EXHIBIT 1
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STOCK PURCHASE AGREEMENT
By and Between
GENESEE & WYOMING INC.
And
THE 1818 FUND III, L.P.
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Dated October 19, 2000
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Table of Contents
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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
2.2 Certificate of Designation.................................................10
2.3 Fees.......................................................................10
2.4 Closing....................................................................10
ARTICLE 3 CONDITIONS TO THE OBLIGATION
OF THE PURCHASER TO CLOSE..................................................11
3.1 Representations and Warranties True........................................11
3.2 Compliance with this Agreement.............................................11
3.3 Officer's Certificate......................................................11
3.4 Secretary's Certificate....................................................12
3.5 Documents..................................................................12
3.6 Purchase Permitted by Applicable Laws; Legal Investment....................12
3.7 Intentionally omitted......................................................12
3.8 Opinion of Counsel.........................................................12
3.9 Consents and Approvals.....................................................12
3.10 No Material Adverse Change.................................................12
3.11 Bolivia or Westrail Closing................................................13
3.12 Conduct of Business.......................................................13
3.13 Registration Rights Agreement..............................................13
3.14 Stockholders Agreement.....................................................13
3.15 Charter of the Company.....................................................13
3.16 Market Conditions..........................................................13
3.17 No Litigation..............................................................13
3.18 No Default or Breach.......................................................14
3.19 Credit Agreement...........................................................14
ARTICLE 4 CONDITIONS TO THE OBLIGATION
OF THE COMPANY TO CLOSE...............................................14
4.1 Representations and Warranties True........................................14
4.2 Compliance with this Agreement.............................................14
4.3 Issuance Permitted by Applicable Laws......................................14
4.4 Consents and Approvals.....................................................15
4.5 Charter of the Company.....................................................15
4.7 Bolivia and Westrail Closing...............................................15
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ARTICLE 5 REPRESENTATIONS AND
WARRANTIES OF THE COMPANY..................................................15
5.1 Corporate Existence and Power..............................................15
5.2 Corporate Authorization; No Contravention..................................16
5.3 Governmental Authorization; Third Party Consents...........................16
5.4 Binding Effect.............................................................16
5.5 No Legal Bar...............................................................17
5.6 Litigation.................................................................17
5.7 No Default or Breach.......................................................17
5.8 Title to Properties........................................................18
5.9 Taxes......................................................................18
5.10 Financial Condition........................................................18
5.11 No Material Adverse Change.................................................18
5.12 Commission Documents.......................................................18
5.13 Environmental Matters......................................................19
5.14 Investment Company.........................................................20
5.15 Subsidiaries...............................................................20
5.16 Capitalization.............................................................20
5.17 Private Offering...........................................................21
5.18 Broker's, Finder's or Similar Fees.........................................21
5.19 Outstanding Indebtedness...................................................21
5.20 Full Disclosure............................................................21
5.21 ERISA and Employee Benefit Plans...........................................21
5.22 Regulatory Compliance......................................................22
5.23 Registration Rights Agreement..............................................23
5.24 Stockholders Agreement.....................................................23
5.25 Trade Relations............................................................23
5.26 Material Contracts.........................................................23
5.27 Projections................................................................24
5.28 No Undisclosed Financial Liabilities.......................................24
5.29 Labor Matters..............................................................24
5.30 Absence of Certain Payments................................................24
ARTICLE 6 REPRESENTATIONS AND WARRANTIES
AND COVENANTS OF THE PURCHASER............................................25
6.1 Existence and Power........................................................25
6.2 Authorization; No Contravention............................................25
6.3 Binding Effect.............................................................25
6.4 No Legal Bar...............................................................26
6.5 Purchase for Own Account...................................................26
6.6 Investment Representation..................................................27
6.7 Litigation.................................................................27
6.8 Broker's, Finder's or Similar Fees.........................................27
ARTICLE 7 INDEMNIFICATION............................................................27
7.1 Indemnification by the Company.............................................27
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7.2 Indemnification by the Purchaser...........................................28
7.3 Notification...............................................................28
7.4 Registration Rights Agreement..............................................29
ARTICLE 8 AFFIRMATIVE COVENANTS......................................................30
8.1 Financial Statements.......................................................30
8.2 Confidentiality............................................................31
8.3 Notices....................................................................31
8.4 Issue Taxes................................................................32
8.5 Reservation of Shares......................................................32
8.6 Inspection.................................................................33
8.7 Registration and Listing...................................................33
8.8 HSR Act Filing.............................................................33
8.9 Use of Proceeds............................................................33
ARTICLE 9 NEGATIVE COVENANTS.........................................................34
9.1 Consolidations and Mergers.................................................34
9.2 Transactions with Affiliates...............................................34
9.3 No Inconsistent Agreements.................................................34
9.4 Issuance of Preferred Stock................................................35
ARTICLE 10 MISCELLANEOUS..............................................................35
10.1 Survival of Provisions.....................................................35
10.2 Further Actions............................................................36
10.3 Notices....................................................................36
10.4 Successors and Assigns.....................................................37
10.5 Amendment and Waiver.......................................................37
10.6 Counterparts...............................................................38
10.7 Headings...................................................................38
10.8 Determinations.............................................................38
10.9 Governing Law..............................................................38
10.10 Jurisdiction...............................................................38
10.11 Severability...............................................................38
10.12 Rules of Construction......................................................38
10.13 Remedies...................................................................38
10.14 Entire Agreement...........................................................39
10.15 Attorneys' Fees............................................................39
10.16 Publicity..................................................................39
10.17 Expenses...................................................................39
10.18 Termination................................................................40
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EXHIBITS
Exhibit A Form of Charter Amendment
Exhibit B Form of Certificate of Designation
Exhibit C Matters to be Addressed by Opinion of Counsel to Company
Exhibit D Form of Registration Rights Agreement
Exhibit E Form of Stockholders Agreement
DISCLOSURE SCHEDULES
Schedule 5.3 of the Disclosure Schedules Governmental Authorizations;
Third Party Consents
Schedule 5.6 of the Disclosure Schedules Litigation
Schedule 5.13 of the Disclosure Schedules Environmental Matters
Schedule 5.15 of the Disclosure Schedules Subsidiaries
Schedule 5.16 of the Disclosure Schedules Capitalization
Schedule 5.21 of the Disclosure Schedules Benefit Plans
Schedule 5.23 of the Disclosure Schedules Registration Rights Agreement
Schedule 5.24 of the Disclosure Schedules Stockholders Agreement
Schedule 5.26 of the Disclosure Schedules Material Contracts
Schedule 5.27 of the Disclosure Schedules Projections
Schedule 5.28 of the Disclosure Schedules Financial Liabilities
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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 5.10.
"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
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2
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, Mortimer B.
Fuller 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.
"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
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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.
"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
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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
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.ss.9601 et seq.), the Hazardous Material Transportation
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5
Act (49 U.S.C.ss. 1801 et seq.), the Resource Conservation and Recovery Act (42
U.S.C.ss.6901 et seq.), the Federal Water Pollution Control Act (33
U.S.C.ss.1251 et seq.), the Clean Air Act (42 U.S.C.ss.1251 et seq.), the Toxic
Substances Control Act (15 U.S.C.ss.2601 et seq.), the Federal Insecticide,
Fungicide and Rodenticide Act (7 U.S.C.ss.121 et seq.), the Asbestos Hazard
Emergency Response Act (15 U.S.C.ss.et seq.); the Safe Drinking Water Act (42
U.S.C.ss.300F et seq.); and the Oil Pollution Act of 1990 (33 U.S.C.ss. 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
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.
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"HSR Act" means the Hart-Scott-Rodino 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 fore going).
"NASDAQ" means the National Market System of the
National Association of Securities Dealers, Inc. Automated Quotations System.
"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.
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"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.
"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.
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"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 unli quidated 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 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.
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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 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
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10
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 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 Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of
the Americas, New York, New York 10019-6064 on the second Business Day following
the fulfillment of all conditions to the Initial Closing (other than those
conditions contemplated to be fulfilled
<PAGE>
11
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.
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
<PAGE>
12
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 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 & Bartlett, 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
<PAGE>
13
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.
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 sus pended 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
<PAGE>
14
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.
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.
<PAGE>
15
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.
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
<PAGE>
16
(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.
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
<PAGE>
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 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.
<PAGE>
18
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.
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.
<PAGE>
19
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;
(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;
<PAGE>
20
(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 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.
<PAGE>
21
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).
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.
<PAGE>
22
(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.
(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.
<PAGE>
23
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, 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.
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24
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 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,
<PAGE>
25
employees or agents of other persons acting on behalf of any of them, has
accepted or received any unlawful contributions, payments, gifts or
expenditures.
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
<PAGE>
26
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 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."
<PAGE>
27
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, Brown 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 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
<PAGE>
28
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 assets of
Brown Brothers Harriman & 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
<PAGE>
29
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
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.
<PAGE>
30
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 Arthur Andersen 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 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;
<PAGE>
31
(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
Brown Brothers Harriman & 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 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
<PAGE>
32
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 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.
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33
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 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.
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34
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;
(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
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35
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.
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
Arthur Andersen LLP (or any successor thereto) or another nationally recognized
independent public account firm
<PAGE>
36
(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.
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, L.P.
c/o Brown Brothers Harriman & Co.
59 Wall Street
New York, New York 10005
Telecopier No.: (212) 493-8429
Attention: Mr. T. Michael Long
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Telecopier No.: (212) 757-3990
Attention: Marilyn Sobel, Esq.
(b) if to the Company at the following address:
Genesee & Wyoming Inc.
66 Field Point Road
Greenwich, Connecticut 06830
Telecopier No.: (203) 661-4106
Attention: John C. Hellmann
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37
with a copy to:
Simpson, Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3909
Telecopier No.: (212) 455-2502
Attention: Philip T. Ruegger, III, Esq.
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.
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38
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.
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 Designation. A Holder may
maintain a proceeding even
<PAGE>
39
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 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.
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40
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 obligations contained in this Agreement
or any documents delivered pursuant to this Agreement.
<PAGE>
41
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:
------------------------------------
Name:
Title:
THE 1818 FUND III, L.P.
By: Brown Brothers Harriman & Co.,
Its General Partner
By:
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Name:
Title:
