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EXHIBIT 1.1
RAILAMERICA TRANSPORTATION CORP.
RAILAMERICA, INC.
AND
THE GUARANTORS NAMED HEREIN
130,000 Units Consisting of
$130,000,000 12 7/8% Senior Subordinated Notes due 2010
of RailAmerica Transportation Corp.
and Warrants to Purchase 1,411,414 Shares of Common Stock
of RailAmerica, Inc.
Purchase Agreement
August 9, 2000
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
and
BARCLAYS BANK PLC
AND
SCOTIA CAPITAL (USA) INC.
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130,000 Units Consisting of
$130,000,000 12 7/8% Senior Subordinated Notes due 2010
of RailAmerica Transportation Corp.
and Warrants to Purchase 1,411,414 Shares of Common Stock
of RailAmerica, Inc.
PURCHASE AGREEMENT
August 9, 2000
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BARCLAYS BANK PLC
SCOTIA CAPITAL (USA) INC.
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Sirs:
RailAmerica Transportation Corp., a Delaware corporation (the
"COMPANY"), proposes to issue and sell to Donaldson, Lufkin & Jenrette
Securities Corporation, Barclays Bank PLC and Scotia Capital (USA) Inc. (each,
an "INITIAL PURCHASER" and, collectively, the "INITIAL PURCHASERS") 130,000
Units (the "UNITS") consisting of an aggregate of $130,000,000 in principal
amount of 12 7/8% Senior Subordinated Notes due 2010 of the Company (the "SERIES
A NOTES") and Warrants (the "WARRANTS") to purchase 1,411,414 shares of common
stock, par value $0.001 per share (the "WARRANT SHARES"), of RailAmerica, Inc.,
a Delaware corporation ("RAILAMERICA"), at an initial exercise price of $6.60
per share, subject to the terms and conditions set forth herein. The Series A
Notes are to be issued pursuant to the provisions of an indenture (the
"Indenture"), to be dated as of the Closing Date (as defined below), among the
Company, the Guarantors (as defined below) and Wells Fargo Bank Minnesota, N.A.,
as trustee (the "TRUSTEE"). The Warrants will be issued pursuant to a warrant
agreement (the "WARRANT AGREEMENT"), to be dated as of the Closing Date, by and
between RailAmerica and Wells Fargo Bank Minnesota, N.A., as warrant agent (the
"WARRANT AGENT"). The Series A Notes and the Series B Notes (as defined below)
issuable in exchange therefor are collectively referred to herein as the
"NOTES." The Notes will be guaranteed (the "GUARANTEES") by RailAmerica and each
of the other Guarantors set forth on the signature pages hereof (each, a
"GUARANTOR" and, collectively, the "Guarantors"). The Units, the Series A Notes,
the Guarantees and the Warrants are collectively referred to herein as "INITIAL
SECURITIES." The Initial Securities and the Warrant Shares are collectively
referred to herein as the "SECURITIES." The Company and RailAmerica are
sometimes collectively referred to herein as the "ISSUERS."
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1. OFFERING MEMORANDUM. The Units will be offered and sold to
the Initial Purchasers pursuant to one or more exemptions from the registration
requirements under the Securities Act of 1933, as amended (the "Act"). The
Company and the Guarantors have prepared a preliminary offering memorandum,
dated July 19, 2000 (the "PRELIMINARY OFFERING MEMORANDUM"), and a final
offering memorandum, dated August 9, 2000 (the "OFFERING MEMORANDUM"), relating
to the Units.
Upon original issuance thereof, and until such time as the
same is no longer required pursuant to the Indenture or the Warrant Agreement,
the Units, the Notes or the Warrants (and all securities issued in exchange
therefor, in substitution thereof or upon conversion thereof) shall bear the
following legend:
"THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY
ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)(A
"QIB"), (B) IT HAS ACQUIRED THIS SECURITY IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT, OR (C) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT) (AN "IAI"),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES,
(B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR
904 OF REGULATION S UNDER THE SECURITIES ACT, (D) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER,
FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THE
SECURITIES (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE
PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000, AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE
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SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY), (F) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED
STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S
UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING
THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN
VIOLATION OF THE FOREGOING."
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Company agrees to
issue and sell to the Initial Purchasers, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company, the number of Units set
forth opposite the name of such Initial Purchaser on Schedule A hereto at a
purchase price equal to $916.87 per Unit (the "PURCHASE PRICE").
3. TERMS OF OFFERING. The Initial Purchasers have advised the
Issuers that the Initial Purchasers will make offers (the "EXEMPT RESALES") of
the Initial Securities purchased hereunder on the terms set forth in the
Offering Memorandum, as amended or supplemented, solely to (i) persons whom the
Initial Purchasers reasonably believe to be "qualified institutional buyers" as
defined in Rule 144A under the Act ("QIBS") and (ii) persons permitted to
purchase the Initial Securities in offshore transactions in reliance upon
Regulation S under the Act (each, a "REGULATION S PURCHASER") (such persons
specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE
PURCHASERS"). The Initial Purchasers will offer the Initial Securities to
Eligible Purchasers initially at a price equal to $940.38 per Unit. Such price
may be changed at any time without notice.
Holders (including subsequent transferees) of the Series A
Notes will have the registration rights set forth in the registration rights
agreement (the "NOTES REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing
Date, in substantially the form of EXHIBIT A hereto, for so long as such Series
A Notes constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the Notes
Registration Rights Agreement). Pursuant to the Notes Registration Rights
Agreement, the Company and the Guarantors will agree to file with the Securities
and Exchange Commission (the "COMMISSION") under the circumstances set forth
therein, (i) a registration statement under the Act (the "EXCHANGE OFFER
REGISTRATION
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STATEMENT") relating to the Company's 12 7/8% Senior Subordinated Notes, Series
B (the "SERIES B NOTES"), to be offered in exchange for the Series A Notes (such
offer to exchange being referred to as the "EXCHANGE OFFER") and the Guarantees
thereof and (ii) a shelf registration statement pursuant to Rule 415 under the
Act (the "SHELF REGISTRATION Statement" and, together with the Exchange Offer
Registration Statement and any registration statement required to be filed by
the Warrant Registration Rights Agreement (as defined below), the "REGISTRATION
STATEMENTS") relating to the resale by certain holders of the Series A Notes and
to use their best efforts to cause such Registration Statements to be declared
and remain effective and usable for the periods specified in the Notes
Registration Rights Agreement and to consummate the Exchange Offer.
Holders (including subsequent transferees) of Warrants and
Warrant Shares will have the registration rights with respect to the Warrants
and Warrant Shares set forth in a registration rights agreement (the "WARRANT
REGISTRATION RIGHTS AGREEMENT") between RailAmerica and the Initial Purchasers
to be dated as of the Closing Date, in substantially the form of EXHIBIT B
hereto. This Agreement, the Indenture, the Notes, the Guarantees, the Warrant
Agreement, the Warrant Registration Rights Agreement and the Notes Registration
Rights Agreement are hereinafter sometimes referred to collectively as the
"OPERATIVE DOCUMENTS."
4. DELIVERY AND PAYMENT.
(a) Delivery of, and payment of the Purchase Price
for, the Units shall be made at the offices of Cahill Gordon & Reindel at 80
Pine Street, New York, New York 10005, or such other location as may be mutually
acceptable. Such delivery and payment shall be made at 9:00 a.m. New York City
time, on August 14, 2000 or at such other time on the same date or such other
date as shall be agreed upon by the Initial Purchasers and the Company in
writing. The time and date of such delivery and the payment for the Units are
herein called the "CLOSING DATE."
(b) One or more of the Initial Securities in
definitive global form, registered in the name of Cede & Co., as nominee of the
Depository Trust Company ("DTC"), and in such denomination or denominations and
registered in such name or names as the Initial Purchasers request upon notice
to the Company at least 36 hours prior to the Closing Date (collectively, the
"GLOBAL SECURITIES"), shall be delivered by the Issuers to the Initial
Purchasers (or as the Initial Purchasers direct) in each case with any transfer
taxes thereon duly paid by the Issuers against payment by the Initial Purchasers
of the Purchase Price thereof by wire transfer in same day funds to the order of
the Company. The Global Securities shall be made available to the Initial
Purchasers for inspection not later than 9:30 a.m., New York City time, on the
business day immediately preceding the Closing Date.
5. AGREEMENTS OF THE COMPANY AND THE GUARANTORS. Each of the
Issuers and the Guarantors hereby agrees with the Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if
requested by the Initial Purchasers, confirm such advice in writing, (i) of the
issuance by any state securities commission of any stop order suspending the
qualification or exemption from qualification of any Initial Securities for
offering or sale in any jurisdiction designated by the Initial Purchasers
pursuant to Section 5(e)
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hereof, or the initiation of any proceeding by any state securities commission
or any other federal or state regulatory authority for such purpose and (ii) of
the happening of any event during the period referred to in Section 5(c) below
that makes any statement of a material fact made in the Preliminary Offering
Memorandum or the Offering Memorandum untrue or that requires any additions to
or changes in the Preliminary Offering Memorandum or the Offering Memorandum in
order to make the statements therein not misleading. The Issuers and the
Guarantors shall use their best efforts to prevent the issuance of any stop
order or order suspending the qualification or exemption of any Initial
Securities under any state securities or Blue Sky laws and, if at any time any
state securities commission or other federal or state regulatory authority shall
issue an order suspending the qualification or exemption of any Initial
Securities under any state securities or Blue Sky laws, the Issuers and the
Guarantors shall use their best efforts to obtain the withdrawal or lifting of
such order at the earliest possible time.
(b) To furnish the Initial Purchasers and those
persons identified by the Initial Purchasers to the Company as many copies of
the Preliminary Offering Memorandum and the Offering Memorandum, and any
amendments or supplements thereto, as the Initial Purchasers may reasonably
request. Subject to the Initial Purchasers' compliance with its representations
and warranties and agreements set forth in Section 7 hereof, the Issuers consent
to the use of the Preliminary Offering Memorandum and the Offering Memorandum,
and any amendments and supplements thereto required pursuant hereto, by the
Initial Purchasers in connection with Exempt Resales.
(c) During such period as in the reasonable opinion
of counsel for the Initial Purchasers an Offering Memorandum is required by law
to be delivered in connection with Exempt Resales by the Initial Purchasers and
in connection with market-making activities of the Initial Purchasers for so
long as any Initial Securities are outstanding, (i) not to make any amendment or
supplement to the Offering Memorandum of which the Initial Purchasers shall not
previously have been advised or to which the Initial Purchasers shall reasonably
object after being so advised and (ii) to prepare promptly upon the Initial
Purchasers' reasonable request, any amendment or supplement to the Offering
Memorandum that may be necessary or advisable in connection with such Exempt
Resales or such market-making activities.
(d) If, during the period referred to in Section 5(c)
above, any event shall occur or condition shall exist as a result of which, in
the reasonable opinion of counsel to the Initial Purchasers, it becomes
necessary to amend or supplement the Offering Memorandum in order to make the
statements therein, in the light of the circumstances when such Offering
Memorandum is delivered to an Eligible Purchaser, not misleading, or if, in the
reasonable opinion of counsel to the Initial Purchasers, it is necessary to
amend or supplement the Offering Memorandum to comply with any applicable law,
forthwith to prepare an appropriate amendment or supplement to such Offering
Memorandum so that the statements therein, as so amended or supplemented, will
not, in the light of the circumstances when it is so delivered, be misleading,
or so that such Offering Memorandum will comply with applicable law, and to
furnish to the Initial Purchasers and such other persons as the Initial
Purchasers may designate such number of copies thereof as the Initial Purchasers
may reasonably request.
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(e) Prior to the sale of all Initial Securities
pursuant to Exempt Resales as contemplated hereby, to cooperate with the Initial
Purchasers and counsel to the Initial Purchasers in connection with the
registration or qualification of the Initial Securities for offer and sale to
the Initial Purchasers and pursuant to Exempt Resales under the securities or
Blue Sky laws of such jurisdictions as the Initial Purchasers may request and to
continue such registration or qualification in effect so long as required for
Exempt Resales and to file such consents to service of process or other
documents as may be necessary in order to effect such registration or
qualification; PROVIDED, HOWEVER, that neither the Issuers nor any Guarantor
shall be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation, other
than as to matters and transactions relating to the Preliminary Offering
Memorandum, the Offering Memorandum or Exempt Resales, in any jurisdiction in
which it is not now so subject.
(f) So long as the Securities are outstanding, (i) to
mail and make generally available as soon as practicable after the end of each
fiscal year to the record holders of the Notes a financial report of the
Issuers, the Guarantors and their respective subsidiaries on a consolidated
basis (and a similar financial report of all unconsolidated subsidiaries, if
any), all such financial reports to include a consolidated balance sheet, a
consolidated statement of operations, a consolidated statement of cash flows and
a consolidated statement of stockholders' equity as of the end of and for such
fiscal year, together with comparable information as of the end of and for the
preceding year, certified by the Issuers' independent public accountants and
(ii) to mail and make generally available as soon as practicable after the end
of each quarterly period (except for the last quarterly period of each fiscal
year) to such holders, a consolidated balance sheet, a consolidated statement of
operations and a consolidated statement of cash flows (and similar financial
reports of all unconsolidated subsidiaries, if any) as of the end of and for
such period, and for the period from the beginning of such year to the close of
such quarterly period, together with comparable information for the
corresponding periods of the preceding year.
(g) So long as the Securities are outstanding, to
furnish to the Initial Purchasers as soon as available copies of all reports or
other communications furnished by the Issuers or any of the Guarantors to its
public security holders or furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the Issuers or
any of the Guarantors is listed and such other publicly available information
concerning the Issuers and/or their subsidiaries as the Initial Purchasers may
reasonably request.
(h) So long as any of the Securities remain
outstanding and are "restricted securities" and during any period in which the
Company and the Guarantors are not subject to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), to make
available to any holder of such Securities in connection with any sale thereof
and any prospective purchaser of such Securities from such holder, the
information of the Issuers ("RULE 144A INFORMATION") required by Rule 144A(d)(4)
under the Act.
(i) Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, to pay or cause
to be paid all expenses incident to the
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performance of the obligations of the Issuers and the Guarantors under this
Agreement, including: (i) the fees, disbursements and expenses of counsel to the
Issuers and the Guarantors and accountants of the Issuers and the Guarantors in
connection with the sale and delivery of the Initial Securities to the Initial
Purchasers and pursuant to Exempt Resales, and all other fees and expenses in
connection with the preparation, printing, filing and distribution of the
Preliminary Offering Memorandum, the Offering Memorandum and all amendments and
supplements to any of the foregoing (including financial statements), including
the mailing and delivering of copies thereof to the Initial Purchasers and
persons designated by it in the quantities specified herein, (ii) all costs and
expenses related to the transfer and delivery of the Initial Securities to the
Initial Purchasers and pursuant to Exempt Resales, including any transfer or
other taxes payable thereon, (iii) all costs of printing or producing this
Agreement, the other Operative Documents and any other agreements or documents
in connection with the offering, purchase, sale or delivery of the Initial
Securities, (iv) all expenses in connection with the registration or
qualification of the Initial Securities for offer and sale under the securities
or Blue Sky laws of the several states and all costs of printing or producing
any preliminary and supplemental Blue Sky memoranda in connection therewith
(including the filing fees and reasonable fees and disbursements of counsel for
the Initial Purchasers in connection with such registration or qualification and
memoranda relating thereto), (v) the cost of printing certificates representing
the Initial Securities, (vi) all expenses and listing fees in connection with
the application for quotation of the Initial Securities in the National
Association of Securities Dealers, Inc. ("NASD") Automated Quotation System -
PORTAL ("PORTAL"), (vii) the fees and expenses of the Trustee, the Warrant Agent
and Trustee's and Warrant Agent's counsel in connection with the Indenture, the
Notes, the Warrant Agreement and the Guarantees, (viii) the costs and charges of
any transfer agent, registrar and/or depositary (including DTC), (ix) any fees
charged by rating agencies for the rating of the Securities, (x) all costs and
expenses of the Exchange Offer and any Registration Statement, as set forth in
the Warrant Registration Rights Agreement and the Notes Registration Rights
Agreement, and (xi) all other costs and expenses incident to the performance of
the obligations of the Issuers and the Guarantors hereunder for which provision
is not otherwise made in this Section.
(j) To use their best efforts to effect the inclusion
of the Units (and following separation of the Units, the Notes and the Warrants)
in PORTAL and to maintain the listing of the Units (and following separation of
the Units, the Notes and the Warrants) on PORTAL for so long as such Securities
are outstanding.
(k) To obtain the approval of DTC for "book-entry"
transfer of the Units (and following separation of the Units, the Notes and the
Warrants), and to comply with all of its agreements set forth in the
representation letters of the Issuers and the Guarantors to DTC relating to the
approval of the Units (and following separation of the Units, the Notes and the
Warrants) by DTC for "book-entry" transfer.
(l) During the period beginning on the date hereof
and continuing to and including the Closing Date, not to offer, sell, contract
to sell or otherwise transfer or dispose of any securities of the Issuers or any
Guarantor or any warrants, rights or options to purchase or otherwise acquire
securities of the Issuers or any Guarantor substantially similar to the
Securities (other than the Initial Securities and other than the issuance of
securities upon the exercise of options, warrants and
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other convertible securities outstanding on the date hereof), without the prior
written consent of the Initial Purchasers.
(m) Not to sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in the Act)
that would be integrated with the sale of the Initial Securities to the Initial
Purchasers or pursuant to Exempt Resales in a manner that would require the
registration of any such sale of the Initial Securities under the Act.
(n) Not to voluntarily claim, and to actively resist
any attempts to claim, the benefit of any usury laws against the holders of any
Securities.
(o) To comply with all of its agreements set forth in
the Notes Registration Rights Agreement and the Warrant Registration Rights
Agreement and to comply with all applicable federal and state securities laws in
connection therewith.
(p) To use its best efforts to do and perform all
things required or necessary to be done and performed under this Agreement by it
prior to the Closing Date and to satisfy all conditions precedent to the
delivery of the Initial Securities.
6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE ISSUERS
AND THE GUARANTORS. As of the date hereof, each of the Issuers and the
Guarantors represents and warrants to, and agrees with, the Initial Purchasers
that:
(a) The Preliminary Offering Memorandum and the
Offering Memorandum do not, and any supplement or amendment to them will not,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties contained in this paragraph (a)
shall not apply to statements in or omissions from the Preliminary Offering
Memorandum or the Offering Memorandum (or any supplement or amendment thereto)
based upon information relating to the Initial Purchasers furnished to the
Issuers in writing by the Initial Purchasers expressly for use therein. No stop
order preventing the use of the Preliminary Offering Memorandum or the Offering
Memorandum, or any amendment or supplement thereto, or any order asserting that
any of the transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued.
(b) Each of the Issuers, the Guarantors and their
respective subsidiaries has been duly incorporated, is validly existing as a
corporation in good standing under the laws of its jurisdiction of incorporation
and has the corporate power and authority to carry on its business as described
in the Preliminary Offering Memorandum and the Offering Memorandum and to own,
lease and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each jurisdiction
in which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified would
not have a material adverse effect on the business, prospects, financial
condition or results of operations of the Issuers, the Guarantors and their
subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT").
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(c) All outstanding shares of capital stock of
RailAmerica have been duly authorized and validly issued and are fully paid,
nonassessable and not subject to any preemptive or similar rights; all
outstanding shares of capital stock of the Company are owned, indirectly, by
RailAmerica. RailAmerica has the authorized, issued and outstanding
capitalization set forth in the Offering Memorandum under the heading
"Capitalization" and "Description of Capital Stock".
(d) The entities listed on Schedule B hereto are the
only subsidiaries, direct or indirect, of the Company. All of the outstanding
shares of capital stock of each of the Company's subsidiaries have been duly
authorized and validly issued and are fully paid and nonassessable, and are
owned by the Company, directly or indirectly through one or more subsidiaries,
free and clear of any security interest, claim, lien, encumbrance or adverse
interest of any nature (each, a "LIEN") other than Permitted Liens (as defined
in the Indenture).
(e) This Agreement has been duly authorized, executed
and delivered by the Issuers and each of the Guarantors.
(f) The Indenture has been duly authorized by the
Company and each of the Guarantors and, on the Closing Date, will have been
validly executed and delivered by the Company and each of the Guarantors. When
the Indenture has been duly executed and delivered by the Company and each of
the Guarantors, the Indenture will be a valid and binding agreement of the
Company and each Guarantor (assuming the due authorization, execution and
delivery thereof by the Trustee), enforceable against the Company and each
Guarantor in accordance with its terms except as (i) the enforceability thereof
may be limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability. On the Closing Date, the Indenture will conform in all material
respects to the requirements of the Trust Indenture Act of 1939, as amended (the
"TIA" or "TRUST INDENTURE ACT"), and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder.
(g) RailAmerica has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Warrant
Agreement. The Warrant Agreement has been duly and validly authorized by
RailAmerica and, when executed and delivered by RailAmerica (assuming the due
authorization, execution and delivery thereof by the Warrant Agent), will
constitute a valid and legally binding agreement of RailAmerica, enforceable
against RailAmerica in accordance with its terms, except that the enforcement
thereof may be subject to (i) bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability.
(h) RailAmerica has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Warrants and
the Warrant Shares. The Warrants and the Warrant Shares have been duly and
validly authorized for issuance and sale by RailAmerica. The Warrants are in the
form contemplated by the Warrant Agreement and, when issued, authenticated and
delivered by RailAmerica against payment by the Initial Purchasers in accordance
with the
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terms of this Agreement and the Warrant Agreement, will constitute valid and
legally binding obligations of RailAmerica, entitled to the benefits of the
Warrant Agreement and enforceable against RailAmerica in accordance with their
terms, except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) rights of acceleration
and the availability of equitable remedies may be limited by equitable
principles of general applicability. When issued in accordance with the terms
and conditions contained in the Warrant Agreement, upon exercise of the
Warrants, the Warrant Shares will be duly authorized, validly issued, fully paid
and nonassessable and will not be subject to any preemptive or similar rights.
Prior to the Closing Date, the Warrant Shares shall have been duly reserved for
issuance in accordance with the terms of the Warrants and the Warrant Agreement.
On the Closing Date, the Warrants and the Warrant Shares will conform as to
legal matters to the descriptions thereof contained in the Offering Memorandum.
(i) RailAmerica has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Warrant
Registration Rights Agreement. The Warrant Registration Rights Agreement has
been duly and validly authorized by RailAmerica and, when duly executed and
delivered by RailAmerica, will constitute a valid and legally binding agreement
of RailAmerica, enforceable against RailAmerica in accordance with its terms,
except that (A) the enforceability thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) rights of acceleration
and the availability of equitable remedies may be limited by equitable
principles of general applicability and (B) any rights to indemnity or
contribution thereunder may be limited by federal and state securities laws and
public policy considerations. On the Closing Date, the Warrant Registration
Rights Agreement will conform as to legal matters to the description thereof in
the Offering Memorandum.
(j) The Series A Notes have been duly authorized and,
on the Closing Date, will have been validly executed and delivered by the
Company. When the Series A Notes have been issued, executed and authenticated in
accordance with the provisions of the Indenture and delivered to and paid for by
the Initial Purchasers in accordance with the terms of this Agreement, the
Series A Notes will be entitled to the benefits of the Indenture and will be
valid and binding obligations of the Company, enforceable in accordance with
their terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
(ii) rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability. On the Closing Date,
the Series A Notes will conform as to legal matters to the description thereof
contained in the Offering Memorandum.
(k) On the Closing Date, the Series B Notes will have
been duly authorized by the Company. When the Series B Notes are issued,
executed and authenticated in accordance with the terms of the Exchange Offer
and the Indenture, the Series B Notes will be entitled to the benefits of the
Indenture and will be the valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) rights of
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<PAGE> 12
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.
(l) The Guarantee to be endorsed on the Series A
Notes by each Guarantor has been duly authorized by such Guarantor and, on the
Closing Date, will have been duly executed and delivered by each such Guarantor.
When the Series A Notes have been issued, executed and authenticated in
accordance with the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, the Guarantee of each
Guarantor endorsed thereon will be entitled to the benefits of the Indenture and
will be the valid and binding obligation of such Guarantor, enforceable against
such Guarantor in accordance with its terms, except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of general
applicability. On the Closing Date, the Guarantees to be endorsed on the Series
A Notes will conform as to legal matters to the description thereof contained in
the Offering Memorandum.
(m) The Guarantee to be endorsed on the Series B
Notes by each Guarantor has been duly authorized by such Guarantor and, when
issued, will have been duly executed and delivered by each such Guarantor. When
the Series B Notes have been issued, executed and authenticated in accordance
with the terms of the Exchange Offer and the Indenture, the Guarantee of each
Guarantor endorsed thereon will be entitled to the benefits of the Indenture and
will be the valid and binding obligation of such Guarantor, enforceable against
such Guarantor in accordance with its terms, except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of general
applicability. When the Series B Notes are issued, authenticated and delivered,
the Guarantees to be endorsed on the Series B Notes will conform as to legal
matters to the description thereof in the Offering Memorandum.
(n) The Notes Registration Rights Agreement has been
duly authorized by the Company and each of the Guarantors and, on the Closing
Date, will have been duly executed and delivered by the Company and each of the
Guarantors. When the Notes Registration Rights Agreement has been duly executed
and delivered, the Notes Registration Rights Agreement will be a valid and
binding agreement of the Company and each of the Guarantors, enforceable against
the Company and each Guarantor in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability. On the Closing Date, the Notes Registration Rights
Agreement will conform as to legal matters to the description thereof in the
Offering Memorandum.
(o) None of the Issuers, the Guarantors or any of
their respective subsidiaries is in violation of its respective charter or
by-laws or in default in the performance of any obligation, agreement, covenant
or condition contained in any indenture, loan agreement, mortgage, lease or
other agreement or instrument that is material to the Issuers, the Guarantors
and their respective subsidiaries, taken as a whole, to which the Issuers, the
Guarantors or any of their respective subsidiaries
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<PAGE> 13
is a party or by which the Issuers, the Guarantors or any of their respective
property is bound, except in each case for such violations or defaults as could
not reasonably be expected to have a Material Adverse Effect.
(p) The execution, delivery and performance of this
Agreement and the other Operative Documents by the Issuers and each of the
Guarantors, compliance by the Issuers and each of the Guarantors with all
provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the securities
or Blue Sky laws of the various states or under the Act), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of either Issuer, the Guarantors or any of their
respective subsidiaries or any indenture, loan agreement, mortgage, lease or
other agreement or instrument that is material to the Issuers, the Guarantors or
their respective subsidiaries, taken as a whole, to which either Issuer, the
Guarantors or their respective subsidiaries is a party or by which either
Issuer, the Guarantors or any of their respective subsidiaries or their
respective property is bound (other than such conflicts, breaches or defaults as
have been waived), (iii) violate or conflict with any applicable law or any
rule, regulation, judgment, order or decree of any court or any governmental
body or agency having jurisdiction over either Issuer, the Guarantors or any of
their respective subsidiaries or their respective property, (iv) result in the
imposition or creation of (or the obligation to create or impose) a Lien under,
any agreement or instrument to which either Issuer, the Guarantors or any of
their respective subsidiaries is a party or by which either Issuer, the
Guarantors or any of their respective subsidiaries or their respective property
is bound, or (v) result in the termination, suspension or revocation of any
Authorization (as defined below) of either Issuer, the Guarantors or any of
their respective subsidiaries or result in any other impairment of the rights of
the holder of any such Authorization which could reasonably be expected, singly
or in the aggregate, to have a Material Adverse Effect.
(q) Other than as disclosed in the Offering
Memorandum, there are no legal or governmental proceedings pending or, to the
best knowledge of the Issuers, threatened to which the Issuers, the Guarantors
or any of their respective subsidiaries is or could be a party or to which any
of their respective property is or could be subject, which might result, singly
or in the aggregate, in a Material Adverse Effect.
(r) Except as disclosed in the Offering Memorandum,
to the best knowledge of the Issuers, none of the Issuers, the Guarantors or any
of their respective subsidiaries has violated any foreign, federal, state or
local law or regulation relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), any provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or any provisions of the
Foreign Corrupt Practices Act or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the aggregate, would
not have a Material Adverse Effect.
(s) Except as disclosed in the Offering Memorandum,
to the best knowledge of the Issuers, there are no costs or liabilities
associated with Environmental Laws (including,
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<PAGE> 14
without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any
Authorization, any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate, have a
Material Adverse Effect.
(t) The Issuers, the Guarantors and their respective
subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged; and none of the Issuers, the
Guarantors or any of their respective subsidiaries (i) has received notice from
any insurer or agent of such insurer that substantial capital improvements or
other material expenditures will have to be made in order to continue such
insurance or (ii) has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers at a cost that would not have a Material
Adverse Effect.
(u) The Issuers, the Guarantors and their respective
subsidiaries have (i) in the case of real property, good and marketable fee
title, leasehold, easement, right of way or other similar estate which is
sufficient to permit such person to operate as railroads and other business as
currently operated or carried on without undue charge or expense, and (ii) in
the case of owned personal property, good and marketable title to such personal
property owned by them, in each case, which are material to the business of the
Issuers, the Guarantors and their respective subsidiaries, and in each case,
free and clear of all Liens and defects, except such as are described in the
Offering Memorandum or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made of such
property by the Issuers, the Guarantors and their respective subsidiaries; and
any real property and buildings held under lease by the Issuers, the Guarantors
and their respective subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Issuers, the Guarantors and their respective subsidiaries, in each case except
as described in the Offering Memorandum.
(v) Each of the Issuers, the Guarantors and their
respective subsidiaries has such permits, licenses, consents, exemptions,
franchises, authorizations and other approvals (each, an "AUTHORIZATION") of,
and has made all filings with and notices to, all governmental or regulatory
authorities and self-regulatory organizations and all courts and other
tribunals, including without limitation, under any applicable Environmental
Laws, as are necessary to own, lease, license and operate its respective
properties and to conduct its business, except where the failure to have any
such Authorization or to make any such filing or notice would not, singly or in
the aggregate, have a Material Adverse Effect. Each such Authorization is valid
and in full force and effect and each of the Issuers, the Guarantors and their
respective subsidiaries is in compliance with all the terms and conditions
thereof and with the rules and regulations of the authorities and governing
bodies having jurisdiction with respect thereto; and no event has occurred
(including, without limitation, the receipt of any notice from any authority or
governing body) that allows or, after notice or lapse of time or both, would
allow, revocation, suspension or termination of any such Authorization or
results or, after notice or lapse of time or both, would result in any other
impairment of the rights of the holder of any such Authorization; and such
Authorizations contain no restrictions that are burdensome to the Issuers, the
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<PAGE> 15
Guarantors or any of their respective subsidiaries; except where such failure to
be valid and in full force and effect or to be in compliance, the occurrence of
any such event or the presence of any such restriction would not, singly or in
the aggregate, have a Material Adverse Effect.
(w) There is no (i) unfair labor practice complaint,
grievance or arbitration proceeding pending or, to the best knowledge of the
Issuers, threatened against either Issuer, the Guarantors or their respective
subsidiaries before the National Labor Relations Board or any state, local or
foreign labor relations board, (ii) strike, labor dispute, slowdown or stoppage
pending or threatened against either Issuer, the Guarantors or their respective
subsidiaries or (iii) union representation question existing with respect to the
employees of the Issuers, the Guarantors or their respective subsidiaries,
except in the case of clauses (i), (ii) and (iii) for such actions which, singly
or in the aggregate, would not have a Material Adverse Effect.
(x) The Issuers, the Guarantors and their respective
subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. This
representation tracks the requirements of Section 13(b)(2) under the Exchange
Act.
(y) The accountants, PricewaterhouseCoopers, L.L.P.,
Arthur Andersen Langton Clarke and Arthur Andersen LLP, that have certified the
financial statements and supporting schedules included in the Preliminary
Offering Memorandum and the Offering Memorandum are independent public
accountants with respect to the Issuers, the Guarantors and their respective
subsidiaries, as required by the Act and the Exchange Act. The historical
financial statements, together with related schedules and notes, set forth in
the Preliminary Offering Memorandum and the Offering Memorandum comply as to
form in all material respects with the requirements applicable to registration
statements on Form S-1 under the Act, it being understood and agreed that the
historical financial statements included in the Offering Memorandum do not
include all the historical financial statements which would be required in a
registration statement on Form S-1.
(z) The historical financial statements, together
with related schedules and notes forming part of the Offering Memorandum (and
any amendment or supplement thereto), present fairly the consolidated financial
position, results of operations and changes in financial position of the
Issuers, the Guarantors and their respective subsidiaries on the basis stated in
the Offering Memorandum at the respective dates or for the respective periods to
which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data set forth
in the Offering Memorandum (and any amendment or supplement thereto) are, in all
material respects, accurately presented and prepared
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<PAGE> 16
on a basis consistent with such financial statements and the books and records
of the Issuers and the Guarantors.
(aa) The PRO FORMA financial statements included in
the Preliminary Offering Memorandum and the Offering Memorandum have been
prepared on a basis consistent with the historical financial statements of the
Issuers, the Guarantors and their respective subsidiaries and give effect to
assumptions used in the preparation thereof on a reasonable basis and in good
faith and present fairly the historical and proposed transactions contemplated
by the Preliminary Offering Memorandum and the Offering Memorandum; and such PRO
FORMA financial statements comply as to form in all material respects with the
requirements applicable to PRO FORMA financial statements included in
registration statements on Form S-1 under the Act. The other PRO FORMA financial
and statistical information and data included in the Offering Memorandum are, in
all material respects, accurately presented and prepared on a basis consistent
with the PRO FORMA financial statements.
(bb) Neither Issuer is and, after giving effect to
the offering and sale of the Initial Securities and the application of the net
proceeds thereof as described in the Offering Memorandum, neither will be an
"investment company," as such term is defined in the Investment Company Act of
1940, as amended.
(cc) None of the Issuers, the Guarantors or any of
their respective subsidiaries nor any agent thereof acting on their behalf has
taken, and none of them will take, any action that might cause this Agreement or
the issuance or sale of the Initial Securities to violate Regulation G (12
C.F.R. Part 207), Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R.
Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors of the
Federal Reserve System.
(dd) No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under the
Act (i) has imposed (or has informed either Issuer, any Guarantor or any of
their respective subsidiaries that it is considering imposing) any condition
(financial or otherwise) on either Issuer's, any Guarantor's or any of their
respective subsidiaries' retaining any rating assigned to either Issuer, any
Guarantor or any of their respective subsidiaries or any securities of the
Issuers, any Guarantor or any of their respective subsidiaries or (ii) has
indicated to the Issuers, any Guarantor or any of their respective subsidiaries
that it is considering (a) the downgrading, suspension, or withdrawal of, or any
review for a possible change that does not indicate the direction of the
possible change in, any rating so assigned or (b) any change in the outlook for
any rating of either Issuer, any Guarantor or any of their respective
subsidiaries or any securities of the Issuers, any Guarantor or any of their
respective subsidiaries.
(ee) No action has been taken and no law, statute,
rule or regulation or order has been enacted, adopted or issued by any
governmental agency or body which prevents the execution, delivery and
performance of any of the Operative Documents, the issuance of the Initial
Securities, or suspends the sale of the Initial Securities in any jurisdiction
referred to in Section 5(e); and no injunction, restraining order or other order
or relief of any nature by a federal or state court or other tribunal of
competent jurisdiction has been issued with respect to the Issuers, the
Guarantors or their
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<PAGE> 17
respective subsidiaries which would prevent or suspend the issuance or sale of
the Initial Securities in any jurisdiction referred to in Section 5(e).
(ff) Since the respective dates as of which
information is given in the Offering Memorandum other than as set forth in the
Offering Memorandum (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), (i) there has not occurred any
material adverse change or any development involving a prospective material
adverse change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Issuers, the Guarantors and their
respective subsidiaries taken as a whole, (ii) there has not been any material
adverse change or any development involving a prospective material adverse
change in the capital stock or in the long-term debt of the Issuers, the
Guarantors or any of their respective subsidiaries and (iii) none of the
Issuers, the Guarantors or any of their respective subsidiaries has incurred any
material liability or obligation, direct or contingent.
(gg) Each of the Preliminary Offering Memorandum and
the Offering Memorandum, as of its date, contains all the information specified
in, and meeting the requirements of, Rule 144A(d)(4) under the Act.
(hh) When the Initial Securities are issued and
delivered pursuant to this Agreement, the Initial Securities will not be of the
same class (within the meaning of Rule 144A under the Act) as any security of
either Issuer or the Guarantors that is listed on a national securities exchange
registered under Section 6 of the Exchange Act or that is quoted in a United
States automated inter-dealer quotation system.
(ii) No form of general solicitation or general
advertising (as defined in Regulation D under the Act) was used by either
Issuer, the Guarantors or their respective subsidiaries or any of their
respective representatives (other than the Initial Purchasers, as to whom the
Issuers, the Guarantors and their respective subsidiaries make no
representation) in connection with the offer and sale of the Initial Securities
contemplated hereby, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine, or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising. No
securities of the same class as the Initial Securities have been issued and sold
by the Issuers within the six-month period immediately prior to the date hereof.
(jj) Prior to the effectiveness of any Registration
Statement, the Indenture is not required to be qualified under the TIA.
(kk) None of the Issuers, the Guarantors or any of
their respective subsidiaries or any of their respective affiliates or any
person acting on its or their behalf (other than the Initial Purchasers, as to
whom the Issuers, the Guarantors and their respective subsidiaries make no
representation) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S under the Act ("REGULATION S") with respect
to the Initial Securities.
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<PAGE> 18
(ll) Assuming the accuracy of the Initial Purchasers'
representations and warranties and agreements set forth in Section 7 hereof, the
Initial Securities offered and sold in reliance on Regulation S have been and
will be offered and sold only in offshore transactions.
(mm) The sale of the Initial Securities pursuant to
Regulation S is not part of a plan or scheme to evade the registration
provisions of the Act.
(nn) The Issuers, the Guarantors and their respective
subsidiaries and their respective affiliates and all persons acting on their
behalf (other than the Initial Purchasers, as to whom the Issuers, the
Guarantors and their respective subsidiaries make no representation) have
complied with and will comply with the offering restrictions requirements of
Regulation S in connection with the offering of the Initial Securities outside
the United States and in connection therewith, the Offering Memorandum will
contain the disclosure required by Rule 902(h).
(oo) The Initial Securities sold in reliance on
Regulation S will be represented upon issuance by a temporary global security
that may not be exchanged for definitive securities until the expiration of the
40-day restricted period referred to in Rule 903(c)(3) of the Act in the case of
the Series A Notes and until the expiration of the one year restricted period in
the case of the Warrants, and only upon certification of beneficial ownership of
such Series A Notes and Warrants by non-U.S. persons or U.S. persons who
purchased such Series A Notes and Warrants in transactions that were exempt from
the registration requirements of the Act.
(pp) No registration under the Act of the Initial
Securities is required for the sale of the Initial Securities to the Initial
Purchasers as contemplated hereby or for the Exempt Resales assuming the
accuracy of the Initial Purchasers' representations and warranties and
agreements set forth in Section 7 hereof.
(qq) Each certificate signed by any officer of the
Issuers or any Guarantor and delivered to the Initial Purchasers or counsel for
the Initial Purchasers shall be deemed to be a representation and warranty by
the Issuers or such Guarantor to the Initial Purchasers as to the matters
covered thereby.
(rr) The statistical and market-related data included
in the Offering Memorandum are based on or derived from sources which the
Issuers reasonably believe to be reliable and accurate or represent the Issuers'
good faith estimates that, in the case of market-related data, are made on the
basis of data derived from such sources.
The Issuers acknowledge that the Initial Purchasers and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Section 9 hereof, counsel to the Issuers and the Guarantors and counsel to the
Initial Purchasers will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
7. INITIAL PURCHASERS' REPRESENTATIONS AND WARRANTIES. Each
Initial Purchaser represents and warrants to, and agrees with, the Issuers and
the Guarantors (as to itself only):
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<PAGE> 19
(a) Such Initial Purchaser is a QIB, with such
knowledge and experience in financial and business matters as is necessary in
order to evaluate the merits and risks of an investment in the Initial
Securities.
(b) Such Initial Purchaser (A) is not acquiring the
Initial Securities with a view to any distribution thereof or with any present
intention of offering or selling any of the Initial Securities in a transaction
that would violate the Act or the securities laws of any state of the United
States or any other applicable jurisdiction and (B) will be reoffering and
reselling the Initial Securities only to (x) QIBs in reliance on the exemption
from the registration requirements of the Act provided by Rule 144A, and/or (y)
in offshore transactions in reliance upon Regulation S under the Act.
(c) Such Initial Purchaser agrees that no form of
general solicitation or general advertising (within the meaning of Regulation D
under the Act) has been or will be used by such Initial Purchaser or any of its
representatives in connection with the offer and sale of the Initial Securities
pursuant hereto, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
(d) Such Initial Purchaser agrees that, in connection
with Exempt Resales, such Initial Purchaser will solicit offers to buy the
Initial Securities only from, and will offer to sell the Initial Securities only
to, Eligible Purchasers. Each Initial Purchaser further agrees that it will
offer to sell the Initial Securities only to, and will solicit offers to buy the
Initial Securities only from (A) Eligible Purchasers that the Initial Purchasers
reasonably believes are QIBs and (B) Regulation S Purchasers, in each case, that
agree that (x) the Initial Securities purchased by them may be resold, pledged
or otherwise transferred within the time period referred to under Rule 144(k)
(taking into account the provisions of Rule 144(d) under the Act, if applicable)
under the Act, as in effect on the date of the transfer of such Initial
Securities, only (I) to the Company or any of its subsidiaries, (II) to a person
whom the seller reasonably believes is a QIB purchasing for its own account or
for the account of a QIB in a transaction meeting the requirements of Rule 144A
under the Act, (III) in an offshore transaction (as defined in Rule 902 under
the Act) meeting the requirements of Rule 904 of the Act, (IV) in a transaction
meeting the requirements of Rule 144 under the Act, (V) to an institutional
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Act (an "ACCREDITED INSTITUTION"), that, prior to such transfer, furnishes the
Trustee a signed letter containing certain representations and agreements
relating to the registration of transfer of such Initial Securities (the form of
which is substantially the same as EXHIBIT D to the Indenture) and, if such
transfer is in respect of an aggregate principal amount of Initial Securities
less than $250,000, an opinion of counsel reasonably acceptable to the Issuers
that such transfer is in compliance with the Act, (VI) in accordance with
another exemption from the registration requirements of the Act (and based upon
an opinion of counsel reasonably acceptable to the Issuers) or (VII) pursuant to
an effective registration statement and, in each case, in accordance with the
applicable securities laws of any state of the United States or any other
applicable jurisdiction and (y) they will deliver to each person to whom such
Initial Securities or an interest therein is transferred a notice substantially
to the effect of the foregoing.
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<PAGE> 20
(e) Such Initial Purchaser and its affiliates or any
person acting on its or their behalf have not engaged or will not engage in any
directed selling efforts within the meaning of Regulation S with respect to the
Initial Securities.
(f) The Initial Securities offered and sold by such
Initial Purchaser pursuant hereto in reliance on Regulation S have been and will
be offered and sold only in offshore transactions.
(g) The sale of the Initial Securities offered and
sold by such Initial Purchaser pursuant hereto in reliance on Regulation S is
not part of a plan or scheme to evade the registration provisions of the Act.
(h) Such Initial Purchaser agrees that it has not
offered or sold and will not offer or sell the Initial Securities in the United
States or to, or for the benefit or account of, a U.S. person (other than a
distributor), in each case, as defined in Rule 902 under the Act (i) as part of
its distribution at any time and (ii) otherwise until 40 days after the later of
the commencement of the offering of the Initial Securities pursuant hereto and
the Closing Date, other than in accordance with Regulation S of the Act or
another exemption from the registration requirements of the Act. Such Initial
Purchaser agree that, during such 40-day restricted period in the case of Series
A Notes and during such one year restricted period in the case of Warrants, it
will not cause any advertisement with respect to the Initial Securities
(including any "tombstone" advertisement) to be published in any newspaper or
periodical or posted in any public place and will not issue any circular
relating to the Initial Securities, except such advertisements as permitted by
and include the statements required by Regulation S.
(i) Such Initial Purchaser agrees that, at or prior
to confirmation of a sale of Initial Securities by it to any distributor, dealer
or person receiving a selling concession, fee or other remuneration during the
40-day restricted period referred to in Rule 903(c)(3) under the Act in the case
of Series A Notes and during such one year restricted period in the case of
Warrants, it will send to such distributor, dealer or person receiving a selling
concession, fee or other remuneration a confirmation or notice to substantially
the following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933, as amended (the "SECURITIES
ACT"), and may not be offered and sold within the United
States or to, or for the account or benefit of, U.S. persons
(i) as part of your distribution at any time or (ii) otherwise
until 40 days after the later of the commencement of the
Offering and the Closing Date in the case of Series A Notes or
until one year after the later of the commencement of the
Offering and the Closing Date in the case of Warrants, except
in either case in accordance with Regulation S under the
Securities Act (or Rule 144A or to Accredited Institutions in
transactions that are exempt from the registration
requirements of the Securities Act), and in connection with
any subsequent sale by you of the Securities covered hereby in
reliance on Regulation S during the period referred to above
to any distributor, dealer or person receiving a selling
concession, fee or
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<PAGE> 21
other remuneration, you must deliver a notice to substantially
the foregoing effect. Terms used above have the meanings
assigned to them in Regulation S."
(j) Such Initial Purchaser agrees that the Initial
Securities offered and sold in reliance on Regulation S will be represented upon
issuance by a global security that may not be exchanged for definitive
securities until the expiration of the 40-day restricted period referred to in
Rule 903(c)(3) of the Act in the case of the Series A Notes and until the
expiration of the one year restricted period in the case of Warrants and only
upon certification of beneficial ownership of such Initial Securities by
non-U.S. persons or U.S. persons who purchased such Initial Securities in
transactions that were exempt from the registration requirements of the Act.
Such Initial Purchaser acknowledges that the Issuers
and the Guarantors and, for purposes of the opinions to be delivered to each
Initial Purchaser pursuant to Section 9 hereof, counsel to the Issuers and the
Guarantors and counsel to the Initial Purchasers will rely upon the accuracy and
truth of the foregoing representations and such Initial Purchaser hereby
consents to such reliance.
8. INDEMNIFICATION.
(a) The Issuers and the Guarantors agree, jointly and
severally, to indemnify and hold harmless the Initial Purchasers, their
directors, their officers and each person, if any, who controls such Initial
Purchaser within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
and judgments (including, without limitation, any legal or other expenses
incurred by the Initial Purchasers, their directors, their officers or control
persons in connection with investigating or defending any matter, including any
action, that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Offering Memorandum (or any amendment or
supplement thereto), the Preliminary Offering Memorandum or any Rule 144A
Information provided by the Issuers, the Guarantors or their respective
subsidiaries to any holder or prospective purchaser of Initial Securities
pursuant to Section 5(h) or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which
made, except insofar as such losses, claims, damages, liabilities or judgments
are caused by any such untrue statement or omission or alleged untrue statement
or omission based upon information relating to the Initial Purchasers furnished
in writing to the Issuers by such Initial Purchaser; PROVIDED HOWEVER, that the
foregoing indemnity agreement with respect to any Preliminary Offering
Memorandum shall not inure to the benefit of any Initial Purchaser who failed to
deliver a Final Offering Memorandum, as then amended or supplemented, (so long
as the Final Offering Memorandum and any amendment or supplement thereto was
provided by the Issuers to the several Initial Purchasers in the requisite
quantity and on a timely basis to permit proper delivery on or prior to the
Closing Date) to the person asserting any losses, claims, damages, liabilities
or judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Offering Memorandum, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, if
such material misstatement or omission or alleged
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<PAGE> 22
material misstatement or omission was cured in the Final Offering Memorandum, as
so amended or supplemented.
(b) The Initial Purchasers agree, severally and not
jointly, to indemnify and hold harmless the Issuers and the Guarantors and their
respective directors and officers and each person, if any, who controls (within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act) the
Issuers or the Guarantors, to the same extent as the foregoing indemnity from
the Issuers and the Guarantors to the Initial Purchasers but only with reference
to information relating to such Initial Purchaser furnished in writing to the
Issuers by such Initial Purchaser expressly for use in the Preliminary Offering
Memorandum or the Offering Memorandum and not with respect to the information
provided by any other Initial Purchaser.
(c) In case any action shall be commenced involving
any person in respect of which indemnity may be sought pursuant to Section 8(a)
or 8(b) (the "INDEMNIFIED PARTY"), the indemnified party shall promptly notify
the person against whom such indemnity may be sought (the "INDEMNIFYING PARTY")
in writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and 8(b), the Initial Purchasers shall not
be required to assume the defense of such action pursuant to this Section 8(c),
but may employ separate counsel and participate in the defense thereof, but the
fees and expenses of such counsel, except as provided below, shall be at the
expense of the Initial Purchasers). Any indemnified party shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all indemnified parties
and all such fees and expenses shall be reimbursed as they are incurred. Such
firm shall be designated in writing by Donaldson, Lufkin & Jenrette Securities
Corporation, in the case of the parties indemnified pursuant to Section 8(a),
and by the Issuers, in the case of parties indemnified pursuant to Section 8(b).
The indemnifying party shall indemnify and hold harmless the indemnified party
from and against any and all losses, claims, damages, liabilities and judgments
by reason of any settlement of any action (i) effected with the indemnifying
party's written consent or (ii) effected without the indemnifying party's
written consent if the settlement is entered into more than twenty business days
after the indemnifying party shall have received a request from the indemnified
party for reimbursement for the fees and expenses of counsel (in any case where
such fees and expenses are at the
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expense of the indemnifying party) and, prior to the date of such settlement,
the indemnifying party shall have failed to comply with such reimbursement
request. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement or compromise of, or consent to the
entry of judgment with respect to, any pending or threatened action in respect
of which the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in
this Section 8 is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages, liabilities or judgments referred to therein,
then each indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Issuers and the Guarantors, on the one hand, and the Initial Purchasers, on the
other hand, from the offering of the Initial Securities or (ii) if the
allocation provided by clause 8(d)(i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause 8(d)(i) above but also the relative fault of the Issuers
and the Guarantors, on the one hand, and the Initial Purchasers, on the other
hand, in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Issuers and the
Guarantors, on the one hand and the Initial Purchasers, on the other hand, shall
be deemed to be in the same proportion as the total net proceeds from the
offering of the Initial Securities (after underwriting discounts and
commissions, but before deducting expenses) received by the Issuers, and the
total discounts and commissions received by the Initial Purchasers bear to the
total price to investors of the Initial Securities, in each case as set forth in
the table on the cover page of the Offering Memorandum. The relative fault of
the Issuers and the Guarantors, on the one hand, and the Initial Purchasers, on
the other hand, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Issuers or the Guarantors, on the one hand, or the Initial Purchasers, on the
other hand, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Issuers, the Guarantors, and the Initial Purchasers agree
that it would not be just and equitable if contribution pursuant to this Section
8(d) were determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any reasonable legal or other
expenses incurred by such indemnified party in connection with investigating or
defending any matter, including any action, that could have given rise to such
losses, claims, damages, liabilities or judgments. Notwithstanding the
provisions of this Section 8, the Initial Purchasers shall not be required to
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<PAGE> 24
contribute any amount in excess of the amount by which the total discounts and
commissions received by such Initial Purchasers exceeds the amount of any
damages which the Initial Purchasers have otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Initial Purchasers'
obligations to contribute pursuant to this Section 8(d) are several in
proportion to the respective amount of Initial Securities purchased by each of
the Initial Purchasers hereunder and not joint.
(e) The remedies provided for in this Section 8 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
9. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The
obligations of the Initial Purchasers to purchase the Units under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the
Issuers and the Guarantors contained in this Agreement shall be true and correct
in all material respects on the Closing Date with the same force and effect as
if made on and as of the Closing Date;
(b) On or after the date hereof, (i) there shall not
have occurred any downgrading, suspension or withdrawal of, nor shall any notice
have been given of any potential or intended downgrading, suspension or
withdrawal of, or of any review (or of any potential or intended review) for a
possible change that does not indicate the direction of the possible change in,
any rating of either Issuer or any Guarantor or any securities of the Issuers or
any Guarantor (including, without limitation, the placing of any of the
foregoing ratings on credit watch with negative or developing implications or
under review with an uncertain direction) by any "nationally recognized
statistical rating organization" as such term is defined for purposes of Rule
436(g)(2) under the Act, (ii) there shall not have occurred any adverse change,
nor shall any notice have been given of any potential or intended adverse
change, in the outlook for any rating of either Issuer or any Guarantor or any
securities of the Issuers or any Guarantor by any such rating organization and
(iii) no such rating organization shall have given notice that it has assigned
(or is considering assigning) a lower rating to the Units than that on which the
Units were marketed;
(c) Since the respective dates as of which
information is given in the Offering Memorandum other than as set forth in the
Offering Memorandum (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), (i) there shall not have occurred any
change or any development involving a prospective change in the condition,
financial or otherwise, or the earnings, business, management or operations of
the Issuers, the Guarantors, and their respective subsidiaries, taken as a
whole, (ii) there shall not have been any change or any development involving a
prospective change in the capital stock or in the long-term debt of either
Issuer, the Guarantors or any of their respective subsidiaries and (iii) none of
the Issuers, the Guarantors or any of their respective subsidiaries shall have
incurred any liability or obligation, direct or contingent,
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<PAGE> 25
the effect of which, in any such case described in clause 9(c)(i), 9(c)(ii) or
9(c)(iii), in your judgment, is material and adverse and, in your judgment,
makes it impracticable to market the Initial Securities on the terms and in the
manner contemplated in the Offering Memorandum;
(d) You shall have received on the Closing Date a
certificate dated the Closing Date, signed by the President and the Chief
Financial Officer of the Issuers and each of the Guarantors, confirming the
matters set forth in Sections 6(ff), 9(a) and 9(b) and stating that each of the
Issuers and the Guarantors has complied in all material respects with all the
agreements and satisfied all of the conditions herein contained and required to
be complied with or satisfied on or prior to the Closing Date;
(e) You shall have received on the Closing Date an
opinion (satisfactory to you and counsel for the Initial Purchasers), dated the
Closing Date, of Greenberg Traurig, P.A., counsel for the Issuers and the
Guarantors, to the effect that;
(i) each of the Issuers and the Guarantors
has been duly incorporated, is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation and
has the corporate power and authority to carry on its business as
described in the Offering Memorandum and to own, lease and operate its
properties;
(ii) each of the Issuers and the Guarantors
is duly qualified and is in good standing as a foreign corporation
authorized to do business in each jurisdiction in which the nature of
its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not
have a Material Adverse Effect;
(iii) all the outstanding shares of capital
stock of RailAmerica have been duly authorized and validly issued and
are fully paid and nonassessable and were not issued in violation of
any preemptive or similar rights expressly created by law or the
certificate of incorporation or bylaws (or similar organizational
documents) of RailAmerica; to such counsel's knowledge, all outstanding
shares of capital stock of the Company are owned, indirectly, by
RailAmerica. RailAmerica has the authorized and to such counsel's
knowledge issued and outstanding capitalization set forth in the
Offering Memorandum under the heading "Capitalization" and "Description
of Capital Stock";
(iv) the Warrants are in the form
contemplated by the Warrant Agreement and, when issued, authenticated
and delivered by RailAmerica against payment by the Initial Purchasers
in accordance with the terms of this Agreement and the Warrant
Agreement, will constitute valid and legally binding obligations of
RailAmerica, entitled to the benefits of the Warrant Agreement and
enforceable against RailAmerica in accordance with their terms, except
that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii)
rights of acceleration and the availability of equitable remedies may
be limited by equitable
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<PAGE> 26
principles of general applicability. When issued in accordance with the
terms and conditions contained in the Warrant Agreement, upon exercise
of the Warrants, the Warrant Shares will be duly authorized, validly
issued, fully paid and nonassessable and will not be subject to any
preemptive or similar rights expressly created by law or the
certificate of incorporation or by-laws of RailAmerica;
(v) all of the outstanding shares of capital
stock of each of the Company's subsidiaries have been duly authorized
and validly issued and are fully paid and nonassessable, and to such
counsel's knowledge are owned directly or indirectly by the Company;
(vi) the Series A Notes have been duly
authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the
Initial Purchasers in accordance with the terms of this Agreement, will
be entitled to the benefits of the Indenture and will be valid and
binding obligations of the Company, enforceable in accordance with
their terms except as (x) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (y) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability;
(vii) the Guarantees have been duly
authorized and, when the Series A Notes are executed and authenticated
in accordance with the provisions of the Indenture and delivered to and
paid for by the Initial Purchasers in accordance with the terms of this
Agreement, the Guarantees endorsed thereon will be entitled to the
benefits of the Indenture and will be valid and binding obligations of
the Guarantors, enforceable in accordance with their terms except as
(x) the enforceability thereof may be limited by bankruptcy, insolvency
or similar laws affecting creditors' rights generally and (y) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability;
(viii) the Indenture has been duly
authorized, executed and delivered by the Company and each Guarantor
and is a valid and binding agreement of the Company and each Guarantor,
enforceable against the Company and each Guarantor in accordance with
its terms except as (x) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (y) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability;
(ix) the Warrant Agreement has been duly
authorized, executed and delivered by RailAmerica and is a valid and
binding agreement of RailAmerica, enforceable against RailAmerica in
accordance with its terms except as (x) the enforceability thereof may
be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (y) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability;
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<PAGE> 27
(x) this Agreement has been duly authorized,
executed and delivered by the Issuers and the Guarantors;
(xi) the Notes Registration Rights Agreement
has been duly authorized, executed and delivered by the Company and the
Guarantors and is a valid and binding agreement of the Company and each
Guarantor, enforceable against the Company and each Guarantor in
accordance with its terms, except as (x) the enforceability thereof may
be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally, (y) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability and (z) any rights to
indemnification or contribution thereunder may be limited by federal
and state securities laws and public policy considerations;
(xii) the Warrant Registration Rights
Agreement has been duly authorized, executed and delivered by
RailAmerica and is a valid and binding agreement of RailAmerica,
enforceable against RailAmerica in accordance with its terms, except as
(x) the enforceability thereof may be limited by bankruptcy, insolvency
or similar laws affecting creditors' rights generally, (y) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability and (z) any rights to
indemnification or contribution thereunder may be limited by federal
and state securities laws and public policy considerations;
(xiii) the Series B Notes have been duly
authorized;
(xiv) the statements under the captions
"Description of the Units," "Description of the Notes," "Description of
the Warrants," "Description of Capital Stock," "Plan of Distribution"
and "Business - Regulation" in the Offering Memorandum, insofar as such
statements constitute a summary of the legal matters, documents or
proceedings referred to therein, fairly present in all material
respects such legal matters, documents and proceedings;
(xv) such counsel is of the opinion ascribed
to it in the Offering Memorandum under the caption "Certain United
States Federal Income Tax Considerations";
(xvi) to the best of such counsel's
knowledge, neither the Issuers, the Guarantors or any of their
respective subsidiaries is in violation of its respective charter or
by-laws and neither the Issuers, the Guarantors or any of their
respective subsidiaries is in default in the performance of any
obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or
instrument that is material to the Issuers, the Guarantors and their
respective subsidiaries, taken as a whole, to which either Issuer, the
Guarantors or any of their respective subsidiaries is a party or by
which either Issuer, the Guarantors or any of their
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<PAGE> 28
respective subsidiaries or their respective property is bound, except
for those which would not result, singly or in the aggregate, in a
Material Adverse Effect;
(xvii) the execution, delivery and
performance of this Agreement and the other Operative Documents by the
Issuers and each of the Guarantors, the compliance by the Issuers and
each of the Guarantors with all provisions hereof and thereof and the
consummation of the transactions contemplated hereby and thereby will
not (i) require any consent, approval, authorization or other order of,
or qualification with, any court or governmental body or agency (except
such as may be required under the securities or Blue Sky laws of the
various states), (ii) conflict with or constitute a breach of any of
the terms or provisions of, or a default under, the charter or by-laws
of the Issuers, the Guarantors or any of their respective subsidiaries
or any indenture, loan agreement, mortgage, lease or other agreement or
instrument known to such counsel that is material to the Issuers, the
Guarantors or any of their respective subsidiaries, taken as a whole,
to which the Issuers, the Guarantors or any of their respective
subsidiaries is a party or by which the Issuers, the Guarantors or any
of their respective subsidiaries or their respective property is bound
(other than such breaches or defaults as shall have been waived), (iii)
violate or conflict with any applicable law or any rule, regulation,
judgment, order or decree known to such counsel of any court or any
governmental body or agency having jurisdiction over either Issuer, the
Guarantors or any of their respective subsidiaries or their respective
property, (iv) result in the imposition or creation of (or the
obligation to create or impose) a Lien under, any agreement or
instrument known to such counsel to which the Issuers, the Guarantors
or any of their respective subsidiaries is a party or by which the
Issuers, the Guarantors or any of their respective subsidiaries or
their respective property is bound, or (v) result in the termination,
suspension or revocation of any Authorization (as defined below) known
to such counsel of the Issuers, the Guarantors or any of their
respective subsidiaries or result in any other impairment of the rights
of the holder of any such Authorization, except in each case for those
which might not result, singly or in the aggregate, in a Material
Adverse Effect;
(xviii) except as disclosed in the Offering
Memorandum, such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Issuers, the Guarantors
or any of their respective subsidiaries is or could be a party or to
which any of their respective property is or could be subject, which
might result, singly or in the aggregate, in a Material Adverse Effect;
(xix) none of the Issuers, the Guarantors
and their respective subsidiaries is and, after giving effect to the
offering and sale of the Initial Securities and the application of the
net proceeds thereof as described in the Offering Memorandum, will be,
an "investment company" as such term is defined in the Investment
Company Act of 1940, as amended;
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<PAGE> 29
(xx) the Indenture complies as to form in
all material respects with the requirements of the TIA and the rules
and regulations of the Commission applicable to an indenture that is
qualified thereunder. Assuming the accuracy of the representations and
warranties and agreements of the Initial Purchasers in Section 7 of the
Purchase Agreement and of the Issuers and their Subsidiaries in Section
6 thereof, it is not necessary in connection with the offer, sale and
delivery of the Initial Securities to the Initial Purchasers in the
manner contemplated by this Agreement or in connection with the Exempt
Resales to qualify the Indenture under the TIA;
(xxi) no registration under the Act of the
Initial Securities is required for the sale of the Initial Securities
to the Initial Purchasers as contemplated by this Agreement or for the
Exempt Resales assuming (i) that each Initial Purchaser is a QIB or a
Regulation S Purchaser, (ii) the accuracy of, and compliance with, the
Initial Purchasers' representations and agreements contained in Section
7 of this Agreement, and (iii) the accuracy of the representations of
the Issuers, their subsidiaries and the Guarantors set forth in
Sections 6(ii), (kk), (ll) and (mm) of this Agreement; and
(xxii) such counsel has no reason to believe
that, as of the date of the Offering Memorandum or as of the Closing
Date, the Offering Memorandum, as amended or supplemented, if
applicable (except for the financial statements and other financial
data included therein, as to which such counsel need not express any
belief) contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
The opinion of Greenberg Traurig, P.A., described in Section
9(e) above shall be rendered to you at the request of the Issuers and the
Guarantors and shall so state therein. In giving such opinion with respect to
the matters covered by Section 9(e)(xxii), Greenberg Traurig, P.A. may state
that their opinion and belief are based upon their participation in the
preparation of the Offering Memorandum and any amendments or supplements thereto
and review and discussion of the contents thereof, but are without independent
check or verification except as specified;
(f) The Initial Purchasers shall have received on the
Closing Date an opinion, dated the Closing Date, of Cahill Gordon & Reindel,
counsel for the Initial Purchasers, in form and substance reasonably
satisfactory to the Initial Purchasers;
(g) The Initial Purchasers shall have received, at
the time this Agreement is executed and at the Closing Date, letters dated the
date hereof or the Closing Date, as the case may be, in form and substance
satisfactory to the Initial Purchasers from PricewaterhouseCoopers, L.L.P.,
Arthur Andersen Langton Clarke and Arthur Andersen LLP, independent public
accountants, containing the information and statements of the type ordinarily
included in accountants' "comfort letters" to the Initial Purchasers with
respect to the financial statements and certain financial information contained
in the Offering Memorandum;
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<PAGE> 30
(h) The Units shall have been approved by the NASD
for trading and duly listed in PORTAL;
(i) The Initial Purchasers shall have received a
counterpart, conformed as executed, of the Indenture which shall have been
entered into by the Company, the Guarantors and the Trustee;
(j) On the Closing Date, the Initial Purchasers shall
have received the Warrant Registration Rights Agreement executed by RailAmerica
and such agreement shall be in full force and effect at all times from and after
the Closing Date;
(k) The Company and the Guarantors shall have
executed the Notes Registration Rights Agreement and the Initial Purchasers
shall have received an original copy thereof, duly executed by the Company and
the Guarantors; and
(l) Neither the Company nor the Guarantors shall have
failed at or prior to the Closing Date to perform or comply in all material
respects with any of the agreements herein contained and required to be
performed or complied with by the Company or the Guarantors, as the case may be,
at or prior to the Closing Date.
10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to
the Closing Date by the Initial Purchasers by written notice to the Issuers if
any of the following has occurred: (i) any outbreak or escalation of hostilities
or other national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or elsewhere that,
in the Initial Purchasers' judgment, is material and adverse and, in the Initial
Purchasers' judgment, makes it impracticable to market the Initial Securities on
the terms and in the manner contemplated in the Offering Memorandum, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of either Issuer or any Guarantor on any
exchange or in the over-the-counter market, (iv) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority which in your opinion
materially and adversely affects, or will materially and adversely affect, the
business, prospects, financial condition or results of operations of either
Issuer and its subsidiaries, taken as a whole, (v) the declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your opinion has a material adverse effect
on the financial markets in the United States.
11. MISCELLANEOUS. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Issuers or any
Guarantor, to RailAmerica Transportation
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<PAGE> 31
Corp. and RailAmerica, Inc., 5300 Broken Sound Boulevard, N.W., Boca Raton,
Florida 33487, Attention: General Counsel, and (ii) if to the Initial
Purchasers, Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park
Avenue, New York, New York 10172, Attention: Syndicate Department, or in any
case to such other address as the person to be notified may have requested in
writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Issuers, the Guarantors
and the Initial Purchasers set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Initial Securities, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of the Initial
Purchasers, the officers or directors of the Initial Purchasers, any person
controlling the Initial Purchasers, the Issuers, any Guarantor, the officers or
directors of the Issuers or any Guarantor, or any person controlling the Issuers
or any Guarantor, (ii) acceptance of the Initial Securities and payment for them
hereunder and (iii) termination of this Agreement.
If for any reason the Initial Securities are not delivered by
or on behalf of the Issuers as provided herein (other than as a result of any
termination of this Agreement pursuant to Section 10), the Issuers and each
Guarantor, jointly and severally, agree to reimburse the Initial Purchasers for
all out-of-pocket expenses (including the fees and disbursements of counsel)
incurred by them. Notwithstanding any termination of this Agreement, the Issuers
shall be liable for all expenses which they have agreed to pay pursuant to
Section 5(i) hereof. The Issuers and each Guarantor also agree, jointly and
severally, to reimburse the Initial Purchasers and their officers, directors and
each person, if any, who controls such Initial Purchasers within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act for any and all fees and
expenses (including without limitation the fees and expenses of counsel)
incurred by them in connection with enforcing their rights under this Agreement
(including without limitation its rights under Section 8).
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Issuers, the
Guarantors, the Initial Purchasers, the Initial Purchasers' directors and
officers, any controlling persons referred to herein, the directors of the
Company and the Guarantors and their respective successors and assigns, all as
and to the extent provided in this Agreement, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Initial Securities from the
Initial Purchasers merely because of such purchase.
This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
-30-
<PAGE> 32
Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Guarantors and the Initial Purchasers.
Very truly yours,
RAILAMERICA TRANSPORTATION CORP.
By: /s/ Donald Redfearn
------------------------------------------
Name: Donald Redfearn
Title: Executive Vice President
RAILAMERICA, INC.,
as Guarantor
By: /s/ Donald Redfearn
------------------------------------------
Name: Donald Redfearn
Title: Chief Administrative Officer, Executive
Vice President and Secretary
S-1
<PAGE> 33
AUSTIN & NORTHWESTERN RAILROAD COMPANY, INC.
BOSTON CENTRAL FREIGHT RAILROAD, INC.
CASCADE AND COLUMBIA RIVER RAILROAD
COMPANY, INC.
CENTRAL OREGON & PACIFIC RAILROAD, INC.
CENTRAL RAILROAD COMPANY OF INDIANA
CENTRAL RAILROAD COMPANY OF INDIANAPOLIS
CONNECTICUT SOUTHERN RAILROAD, INC.
DAKOTA RAIL, INC.
DALLAS, GARLAND & NORTHEASTERN RAILROAD, INC.
DALLAS, GARLAND & NORTHEASTERN RAILROAD, INC.
DELAWARE VALLEY RAILWAY COMPANY, INC.
FLORIDA RAIL LINES, INC.
GEORGIA SOUTHWESTERN RAILROAD, INC.
HURON AND EASTERN RAILWAY COMPANY, INC.
INDIANA & OHIO CENTRAL RAILROAD, INC.
INDIANA & OHIO RAIL CORP.
INDIANA & OHIO RAILWAY COMPANY
INDIANA SOUTHERN RAILROAD, INC.
MARKSMAN CORP.
MID-MICHIGAN RAILROAD, INC.
MINNESOTA NORTHERN RAILROAD, INC.
MISSOURI & NORTHERN ARKANSAS RAILROAD
COMPANY, INC.
NEW ENGLAND CENTRAL RAILROAD, INC.
NEW ORLEANS LOWER COAST RAILROAD COMPANY, INC.
NORTH CAROLINA AND VIRGINIA RAILROAD
COMPANY, INC.
OTTER TAIL VALLEY RAILROAD COMPANY, INC.
PALM BEACH RAIL HOLDING, INC.
PITTSBURG INDUSTRIAL RAILROAD, INC.
PLAINVIEW TERMINAL COMPANY
PRAIRIE HOLDINGS CORPORATION
RAIL OPERATING SUPPORT GROUP, INC.
RAILAMERICA AUSTRALIA, INC.
S-2
<PAGE> 34
RAILAMERICA EQUIPMENT CORPORATION
RAILAMERICA INTERMODAL SERVICES, INC.
RAILINK ACQUISITION, INC.
RAILTEX ACQUISITION CORP.
RAILTEX DISTRIBUTION SERVICES, INC.
RAILTEX, INC.
RAILTEX INTERNATIONAL HOLDINGS, INC.
RAILTEX LOGISITICS, INC.
RAILTEX SERVICES CO., INC.
SAGINAW VALLEY RAILWAY COMPANY, INC.
SAN DIEGO & IMPERIAL VALLEY RAILROAD
COMPANY, INC.
SOUTH CAROLINA CENTRAL RAILROAD COMPANY, INC.
SOUTH CENTRAL TENNESSEE RAILROAD CORP., INC.
ST. CROIX VALLEY RAILROAD COMPANY
THE TOLEDO, PEORIA & WESTERN RAILROAD
CORPORATION
TOLEDO, PEORIA & WESTERN RAILWAY CORPORATION
VENTURA COUNTY RAILROAD CO., INC.
WEST TEXAS AND LUBBOCK RAILROAD COMPANY, INC.,
as Guarantors
By: /s/ Donald Redfearn
------------------------------------------
Name: Donald Redfearn
Title: Executive Vice President,
On behalf of each of the
above-named entities
S-3
<PAGE> 35
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Steven D. Smith
------------------------------------
Name: Steven D. Smith
Title: Senior Vice President
BARCLAYS BANK PLC
By: /s/ Joseph S. Muratore
------------------------------------
Name: Joseph S. Muratore
Title: Director
SCOTIA CAPITAL (USA) INC.
By: /s/ Amil V. Sobinoffino
------------------------------------
Name: Amil V. Sobinoffino
Title: Managing Director
S-4
<PAGE> 36
SCHEDULE A
Number of
Initial Purchasers Units
------------------ ----------
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION........................................ 130,000
BARCLAYS BANK PLC.................................................... 0
SCOTIA CAPITAL (USA) INC. ........................................... 0
-------
Total................................................... 130,000
=======
<PAGE> 37
SCHEDULE B
Subsidiaries
Austin & Northwestern Railroad Company, Inc.
Boston Central Freight Railroads, Inc.
Cascade and Columbia River Railroad Company, Inc.
Central Oregon & Pacific Railroad, Inc.
Central Railroad Company of Indiana
Central Railroad Company of Indianapolis
Connecticut Southern Railroad, Inc.
Dakota Rail, Inc.
Dallas, Garland & Northeastern Railroad, Inc.
Dallas, Garland & Northeastern Railroad, Inc.
Delaware Valley Railway Company, Inc.
Florida Rail Lines, Inc.
Georgia Southwestern Railroad, Inc.
Huron and Eastern Railway Company, Inc.
Indiana & Ohio Central Railroad, Inc.
Indiana & Ohio Rail Corp.
Indiana & Ohio Railway Company
Indiana Southern Railroad, Inc.
Marksman Corp.
Mid-Michigan Railroad, Inc.
Minnesota Northern Railroad, Inc.
Missouri & Northern Arkansas Railroad Company, Inc.
New England Central Railroad, Inc.
New Orleans Lower Coast Railroad Company, Inc.
North Carolina and Virginia Railroad Company, Inc.
Otter Tail Valley Railroad Company, Inc.
Palm Beach Rail Holding, Inc.
Pittsburg Industrial Railroad, Inc.
Plainview Terminal Company
Prairie Holdings Corporation
Rail Operating Support Group, Inc.
RailAmerica Australia, Inc.
RailAmerica Equipment Corporation
RailAmerica Intermodal Services, Inc.
RaiLink Acquisition, Inc.
RailTex Acquisition Corp.
RailTex Distribution Services, Inc.
RailTex, Inc.
<PAGE> 38
RailTex International Holdings, Inc.
RailTex Logisitics, Inc.
RailTex Services Co., Inc.
Saginaw Valley Railway Company, Inc.
San Diego & Imperial Valley Railroad Company, Inc.
South Carolina Central Railroad Company, Inc.
South Central Tennessee Railroad Corp., Inc.
St. Croix Valley Railroad Company
The Toledo, Peoria & Western Railroad Corporation
Toledo, Peoria & Western Railway Corporation
Ventura County Railroad Co., Inc.
West Texas and Lubbock Railroad Company, Inc.
<PAGE> 39
EXHIBIT A
Form of Notes Registration Rights Agreement
<PAGE> 40
EXHIBIT B
Form of Warrant Registration Rights Agreement
