances for which the Company or any of its Subsidiaries could reasonably
be expected to be responsible;
-20-
(f) Except in cases which would not give rise
to liability under any applicable Environmental Law, there is not now and has
not been at any time in the past at, on or in any of the real properties
owned, leased or operated by the Company or any of its Subsidiaries, and, to
the knowledge of the Company or any of its Subsidiaries, there was not at, on
or in any real property previously owned, leased or operated by the Company
or any of its Subsidiaries or any predecessor, any UST, surface impoundment,
lagoon, landfill, solid waste disposal area, or other containment facility
(past or present) for the temporary or permanent storage, treatment or
disposal of Hazardous Substances;
(g) To the knowledge of the Company or any of
its Subsidiaries: (i) there is no basis for any Environmental Claim against
any of them, and (ii) there is no condition that could reasonably be expected
to result in Environmental Compliance costs to any of them;
(h) To the knowledge of the Company or any of
its Subsidiaries, neither the Company or any of its Subsidiaries has
transported, stored, treated or disposed, nor has it allowed or arranged for
any third persons to transport, store, treat or dispose, any Hazardous
Substance to or at: (i) any location other than a site lawfully permitted to
receive such substances for such purposes, or (ii) any location designated
for Remedial Action pursuant to Environmental Laws; nor has it performed,
arranged for or allowed by any method or procedure such transportation or
disposal in contravention of any Environmental Laws or in any other manner
which could reasonably be expected to result in Environmental Compliance
Costs or in an Environmental Claim.
5.14 Investment Company. The Company is not an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
5.15 Subsidiaries. Schedule 5.15 of the Disclosure
Schedules sets forth a complete and accurate list of all of the Subsidiaries
of the Company together with their respective jurisdictions of incorporation
or organization. Except as set forth on Schedule 5.15 of the Disclosure
Schedules, each such Subsidiary is directly or indirectly wholly owned by the
Company.
5.16 Capitalization. As of the date hereof, the
authorized capital stock of the Company consists of 12,000,000 shares of
Class A Common Stock and 1,500,000 shares of Class B Common Stock. Upon the
filing and effectiveness of the Charter Amendment, the authorized capital
stock of the Company will consist of 12,000,000 shares of Class A Common
Stock, 1,500,000 shares of Class B Common Stock and 1,000,000 shares of
preferred stock, par value $.01 per share. Upon the filing and effectiveness
of the Certificate of Designation, 25,000 of such shares of preferred stock
-21-
will be designated as Preferred Stock. As of October 15, 2000, 3,492,328
shares of Class A Common Stock and 845,447 shares of Class B Common Stock are
issued and outstanding. Except as set forth in Section 5.16 of the
Disclosure Schedules or as contemplated by this Agreement, there are no
shares of capital stock of the Company reserved for issuance. All of the
outstanding shares of capital stock of the Company have been duly authorized
and are fully paid and non-assessable. The Preferred Shares when issued upon
payment of the Purchase Price, and the shares of Class A Common Stock when
issued upon conversion of the Preferred Shares, are duly authorized, and,
when issued, in each case will be validly issued, fully paid and
nonassessable. Other than options granted pursuant to the Company's 1996
Stock Option Plan or Stock Option Plan for Outside Directors and except as
set forth in Schedule 5.16 of the Disclosure Schedules or in the Certificate
of Designation, there are no options, warrants or other rights to purchase
shares of capital stock or other securities of the Company, nor is the
Company obligated in any manner to issue shares of its capital stock or other
securities. Except as set forth in the Company's Restated Certificate of
Incorporation (as in effect on the date hereof) and except as contemplated
hereby (including the filing of the Certificate of Designation) and for
relevant state and federal securities laws, there are no restrictions on the
transfer of shares of capital stock of the Company.
5.17 Private Offering. No form of general solicitation
or general advertising was used by the Company or, to its knowledge, its
representatives in connection with the offer or sale of the Preferred Shares.
Assuming the accuracy of the Purchaser's representations contained in Section
6.5, no registration of the Preferred Shares pursuant to the provisions of
the Securities Act or any state securities or "blue sky" laws will be
required by the offer, sale or issuance of the Preferred Shares pursuant to
this Agreement. The Company agrees that neither it, nor anyone acting on its
behalf, will offer or sell the Preferred Shares or any other security so as
to require the registration of the Preferred Shares pursuant to the
provisions of the Securities Act or any state securities or "blue sky" laws,
unless such Preferred Shares are so registered.
5.18 Broker's, Finder's or Similar Fees. Except as set
forth herein, there are no brokerage commissions, finder's fees or similar
fees or commissions payable in connection with the transactions contemplated
hereby based on any agreement, arrangement or understanding with the Company
or any of its Subsidiaries, or any action taken by any such entity.
5.19 Outstanding Indebtedness. After giving effect to
the issuance of the Preferred Shares, and the conversion of the Preferred
Stock into Common Stock, neither the Company nor any of its Subsidiaries
would be in default under or with respect to any covenant in the Credit
Agreement (determined after giving effect to the amendment thereto
contemplated in Sections 3.19 and 4.6).
-22-
5.20 Full Disclosure. No statement by the Company
contained in (i) this Agreement or (ii) any Commission Documents or any other
documents, certificates, notices or consents (collectively, "Documents")
delivered to the Purchaser in connection with the purchase and sale of the
Preferred Shares at or prior to the Closing contains an untrue statement of a
material fact or omits to state a material fact required to be stated therein
or necessary to make the statements made, in the light of the circumstances
in which made, not materially false or misleading.
5.21 ERISA and Employee Benefit Plans.
(a) There are no material employee benefit
plans, arrangements, policies or commitments of any type (including, but not
limited to, plans described in section 3(3) of ERISA) maintained by the
Company or its Subsidiaries, or with respect to which the Company or its
Subsidiaries has or could have any direct or indirect liability, other than
those described in Schedule 5.21(a) of the Disclosure Schedules ("Benefit
Plans").
(b) Accurate and complete copies of all plan
text and agreements, the most recent annual report, the most recent annual
and periodic accounting of plan assets, and the most recent actuarial
valuation with respect to each Benefit Plan have been made available upon
request to the Purchaser.
(c) Except as provided in Schedule 5.21(c) of
the Disclosure Schedules, no Benefit Plan is or, in the preceding five
calendar years, has been subject to Title IV of ERISA or section 412 of the
Code. With respect to each Benefit Plan subject to Section 412 of the Code
or section 302 of ERISA: (i) such plan uses a funding method permissible
under ERISA and the actuarial assumptions used in connection therewith are
reasonable individually and in the aggregate; (ii) no such Benefit Plan has
incurred an accumulated funding deficiency, whether or not waived; (iii) the
fair market value of the assets of such Benefit Plan will exceed or equal the
"projected benefit obligation" (as defined in Statement of Financial
Accounting Standard No. 87) and the "amount of unfunded benefit liabilities,"
as defined in section 4001(a)(18) of ERISA is zero; (iv) no such Benefit Plan
has been terminated, no filing of a notice of intent to terminate such a
Benefit Plan has been made, and the Pension Benefit Guaranty Corporation has
not initiated any proceeding to terminate any such Benefit Plan; and (v) no
event has occurred and to the Company's Knowledge, there exists no condition
or set of circumstances which presents a material risk that any such Benefit
Plan has or is likely to experience a "partial termination" within the
meaning of section 411(d)(3) of the Code. No Benefit Plan is a "multiple
employer plan" within the meaning of the Code or ERISA.
-23-
(d) With respect to each Benefit Plan, except
as set forth in Schedule 5.21 of the Disclosure Schedules and to the extent
that the failure to comply would not affect the condition of the Company in
any material respect: (i) if it is intended to qualify under section 401(a)
or 403(a) of the Code, such plan has received a favorable determination
letter as to its qualification; (ii) such Benefit Plan has been maintained
and administered at all times in compliance with its terms and applicable
laws and regulations; and (iii) no event has occurred and there exists no
circumstances under which the Company or its Subsidiaries could incur
liability under ERISA, the Code or otherwise (other than routine claims for
benefits) with respect to such plan.
(e) Except as provided in Schedule 5.21(e) of
the Disclosure Schedules, with respect to each Benefit Plan that is a
"welfare plan" (as defined in ERISA section 3(1)): no such plan provides
medical benefits with respect to current or former employees of the Company
or its Subsidiaries beyond their termination of employment (other than as
required under Code section 4980B).
(f) Except as set forth in Schedule 5.21(f) of
the Disclosure Schedules, the consummation of the transactions contemplated
by this Agreement will not give rise to any liability or increase any
existing liability under any Benefit Plan.
5.22 Regulatory Compliance. The Company and its
Subsidiaries, in their ownership, management and operation of their business,
as now conducted, do not require any authorization, filing, submission or
exemption from the Surface Transportation Board, the Federal Railroad
Administration or any similar Government Authority body in any country in
which the Company or its Subsidiaries operate, other than those that have
already been obtained and are in effect and except for instances of
noncompliance that would not affect the Condition of the Company in any
material respect.
5.23 Registration Rights Agreement. Schedule 5.23 of the
Disclosure Schedules sets forth all agreements to which the Company or any
Subsidiary is a party or by which it is bound relating to the registration of
its securities or, in the case of a Subsidiary, the securities of the
Subsidiary. None of the agreements listed in Schedule 5.23 of the Disclosure
Schedules grants any registration rights to any Person which conflict with
the rights to be granted to the Purchaser in the Registration Rights
Agreement; provided, however, that under Section 2(b) of the Registration
Rights Agreement, dated September 30, 1999, by and between the Company and
Unirail, LLC, in the case of a demand registration pursuant to Section 2.1 of
the Registration Rights Agreement in which cutbacks are required, the Company
would have priority over the Initiating Holders (as defined in the
Registration Rights Agreement); provided, further, that in any such event,
-24-
the Company hereby irrevocably waives such right and shall only be entitled
to include its securities in any such registration in accordance with Section
2(e) of the Registration Rights Agreement.
5.24 Stockholders Agreement. Schedule 5.24 of the
Disclosure Schedules sets forth all agreements to which the Company or any
Subsidiary is a party or by which it is bound relating to shareholder actions
or voting. None of the agreements listed in Schedule 5.24 of the Disclosure
Schedules grants any shareholder rights which conflict with the rights to be
granted to the Purchaser in the Stockholders Agreement.
5.25 Trade Relations. To the best knowledge of the
Company, there exists no actual or threatened termination, cancellation or
limitation of, or any adverse modification or change in, the business
relationship or business of the Company and its Subsidiaries taken as a whole
or their business with any customer or any group of customers whose use of
their services are individually or in the aggregate material to the business
of the Company and its Subsidiaries taken as a whole, or with any material
supplier.
5.26 Material Contracts. Schedule 5.26 of the Disclosure
Schedules lists (i) all of the Company's "material contracts" (as defined in
Item 601 of Regulation S-K of the Commission) and (ii) all agreements
restricting the payments of dividends on the Preferred Stock. All of the
contracts, agreements and commitments of the Company and its Subsidiaries
listed in Schedule 5.26 of the Disclosure Schedules are (assuming due
execution of the counterparties thereto) in full force and effect and binding
upon the parties thereto in accordance with their terms (subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in equity or at
law) and an implied covenant of good faith and fair dealing). Neither the
Company nor any of its Subsidiaries, nor to the knowledge of the Company or
any of its Subsidiaries, or other party to such contracts, agreements and
commitments is in default thereunder, nor does any condition exist that with
notice or lapse of time, or both would constitute a default in any material
respect thereunder. Neither the Company nor any of its Subsidiaries has any
knowledge of any proposed, pending, or likely cancellation or termination of
any such contract, agreement or commitment.
5.27 Projections. Prior to the date hereof, the Company
delivered to the Purchaser its latest budgets for the six months ended
December 31, 2000 and fiscal year 2001 (prepared excluding the investments in
Bolivia and Westrail but including the transactions contemplated by this
Agreement) , a copy of which is included in Schedule 5.27 of the Disclosure
Schedules (the "Projections"). The assumptions used in preparation of the
Projections were reasonable when made and continue to be reasonable as of the
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Closing Date. The Projections have been prepared in good faith and the
Projections give effect to the transactions contemplated by this Agreement.
The Purchaser acknowledges that the Projections contain assumptions about
future events and that actual results during the period or periods covered
may differ from the data and results contained in such Projections.
5.28 No Undisclosed Financial Liabilities. Except as set
forth in Schedule 5.28 of the Disclosure Schedules, the Company and its
Subsidiaries, after giving effect to the transactions contemplated hereby, do
not have any material direct or indirect indebtedness, liability (including,
without limitation, product liability or warranty claim), obligation, fixed
or unfixed, contingent or otherwise, (collectively "Financial Liabilities"),
other than (i) Financial Liabilities fully and adequately reflected on the
1999 Audited Financials or the Interim Financials, (ii) those incurred since
December 31, 1999 or in the ordinary course of business or pursuant to the
Credit Agreement and (iii) Financial Liabilities incurred pursuant to this
Agreement.
5.29 Labor Matters. Except as set forth in Schedule 5.29
of the Disclosure Schedules, as of the date hereof, (i) there are no
controversies pending or, to the Company's knowledge, threatened, between the
Company or any of its Subsidiaries and any of their respective employees,
which controversies have had, or would reasonably be expected to have, a
material adverse effect on the Company; (ii) neither the Company nor any of
its Subsidiaries is a party to any collective bargaining agreement or other
labor union contract applicable to persons employed by the Company or its
Subsidiaries, or does the Company or any of its Subsidiaries know of any
activities or proceedings of any labor union to organize any such employees;
and (iii) to the knowledge of the Company, there are no strikes, slowdowns,
work stoppages, lockouts, or threats thereof, by or with respect to any
employees of the Company or any of its Subsidiaries which would reasonably be
expected to have a material adverse effect on the condition of the Company.
5.30 Absence of Certain Payments. None of the Company,
any of its Subsidiaries or any of their respective Affiliates, officers,
directors, employees or agents or other people acting on behalf of any of
them have (i) engaged in any activity prohibited by the United States Foreign
Corrupt Practices Act of 1977 or any other similar law, regulation, decree,
directive or order of any other country and (ii) without limiting the
generality of the preceding clause (i) used any corporate or other funds for
unlawful contributions, payments, gifts or entertainment, or made any
unlawful expenditures relating to political activity to government officials
or others. None of the Company, any of its Subsidiaries or any of their
respective Affiliates, directors, officers, employees or agents of other
persons acting on behalf of any of them, has accepted or received any
unlawful contributions, payments, gifts or expenditures.
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ARTICLE 6
REPRESENTATIONS AND WARRANTIES
AND COVENANTS OF THE PURCHASER
The Purchaser represents and warrants to, and covenants and
agrees with, the Company as follows:
6.1 Existence and Power. The Purchaser:
(a) is duly organized and validly existing
under the laws of the jurisdiction of its organization;
(b) has all requisite power and authority to
execute and deliver this Agreement, to consummate the transactions
contemplated hereby and to perform its obligations hereunder; and
(c) has the power and authority to own and
operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently, or is currently proposed to
be, engaged.
6.2 Authorization; No Contravention. The execution,
delivery and performance by the Purchaser of this Agreement:
(a) is within the Purchaser's power and
authority and has been duly authorized by all necessary action;
(b) will not violate, conflict with or result
in any breach or contravention of or the creation of any Lien under, any
Contractual Obligation of the Purchaser in any material respect, or any order
or decree directly relating to the Purchaser;
(c) as of the date hereof, will not subject the
Purchaser to any material penalty or other onerous condition under or
pursuant to any applicable law or governmental regulation; and
(d) as of the date hereof, is permitted by the
laws and regulations of the jurisdiction to which it is subject.
6.3 Binding Effect. This Agreement and, when executed
by the Company and the other parties thereto on the Closing Date, the
Registration Rights Agreement and the Stockholders Agreement have been duly
executed and delivered by the Purchaser, constitute the legal, valid and
binding obligation of the Purchaser enforceable against it in accordance with
its terms, except as enforceability may be limited by an implied covenant of
good faith and fair dealing, by applicable bankruptcy, insolvency, or similar
laws affecting the enforcement of creditors' rights generally or by equitable
-27-
principles relating to enforceability or as the enforcement may be limited by
considerations of public policy.
6.4 No Legal Bar. The execution, delivery and
performance of this Agreement will not violate any Requirement of Law in any
material respect.
6.5 Purchase for Own Account. The Preferred Shares
(including, for purposes of this Section 6.5, the Class A Common Stock
issuable upon conversion of the Preferred Shares) to be acquired by the
Purchaser pursuant to this Agreement are being acquired for its own account
and with no intention of distributing or reselling such securities or any
part thereof in any transaction that would be in violation of the securities
laws of the United States of America, or any state, without prejudice,
however, to the rights of such Purchaser at all times to sell or otherwise
dispose of all or any part of the Preferred Shares under an effective
registration statement under the Securities Act, or under an exemption from
such registration available under the Securities Act, and subject,
nevertheless, to the disposition of the Purchaser's property being at all
times within its control. If the Purchaser should in the future decide to
dispose of any of the Preferred Shares, the Purchaser understands and agrees
that it may do so only in compliance with the Securities Act and applicable
state securities laws, as then in effect, and that stop-transfer instructions
to that effect, where applicable, will be in effect with respect to the
Preferred Shares. If the Purchaser should decide to dispose of the Preferred
Shares, other than pursuant to the provisions of the Registration Rights
Agreement, the Purchaser, if requested by the Company, will have the
obligation in connection with such disposition, at the Purchaser's expense,
of delivering an opinion of counsel of recognized standing in securities law,
in connection with such disposition to the effect that the proposed
disposition of the Preferred Shares would not be in violation of the
Securities Act or any applicable state securities laws and, assuming such
opinion is required and is otherwise appropriate in form and substance under
the circumstances, the Company will accept, and will recommend to any
applicable transfer agent or trustee for any of the Preferred Shares that it
accept, such opinion. The Purchaser agrees to the imprinting, so long as
required by law, of a legend on certificates representing all of the
Preferred Shares and the shares of Class A Common Stock issued on conversion
thereof to the following effect:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH
LAWS."
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6.6 Investment Representation. The Purchaser is an
"accredited investor" within the meaning of Regulation D, Rule 501(a),
promulgated by the Commission.
6.7 Litigation. There is no order or claim, action,
suit, audit, assessment, arbitration or inquiry, or any proceeding or
investigation by or before any governmental authority, pending, or to the
Purchaser's knowledge, currently threatened against the Purchaser which, if
adversely determined, would, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the ability of the Purchaser to
perform its obligations under this Agreement and to consummate the
transactions contemplated hereby.
6.8 Broker's, Finder's or Similar Fees. There are no
brokerage commissions, finder's fees or similar fees or commissions payable
in connection with the transactions contemplated hereby based on any
agreement, arrangement or understanding with the Purchaser or any action
taken by the Purchaser.
ARTICLE 7
INDEMNIFICATION
7.1 Indemnification by the Company. In addition to all
other sums due hereunder or provided for in this Agreement, the Company
agrees to indemnify and hold harmless the Purchaser and its Affiliates
(including, without limitation, ▇▇▇▇▇ Brothers Harriman& Co.) and their
respective officers, directors, agents, employees, subsidiaries, partners and
controlling persons (each, an "indemnified party") to the fullest extent
permitted by law from and against any and all losses, claims, damages,
reasonable expenses (including reasonable fees, disbursements and other
charges of counsel) or other liabilities ("Liabilities") resulting from any
breach of any covenant or agreement of the Company contained in this
Agreement or any legal, administrative or other actions (including actions
brought by the Company or any equity holders of the Company or derivative
actions brought by any Person claiming through the Company or in the
Company's name), proceedings or investigations (whether formal or informal),
or written threats thereof, based upon, relating to or arising out of this
Agreement, the Preferred Shares, the Registration Rights Agreement, the
Stockholders Agreement, the transactions contemplated hereby or thereby, or
any indemnified person's role therein or in the transactions contemplated
hereby or thereby; provided, however, that the Company shall not be liable
under this Section 7.1: (a) for any amount paid in settlement of claims
without the Company's consent (which consent shall not be unreasonably
withheld unless the Company shall have agreed in writing in a form
satisfactory to the Purchaser to pay any amount (and not challenge an
indemnified party's right to indemnification under this Article 7) required
to be paid to settle a claim, in which case the Company may grant or withhold
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its consent in its sole discretion) or (b) to the extent that it is finally
judicially determined that such Liabilities resulted primarily from the
willful misconduct, bad faith or gross negligence of such indemnified party;
provided, further, that if and to the extent that such indemnification is
unenforceable for any reason, the Company shall make the maximum contribution
to the payment and satisfaction of such indemnified liability which shall be
permissible under applicable laws. In connection with the obligation of the
Company to indemnify for expenses as set forth above, the Company further
agrees to reimburse each indemnified party for all such expenses (including
reasonable fees, disbursements and other charges of counsel) incurred by such
indemnified party on a monthly basis (subject to receipt of customary
invoices and other appropriate documentation); provided, however, that if an
indemnified party is reimbursed hereunder for any expenses, such
reimbursement of expenses shall be refunded to the extent it is finally
judicially determined that the Liabilities in question resulted primarily
from the willful misconduct, bad faith or gross negligence of such
indemnified party.
7.2 Indemnification by the Purchaser. In addition to
all other sums due hereunder or provided for in this Agreement, the Purchaser
agrees to indemnify and hold harmless the Company and its officers,
directors, agents, employees, subsidiaries, partners and controlling persons
(each, a "Company Indemnified Party") to the fullest extent permitted by law
from and against any and all Liabilities resulting from any breach of any
covenant or agreement of the Purchaser contained in this Agreement; provided,
however, that the Purchaser shall not be liable under this Section 7.2: (a)
for any amount paid in settlement of claims without the Purchaser's consent
(which consent shall not be unreasonably withheld) or (b) to the extent that
it is finally judicially determined that such Liabilities resulted primarily
from the willful misconduct, bad faith or gross negligence of such Company
Indemnified Party; provided, further, that if and to the extent that such
indemnification is unenforceable for any reason, the Purchaser shall make the
maximum contribution to the payment and satisfaction of such indemnified
liability which shall be permissible under applicable laws. In connection
with the obligation of the Purchaser to indemnify for expenses as set forth
above, the Purchaser further agrees to reimburse each Company Indemnified
Party for all such expenses (including reasonable fees, disbursements and
other charges of counsel) incurred by such Company Indemnified Party on a
monthly basis (subject to receipt of customary invoices and other appropriate
documentation); provided, however, that if a Company Indemnified Party is
reimbursed hereunder for any expenses, such reimbursement of expenses shall
be refunded to the extent it is finally judicially determined that the
Liabilities in question resulted primarily from the willful misconduct, bad
faith or gross negligence of such Company Indemnified Party. Notwithstanding
anything to the contrary in this Agreement, any claim for indemnification
under this Section 7.2 shall be limited solely to the assets of the Purchaser
and shall not be made against or in any way be construed to include the
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assets of ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co. In addition, the indemnification
provided by the Purchaser in this Section 7.2 shall be limited as follows:
the Purchaser shall not be obligated to pay any amount for indemnification in
excess of the Purchase Price paid by the Purchaser.
7.3 Notification. Each indemnified party under this
Article 7 will, promptly after the receipt of notice of the commencement of
any action or other proceeding against such indemnified party in respect of
which indemnity may be sought from the Company or the Purchaser, as the case
may be, under this Article 7, notify the Company or the Purchaser, as the
case may be, in writing of the commencement thereof. The omission of any
indemnified party so to notify the Company or the Purchaser, as the case may
be, of any such action shall not relieve the Company or the Purchaser, as the
case may be, from any liability which it may have to such indemnified party
(i) other than pursuant to this Article 7 or (ii) under this Article 7,
except to the extent the Company or the Purchaser, as the case may be, is
prejudiced by such omission. In case any such action or other proceeding
shall be brought against any indemnified party and it shall notify the
Company or the Purchaser, as the case may be, of the commencement thereof,
the Company or the Purchaser, as the case may be, shall be entitled to
participate therein and, to the extent that it may wish, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified
party; provided, however, that any indemnified party may, at its own expense,
retain separate counsel to participate in such defense. Notwithstanding the
foregoing, in any action or proceeding in which both the Company or the
Purchaser, as the case may be, and an indemnified party is, or is reasonably
likely to become, a party, such indemnified party shall have the right to
employ separate counsel at the Company's or the Purchaser's, as the case may
be, expense and to control its own defense of such action or proceeding if,
in the reasonable opinion of counsel to such indemnified party, (a) there are
or may be legal defenses available to such indemnified party or to other
indemnified parties that are different from or additional to those available
to the Company or the Purchaser, as the case may be, or (b) any conflict or
potential conflict exists between the Company or the Purchaser, as the case
may be, and such indemnified party that would make such separate
representation advisable; provided, however, that in no event shall the
Company or the Purchaser, as the case may be, be required to pay fees and
expenses under this Section 7 for more than one firm of attorneys in any
jurisdiction in any one legal action or group of related legal actions. The
Company or the Purchaser, as the case may be, agrees that the Company or the
Purchaser, as the case may be, will not, without the prior written consent of
the Purchaser or the Company, as the case may be (such consent not to be
unreasonably conditioned or withheld), settle, compromise or consent to the
entry of any judgment in any pending or threatened claim, action or
proceeding relating to the matters contemplated hereby (if any indemnified
party is a party thereto or has been actually threatened to be made a party
thereto) unless such settlement, compromise or consent includes an
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unconditional release of the Purchaser or the Company, as the case may be,
and each other indemnified party from all liability arising or that may arise
out of such claim, action or proceeding. The rights accorded to indemnified
parties hereunder shall be in addition to any rights that any indemnified
party may have at common law, by separate agreement or otherwise.
7.4 Registration Rights Agreement. Notwithstanding
anything to the contrary in this Article 7, the indemnification and
contribution provisions of the Registration Rights Agreement shall govern any
claim made with respect to registration statements filed pursuant thereto or
sales made thereunder.
ARTICLE 8
AFFIRMATIVE COVENANTS
The Company hereby covenants and agrees (a) with the
Purchaser, with respect to all of this Article 8, and (b) with any other
Holder, with respect to Sections 8.1 (except with respect to Section 8.1(c)),
8.3 (provided such Holder has agreed to be bound by the provisions contained
in Section 8.2), 8.4, 8.5, 8.7 and 8.8:
8.1 Financial Statements. The Company shall deliver to
the Purchaser and make publicly available to any other Holder (except with
respect to Section 8.1(c)) any other Holder:
(a) not later than ninety (90) days after the
end of each fiscal year of the Company, a copy of the audited consolidated
balance sheet of the Company and its Subsidiaries as of the end of such year
and the related consolidated statements of income, stockholders' equity and
cash flows for such fiscal year, setting forth in each case in comparative
form the figures for the previous year, all in reasonable detail and
accompanied by a management discussion and analysis of the operations of the
Company and its Subsidiaries for such fiscal year and by the opinion of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP (or any successor thereto) or another nationally
recognized independent public accounting firm which report shall state that
such consolidated financial statements present fairly, in all material
respects, the financial position for the periods indicated in conformity with
GAAP applied on a basis consistent with prior years (except for changes with
respect to which such accounting firm concurs); provided, however, that the
delivery of a copy of the Company's Annual Report on Form 10-K shall satisfy
the requirements of this Section 8.1(a);
(b) commencing with the fiscal period ending on
September 30, 2000, not later than forty-five (45) days after the end of each
of the first three fiscal quarters of each year, the unaudited consolidated
balance sheet of the Company and its Subsidiaries, and the related
consolidated statements of income and cash flow for such quarter and for the
-32-
period commencing on the first day of the fiscal year and ending on the last
day of such quarter, all certified by an appropriate officer of the Company;
provided, however, that the delivery of a copy of the Company's Quarterly
Report on Form 10-Q shall satisfy the requirements of this Section 8.1(b);
(c) so long as the Purchaser holds at least 20%
of the shares of Class A Common Stock issued or issuable upon conversion of
the Preferred Stock (whether or not the Preferred Shares have been
converted), annual budgets and such other financial and operating data of the
Company and its Subsidiaries, as the Purchaser reasonably may request, to the
extent that such information is formally prepared for the Company's Chairman,
President, Board of Directors, other investor groups and/or banks or other
lenders;
(d) at any time when it is not subject to
Section 13 or 15(d) of the Exchange Act, upon request, to the Purchaser and
prospective purchasers of the Preferred Shares, information of the type that
would satisfy the requirement of subsection (d)(4)(i) of Rule 144A (or any
similar successor provision) under the Securities Act; and
(e) except as otherwise provided in Sections
8.1(a) and (b), promptly after the same are filed, copies of all Commission
Documents.
8.2 Confidentiality. The Purchaser will utilize
reasonable good faith efforts to maintain as confidential any information
obtained from the Company (to the extent the Purchaser reasonably believes
such information is material and non-public or to the extent the Purchaser is
advised by the Company that such information is confidential) (other than
information which (i) at the time of disclosure or thereafter is generally
available to and known by the public (other than as a result of a disclosure
directly or indirectly by the Purchaser or any of its representatives); (ii)
is available to the Purchaser on a non-confidential basis from a source other
than the Company or its Subsidiaries; provided, that such source was not
known by the Purchaser to be bound by a confidentiality agreement with the
Company or any of its Subsidiaries; or (iii) has been independently developed
by the Purchaser), and shall not disclose any information obtained from the
Company pursuant to Section 8.1 and required to be maintained as confidential
pursuant hereto, except (a) to ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co. and its
advisors, representatives, agents, partners and employees; (b) to its
advisors, representatives, agents, partners (and their representatives and
advisors) and employees (collectively, the "Purchaser's Representatives");
(c) as may be required by law (including a court order, subpoena or other
administrative order or process) or applicable regulations to which the
Purchaser is or becomes subject to; (d) in connection with any litigation
arising out of or related to this Agreement; provided, that in any such event
the Purchaser shall provide the Company with prompt notice of such
-33-
requirement so that the Company may seek a protective order or other
appropriate remedy and provided, further, that if such protective order or
other remedy is not obtained, the Purchaser and the Purchaser's
Representative shall disclose only that portion of such information which the
Purchaser is advised by counsel is legally required to be disclosed and shall
take all reasonable steps to preserve the confidentiality of such information
(including by obtaining, at the Company's expense, an appropriate protective
order or other reliable assurance that confidential treatment will be
accorded such information); (e) to the executive officers of the Company or
any of its Subsidiaries; or (f) with the consent of the Company.
Notwithstanding anything to the contrary in this Article 8, the Purchaser
shall advise the parties set forth in clauses (a) and (b) of the proviso of
the immediately preceding sentence of the terms of this Section 8.2 and, in
any event, shall be responsible for any breach of this Section 8.2 by such
persons.
8.3 Notices. Promptly following actual knowledge of the
Chief Executive Officer, the President or the Chief Financial Officer of the
Company of the events described below, the Company shall give written notice
within 10 days to the Purchaser of:
(a) the occurrence of any material default
under, or material breach of, any provision of Article 8 or 9 accompanied by
a certificate specifying the nature of such default or breach, the period of
existence thereof and the action that the Company has taken or proposes to
take with respect thereto; and
(b) any (i) material default or event of
default under any material Contractual Obligation of the Company or any of
its Subsidiaries, or (ii) material dispute, litigation, investigation,
proceeding or suspension which may exist at any time between the Company or
any of its Subsidiaries and any Governmental Authority;
each accompanied by a statement setting forth details of the occurrence
referred to therein and stating what action the Company proposes to take with
respect thereto. Notice to the Purchaser shall be deemed satisfied if the
Purchaser's representative on the Company's board of directors has actual
knowledge of an event described in this section because of specific
disclosure of such an event at a meeting of the Company's board of directors
at which such representative is present.
8.4 Issue Taxes. The Company shall pay, or cause to be
paid, all documentary and similar taxes levied under the laws of any
applicable jurisdiction in connection with the issuance of the Preferred
Shares and the execution and delivery of the other agreements and documents
contemplated hereby and any modification of the Preferred Shares or such
other agreements and documents and will hold the Purchaser harmless, without
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limitation as to time, against any and all Liabilities with respect to all
such taxes.
8.5 Reservation of Shares.
(a) The Company shall reserve and keep
available out of its authorized preferred stock, solely for the purpose of
sale to the Purchaser of the Additional Shares, 15,000 Preferred Shares until
the expiration of the Purchaser Option. The Additional Shares shall be duly
and validly issued and, upon payment of the applicable Additional Purchase
Price, be fully paid and non-assessable.
(b) The Company shall at all times reserve and
keep available out of its authorized Class A Common Stock, solely for the
purpose of issue or delivery upon conversion of the Preferred Shares as
provided in the Certificate of Designation, such number of shares of Class A
Common Stock as shall then be issuable or deliverable upon the conversion of
all outstanding Preferred Shares. Such shares of Class A Common Stock shall,
when issued or delivered in accordance with the Certificate of Designation,
be duly and validly issued and fully paid and non-assessable. The Company
shall issue the Class A Common Stock into which the Preferred Shares are
convertible upon the proper surrender of the Preferred Shares in accordance
with the provisions of the Certificate of Designation and shall otherwise
comply with the terms thereof.
8.6 Inspection. So long as the Purchaser owns at least
20% of the shares of Class A Common Stock issued or issuable upon conversion
of the Preferred Shares (whether or not the Preferred Shares have been
converted), the Company will permit, and will cause each of its Subsidiaries
to permit, representatives of the Purchaser to visit and inspect any of its
properties and to discuss its affairs, finances and accounts with a senior
executive of the Company, all at such reasonable times during normal business
hours and as often as may be reasonably requested, upon reasonable advance
notice to the Company.
8.7 Registration and Listing. If any shares of Class A
Common Stock required to be reserved for purposes of conversion of the
Preferred Shares as provided in the Certificate of Designation require
registration with or approval of any Governmental Authority under any Federal
or state or other applicable law before such Class A Common Stock may be
issued or delivered upon conversion, the Company will endeavor in good faith
and use its best efforts to, as expeditiously as possible, to cause such
Class A Common Stock to be duly registered or approved, as the case may be,
unless such registration or approval is required solely because of a breach
of the Purchaser's representation contained in Section 6.5. So long as the
Class A Common Stock is quoted on the NASDAQ or listed on any national
securities exchange, the Company, if permitted by the rules of such system or
-35-
exchange, will quote or list and keep quoted or listed on such system or
exchange, upon official notice of issuance, all Class A Common Stock issuable
or deliverable upon conversion of the Preferred Shares. In addition, at the
request of the Purchaser, the Company will endeavor in good faith and as
expeditiously as possible obtain private placement numbers for the Preferred
Shares and the Common Stock issued upon conversion of the Preferred Shares,
assigned by the CUSIP Service Bureau of Standard & Poor's ratings group and
make such securities PORTAL and DTC eligible.
8.8 HSR Act Filing. The Company and the Purchaser shall
cooperate with one another to (including furnishing such necessary
information and reasonable assistance as the other party may request) prepare
and file notification and report forms in compliance with the HSR Act when
necessary, and to otherwise ensure full compliance with the requirements of
the HSR Act. The Company and the Purchaser shall each bear 50% of the
aggregate expenses of the parties (including filing fees and reasonable
attorneys' fees, charges and expenses) in connection with any such
preparation and filing.
8.9 Use of Proceeds. The Company shall use the proceeds
from the sale of the Preferred Shares for general corporate purposes and
acquisitions, including the investment in Bolivia.
ARTICLE 9
NEGATIVE COVENANTS
The Company hereby covenants and agrees that:
9.1 Consolidations and Mergers. The Company shall not
merge, consolidate with or into, or convey, transfer, lease or otherwise
dispose of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whenever acquired), except the Company may
consolidate or merge with or into, or sell all or substantially all of its
assets to, any Person if:
(a) The corporation or partnership formed by
such consolidation or surviving such merger or the Person which acquires all
or substantially all of the assets of the Company shall be (after giving
effect to such transaction) a Solvent corporation or partnership organized or
formed, as the case may be, and existing under, the laws of the United
States, any state thereof, or the District of Columbia and shall expressly
assume in writing all of the obligations of the Company under this Agreement,
the Preferred Shares, the Stockholders Agreement and the Registration Rights
Agreement;
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(b) immediately after giving effect to such
transaction, no default under, or breach of, provisions of Article 8 and 9
exists; and
(c) the Company shall have furnished to the
Holders (i) an opinion of counsel satisfactory to a majority in interest of
the Holders addressing the matters (other than Solvency) set forth in clause
(a) above and (ii) the certificate of the Chief Financial Officer of the
Company to the effect that such transaction has been consummated in
compliance with the foregoing requirements; provided that nothing in this
Section 9.1 shall affect the rights of any Holder under this Agreement, the
Preferred Shares, the Stockholders Agreement or the Registration Rights
Agreement.
9.2 Transactions with Affiliates. The Company shall
not, and shall not permit any of its Subsidiaries to, enter into any
transaction with any Affiliate of the Company or of any such Subsidiary,
except on terms no less favorable to the Company or such Subsidiary than
those the Company or such Subsidiary would obtain in a comparable
arm's-length transaction with a Person not an Affiliate of the Company or
such subsidiary; provided that any transaction approved by a majority of the
independent directors of the Company shall be conclusively deemed to be on
such terms.
9.3 No Inconsistent Agreements. Neither the Company nor
any of its Subsidiaries shall enter into any loan or other agreement, or
enter into any amendment or other modification to any currently existing
agreement, which newly executed loan or other agreement or amendment or
modification to a currently existing agreement by its terms restricts or
prohibits the ability of the Company to pay the dividends on the Preferred
Stock contemplated in the Certificate of Designation or to issue Class A
Common Stock upon conversion of the Preferred Stock in accordance with the
Certificate of Designation and this Agreement; provided, however, that the
foregoing shall not prevent the Company from entering into loan or other
agreements that contain restrictions on the ability of the Company to pay
dividends on the Preferred Stock either (i) during the existence of an event
of default under such agreements or (ii) if such payment would, although not
in itself a breach of any covenant or a default or event of default under any
such agreement, result in the occurrence of a default or event of default
under any such agreement so long as, on the date such agreement is entered
into, (x) the terms of any such agreement would not prohibit such payment on
such date and (y) the Company does not reasonably anticipate based on facts
available as of the date of the execution of any such loan or other
agreement, that any of the terms of any such agreement is likely to be
breached during the term of such agreement as a result of such payment of
dividend.
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9.4 Issuance of Preferred Stock. The Company shall not
issue any Preferred Stock except pursuant to this Agreement.
Notwithstanding the foregoing provisions of this Article 9,
this Article 9 shall cease to be operative and shall have no further force
and effect if no Preferred Shares shall remain outstanding.
ARTICLE 10
MISCELLANEOUS
10.1 Survival of Provisions. All warranties,
representations and covenants made by the Company in or under this Agreement
shall be considered to have been relied upon by the Purchaser and shall
survive the execution and delivery of this Agreement and the issuance to the
Purchaser of the Preferred Shares, regardless of any investigation made by
the Purchaser or on its behalf. All warranties, representations and
covenants made by the Purchaser or on its behalf shall survive the execution
and delivery of this Agreement and the issuance to the Purchaser of the
Preferred Shares. Except as otherwise set forth in Article 8 or 9, all of
the representations and warranties made herein and each of the provisions of
Articles 5, 6, 7 and 10 shall survive the execution and delivery of this
Agreement, any investigation by or on behalf of the Purchaser or any
Affiliate, acceptance of the Preferred Shares and payment therefor, payment
or prepayment of the Preferred Shares upon redemption or otherwise,
conversion of the Preferred Shares or termination of this Agreement.
Notwithstanding anything to the contrary contained in the foregoing, the
representations and warranties set forth in Articles 5 and 6 shall, with
respect to the Initial Closing and any Additional Closing pursuant to Section
2.1(b)(i), expire on the forty-fifth day following the earlier of (x) the
delivery to the Purchaser of audited consolidated financial statements of the
Company for the period commencing on the date of the last audited financial
statements of the Company that are publicly available and ending on the last
day of the month in which such Closing occurred, accompanied by the opinion
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP (or any successor thereto) or another nationally
recognized independent public account firm (which report shall state that
such consolidated financial statements present fairly, in all material
respects, the financial position for the period indicated in conformity with
GAAP applied on a basis consistent with prior years (except for changes with
respect to which such accounting firm concurs) and (y) the filing with the
SEC by the Company of the Company's Annual Report on Form 10-K (including
audited financial statements that comply with the requirements of Section
8.1(a) of this Agreement) for the year ended December 31) in which such
Initial Closing or Additional Closing pursuant to Section 2.1(b)(i) occurred.
In addition, the representations and warranties set forth in Articles 5 and 6
shall, with respect to any Additional Closing pursuant to Section 2.1(b)(ii),
expire 180 days following such Additional Closing.
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10.2 Further Actions. Each of the parties hereto agrees
that, except as otherwise provided in this Agreement and subject to its legal
obligations, it will use its reasonable best efforts to fulfill all
conditions precedent specified herein, and to do all things reasonably
necessary to consummate the transactions contemplated hereby.
10.3 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:
(a) if to the Purchaser at the following
address:
The 1818 Fund III, ▇.▇.
▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Mr. T. ▇▇▇▇▇▇▇ ▇▇▇▇
with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
(b) if to the Company at the following address:
Genesee & Wyoming Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to:
Simpson, Thacher & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III, Esq.
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All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; when
delivered by courier, if delivered by commercial overnight courier service;
five Business Days after being deposited in the mail, postage prepaid, if
mailed; and when receipt is acknowledged, if telecopied.
10.4 Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the successors and permitted assigns of
the parties hereto. The Purchaser may assign any of its rights under this
Agreement, the Preferred Shares, the Registration Rights Agreement or the
Stockholders Agreement to any of its Affiliates. Subject to the restrictions
of this Agreement, the Purchaser may assign any of its rights under this
Agreement (other than those set forth in Section 8.1(c), 8.3 (unless the
Holder agrees to be bound by Section 8.2) or 8.6, assignments of which shall
be void and of no force and effect), or the Preferred Shares, or a portion
thereof to any other Holder. The Company may not assign any of its rights
under this Agreement without the written consent of the Purchaser; provided,
however, that any merger of the Company with or into any Person shall not be
deemed to be an assignment hereunder. Except as provided in Article 7, no
Person other than the parties hereto is intended to be a beneficiary of this
Agreement, the Preferred Shares, the Registration Rights Agreement or the
Stockholders Agreement.
10.5 Amendment and Waiver. No failure or delay on the
part of the Company 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. The
remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to the Company or the Purchaser at law, in
equity or otherwise. Any amendment, supplement, modification or termination
of or to any provision of this Agreement, any waiver of any provision of this
Agreement, and any consent to any departure by the Company from the terms of
any provision of this Agreement, shall be effective only in the specific
instance and for the specific purpose for which made or given and shall be
effective only when signed in writing by or on behalf of holders of at least
50% of the outstanding Preferred Shares. Except where notice is specifically
required by this Agreement, no notice to or demand on the Company in any case
shall entitle the Company to any other or further notice or demand in similar
or other circumstances.
10.6 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.
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10.7 Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
10.8 Determinations. Except where any provision
expressly requires that a determination be reasonable or a consent not be
unreasonably withheld, or be subject to qualifications to similar effect, all
determinations to be made by the Company, the Purchaser or any Holder
hereunder in its opinion or judgment or with its approval or otherwise shall
be made by it in its sole discretion.
10.9 Governing Law. This Agreement has been negotiated,
executed and delivered in the State of New York and shall be governed by and
construed in accordance with the laws of the State of New York.
10.10 Jurisdiction. Each party to this Agreement hereby
irrevocably agrees that any legal action or proceeding arising out of or
relating to this Agreement or any agreements or transactions contemplated
hereby may be brought in the courts of the State of New York located in New
York City or of the United States of America for the Southern District of New
York and hereby expressly submits to the personal jurisdiction and venue of
such courts for the purposes thereof and expressly waives any claim of
improper venue and any claim that such courts are an inconvenient forum.
Each party hereby irrevocably consents to the service of process of any of
the aforementioned courts in any such suit, action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid,
to the address set forth in Section 10.3, such service to become effective 10
days after such mailing.
10.11 Severability. In the event that 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.
10.12 Rules of Construction. Unless the context otherwise
requires, "or" is not exclusive, and references to sections or subsections
refer to sections or subsections of this Agreement.
10.13 Remedies. If a breach of this Agreement or the
Certificate of Designation by the Company occurs and is continuing, any
Holder may pursue any available remedy by proceeding at law or in equity to
enforce the performance (including, without limitation, the specific
performance) of any provision of this Agreement or the Certificate of
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Designation. A Holder may maintain a proceeding even if it does not possess
any of the Preferred Shares or does not produce any of them in the
proceeding. Except as otherwise provided by law, a delay or omission by any
Holder in exercising any right or remedy accruing upon any such breach shall
not impair the right or remedy or constitute a waiver of or acquiescence in
any such breach. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
10.14 Entire Agreement. This Agreement, together with the
exhibits and schedules hereto, the Certificate of Designation, the
Registration Rights Agreement and the Stockholders Agreement, 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, warranties or undertakings, other than
those set forth or referred to herein or therein. This Agreement, together
with the exhibits and schedules hereto, the Certificate of Designation, the
Registration Rights Agreement and the Stockholders Agreement supersede all
prior agreements and understandings between the parties with respect to such
subject matter.
10.15 Attorneys' Fees. In any action or proceeding
brought to enforce any provision of this Agreement, the Certificate of
Designation, the Registration Rights Agreement or the Stockholders Agreement
or any other document or instrument contemplated hereby or thereby, or where
any provision hereof or thereof is validly asserted as a defense, the
successful party shall be entitled to recover reasonable attorneys' fees,
charges and disbursements in addition to any other available remedy.
10.16 Publicity. Except as may be required by applicable
law, neither party hereto shall issue a publicity release or announcement or
otherwise make any public disclosure concerning this Agreement or the
transactions contemplated hereby, without prior approval by the other party
hereto. If any announcement is required by law to be made by either party
hereto, prior to making such announcement such party will deliver a draft of
such announcement to the other party and shall give the other party an
opportunity to comment thereon.
10.17 Expenses. The company acknowledges and agrees that
if the transactions contemplated hereby are consummated at the Initial
Closing, the Company shall reimburse the Purchaser for all (i) reasonable
out-of-pocket expenses and all consulting and legal fees and expenses and
other charges of the Purchaser in connection with the negotiation, execution
and delivery of this Agreement, the Preferred Shares, the Registration Rights
Agreement and the Stockholders Agreement; provided, however, that the
Company's total liability for such expenses shall not exceed $60,000 in the
aggregate and (ii) reasonable out-of pocket expenses for attendance at
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meetings of the Board of Directors of the Company by the Purchaser's director
to the same extent and upon the same terms as the Company reimburses its
other directors; provided, however, that if a representative of the Purchaser
attends such meetings in lieu of the Purchaser's director, the Company shall
reimburse the Purchaser for reasonable out-of-pocket expenses for such
representative's attendance at meetings of the Board of Directors of the
Company to the same extent as would have been provided for the Purchaser's
director.
10.18 Termination.
(a) This Agreement may be terminated prior to
the Initial Closing Date as follows:
(i) at the election of the Company if any one
or more of the conditions to its obligation to close has not been fulfilled
as of the Initial Closing Date;
(ii) at the election of the Purchaser if any one
or more of the conditions to its obligation to close has not been fulfilled
as of the Initial Closing Date;
(iii) at the election of the Company if the
Purchaser has breached a covenant or agreement in any material respect
contained in this Agreement, which breach cannot be or is not cured by the
Initial Closing Date;
(iv) at the election of the Purchaser if the
Company has breached a covenant or agreement in any material respect
contained in this Agreement, which breach cannot be or is not cured by the
Initial Closing Date; or
(v) at any time on or prior to the Initial
Closing Date, by mutual written consent of the Company and the Purchaser.
If this Agreement so terminates, it shall become null and
void and have no further force or effect, except as provided in Section
10.18(b).
(b) If this Agreement is terminated in
accordance with Section 10.18(a) and the transactions contemplated by this
Agreement are not consummated, this Agreement shall become null and void and
of no further force and effect, except for the provisions of Article 7;
provided, however, that none of the parties shall have any liability in
respect of a termination of this Agreement except to the extent that failure
to satisfy the conditions of Article 3 or Article 4, as the case may be,
results from the intentional or willful violation by such party of its
-43-
obligations contained in this Agreement or any documents delivered pursuant
to this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their respective representatives
hereunto duly authorized as of the date first above written.
GENESEE & WYOMING INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
Title: Chairman and C.E.O.
THE 1818 FUND III, L.P.
By: ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co.,
Its General Partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Manager
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Table of Contents
Page
ARTICLE 1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Accounting Terms; Financial Covenants . . . . . . . . . 8
ARTICLE 2
PURCHASE AND SALE OF PREFERRED STOCK . . . . . . . . . . . . . . . . . . 9
2.1 Purchase and Sale of Preferred Stock . . . . . . . . . 9
2.3 Fees . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.4 Closing . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 3
CONDITIONS TO THE OBLIGATION
OF THE PURCHASER TO CLOSE . . . . . . . . . . . . . . . . . . . . . . . . 12
3.1 Representations and Warranties True . . . . . . . . . . 12
3.2 Compliance with this Agreement . . . . . . . . . . . . 12
3.3 Officer's Certificate . . . . . . . . . . . . . . . . . 12
3.4 Secretary's Certificate . . . . . . . . . . . . . . . . 12
3.5 Documents . . . . . . . . . . . . . . . . . . . . . . . 12
3.6 Purchase Permitted by Applicable Laws; Legal
Investment . . . . . . . . . . . . . . . . . . . . . . 12
3.7 Intentionally omitted . . . . . . . . . . . . . . . . . 13
3.8 Opinion of Counsel . . . . . . . . . . . . . . . . . . 13
3.9 Consents and Approvals . . . . . . . . . . . . . . . . 13
3.10 No Material Adverse Change . . . . . . . . . . . . . . 13
3.12 Conduct of Business . . . . . . . . . . . . . . . . . 13
3.13 Registration Rights Agreement . . . . . . . . . . . . . 14
3.14 Stockholders Agreement . . . . . . . . . . . . . . . . 14
3.15 Charter of the Company . . . . . . . . . . . . . . . . 14
3.16 Market Conditions . . . . . . . . . . . . . . . . . . . 14
3.17 No Litigation . . . . . . . . . . . . . . . . . . . . . 14
3.18 No Default or Breach . . . . . . . . . . . . . . . . . 14
3.19 Credit Agreement . . . . . . . . . . . . . . . . . . . 15
ARTICLE 4
CONDITIONS TO THE OBLIGATION
OF THE COMPANY TO CLOSE . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.1 Representations and Warranties True . . . . . . . . . . 15
4.2 Compliance with this Agreement . . . . . . . . . . . . 15
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4.3 Issuance Permitted by Applicable Laws . . . . . . . . . 15
4.4 Consents and Approvals . . . . . . . . . . . . . . . . 15
4.5 Charter of the Company . . . . . . . . . . . . . . . . 16
4.6 Credit Agreement . . . . . . . . . . . . . . . . . . . 16
4.7 Bolivia and Westrail Closings . . . . . . . . . . . . . 16
ARTICLE 5
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . 16
5.1 Corporate Existence and Power . . . . . . . . . . . . . 16
5.2 Corporate Authorization; No Contravention . . . . . . . 17
5.3 Governmental Authorization; Third Party Consents . . . 17
5.4 Binding Effect . . . . . . . . . . . . . . . . . . . . 17
5.5 No Legal Bar . . . . . . . . . . . . . . . . . . . . . 18
5.6 Litigation . . . . . . . . . . . . . . . . . . . . . . 18
5.7 No Default or Breach . . . . . . . . . . . . . . . . . 18
5.8 Title to Properties . . . . . . . . . . . . . . . . . . 19
5.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.10 Financial Condition . . . . . . . . . . . . . . . . . . 19
5.11 No Material Adverse Change . . . . . . . . . . . . . . 19
5.12 Commission Documents . . . . . . . . . . . . . . . . . 20
5.13 Environmental Matters . . . . . . . . . . . . . . . . . 20
5.14 Investment Company . . . . . . . . . . . . . . . . . . 21
5.15 Subsidiaries . . . . . . . . . . . . . . . . . . . . . 21
5.16 Capitalization . . . . . . . . . . . . . . . . . . . . 21
5.17 Private Offering . . . . . . . . . . . . . . . . . . . 22
5.18 Broker's, Finder's or Similar Fees . . . . . . . . . . 22
5.19 Outstanding Indebtedness . . . . . . . . . . . . . . . 22
5.20 Full Disclosure . . . . . . . . . . . . . . . . . . . . 23
5.21 ERISA and Employee Benefit Plans . . . . . . . . . . . 23
5.22 Regulatory Compliance . . . . . . . . . . . . . . . . . 24
5.23 Registration Rights Agreement . . . . . . . . . . . . . 24
5.24 Stockholders Agreement . . . . . . . . . . . . . . . . 25
5.25 Trade Relations . . . . . . . . . . . . . . . . . . . . 25
5.26 Material Contracts . . . . . . . . . . . . . . . . . . 25
5.27 Projections . . . . . . . . . . . . . . . . . . . . . . 25
5.28 No Undisclosed Financial Liabilities . . . . . . . . . 26
5.29 Labor Matters . . . . . . . . . . . . . . . . . . . . . 26
5.30 Absence of Certain Payments . . . . . . . . . . . . . . 26
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
AND COVENANTS OF THE PURCHASER . . . . . . . . . . . . . . . . . . . . . 27
6.1 Existence and Power . . . . . . . . . . . . . . . . . . 27
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6.2 Authorization; No Contravention . . . . . . . . . . . . 27
6.3 Binding Effect . . . . . . . . . . . . . . . . . . . . 27
6.4 No Legal Bar . . . . . . . . . . . . . . . . . . . . . 28
6.5 Purchase for Own Account . . . . . . . . . . . . . . . 28
6.6 Investment Representation . . . . . . . . . . . . . . . 29
6.7 Litigation . . . . . . . . . . . . . . . . . . . . . . 29
6.8 Broker's, Finder's or Similar Fees . . . . . . . . . . 29
ARTICLE 7
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.1 Indemnification by the Company . . . . . . . . . . . . 29
7.2 Indemnification by the Purchaser . . . . . . . . . . . 30
7.3 Notification . . . . . . . . . . . . . . . . . . . . . 31
7.4 Registration Rights Agreement . . . . . . . . . . . . . 32
ARTICLE 8
AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.1 Financial Statements . . . . . . . . . . . . . . . . . 32
8.2 Confidentiality . . . . . . . . . . . . . . . . . . . . 33
8.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . 34
8.4 Issue Taxes . . . . . . . . . . . . . . . . . . . . . . 34
8.5 Reservation of Shares . . . . . . . . . . . . . . . . . 35
8.6 Inspection . . . . . . . . . . . . . . . . . . . . . . 35
8.7 Registration and Listing . . . . . . . . . . . . . . . 35
8.8 HSR Act Filing . . . . . . . . . . . . . . . . . . . . 36
8.9 Use of Proceeds . . . . . . . . . . . . . . . . . . . . 36
ARTICLE 9
NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.1 Consolidations and Mergers . . . . . . . . . . . . . . 36
9.2 Transactions with Affiliates . . . . . . . . . . . . . 37
9.3 No Inconsistent Agreements . . . . . . . . . . . . . . 37
9.4 Issuance of Preferred Stock . . . . . . . . . . . . . . 38
ARTICLE 10
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.1 Survival of Provisions . . . . . . . . . . . . . . . . 38
10.2 Further Actions . . . . . . . . . . . . . . . . . . . . 39
10.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . 39
10.4 Successors and Assigns . . . . . . . . . . . . . . . . 40
10.5 Amendment and Waiver . . . . . . . . . . . . . . . . . 40
10.6 Counterparts . . . . . . . . . . . . . . . . . . . . . 40
10.7 Headings . . . . . . . . . . . . . . . . . . . . . . . 41
10.8 Determinations . . . . . . . . . . . . . . . . . . . . 41
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10.9 Governing Law . . . . . . . . . . . . . . . . . . . . . 41
10.10 Jurisdiction . . . . . . . . . . . . . . . . . . . . . 41
10.11 Severability . . . . . . . . . . . . . . . . . . . . . 41
10.12 Rules of Construction . . . . . . . . . . . . . . . . . 41
10.13 Remedies . . . . . . . . . . . . . . . . . . . . . . . 41
10.14 Entire Agreement . . . . . . . . . . . . . . . . . . . 42
10.15 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . 42
10.16 Publicity . . . . . . . . . . . . . . . . . . . . . . . 42
10.17 Expenses . . . . . . . . . . . . . . . . . . . . . . . 42
10.18 Termination . . . . . . . . . . . . . . . . . . . . . . 43
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