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EXHIBIT 99.1
STOCK EXCHANGE AGREEMENT
This Stock Exchange Agreement dated October 8, 1998 is by and between
RailWorks Corporation ("RW") and BT Alex. Xxxxx Incorporated ("BT AB").
RECITALS
A. BT AB owns in excess of 1,370,000 shares of the Common Stock,
$.01 par value of RW (the "Common Stock").
B. BT AB desires to exchange 1,370,000 shares of Common Stock
(the "Common Shares") for 13,700 shares of Series A
Convertible Preferred Stock, $.01 par value (the "Preferred
Shares").
C. RW desires to issue the Preferred Shares in exchange for the
Common Shares.
NOW THEREFORE, in consideration of the mutual promises contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
1. Effective upon execution of this Agreement, (a) RW will issue to BT
AB the Preferred Shares in consideration of the transfer by BT AB to RW of the
Common Shares, duly endorsed for transfer or accompanied by a stock power duly
executed in blank, and (b) BT AB will acquire the Preferred Shares in exchange
for the Common Shares.
2. BT AB represents and warrants to, and agrees with, RW that the
following representations and warranties are, as of the date of this Agreement,
true, correct and complete:
(A) The execution, delivery and performance by BT AB of this
Agreement and the effectuation of the transactions contemplated hereby are
within its corporate power and have been duly authorized by all proceedings
required to be taken under its certificate of incorporation and the laws of the
State of Delaware.
(B) BT AB is the beneficial and record owner of the Common Shares
free and clear of all liens, pledges or other encumbrances.
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(C) BT AB acknowledges that the Preferred Shares issued to it and
the shares of Common Stock into which the Preferred Shares are convertible will
not be registered under the Securities Act of 1933, as amended (the "Securities
Act"), and may not be sold, transferred or otherwise distributed in the absence
of such registration or an applicable exemption therefrom. BT AB further
acknowledges that RW has not granted it and does not hereby grant it any right
to have the Preferred Shares or the shares of Common Stock into which the
Preferred Shares are convertible registered for sale in accordance with the
Securities Act.
3. RW represents and warrants to, and agrees with, BT AB that the
following representations and warranties are, as of the date of this Agreement,
true, correct and complete:
(A) The execution, delivery and performance by RW of this Agreement
and the effectuation of the transactions contemplated hereby are within its
corporate power and have been duly authorized by all proceedings required to be
taken under its certificate of incorporation and the laws of the State of
Delaware.
(B) The designations, rights and preferences of the Preferred Shares
are as set forth in the Certificate of Designation attached hereto as Exhibit
A.
(C) Upon execution of this Agreement and completion of the
transactions contemplated herein in accordance with the terms of this
Agreement, the Preferred Shares will be duly issued, fully paid and
non-assessable.
4. (a) BT AB agrees to indemnify RW and its affiliated companies and
its and their officers, directors, employees, agents and representatives for
and against all claims, actions, costs, expenses, damages, reasonable attorneys
fees and other losses ("Claims") made, arising or paid with respect to (i)
issuance of the Preferred Shares or (ii) the exchange of the Preferred Shares
for shares of Common Stock to the extent said Claims are not actually paid by
RW's liability and officers and directors insurance policies. Said
indemnification shall, without limiting the generality of the foregoing,
include Claims to the extent subject to any deductibles or retentions under
said insurance policies and any increase in premiums charged to RW as a result
of said Claims. RW makes no representation or warranty as to coverage, or the
scope thereof, of any insurance policies it now has or may in the future have.
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(b) RW agrees to, and to the extent it is reasonably able, to cause
its affiliated companies and its and their officers, directors, employees,
agents and representatives to first pursue recovery of any Claims under the
applicable insurance policies.
5. (a) All claims for indemnification under this Agreement shall be
asserted and resolved as follows in this Section 5.
(b) A party claiming indemnification under this Agreement (an
"Indemnified Party") shall promptly (i) notify BT AB of any Claim that could
give rise to a right of indemnification under this Agreement and (ii) transmit
to BT AB a written notice ("Claim Notice") describing in reasonable detail the
nature of the Claim, a copy of all papers served with respect to that claim (if
any), an estimate of the amount of damages attributable to the Claim to the
extent feasible (which estimate shall not be conclusive of the final amount of
such claim) and the basis for the Indemnified Party's request for
indemnification under this Agreement. The failure to promptly deliver a Claim
Notice shall not relieve BT AB of its obligations to the Indemnified Party with
respect to the related Claim except to the extent that the resulting delay is
materially prejudicial to the defense of that claim.
(c) The Indemnified Party, and/or its insurance carrier(s) pursuant
to the terms of any relevant insurance policy, shall have full control of such
defense. Notwithstanding the foregoing, if BT AB has delivered a written notice
to the Indemnified Party to the effect that BT AB disputes its potential
liability to the Indemnified Party under Sections 4 and 5 and if such dispute
is resolved in favor of BT AB, BT AB shall not be required to bear the costs
and expenses of the Indemnified Party's defense pursuant to this Section 5 or
of BT AB's participation therein at the Indemnified Party's request. BT AB may
participate in, but not control, any defense or settlement controlled by the
Indemnified Party pursuant to this Section 5(c), and BT AB shall bear its own
costs and expenses with respect to such participation.
(d) Payments of all amounts owing by BT AB pursuant to any Claim
under Sections 4 and 5 shall be made (i) with respect to reasonable attorneys
fees and other expenses of defense, as incurred and (ii) with respect to other
Claims, within 30 days after the latest of (A) the settlement of that Claim,
(B) the expiration of the period for appeal of a final adjudication of that
Claim or (C) the expiration of the period for appeal of a final adjudication of
BT AB's liability to the Indemnified Party under this Agreement.
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6. Execution of this Agreement shall be deemed to be BT AB's written
consent, to the extent required by the Underwriting Agreement between RW, BT
AB, Xxxxxxxx & Co., Inc. and Xxxxx Xxxxxxx, Inc. dated July 29, 1998, for RW to
issue the Preferred Shares.
7. Each party represents and warrants to the other that such person
has not directly or indirectly employed or become obligated to pay any broker,
finder or similar agent in connection with the transactions contemplated hereby
and agrees to indemnify the other party against all claims arising for fees and
commissions of brokers or similar agents employed or promised payment by such
person
8. This Agreement constitutes the entire agreement and understanding
between the parties on the subject matter hereof and supersedes all prior
agreements and understandings, both written and oral, relating to the subject
matter of this Agreement.
9. Each party will pay all fees, costs and expenses incurred by it
connection with the transactions contemplated herein, including, without
limitation, the fees and expenses of attorneys, accountants and other persons,
and no portion thereof shall be or paid by the other party hereto, except if
otherwise specifically provided herein.
10. This Agreement, and the rights and obligations of the parties
hereto, shall be governed and construed and enforced accordance with the
substantive laws of the State of New York without regard to the conflicts of
laws provisions thereof.
(Signatures on following page)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
BT ALEX. XXXXX INCORPORATED
By: Xxxxxxxx Xxxx Xxxxxxx
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RAILWORKS CORPORATION
By: Xxxx X. Xxxxxx
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Xxxx Xxxxxx
Chairman and Chief
Executive Officer
With regard to Section 6 As Representative
of the Several Underwriters listed on
Schedule I of the Underwriting Agreement
dated July 29, 1998 (as each of such terms
are used therein)
BT ALEX. XXXXX INCORPORATED
By: Xxxxxxx X. Xxx
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