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AGREEMENT FOR
PURCHASE OF RAILROAD ASSETS OF
DELAWARE VALLEY RAILWAY COMPANY, INC.
BY
DELAWARE TRANSPORTATION GROUP, INC.
TABLE OF CONTENTS
1. DESCRIPTION OF BUSINESS SOLD....................................................................1
2. CONSIDERATION FOR THE SALE......................................................................5
3. DUE DILIGENCE...................................................................................7
4. SURFACE TRANSPORTATION BOARD APPROVAL...........................................................7
5. REPRESENTATIONS AND WARRANTIES..................................................................8
6. LIABILITY AND INDEMNITY........................................................................12
7. OBLIGATIONS ARE CONTINUING.....................................................................16
8. INSPECTION AND CONDITION OF RAIL LINE..........................................................16
9. LIENS AND ENCUMBRANCES.........................................................................17
10. FUNDING DATE...................................................................................18
11. PRORATION AND EXPENSES.........................................................................19
12. TRANSFER OF OPERATIONS.........................................................................19
13. ASSIGNMENT OF FREIGHT TRANSPORTATION CONTRACTS.................................................20
14. APPLICABLE LAW.................................................................................20
15. NOTICES........................................................................................20
16. CONFIDENTIALITY................................................................................21
17. ENTIRE AGREEMENT; INTEGRATION OF AGREEMENT.....................................................21
18. APPROVAL BY SELLER'S BOARD.....................................................................22
19. ATTORNEYS' FEES AND COSTS......................................................................22
20. CAPTIONS.......................................................................................22
21. SUCCESSORS.....................................................................................22
22. CONSTRUCTION...................................................................................22
23. COUNTERPARTS...................................................................................23
24. TRANSITIONAL EMPLOYEES.........................................................................23
25. DEFAULT........................................................................................23
26. CROSS-DEFAULT..................................................................................23
27. DISPUTE RESOLUTION.............................................................................24
Exhibit A Quitclaim Deed
Exhibit B ▇▇▇▇ of Sale
Exhibit C Tangible Personal Property
Exhibit D Agreements to be Assigned to Buyer in Whole or in Part
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AGREEMENT FOR
PURCHASE OF RAILROAD ASSETS OF
DELAWARE VALLEY RAILWAY COMPANY, INC.
BY
DELAWARE TRANSPORTATION GROUP, INC.
This Agreement is effective as of the 30th day of September, 1997 (the
"Effective Date"), between DELAWARE VALLEY RAILWAY COMPANY, INC., a Delaware
corporation (hereinafter referenced as "Seller") , and DELAWARE TRANSPORTATION
GROUP, INC., a Delaware corporation (hereinafter referenced as "Buyer").
WHEREAS, Seller desires to sell and convey to Buyer, on the terms and
conditions set forth in this Agreement, Seller's ownership interest in its
Gettysburg Division, operating under the fictitious name Gettysburg Railway
("GR"), comprising rail line segments located in ▇▇▇▇▇ and Cumberland Counties,
Pennsylvania, the rail freight transportation business which Seller conducts on
these rail line segments, and certain other rights, obligations and assets as
specified in this Agreement; and
WHEREAS, Buyer desires to purchase, pursuant to the terms and
conditions set forth in this Agreement, the Gettysburg Division assets including
the rail line segments, the rail freight transportation business which Seller
conducts thereon, and certain other assets, rights and obligations as specified
in this Agreement.
NOW THEREFORE, Buyer and Seller agree as follows:
1. DESCRIPTION OF BUSINESS SOLD.
(a) Seller shall convey to Buyer, by a Quitclaim Deed delivered to
Buyer on the date of Funding (as hereinafter defined), all of Seller' s interest
in the Gettysburg Division rail line segments located in ▇▇▇▇▇ and Cumberland
Counties, Pennsylvania, including those segments formerly known as USRA Line
912, extending from and between Mt. ▇▇▇▇▇ Springs, Pennsylvania
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at Milepost 7.84, and Gettysburg, Pennsylvania at Milepost 31.20 and a certain
outparcel located near Mt. ▇▇▇▇▇ Springs and the Conrail interchange.
The rail line segments being sold, including Seller's related rail
corridor real property interests being conveyed, are described specifically in
Attachment 1 to the Quitclaim Deed, set forth in Exhibit A attached hereto, and
together with Seller's leasehold and other interests are referenced hereinafter
as "Rail Lines". The conveyance shall include all fee interests, easements,
rights of way, leases, minerals and water rights over, under, across, and
attributable to the real property interests, including that certain Deed of
Easement to the CSX interchange and engine house property originally granted by
easement from Gettysburg College to Gettysburg Railroad Company ("GRC") and then
granted by GRC to Seller.
(b) Seller's conveyance to Buyer shall also include all buildings,
facilities, fixtures, and leasehold and other improvements located on or
appurtenant to the Rail Lines.
(c) Seller shall convey to Buyer, by delivering to Buyer on the
date of Funding a ▇▇▇▇ of Sale in the form set forth in Exhibit "B" attached
hereto, all of Seller's interest in all rail, ties, spikes, tie plates, rail
anchors, bridges, culverts, signaling equipment, and other supporting
structures, ballast, track materials, and supplies that are not improvements
that constitute the Rail Lines, but which then are present on the real property
comprising the Rail Lines, and Seller shall leave behind all uninstalled rail
and other track material (collectively, the "Track").
(d) Seller's conveyance to Buyer by ▇▇▇▇ of Sale shall also include
equipment, small tools and inventory located in the Engine House, office
equipment, maintenance equipment on wheels and radios, furniture, and
furnishings located in the Gettysburg Railway office, and other tangible
personal property listed on Exhibit "C", with only such additions and deletions
as may occur in the
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ordinary and necessary conduct of the rail operations between the date hereof
and the Funding Date in connection with the replacement of any such items (all
items described in this provision being collectively referred to as the
"Tangible Personal Property").
(e) Seller hereby assigns to Buyer, as of the Effective Date,
subject to all terms and conditions set forth in this Agreement, the following:
(i) all leases of real and personal property utilized in the
railroad operations, or otherwise, as listed in Exhibit "D" (the "Leases"); and
Buyer shall hereafter become responsible for, and assume the Seller's
obligations under, such Leases, except that Seller shall retain the rights to
acquire a certain crane from Blairsville Eastern Incorporated or ▇▇▇▇▇ ▇▇▇▇▇▇▇
and the Seller shall retain the sole responsibility to pay the purchase price
associated with the crane;
(ii) all agreements relating to railroad operations including,
without limitation, all operating agreements, interchange agreements, freight
transportation contracts, licenses, other contracts, commitments and
understandings with governmental agencies, rail car leases, and customers,
including those agreements listed on Exhibit "D" (collectively, the
"Contracts"), and specifically including assignment of that certain trackage
rights agreement by and between DVRC and Conrail accessing the Conrail
interchange at Mt. ▇▇▇▇▇ Springs, and that certain Option to Purchase the stock
shares of Gettysburg Passenger Service, Inc., a Pennsylvania corporation
("GPS"), GPS being the tenant pursuant to a certain station house lease with
Gettysburg College. Buyer hereby accepts the assignment of all such rights and
obligations in accordance with their terms and the terms of this Agreement, and
Buyer shall hereafter become responsible for, and assume the Seller's
obligations under, such contracts; and
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(iii) all of Seller's trackage rights authority to operate over
and across any lines connecting to or interchanging with the Rail Lines, if any
("Trackage Rights").
If any Lease or Contract pertains to the Rail Lines and inadvertently
is not identified in Exhibit "D", Seller promptly shall provide to Buyer a copy
of any such Lease or Contract immediately upon locating it. It is the intent of
both Seller and Buyer that all assignments related to the Rail Lines shall be
effective as of the Funding Date.
(f) Seller hereby assigns to Buyer, as of the Funding Date, the
following:
(i) all customer lists, technical information and data,
machinery and equipment warranties and service contracts, permits, licenses,
authorizations and regulatory approvals, and all other files and relating to the
operations of the Rail Lines, including the rights to the fictitious name
"Gettysburg Railway" (collectively, the "Intangible Personal Property"); and
(ii) all existing property records, tax and assessment records,
valuation maps, data and information related to railroad operations, including,
without limitation, inventory records, vendor lists, customer lists and records
(the "Records").
(g) Seller hereby assigns to Buyer and Buyer assumes responsibility,
as of the Funding Date, for the following (collectively, the "Cornell
Contracts"):
(i) That certain Employment Contract between ▇▇▇▇▇ ▇▇▇▇▇▇▇ and
Seller, dated November 15, 1996; and
(ii) that certain Contract between ▇▇▇▇▇ ▇▇▇▇▇▇▇, Seller, GPS
and GSRT dated September 27, 1996.
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(h) The Rail Lines, Track, Leases, Contracts, Trackage Rights,
Tangible Personal Property, Intangible Personal Property, Records, and Cornell
Contracts are sometimes hereinafter collectively referred to as the "Gettysburg
Assets."
2. CONSIDERATION FOR THE SALE.
(a) Purchase Price. The purchase price to be paid by Buyer for the
Rail Lines and other rights and interests to be sold by the Seller hereunder
shall be One Million Four Hundred Fifty Thousand and NO/100 Dollars
($1,450,000.00). The purchase price shall not include the acquisition of any
locomotives or rolling stock operated on the Rail Lines.
(b) Terms of Payment. The Purchase Price of $1,450,000.00 shall be
paid by delivery to Seller of a promissory note from the Buyer, with scheduled
maturity by or before December 31, 1997, as per subparagraph (c) below.
(c) Short Term Note and Stock Pledge. Seller shall accept from Buyer
a Promissory Note ("Short Term Note") in the full amount of the Purchase Price
intended to provide bridge loan financing to Buyer. This Short Term Note shall
accrue interest at the rate of eight and one-half percent (8.50%) per annum.
Principal and interest shall be payable in a single, balloon payment due by or
before the December 31, 1997 maturity date. In the event that Buyer has a
binding commitment for its permanent take-out financing and is in the final
stages of closing on that financing, then Buyer shall have a grace period of up
to twenty (20) days from the maturity date to complete payment of the Short Term
Note.
In the event that Buyer assigns its rights under this Agreement, and
closes in the name of a subsidiary or affiliate, this Short Term Note shall be
given by such assignee but guaranteed by Buyer. The Short Term Note shall be
secured by a collateral assignment and possessory pledge of all of the
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issued and outstanding stock of the assignee corporation, or of Buyer if no
assignment is made. The possessory pledge shall be accomplished by delivery of
signed stock powers as to all of the outstanding stock of the Buyer Corporation,
into an escrow to be held by Seller's attorney. Buyer shall pay all its costs
associated with the preparation and delivery of this Short Term Note and the
stock pledge, including any transfer taxes associated with same.
Buyer acknowledges and recognizes that its purchase of the Gettysburg
Division Assets will initially be subject and subordinate to the existing
mortgage and blanket liens in favor of National Bank of Canada ("NBC"). The NBC
mortgage and liens shall remain in place until such time as Buyer arranges its
permanent, take-out financing by or before the December 31, 1997 maturity date,
at which time Buyer shall repay the Short Term Note, in full, and Seller shall
deliver releases of the NBC mortgage and liens at Seller's expense. The Buyer's
repayment of the Short Term Note shall include at least $1,160,000 of principal
repayment in the form of cash and a sum not to exceed $290,000 by delivery of
Buyer's longer term promissory note, described in subparagraph (d) below.
(d) Purchase Money Note and Mortgage. In order to effect the
above-referenced take-out financing arrangement by or before December 31, 1997,
Seller shall accept a Promissory Note ("Purchase Money Note") from Buyer in a
principal amount to be agreed upon by the parties, but not to exceed Two Hundred
Ninety Thousand Dollars ($290,000.00). This Purchase Money Note shall bear
interest at the rate of eight and one-half percent (8.5%) per annum for a term
of five (5) years. Principal and accrued interest shall be amortized over a
twenty (20) year schedule and paid in fifty-nine (59) equal monthly installments
with a single, balloon payment of all outstanding principal and accrued interest
due in full upon the fifth (5th) anniversary date of the Purchase Money Note.
Said Purchase Money Note shall be guaranteed by Delaware Transportation Group,
Inc. and secured
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by a first-priority mortgage lien (the "Purchase Money Mortgage") on all of the
Buyer's real property, including all Rail Line segments, rail corridors, the CSX
interchange and engine house grants of easement, aforesaid, and all outparcels
but excluding Track, in form and substance acceptable to the Seller. Seller's
security shall also include a collateral assignment of all real property leases
and collateral assignment of that certain Option to purchase the stock shares of
Gettysburg Passenger Service, Inc., a Pennsylvania corporation ("GPS"). Buyer
shall pay all costs associated with the preparation, delivery and recording of
the mortgage and the collateral assignment documents, including any transfer or
recording taxes associated with same.
Seller agrees that Buyer may convey the Rail Lines to its affiliate,
Pennsylvania Land Company, LLC, a Delaware limited liability company after
repayment of the Short Term Note and subject to the lien of the Purchase Money
Mortgage, without release to Buyer.
3. DUE DILIGENCE.
The sale contemplated by this Agreement is subject to a Buyer's due
diligence period which shall be completed, and shall expire, as of September 30,
1997. Buyer may terminate this transaction at any time by or before September
30th with no further obligation.
4. SURFACE TRANSPORTATION BOARD APPROVAL.
Buyer represents that Buyer is not a "carrier" within the meaning of 49
U.S.C. Section 10102(5). Promptly, so as to not cause any delay in the Funding
Date, Buyer, at its sole expense, shall prepare and file such documents as may
be required to secure approval or exemption from approval by the Surface
Transportation Board ("STB") of Buyer's purchase from Seller. Buyer shall permit
Seller to review prior to filing all documents proposed by Buyer to be filed
with the STB, or any court, to secure legal approval or exemption of this
transaction.
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5. REPRESENTATIONS AND WARRANTIES.
(a) Seller hereby represents and warrants to Buyer, and Buyer's
successors and assignees, the following facts, as of the date of this Agreement
and as of the date of Funding:
(i) Seller is a corporation duly organized, validly
existing, and in good standing under the laws of the
State of Delaware, and is qualified to do business as a
foreign corporation in the State of Pennsylvania under
the fictitious name "Gettysburg Railway";
(ii) Seller has the corporate power and authority to enter
into this Agreement and carry out its obligations under
this Agreement;
(iii) Except as disclosed in Section 18 hereof, which approval
shall be obtained before Funding, the execution,
delivery and performance of this Agreement have been
duly authorized and approved by all necessary corporate
actions of Seller, and no further corporate proceedings
of Seller are required to complete the transactions
covered by this Agreement;
(iv) All of Seller's obligations set forth in this Agreement
constitute legal, valid and binding obligations of
Seller which are enforceable against Seller in
accordance with their terms, except to the extent
enforcement may be limited by bankruptcy, insolvency or
reorganization law;
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(v) There is no provision in the Certificate of
Incorporation or By-Laws of Seller which prohibits the
execution of this Agreement or consummation of the
transactions covered by this Agreement;
(vi) The negotiations related to this Agreement have been
handled by Seller on its own behalf, without
intervention of any agent or other person, so that no
party has a valid claim on this basis for any finder's
fee, brokerage commission, or other similar payment in
connection with any of the transactions included in this
Agreement;
(vii) Seller has duly filed with the appropriate agencies of
the United States, the State of Pennsylvania, the State
of Delaware, and appropriate local governments or
political subdivisions within that State, all tax
returns and reports required to be filed and has paid
all taxes required thereunder;
(viii) To Seller's knowledge, except for existing arbitration
awards or lawsuits, there is no pending or threatened
litigation or arbitration proceeding, or administrative
proceeding or investigation, against or affecting the
properties or assets comprising the Rail Lines, or
Seller's rights to conduct rail freight transportation
operations over the Rail Lines as Seller conducts those
operations on the date of this Agreement, the result of
which forseeably would materially adversely affect
Buyer's ability to conduct rail freight transportation
operations over the Rail Lines following the date of
Funding;
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(ix) Seller has received no written notice of any pending or
threatened civil, criminal, or administrative actions
with respect to any hazardous or toxic substance on or
adjacent to the Rail Lines;
(x) The financial records, data and information provided to
Buyer as to the operations of the Rail Lines are
accurate, and fairly reflect the information intended to
be stated therein;
(xi) The Seller has furnished to Buyer true and correct
copies of the Leases and the Contracts referred to in
Exhibit "D";
(xii) The Seller has furnished, or will furnish, to Buyer a
complete list of accounts payable or accounts receivable
in the ordinary course of Seller's business, with regard
to the Gettysburg Division operations, and will update
that list through September, 1997, at Buyer's request;
(xiii) No representation or warranty by Seller in this
Agreement contains any untrue statement of a material
fact, nor omits any material fact that is necessary to
make any representation or warranty not materially
misleading.
(b) Buyer hereby represents and warrants to Seller, and Seller's
successors and assignees, the following facts as of the date of this Agreement
and as of the date of Funding:
(i) Buyer, or its assignee, is a corporation duly organized,
validly existing and in good standing under the laws of
the State of Delaware, and by the date of Funding will
be qualified to do business in the State of
Pennsylvania;
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(ii) Buyer has all requisite corporate authority to purchase
Seller's rights and properties which are conveyed to
Buyer by this Agreement;
(iii) The execution of this Agreement and consummation of the
transactions which are a part of this Agreement have
been duly authorized and approved by all necessary
corporate actions by Buyer, and immediately upon
execution of this Agreement by Buyer's authorized
representative, all of Buyer's obligations set forth in
or referenced in this Agreement shall constitute legal,
valid and binding obligations of Buyer, or Buyer's
successors or assignees, which obligations are
enforceable against Buyer in accordance with their terms
against Buyer or Buyer's successors or assignees;
(iv) There is no provision in the Articles of incorporation
or By-Laws of Buyer which prohibits the execution of
this Agreement or consummation of the transactions
covered by this Agreement;
(v) The negotiations related to this Agreement have been
handled by Buyer on its own behalf, without intervention
of any agent or party, and in such manner as not to give
rise to any valid claim by any party for any finder's
fee, brokerage commission, or other similar payment in
connection with any of the transactions included in this
Agreement;
(vi) No representation or warranty by Buyer in this Agreement
contains any untrue statement of a material fact, nor
omits any material fact
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that is necessary to make any representation or warranty
not materially misleading.
6. LIABILITY AND INDEMNITY.
(a) Cooperation in Defense. Buyer and Seller agree that, for one (1)
year following the date of Funding, they will cooperate as necessary in defense
of any claim, demand, investigation or litigation arising out of Seller's or
Buyer's ownership or operation of the Rail Line.
(b) Definition of Losses. In this Agreement, the term "Losses" shall
include all costs, expenses, fees or liabilities of, or in any way related to:
(i) any violation of law or regulation, (ii) any damage to property, the
environment or natural resources, (iii) any bodily injury or death of any
person, or (iv) the breach of any contract, including this Agreement to the
extent set forth in this Agreement. "Losses" shall include, but not be limited
to, all costs of claims, activities in response to enforcement, costs of
investigation and remediation, damages, judgments, awards, orders, decrees,
payments, fines, penalties, assessments, court costs, and attorney, consultant
and expert witness fees, and shall include cost recovery or contribution claims
made pursuant to CERCLA or similar federal or state laws.
(c) General Liability and Indemnity.
(i) Seller's General Liability and Indemnity. Except as
provided in Subparagraph (d) of this Section
(environmental liability), Seller shall be responsible
for, and shall indemnify, defend and hold harmless Buyer
fully against, all Losses, which: (A) arise out of
Seller's ownership or operation of the Rail Lines on or
prior to the date of Funding; or (B) result from any
breach by Seller of any of its
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representations and warranties set forth in Sections
5(a) and 9 of this Agreement, or any failure by Seller
to perform any of its obligations under this Agreement;
or (C) arise out of Seller's failure to obtain release
of the NBC mortgage and blanket liens at such time as
Buyer has repaid the Short Term Note in full as per
Section 2(c) hereof.
(ii) Buyer's General Liability and Indemnity. Except as
provided in Subparagraph (d) of this Section
(environmental liability), and further except for Losses
resulting from one or more of Seller's representations
or warranties set forth in this Agreement containing any
untrue or materially misleading statement of a material
fact, or omitting any material fact that is necessary to
prevent that representation or warranty from being
materially misleading, Buyer shall be responsible for,
and shall indemnify, defend and hold harmless Seller
fully against, regardless of any negligence or alleged
negligence of Seller, all Losses which: (A) arise out of
Buyer's ownership or operation of the Rail Lines after
12:01 a.m. on the day following the date of Funding; or
(B) result from any breach by Buyer of any of its
representations or warranties set forth in Section 5(b)
of this Agreement, or any failure by Buyer to perform
any of its obligations under this Agreement.
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(d) Environmental Liability and Indemnity.
(i) Buyer's Acknowledgments with Respect to the Rail Lines.
Buyer acknowledges that Seller has provided Buyer with
full access to inspect the Rail Lines. Buyer further
acknowledges that Seller makes only those
representations and warranties to Buyer concerning the
existence of any hazardous or toxic substances on or
near the Rail Lines, or compliance of the Rail Lines
with any statutes, ordinances, rules, regulations,
orders or decisions with regard to hazardous or toxic
substances on or near the Rail Lines, which are
expressly set forth in Section 5(a)(ix) of this
Agreement.
(ii) Seller's Environmental Liability and Indemnity.
Notwithstanding any other liability or indemnification
provision in this Agreement, Seller shall be responsible
for, and shall indemnify, defend and hold harmless Buyer
(including its successors and assignees) fully against,
Losses incurred due to any claim, demand or litigation,
to the extent it is based on any violation or
requirement of any applicable environmental statute,
ordinance, rule, regulation, order or decision, and the
Losses arise from: (A) any chemical material or
substance that is now, or at the time in question is,
regulated or governed by any law, the release of which
creates any liability under any applicable law; or (B)
any other material which, when released, would cause
significant ecological damage (items described by (A) or
(B) above are
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referenced hereinafter as "Hazardous Materials") located
on, under or near the Rail Lines, where such Losses:
I. Were caused by one or more acts of Seller that
occurred on or prior to the date of Funding;
II. result from any written claim made by a party
other than Buyer or one of Buyer's affiliates
("Claims") that is delivered to Seller within
one (1) year following the date of Funding; and
III. exceed $10,000 in the aggregate in any year.
(iii) Buyer's Environmental Liability and Indemnity. As part
of the consideration for this Agreement, and
notwithstanding any other liability or indemnification
provision in this Agreement, Buyer shall be responsible
for, and shall indemnify, defend, and hold harmless
Seller fully against, regardless of any negligence or
alleged negligence of Seller, Losses incurred due to any
claim, demand or litigation, to the extent it is based
on any violation or requirement of any applicable
environmental statute, ordinance, rule, regulation,
order or decision, and the Losses arise from any
Hazardous Materials located on, under or near the Rail
Lines, where such Losses either:
I. were not caused by one or more acts of Seller,
or Seller's predecessor in title, regardless of
when the act or omission giving rise to the
Claim occurred;
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II. regardless of cause, do not result from a Claim
delivered to Seller within one (1) year of the
date of Funding; or
III. were caused by Seller and result from a Claim
delivered to Seller within one (1) year of
Funding, but only up to $10,000 in the aggregate
in any year.
(iv) Buyer to Comply with Hazardous Materials Laws. Buyer
agrees to comply with all federal, state and local laws,
regulations and rules concerning handling and disposal
of Hazardous Materials.
(e) Other Liabilities and Indemnities. In addition to the foregoing
allocations of liabilities and indemnity as set forth in this Section, Seller
and Buyer agree that Seller and RailAmerica shall indemnify, defend and hold
harmless Buyer and ▇▇▇▇ ▇▇▇▇▇▇, individually, against any claims, attorneys'
fees or expenses arising out of any arbitration awards or orders entered against
Seller or RailAmerica, Inc., or any lawsuits filed or judgments obtained against
Seller or RailAmerica, Inc.
7. OBLIGATIONS ARE CONTINUING.
The representations, warranties and obligations of Buyer and Seller in
this Agreement are continuing and survive the Funding, and delivery of the
Quitclaim Deed. Terms of continuing obligations in this Agreement are subject to
amendment only by a written contract signed by both Buyer and Seller, or their
respective successors or assignees.
8. INSPECTION AND CONDITION OF RAIL LINE.
(a) As of the Funding Date, Buyer acknowledges that Buyer has
inspected the Rail Line, including all improvements and structures on the Rail
Line. Buyer further acknowledges that
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(i) except as set forth in Paragraph 5(a)(ix) of this Agreement, no
representation has been made by Seller to Buyer concerning the state or
condition of the Rail Line or the other Gettysburg Division Assets, or the age
of any improvements on the Rail Line; (ii) Buyer has not relied upon any
statement or declaration of Seller, oral or in writing, as an inducement to
entering into this Agreement, other than as stated in this Agreement; and (iii)
the sole consideration for execution of this Agreement by Buyer is set forth in
this Agreement.
(b) SELLER HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY, WHETHER
EXPRESS OR IMPLIED, AS TO THE DESIGN OR CONDITION OF THE RAIL LINE OR THE OTHER
GETTYSBURG DIVISION ASSETS, ITS MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE, THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE RAIL LINE, OR THE
CONFORMITY OF THE RAIL LINE TO ITS INTENDED USES. SELLER SHALL NOT BE LIABLE TO
BUYER FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN
TORT) WITH RESPECT TO THE DESIGN, CONDITION, QUALITY, SAFETY, MERCHANTABILITY,
OR FITNESS FOR ANY PARTICULAR PURPOSES, OF THE RAIL LINE OR THE OTHER GETTYSBURG
DIVISION ASSETS, OR THE CONFORMITY OF THE RAIL LINE OR THE OTHER GETTYSBURG
DIVISION ASSETS, TO ITS INTENDED USES. SELLER OFFERS, AND BUYER ACCEPTS, THE
RAIL LINE IN "AS IS, WHERE IS" AND "WITH ALL FAULTS" CONDITION, AND SUBJECT TO
ALL LIMITATIONS ON SELLER'S RIGHTS, INTEREST, AND TITLE TO THE PROPERTY
COMPRISING THE RAIL LINE.
9. LIENS AND ENCUMBRANCES.
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Seller represents, warrants and covenants that, except as set forth in
Section 2 hereof, the Rail Lines are, or will be, free and clear of all
mortgages and other liens as of Funding. The only encumbrances presently
affecting the Rail Lines of which Seller is aware are described in the
agreements identified in Exhibit "D", attached hereto, and may encumber the Rail
Lines on the terms and conditions set forth in those agreements.
10. FUNDING DATE.
(a) The funding of this transaction shall occur at a time mutually
convenient to the parties but no later than Friday, October 31, 1997, at the
corporate offices of Seller in Boca Raton, Florida ("Funding"). For all other
purposes hereunder, including calculation of the additional purchase price,
closing shall be considered effective as of September 30, 1997.
(b) At Funding, Seller shall deliver to Buyer the following
documents:
(i) A sufficient number of original counterparts of an
executed Quitclaim Deed to the Rail Lines, in exact form
as the Quitclaim Deed attached hereto as Exhibit "A", to
enable Buyer to file an original Quitclaim Deed in each
of ▇▇▇▇▇ and Cumberland Counties, Pennsylvania;
(ii) An executed ▇▇▇▇ of Sale in the form of the ▇▇▇▇ of Sale
attached hereto as Exhibit "B";
(iii) A copy of Seller's Articles of Incorporation and
By-Laws; and
(iv) An opinion of counsel for Seller to Buyer with respect
to those items represented by Seller to Buyer in
Sections 5(a)(i), 5(a)(ii), 5(a)(iii), 5(a)(iv), and
5(a)(v) of this Agreement.
(c) At Funding, Buyer shall deliver to Seller:
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(i) A copy of Buyer's Articles of Incorporation and By-Laws;
(ii) An opinion of counsel for Buyer to Seller with respect
to those items represented by Buyer to Seller in
Paragraphs 5(b)(i), 5(b)(ii), 5(b)(iii), and 5(b)(iv) of
this Agreement.
11. PRORATION AND EXPENSES.
Real estate taxes, prepaid rentals, utilities, and other income or fees
attributable to the Rail Line interests transferred to Buyer under the terms of
this Agreement, shall be prorated between Seller and Buyer in such manner as to
allocate to Seller all income, taxes and expenses attributable to the Rail Lines
as of the Effective Date, and to allocate to Buyer all income, taxes and
expenses attributable to the Rail Lines after the Effective Date. To the extent
practicable, the balance of the Purchase Price paid by Buyer to Seller at
Funding shall be adjusted based upon this proration. To the extent that this
proration cannot be computed or completed as of Funding, settlement upon the
remaining prorated items shall be paid, in full, no later than sixty (60) days
following the date of Funding.
Buyer shall bear the expense of any real estate transfer taxes, excise
taxes, sales taxes, and recording fees attributable to the sale and conveyance
of the Rail Lines, and the real and personal property, governed by this
Agreement. Each party shall pay its own professional fees and expenses of
document preparation.
12. TRANSFER OF OPERATIONS.
All rail operations on the Rail Lines shall be transferred from Seller
to Buyer at 12:01 a.m. on the day following the Funding Date and all prorations
shall be determined based upon the Funding
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Date. Except with the prior written consent of Buyer, the Seller shall conduct
all rail operations in the ordinary course of business between the Effective
Date and the Funding Date.
13. ASSIGNMENT OF FREIGHT TRANSPORTATION CONTRACTS.
As of Effective Date, Seller hereby assigns to the Buyer all of the
following freight transportation contracts: (a) those freight transportation
contracts that apply to traffic moving to or from facilities on or along the
Rail Lines; and (b) those freight transportation contracts with or involving
shippers or receivers that have facilities on or along the Rail Lines and which
would apply to one or more shipments to or from a facility on or along the Rail
Lines.
14. APPLICABLE LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Florida.
15. NOTICES.
All notices and other communications under this Agreement shall be in
writing and deemed properly served if delivered by hand to the party addressed
or, if mailed, when received by the United States Postal Service in registered
or certified mail, postage prepaid, or, if sent by a national overnight service,
when received by the carrier service in a prepaid mailer, return receipt
requested, addressed as follows:
Buyer: Delaware Transportation Group, Inc.
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇, President
▇▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Seller: Delaware Valley Railway Company, Inc.
c/o Rail America, Inc.
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇, CEO
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇
Rail America, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Either party hereto may change its address or addressee to which notices are to
be given by providing written notice of the change to the other party.
16. CONFIDENTIALITY.
Except to the extent that the terms of this Agreement are required to
be disclosed by the STB or the State regulatory agency, by order of any court of
competent jurisdiction or any governmental agency, or by parties involved in
financing this purchase, each party to this Agreement shall not disclose the
contents of this Agreement to any other party, without the prior written consent
of the other party to this Agreement. The parties agree to a joint press release
acknowledging this transaction at Funding.
17. ENTIRE AGREEMENT; INTEGRATION OF AGREEMENT.
This document, together with all Exhibits attached hereto, constitutes
the entire agreement between Buyer and Seller relating to this transaction. Any
other prior or contemporaneous agreements, understandings, representations or
statements, whether oral or written, relating to this transaction are merged
herein. The headings and titles to provisions in this Agreement are for
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convenience only, and shall not be deemed to modify or affect the rights or
duties of Buyer or Seller. All rights and obligations of Buyer and Seller set
forth in this Agreement, or in any Exhibit attached hereto, are integral parts
of this Agreement. The consideration inducing Buyer and Seller to enter into
this Agreement includes all of the commitments by Buyer to Seller, and by Seller
to Buyer, as set forth in this Agreement, including terms set forth in the
Exhibits attached hereto.
18. APPROVAL BY SELLER'S BOARD.
The Seller's obligations under this Agreement have been approved by the
Seller's Board of Directors subject to, and conditioned upon, review and
ratification of this Agreement by the Board's designee. In the event that the
Board's designee does not approve of the final Agreement, either party may elect
to terminate this Agreement and all deposits shall be refunded, in full, to the
Buyer. Thereafter, Seller and Buyer shall be released as to any further
obligations to each other hereunder.
19. ATTORNEYS' FEES AND COSTS. In the event of any litigation or
arbitration of disputes between the parties arising out of or relating to this
Agreement, the prevailing party shall be entitled to recover all costs incurred
and reasonable attorneys' fees, including attorneys' fees in all investigations,
trials, bankruptcies, arbitration proceedings and appeals.
20. CAPTIONS. The captions of this Agreement are for convenience and
reference only and in no way define, describe, extend or limit the scope or
intent of this Agreement or the intent of any provision in it.
21. SUCCESSORS. This Agreement shall be binding on and inure to the
benefit of the parties and their respective successors, assigns and personal
representatives.
22. CONSTRUCTION. This Agreement shall not be construed against either
party regardless of who is responsible for its drafting.
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23. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which will
constitute one and the same instrument.
24. TRANSITIONAL EMPLOYEES
Seller's employee, ▇▇ ▇▇▇▇▇, shall assist Buyer during transition, on a
half-time basis, for up to sixty (60) days after Funding, with Buyer being
responsible for one-half (50%) of his current actual compensation. At the end of
such sixty (60) day transitional period, Buyer shall have the option to employ
▇▇ ▇▇▇▇▇ either full-time or part-time, at Buyer's cost and subject to
negotiation of appropriate arrangements with ▇▇ ▇▇▇▇▇. To the extent utilized by
Seller, Seller shall reimburse Buyer for a pro-rata share of the Administrative
Assistant's costs after Funding, such Administrative Assistant to be employed by
Buyer at Buyer's Gettysburg, Pennsylvania offices.
25. DEFAULT.
If the Buyer refuses or fails to close this Agreement within the time
specified, Seller may seek specific performance of Buyer's obligations
hereunder. If, for any reason other than failure of Seller to render its title
marketable after diligent effort, the Seller refuses or fails to close this
Agreement, the Buyer may seek specific performance, whereupon all parties shall
be relieved of all obligations under the Agreement. In the event that either
party fails, neglects, or refuses to perform its post-closing obligations under
the Agreement, the other party may, at its option, seek specific performance or
elect to pursue an action for damages resulting from the defaulting party's
breach.
26. CROSS-DEFAULT.
The parties hereto acknowledge that their obligations to close this
transaction are contingent upon the simultaneous closing on the stock and asset
sale and purchase transaction involving
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RailAmerica, Inc. and Buyer and pertaining to the stock shares of Gettysburg
Scenic Rail Tours ("GST"), equipment, rolling stock and the locomotives (as
defined therein), and other assets. A default by Buyer in its contract with
RailAmerica, Inc. shall be deemed a default by Buyer hereunder. Likewise, a
default by RailAmerica, Inc. in this same transaction shall be deemed a default
by Seller hereunder.
27. DISPUTE RESOLUTION. The parties hereto agree to resolve any
disputes regarding this agreement, by binding arbitration, in Florida, under the
rules of the American Arbitration Association, then in effect, upon written
notice form one party to another. Each party shall be responsible for its
appropriate share of any costs of such arbitration.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
Witnesses as to Buyer: BUYER:
____________________________________ DELAWARE TRANSPORTATION GROUP,
INC., a Delaware corporation
____________________________________
Print Name
/s/ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
____________________________________ By: ______________________________
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇, President
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Witnesses as to Seller: SELLER:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
____________________________________ DELAWARE VALLEY RAILWAY COMPANY,
▇▇▇▇ ▇. ▇▇▇▇▇▇ INC., a Delaware corporation
____________________________________
Print Name
____________________________________ By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
____________________________________ Executive Vice President
Print Name
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