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As filed with the Securities and Exchange Commission on May 7, 1997
Registration No. 333-22479
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2 TO
FORM S-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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RAILAMERICA, INC.
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(Exact Name of Registrant as Specified in its Charter)
DELAWARE 4011 65-0328006
(State or Other Jurisdiction (Primary Standard (I.R.S. Employer
of Incorporation Industrial Classification Identification No.)
or Organization) Code Number)
301 YAMATO ROAD
SUITE 1190
BOCA RATON, FLORIDA 33431
(561) 994-6015
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
GARY O. MARINO
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
RAILAMERICA, INC.
301 YAMATO ROAD
SUITE 1190
BOCA RATON, FLORIDA 33431
(561) 994-6015
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code of Agent for Service)
Please send copies of all communications to:
GARY EPSTEIN, ESQ.
GREENBERG, TRAURIG, HOFFMAN, LIPOFF, ROSEN & QUENTEL, P.A.
1221 BRICKELL AVENUE
MIAMI, FLORIDA 33131
(305) 579-0500
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this registration statement becomes effective.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, please check the following box and list the
Securities Act registration number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
Pursuant to Rule 416, this Registration Statement also covers such
indeterminable number of additional shares of Common Stock and Class B
Warrants, if any, which may become issuable by virtue of the anti-dilution
provisions of the Unit Purchase Warrants. See "Plan of Distribution."
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PROSPECTUS
RAILAMERICA, INC.
39,852 UNITS CONSISTING OF
79,704 SHARES OF COMMON STOCK,
39,852 CLASS B WARRANTS &
51,807 SHARES OF COMMON STOCK
UPON THE EXERCISE OF THE CLASS B WARRANTS
This Prospectus relates to the issuance by RailAmerica, Inc., a
Delaware corporation (together with its consolidated subsidiaries, the
"Company"), of (a) 39,852 Units (the "Units"), consisting of 79,704 shares (the
"Representatives' Shares") of the Company's common stock, par value $.001 per
share (the "Common Stock"), and 39,852 Class B Warrants (the "Representatives'
Warrants"), and (b) 51,807 shares of Common Stock (the "Warrant Shares")
issuable upon the exercise of the Representatives' Warrants. This Prospectus
also relates to the proposed sale from time to time of the Representatives'
Shares, Representatives' Warrants and Warrant Shares (collectively, the
Representatives' Shares, Representatives' Warrants and Warrant Shares shall be
referred to as the "Securities") by the holders thereof (the "Selling
Securityholders").
The Units are issuable upon exercise of outstanding unit purchase
warrants (the "Unit Purchase Warrants") which were issued to the Selling
Securityholders in connection with the Company's initial public offering which
occurred in 1992. Each Unit Purchase Warrant entitles its holder to purchase a
certain number of Units (each Unit consisting of two shares of Common Stock and
one Class B Warrant) at an exercise price of $7.97 per Unit. The Company will
receive $7.97 per Unit and $3.50 per share of Common Stock upon the exercise by
the Selling Securityholders of the Unit Purchase Warrants and the Class B
Warrants, respectively, but will not receive any proceeds from the resale of the
Securities by such Selling Securityholders.
The Selling Securityholders have advised the Company that they may from
time to time sell all or part of the Securities in one or more transactions
(which may involve block transactions) in the over-the-counter market, on the
NASDAQ National Market (or any exchange on which the Securities may then be
listed), in negotiated transactions, through the writing of options on the
Securities (whether such options are listed on an options exchange or
otherwise), or a combination of such methods of sale, at market prices
prevailing at the time of such sales or at negotiated prices. The Selling
Securityholders may effect such transactions by selling the Securities to or
through broker-dealers, and such broker-dealers may receive compensation in the
form of underwriting discounts, concessions or commissions from the Selling
Securityholders and/or purchasers of the Securities for whom they may act as
agent (which compensation may be in excess of customary commissions). The
Selling Securityholders may also pledge the Securities as collateral for margin
accounts or loans and the Securities could be resold pursuant to the terms of
such accounts or loans. In connection with such sales, the Selling
Securityholders and any participating brokers and dealers may be deemed to be
"underwriters" as defined in the Securities Act of 1933, as amended. Neither the
Company nor the Selling Securityholders can presently estimate the amount of
commissions or discounts, if any, that will be paid by the Selling
Securityholders on account of their sale of the Securities from time to time.
The Company will pay all expenses, estimated to be approximately $25,000, in
connection with this offering, other than underwriting and brokerage
commissions, discounts, fees and counsel fees and expenses incurred by the
Selling Securityholders.
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE. FOR A
DISCUSSION OF CERTAIN RISKS WHICH SHOULD BE CONSIDERED IN
EVALUATING AN INVESTMENT IN THE SECURITIES,
SEE "RISK FACTORS" ON PAGES 2 TO 6.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is May 7, 1997.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Atlanta Regional Office of the Commission at
3475 Lenox Road, N.E., Suite 1000, Atlanta, Georgia 30326-7232. Copies of such
materials may also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Copies of each document may also be obtained through the Commission's
internet address at http://www.sec.gov. The Common Stock of the Company is
quoted on the NASDAQ National Market System. Reports, proxy statements and other
information concerning the Company may be inspected at the offices of NASDAQ,
1735 K. Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Securities offered hereby. This Prospectus, which is a part of
the registration statement, does not contain all the information set forth in,
or annexed as exhibits to, such registration statement, certain portions of
which have been omitted pursuant to rules and regulations of the Commission. For
further information with respect to the Company and the Securities, reference is
made to such registration statement, including the exhibits thereto, copies of
which may be inspected and copied at the aforementioned facilities of the
Commission. Copies of such registration statement, including the exhibits, may
be obtained from the Public Reference Section of the Commission at the
aforementioned address upon payment of the fee prescribed by the Commission.
Copies of each document may also be obtained through the Commission's internet
address at http://www.sec.gov. The summaries contained in this Prospectus of
additional information included in the Registration Statement or any exhibit
thereto are qualified in their entirety by reference to such information or
exhibit.
THIS PROSPECTUS IS ACCOMPANIED BY A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM
10-KSB/A FOR THE YEAR ENDED DECEMBER 31, 1996
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents which have been filed by the Company with the
Commission pursuant to the Exchange Act or the Securities Act are incorporated
by reference in this Prospectus:
- The Company's Annual Report on Form 10-KSB/A for the year
ended December 31, 1996, filed on May 7, 1997.
- The Company's Report on Form 8-K dated January 15, 1997, filed
on January 29, 1997.
- The Company's report on Form 8-K dated February 19, 1997,
filed on March 6, 1997.
- The Company's Definitive Proxy Statement on Schedule 14A as
filed with the Commission on June 28, 1996.
- All other reports filed by the Registrant pursuant to Section
13(a) or 15 (d) of the Exchange Act since the end of fiscal
year 1996.
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Any information contained herein or in a document incorporated by reference
herein shall be deemed to be modified or replaced for purposes of this
Prospectus to the extent that information contained herein or in any other
subsequently filed document which also is incorporated by reference herein
modifies or replaces such information. Any such information so modified or
replaced shall not be deemed, except as so modified or replaced, to constitute a
part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus is delivered,
upon the written or oral request of any such person, a copy of any and all of
the above documents (not including exhibits to any of such documents unless such
exhibits are specifically incorporated by reference into such documents). Such
requests should be addressed to the Secretary, RailAmerica, Inc., 301 Yamato
Road, Suite 1190, Boca Raton, Florida 33431.
RISK FACTORS
Before purchasing any of the Securities offered hereby, a prospective
purchaser should carefully consider the following risk factors, in addition to
the other information in this Prospectus. This Prospectus contains certain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act"), and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") with respect to
the financial condition, results of operations and business of the Company.
These forward-looking statements are subject to certain risks and uncertainties.
Factors that may cause actual results to differ materially from those
contemplated by such forward-looking statements include, among many others, the
following: (1) competitive conditions in the industry in which the Company
operates and (2) general economic conditions that are less favorable than
expected.
The Securities offered hereby involve a high degree of risk.
Prospective investors should carefully consider, among other things, the
following factors before a decision is made to purchase any Common Stock.
DEPENDENCE ON INDUSTRY AND GOVERNMENTAL AGENCY DEMAND FOR TRUCK
TRAILERS. Through its wholly-owned subsidiary, Kalyn/Siebert, Inc. ("Kalyn"),
the Company manufactures a broad range of specialty truck trailers. Kalyn's
operations are dependent on the demand for its products. Unit sales of new truck
trailers have historically been subject to substantial cyclical variation. In
addition, periods of economic recession in the United States have historically
caused declines in the profitability of the trucking industry, have had a
materially adverse effect on industry-wide demand for new truck trailers and may
have a materially adverse effect on Kalyn's results of operations. Future
economic downturns or cyclical decreases in demand for truck trailers would
likely have a material adverse effect on Kalyn and the Company. In the year
ended December 31, 1996, sales to commercial accounts and governmental agencies
represented 80% and 20%, respectively, of Kalyn's sales. The majority of Kalyn's
sales to governmental agencies are to the General Services Administration (the
"GSA"), the purchasing arm of non-military agencies, and to the U.S. Army Tank
Automotive Command ("TACOM"), a department of defense unit established to
consolidate purchases for various branches of the military. Accordingly, Kalyn
believes the loss of GSA's and/or TACOM's business could have a material adverse
effect on Kalyn and the Company.
DEPENDENCE ON ONE TRUCK TRAILER MANUFACTURING SITE; DEPENDENCE ON KALYN
REVENUES. Kalyn operates one manufacturing facility which, as of the date of
this Prospectus, was operating at approximately 70% of capacity. Sustained
growth of Kalyn's production and, in turn, its net sales are dependent on its
ability to increase production at its plant on a cost-efficient basis. In 1996,
sales attributable to Kalyn accounted for 53% of the Company's total revenues
from continuing operations. Although management anticipates that Kalyn's
revenues will account for a smaller percentage of revenues in the year ending
December 31, 1997, because of the expansion of the Company's railroad
operations, such revenues will continue to be material to the Company. Any
long-term interruption in the operation of Kalyn's plant, from labor strikes, a
natural disaster or other cause, whether or not covered by insurance, could have
a material adverse effect on the Company.
DEPENDENCE ON SUPPLIERS. Kalyn's ability to manufacture truck trailers
is dependent upon receiving supplies, or components and raw materials from a
limited number of sources. To date, Kalyn has experienced no
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material difficulties in procuring supplies, components or materials. However,
if deliveries of such items are delayed, Kalyn's production ability may be
decreased, which could have a negative effect on Kalyn's and the Company's
results of operations.
RAILROAD OPERATIONS - DEPENDENCE ON AGRICULTURAL INDUSTRY. Through its
wholly-owned subsidiaries, the Company operates thirteen short line railroads in
the States of Delaware, Michigan, Minnesota, Pennsylvania, Tennessee,
Washington, Indiana and Texas. The Company's haulage in Michigan includes
agricultural commodities, automotive parts, chemicals and fertilizer, ballast
and other stone products. Its haulage in Tennessee includes wood chips, paper,
chemicals and processed foods. Haulage handled in Pennsylvania and Delaware
includes iron and steel products, chemicals, agricultural products, lumber and
processed foods. The Company's haulage in Minnesota includes agricultural
products, aggregates, coal, plastics, lumber, denatured alcohol, scrap iron and
steel. The Company's haulage in Texas consists of cotton, sodium sulfate,
chemicals, fertilizer, scrap iron and steel. The Company's haulage in Indiana
consists of agricultural commodities and plastics. The Company's haulage in
Washington consists of woodchips, lumber, minerals, cement and agricultural
products. A substantial portion of the Company's haulage has consisted of
agricultural commodities. As a result, the Company could be materially and
adversely affected by factors that generally affect the agricultural industry in
the regions in which it operates. Such factors include, without limitation,
weather and fluctuations in agricultural prices. Sellers of agricultural
commodities typically hold back shipment of their products until they deem
prices to be advantageous. As a result, the number of carloads handled by the
Company and its recognition of revenue may vary significantly from period to
period as a result of fluctuations in the price for those commodities. Shipments
of agricultural commodities, on an overall basis, occur seasonally, with the
majority of the agricultural products being shipped from September through May.
As a result, the Company's revenues will normally be higher during these months
than during the summer. The Company believes that agricultural commodities will
continue to represent the primary component of the Company's rail haulage for
the near future.
RELATIONSHIPS WITH CLASS I RAILROADS. The railroad industry in the
United States is dominated by a small number of large Class I carriers that have
substantial market control and negotiating leverage. Almost all of the traffic
on the Company's railroads is interchanged with Class I carriers. A decision by
any of these Class I carriers to discontinue transporting certain commodities or
to use alternate modes of transportation, such as motor carriers, could
adversely affect the Company's business.
The Company's ability to provide rail service to its customers depends
in large part upon its ability to maintain cooperative relationships with Class
I connecting carriers with respect to, among other matters, freight rates, car
supply, reciprocal switching, interchange and trackage rights. A deterioration
in the operations of or service provided by those connecting carriers, or in the
Company's relationship with its connecting carriers, could adversely affect the
Company's business. In addition, much of the freight transported by the
Company's railroads moves on railcars supplied by Class I carriers. Were these
carriers to reduce the number of railcars available for use by its railroads,
the Company might not be able to obtain replacement railcars on favorable terms.
ACQUISITION STRATEGY; POTENTIAL NEED FOR ADDITIONAL FINANCING;
DILUTION. The Company's business strategy includes the acquisition of additional
railroad properties or other transportation related businesses. The Company's
ability to implement this strategy is dependent on the availability of financing
alternatives for such acquisitions. There can be no assurance, however, that
such financing will be available or, if available, will be obtainable by the
Company on favorable terms. As of the date of this Prospectus, the Company had
approximately 20,000,000 shares of authorized but unissued Common Stock. The
Company could issue Common Stock in the future to finance future acquisitions on
terms which could be dilutive to the stock ownership of existing stockholders.
Due to the Company's business strategy which places an emphasis on additional
acquisitions of transportation-related companies, it is anticipated that
deferred acquisition costs will continue to accumulate. Termination of
acquisition efforts prior to successful completion will result in write-downs or
write-offs of deferred acquisition costs and corresponding charges against
earnings. Depending on the deferred acquisition costs associated with a
terminated acquisition effort, these charges may be material.
GOVERNMENTAL REGULATION OF RAILROAD OPERATIONS. The Company is subject
to governmental regulation by the Surface Transportation Board ("STB"), the
Federal Railroad Administration and other federal, state and local regulatory
authorities with respect to certain rates and railroad operations, as well as a
variety of health, safety, labor, environmental and other matters, all of which
could potentially affect the competitive position and profitability of the
Company. All railroad industry employees are covered by the Railroad Retirement
Act and the Railroad Unemployment Insurance Act in lieu of Social Security and
other federal and state unemployment insurance programs. Employer contributions
under the Railroad Retirement Act are currently about triple those required
under Social Security. Management of the Company believes that the regulatory
freedoms granted by the Staggers Rail Act have been beneficial to the Company by
giving it flexibility to adjust prices and
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operations to respond to market forces and industry changes. However, various
interests, and certain members of the United States House of Representatives and
Senate that have jurisdiction over federal regulation of railroads, have from
time to time expressed their intention to support legislation that would
eliminate or reduce certain significant freedoms granted by the Staggers Rail
Act. If enacted, these proposals, or court or administrative rulings to the same
effect under current law, could have a significant adverse effect on the
Company.
DEPENDENCE ON GOVERNMENT GRANTS. The Company, in the past, attracted
federal and state financial support for rail infrastructure improvements. The
Company believes that it is a critical element of the transportation
infrastructure in many of its territories and that it enjoys strong support from
state and federal authorities. However, there can be no assurance that such
grants will be available in the future or that the Company will continue to be
able to obtain them.
COMPETITION. The Company's primary source of competition in its rail
operations comes from over-the-road trucks. While the Company must build or
acquire and maintain its rail system, trucks are able to use public roadways.
Any future expenditures materially increasing the roadway system in the
Company's present or proposed areas of operation (or legislation granting
materially greater latitude for trucks with respect to size or weight
limitations) could have a significant adverse effect on the Company's
competitiveness.
The Company faces significant competition in the truck trailer
manufacturing industry, which is highly competitive and has relatively low
barriers to entry. Kalyn competes with a number of other trailer manufacturers,
some of which have greater financial resources and higher sales than Kalyn.
Furthermore, Kalyn's products compete with alternative forms of shipping, such
as intermodal containers. There can be no assurance that Kalyn will be able to
continue to compete effectively with existing or potential competitors or
alternative forms of shipping containers.
DEPENDENCE ON KEY PERSONNEL. The Company's success is dependent on
certain management and personnel, including Gary O. Marino, its Chairman,
President, Treasurer and Chief Executive Officer. The Company's success is also
dependent upon the efforts of Robert B. Coward, the Vice President and General
Manager of Kalyn. The loss of the services of one or more of these executives
could have an adverse effect upon the business of the Company. While the Company
believes that it would be able to locate suitable replacements for these
executives if their services were lost to the Company, there can be no assurance
it would be able to do so. Gary Marino has agreed, pursuant to an employment
agreement, to serve the Company until, at a minimum, March 1, 1998. Mr. Coward
has agreed, pursuant to an employment agreement, to serve the Company until, at
a minimum, August 1997. The Company does not have "key-person" life insurance on
any personnel.
LIABILITY FOR CASUALTY LOSSES. The Company has obtained insurance
coverage for losses arising from personal injury and for property damage in the
event of derailments or other accidents or occurrences. While the Company
believes, based upon its experience, that its insurance coverage is adequate,
under catastrophic circumstances the Company's liability could exceed its
insurance limits. Insurance is available from only a very limited number of
insurers and there can be no assurance that insurance protection at the
Company's current levels will continue to be available or, if available, will be
obtainable on terms acceptable to the Company. The
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occurrence of losses or other liabilities which are not covered by insurance or
which exceed the Company's insurance limits could materially adversely affect
the financial condition of the Company.
ENVIRONMENTAL MATTERS. The Company's railroad operations and real
estate ownership are subject to extensive federal, state and local environmental
laws and regulations concerning, among other things, emissions to the air,
discharges to waters, and the handling, storage, transportation and disposal of
waste and other materials. While the Company believes it is in substantial
compliance with all such matters, any allegations or findings to the effect that
the Company had violated laws or regulations could have a materially adverse
effect on the Company.
CERTAIN ANTI-TAKEOVER PROVISIONS. The Company's Amended and Restated
Certificate of Incorporation contains certain anti-takeover provisions that
could have the effect of making it more difficult for a third party to acquire,
or of discouraging a third party from attempting to acquire control of the
Company without negotiating with its Board of Directors. Such provisions could
limit the price that certain investors might be willing to pay in the future for
the Company's securities. Certain of such provisions provide for a classified
Board of Directors with staggered terms, and allow the Company to issue
preferred stock with rights senior to those of the common stock or impose
various procedural and other requirements which could make it more difficult for
stockholders to effect certain corporate actions.
DIVIDEND POLICY. The Company has never declared or paid a dividend on
its Common Stock, and management of the Company expects that a substantial
portion of the Company's future earnings will be retained for expansion or
development of the Company's business, which may include additional
acquisitions. Whether the Company will pay dividends in the future will be at
the discretion of the Company's Board of Directors and will depend upon, among
other things, future earnings, operations, capital requirements and surplus, the
general financial condition of the Company, restrictive covenants in loan or
other agreements to which the Company may be subject, and such other factors as
the Board of Directors may deem to be relevant, including the desirability of
cash dividends to stockholders.
PROBLEMS INHERENT IN GROWTH AND ACQUISITIONS. Since its first
acquisition, the Company has experienced significant growth in revenues,
primarily through the acquisition of transportation services companies that fit
its growth strategy. Since inception, the Company has completed 13 acquisitions.
The Company expects to continue its acquisition strategy. Although the Company
believes that additional acquisitions will enhance the opportunity to increase
net earnings, such acquisitions would result in greater administrative burdens
and create the financial risks of additional operating costs and additional
interest costs. Acquisitions also involve a number of other risks, including
diversion of management's attention to the assimilation of operations and
personnel of the acquired companies, the difficulty of integrating acquired
companies into the Company's management information and financial reporting
systems, possible adverse short-term effects on the Company's operating results
and an adverse impact on earnings from the amortization of acquired intangible
assets. There can be no assurance that the Company's business will continue to
grow in a similar fashion in the future, that it will be able to find, finance
and complete further suitable acquisitions and integrate effectively any
acquisitions made, that such acquisitions will be profitable or that the Company
can effectively adapt its management, administrative and operational systems to
respond to any future growth.
DEPENDENCE ON CHILEAN ECONOMY. As a result of the Company's acquisition
of a majority interest in the stock of Empressa de Transporte Ferroviario, S.A.
("Ferronor"), the Company's financial condition and results of operations may
be, to a certain extent, sensitive to and dependent upon economic conditions
prevailing from time to time in Chile. There can be no assurance that the
Chilean economy will grow in the future or that future developments in the
Chilean economy will not impair the Company's ability to proceed with its
strategy or its business, financial condition or results of operations. The
Company's financial condition and results of operations could also be affected
by changes in economic or other policies of the Chilean Government or other
political or economic developments in Chile, as well as regulatory changes or
administrative practices of Chilean authorities, over which the Company has no
control.
IMPACT OF INFLATION ON THE CHILEAN ECONOMY. Chile has experienced high
levels of inflation in the past. High levels of inflation in Chile could
adversely affect the Chilean economy. The rate of inflation as measured by
changes in the official consumer price index ("CPI") of the Instituto Nacional
de Estadisticas (the "Chilean National Institute of Statistics") (which is the
inflation index applicable for the restatement of financial information) in 1991
and 1992 was 18.7% and 12.7%, respectively. Inflation for 1993 and 1994 was
12.2% and 8.9%, respectively. Inflation in the year ended December 31, 1995 was
8.2%. The level of Chilean inflation may affect the Company's financial
condition and results of operations. There
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can be no assurance that the performance of the Chilean economy or the operating
results of the Company will not be adversely affected by continuing or increased
levels of inflation or that Chilean inflation will not increase significantly
from the current level.
FOREIGN CURRENCY AND FOREIGN EXCHANGE REGULATION. The Chilean peso has
been subject to large nominal devaluations in the past and may be subject to
significant fluctuations in the future. In the three-year period ended December
31, 1995, the value of the Chilean peso relative to the US dollar depreciated
approximately 6.5% in nominal terms (without adjusting for inflation) based on
the observed exchange rates on December 31, 1992 and December 31, 1995, and
appreciated 19.5% in real terms (adjusting for inflation) based on the average
of the monthly average of the observed exchange rates for such period. In the
five-year period ended December 31, 1995, the value of the Chilean peso relative
to the US dollar declined approximately 20.7% in nominal terms based on the
observed exchange rates on December 31, 1990 and December 31, 1995, and
appreciated 31.8% in real terms. Although most of Ferronor's anticipated
revenues from operations in Chile will be in US dollars, a small percentage of
anticipated revenues will be in the form of the Chilean peso. As a result, the
Company will be subject to the risk that the value of the Chilean peso will
decline against the dollar. The Company may seek to limit its exposure to the
risk of currency fluctuations by engaging in hedging or other transactions,
which transactions could expose the Company to substantial risk of loss. The
Company has some experience in managing international transactions, but has yet
to formulate a strategy to protect the Company against currency fluctuations, or
retained a financial officer experienced in such transactions. There can be no
assurance that the Company will successfully manage its exposure to currency
fluctuations or that such fluctuations will not have a material adverse effect
on the Company.
DISCONTINUED OPERATIONS OF STEEL CITY CARRIERS, INC. Since the
Company's acquisition of Steel City Carriers, Inc. ("Steel City") in February
1995, Steel City's financial performance and development have not met the
Company's expectations. Accordingly, in March 1997, the Company adopted a formal
plan to dispose of Steel City and to refocus the Company's efforts on expanding
its core railroad business. Although the Company believes that discontinuing the
operations of Steel City will enhance its opportunity to increase net earnings,
there can be no assurance that such a discontinuance of operations will not
adversely affect the Company's operating results in the future, or that the
Company will not incur a loss on the disposition of Steel City.
SHARES ELIGIBLE FOR FUTURE SALE. On the date of this Prospectus, the
Company had 8,428,229 shares of Common Stock issued and outstanding and
2,812,161 shares of Common Stock reserved for issuance, including: (1) 51,807
shares of Common Stock reserved for issuance upon exercise of the Class B
Warrants (exercise price $3.50 per share) issuable hereunder; (2) 444,440 shares
of Common Stock reserved for issuance upon conversion of $1,000,000 in principal
amount of Convertible Subordinated Promissory Notes (conversion price $2.25);
(3) 364,961 shares of Common Stock reserved for issuance upon conversion of
$2,000,000 in principal amount of Series A Convertible Subordinated Debentures
(conversion price $5.48); (4) 250,000 shares of Common Stock reserved for
issuance upon exercise of options granted under the 1992 Stock Option Plan
(exercise price $3.50); (5) 430,000 shares of Common Stock reserved for issuance
upon the exercise of options granted to officers of the Company (exercise price
$3.10 - $5.00); (6) 206,500 and 4,000 shares of Common Stock reserved for
issuance upon exercise of options granted and yet to be granted, respectively,
under the 1995 Stock Incentive Plan (exercise price $3.50 - $3.625); (7) 210,000
and 40,000 shares of Common Stock reserved for issuance upon exercise of options
granted and yet to be granted, respectively, under the 1995 Non-Employee
Director Stock Option Plan (exercise price $3.50 - $4.81); (8) 232,092 shares of
Common Stock reserved for issuance upon exercise of options yet to be granted
under the 1995 Employee Stock Purchase Plan; (9) 127,500 shares of Common Stock
issuable upon exercise of a warrant issued to Eric D. Gerst (exercise price
$4.09); (10) 50,000 shares of Common Stock reserved for issuance on August 31,
1997 to certain employees of Kalyn; (11) 29,157 shares of Common Stock reserved
for issuance to certain key employees of Steel City; (12) 292,000 shares of
Common Stock reserved for issuance upon the exercise of warrants issued to First
London Securities pursuant to a private placement agreement entered by the
Company (exercise price $4.60 - $5.75); and (13) 79,704 shares of Common Stock
reserved for issuance upon exercise of underwriter's warrants granted to Keane
Securities (effective exercise price - $3.99) issuable hereunder. Of the
8,428,229 shares of Common Stock issued and outstanding, the Company believes
that approximately 4,900,000 of the shares are freely tradable without
restriction or further registration under the Securities Act, except for any
shares purchased by an "affiliate" of the Company (in general, a person who has
a control relationship with the Company). The Company believes the approximately
3,400,000 shares of Common Stock remaining are "restricted securities", as that
term is defined under Rule 144 promulgated under the Securities Act,
6
<PAGE> 9
and may be resold thereafter in compliance with Rule 144. Of the 3,400,000
"restricted securities," 2,920,000 are the subject of a pending registration
statement (File No. 333-25351), and such shares will no longer be "restricted
securities" upon the effectiveness of such registration statement.
In general, under Rule 144, as recently amended, a person (or persons
whose shares are aggregated) including an affiliate, who has beneficially
owned such shares for one year, may sell in the open market within any
three-month period a number of shares that does not exceed the greater of (i)
1% of the then outstanding shares of the Company's Common Stock or (ii) the
average weekly trading volume in the Common Stock in the over-the-counter
market during the four calendar weeks preceding such sale. Sales under Rule 144
are also subject to certain limitations on the manner of sale, notice
requirements and availability of current public information about the Company.
Pursuant to the amendment, a person (or persons whose shares are aggregated)
who is deemed not to have been an "affiliate" of the Company at any time
during the 90 days preceding a sale by such person and who has beneficially
owned such shares for at least two years, will be able to sell such shares in
the public market under Rule 144(k) without regard to the volume limitations,
manner of sale provisions, notice requirements or availability of current
information referred to above. Restricted shares properly sold in reliance upon
Rule 144 are thereafter freely tradeable without restrictions or registration
under the Act, unless thereafter held by an "affiliate" of the Company.
The possibility that substantial amounts of Common Stock may be issued
and/or freely resold in the public market may adversely affect prevailing market
prices for the Common Stock and could impair the Company's ability to raise
capital through the sale of its equity securities.
THE COMPANY
The Company is a multimodal transportation company that has experienced
significant growth in recent years. Historically, the Company has acquired,
developed and operated short line railroads formed primarily through the
acquisition of light density rail lines from larger railroads. The Company
currently operates approximately 2,400 miles of rail lines in Delaware, Indiana,
Michigan, Minnesota, Pennsylvania, Tennessee, Texas, Washington and Chile. In
1994, the Company expanded its operations in the transportation industry through
its acquisition of Kalyn/Siebert, Inc. ("Kalyn"), a manufacturer of a broad
range of specialty and custom truck trailers, located in Gatesville, Texas.
Since deregulation in 1980, Class I railroads in the United States and
Canada have focused their management and capital resources on their long-haul
core systems while divesting branch lines to smaller and more cost-effective
rail operators that are willing to commit the resources necessary to meet the
needs of the shippers located on these lines. Since 1980, more than 300 short
line and regional railroads operating approximately 26,000 miles of track have
been created. The commitment of Class I carriers to increase efficiency and
profitability and the recent merger activity among long-haul railroads is
expected to lead to additional short line divestitures as overlapping routes are
sold and the merged railroads seek to achieve synergies.
The Company's objectives are to foster growth of its existing
subsidiaries and to create a diversified transportation company by acquiring
additional railroads and, to a lesser extent, other transportation-related
companies. Over the last two and a half years, the Company has completed 13
acquisitions, including a number of short line railroads and a specialty truck
trailer manufacturing company. These acquisitions have been successfully
integrated into current operations and serve as a platform for the growth
experienced by the Company.
On February 21, 1997, the Company's wholly owned subsidiary,
RailAmerica de Chile, S.A., acquired a majority interest in the stock of
Empressa de Transporte Ferroviario, S.A. ("Ferronor"), a 1,400 mile railroad
serving northern Chile. The Company has joined in the purchase of Ferronor with
Andres Pirazzoli y Cia, Ltda. ("APCO"), a family-owned Chilean transportation
and distribution company. The purchase price paid by RailAmerica/APCO for
substantially all of the stock of Ferronor was approximately $12 million and was
funded 55% by the Company and 45% by APCO. The sale of Ferronor by Corporacion
de Fomento de la Produccion, an agency of the Chilean government, is a
continuation of Chile's privatization process.
Ferronor operates the only north-south railroad in northern Chile,
extending from La Calera near Santiago, where it connects with Chile's southern
railway, Ferrocarril del Pacifico, S.A., to its northern terminus at Iquique,
approximately 120 miles south of the Peruvian border. It also operates several
east-west branch lines that link a number of iron, copper and limestone mines
and production processing facilities with several Chilean Pacific port cities.
Ferronor also serves Argentina and Bolivia through traffic interchanged with the
General Belgrano Railroad and the Ferrocarriles Antofagasta Bolivia.
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<PAGE> 10
The Company's principal executive offices are located at 301 Yamato
Road, Suite 1190, Boca Raton, Florida 33431 and its telephone number is (561)
994-6015.
USE OF PROCEEDS
The net proceeds to be received by the Company from the issuance of the
Units and the shares of Common Stock upon the exercise of the Unit Purchase
Warrants and the Representatives' Warrants, respectively, will be $0 if none of
the Unit Purchase Warrants and Representatives' Warrants are exercised, and a
maximum of $457,102 if all of the Unit Purchase Warrants and Representatives'
Warrants are exercised. The number of Unit Purchase Warrants and
Representatives' Warrants exercised will depend on several factors beyond the
control of the Company, including the market price of the Common Stock and the
Representatives' Warrants. Therefore, the Company cannot estimate with
reasonable accuracy the number of Unit Purchase Warrants and Representatives'
Warrants which may be exercised and the amount of proceeds to be received
therefrom. Proceeds, if any, received from the exercise of the Unit Purchase
Warrants and Representatives' Warrants will be used to increase working capital,
to redeem or pay down the outstanding indebtedness of the Company, and/or to
finance capital expenditures for the Company's existing business and future
acquisitions. The Company will receive $7.97 per Unit and $3.50 per share of
Common Stock upon the exercise by the Selling Securityholders of the Unit
Purchase Warrants and the Class B Warrants, respectively, but will not receive
any of the proceeds from the resale of the Securities by Selling Securityholders
hereunder.
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<PAGE> 11
SELLING SECURITYHOLDERS
Pursuant to separate, identical Unit Purchase Warrants, each of the
Selling Securityholders is entitled to buy a certain number of Units prior to
November 9, 1997. See "Description of Capital Stock" for a description of the
Units. None of the Selling Securityholders have been officers, directors, or
employees, or have had a material relationship with the Company.
The following table sets forth certain information with respect to the
amount of Securities beneficially owned by the Selling Securityholders and is
adjusted to reflect the sale of Securities offered hereby. The following table
assumes that each of the Selling Securityholders (i) exercises all the options
to buy Units under his or her Unit Purchase Warrants; (ii) exercises all of his
or her Representatives' Warrants (Class B Warrants); and (iii) sells all of his
or her Representatives' Shares and Warrant Shares.
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF SHARES
NUMBER OF SHARES OF SHARES OF COMMON PERCENT OF SHARES OF OF COMMON STOCK
COMMON STOCK AND STOCK AND CLASS B COMMON STOCK AND AND CLASS B
CLASS B WARRANTS WARRANTS CLASS B WARRANTS WARRANTS
SELLING BENEFICIALLY REGISTERED HELD PRIOR TO HELD AFTER
STOCKHOLDER OWNED HEREIN OFFERING OFFERING (7)
- --------------------- ---------------------- ------------------- ---------------------- -----------------
COMMON CLASS B COMMON CLASS B COMMON CLASS B
STOCK WARRANTS STOCK WARRANTS STOCK WARRANTS(+)
<S> <C> <C> <C> <C> <C> <C> <C>
H. Kelly McLaughlin 13,870(1) 4,203(1) 13,870 4,203 * 10.5% 0
Estate of John Prisco 9,563(2) 2,898(2) 9,563 2,898 * 7.3% 0
Walter O'Hearn 32,162(3) 9,746(3) 32,162 9,746 * 24.4% 0
Kenneth Nielsen 10,520(4) 3,188(4) 10,520 3,188 * 8.0% 0
James Keane 62,168(5) 18,839(5) 62,168 18,839 1% 47.2% 0
Marie Keane 3,227(6) 978(6) 3,227 978 * 2.5% 0
</TABLE>
- ------------------------------
* indicates less than 1%
(+) Based on 39,852 Class B Warrants outstanding as of the date of this
Prospectus.
(1) Such figures include: (i) 8,406 Representatives' Shares issuable as
part of Units upon the exercise of the Selling Securityholder's Unit
Purchase Warrant; and (ii) 5,464 Warrant Shares issuable upon the
exercise of Representatives' Warrants. The 4,203 Representatives'
Warrants are issuable as part of 4,203 Units upon the exercise of the
Selling Securityholder's Unit Purchase Warrant.
(2) Such figures include: (i) 5,796 Representatives' Shares issuable as
part of Units upon the exercise of the Selling Securityholder's Unit
Purchase Warrant; and (ii) 3,767 Warrant Shares issuable upon the
exercise of Representatives' Warrants. The 2,898 Representatives'
Warrants are issuable as part of 2,898 Units upon the exercise of the
Selling Securityholder's Unit Purchase Warrant.
(3) Such figures include: (i) 19,492 Representatives' Shares issuable as
part of Units upon the exercise of the Selling Securityholder's Unit
Purchase Warrant; and (ii) 12,670 Warrant Shares issuable upon the
exercise of Representatives' Warrants. The 9,746 Representatives'
Warrants are issuable as part of 9,746 Units upon the exercise of the
Selling Securityholder's Unit Purchase Warrant.
(4) Such figures include: (i) 6,376 Representatives' Shares issuable as
part of Units upon the exercise of the Selling Securityholder's Unit
Purchase Warrant; and (ii) 4,144 Warrant Shares issuable upon the
exercise of Representatives' Warrants. The 3,188 Representatives'
Warrants are issuable as part of 3,188 Units upon the exercise of the
Selling Securityholder's Unit Purchase Warrant.
(5) Such figures include: (i) 37,678 Representatives' Shares issuable as
part of Units upon the exercise of the Selling Securityholder's Unit
Purchase Warrant; and (ii) 24,491 Warrant Shares issuable upon the
exercise of Representatives' Warrants. The 18,839 Representatives'
Warrants are issuable as part of 18,839 Units upon the exercise of the
Selling Securityholder's Unit Purchase Warrant.
(6) Such figures include: (i) 1,956 Representatives' Shares issuable as
part of Units upon the exercise of the Selling Securityholder's Unit
Purchase Warrant; and (ii) 1,271 Warrant Shares issuable upon the
exercise of Representatives' Warrants. The 978 Representatives'
Warrants are issuable as part of 978 Units upon the exercise of the
Selling Securityholder's Unit Purchase Warrant.
(7) Assumes all of the Securities registered hereby are sold.
9
<PAGE> 12
PLAN OF DISTRIBUTION
The Selling Securityholders have advised the Company that they may from
time to time sell all or part of the Securities in one or more transactions
(which may involve block transactions) in the over-the-counter market, on the
NASDAQ National Market (or any exchange on which the Securities may then be
listed), in negotiated transactions, through the writing of options on the
Securities (whether such options are listed on an options exchange or
otherwise), or a combination of such methods of sale, at market prices
prevailing at the time of such sales or at negotiated prices. The Selling
Securityholders may effect such transactions by selling the Securities to or
through broker-dealers, and such broker-dealers may receive compensation in the
form of underwriting discounts, concessions or commissions from the Selling
Securityholders and/or purchasers of the Securities for whom they may act as
agent (which compensation may be in excess of customary commissions). The
Selling Securityholders may also pledge the Securities as collateral for margin
accounts or loans and the Securities could be resold pursuant to the terms of
such accounts or loans. In connection with such sales, the Selling
Securityholders and any participating brokers and dealers may be deemed to be
"underwriters" as defined in the Securities Act of 1933, as amended. Neither the
Company nor the Selling Securityholders can presently estimate the amount of
commissions or discounts, if any, that will be paid by the Selling
Securityholders in connection with the sale of the Securities from time to time.
In addition to sales under the Registration Statement, Securities may be sold by
the Selling Securityholders through an applicable exemption from registration,
including, without limitation, pursuant to Rule 144 under the Securities Act.
The Company has been advised by the Selling Securityholders that they
have not, as of the date of this Prospectus, entered into any arrangement with a
broker-dealer for the sale of the Securities.
At the time a particular offer of Securities is made by the Selling
Securityholders, to the extent required, a supplemental Prospectus will be
distributed which will set forth the number of Securities being offered and the
terms of the offering, including the name or names of any underwriters, dealers,
or agents, the purchase price paid by the underwriters for the Securities
purchased from the Selling Securityholders, any discounts, commissions and other
items constituting compensation from the Selling Securityholders, and any
discounts, commissions or concessions allowed or re-allowed or paid to dealers.
The Company will pay all the expenses, estimated to be approximately
$25,000, in connection with this offering, other than underwriting and brokerage
commissions, discounts, fees and counsel fees and expenses incurred by the
Selling Securityholders.
Under the securities laws of certain states, the Securities may be sold
in such states only through registered or licensed brokers or dealers. In
addition, in certain states the Securities may not be sold unless the Securities
have been registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with.
The Securities are being registered at the request of the Selling
Securityholders and pursuant to a registration rights provision included in the
Unit Purchase Warrants issued to the Selling Securityholders. The following, to
the extent it describes the Selling Securityholders' options to buy Units
pursuant to the Selling Securityholders' Unit Purchase Warrants, is qualified in
its entirety by reference to the Unit Purchase Warrants, copies of which are
filed as exhibits to the Company's Registration Statement of which this
Prospectus is a part.
As of the date of this Prospectus, the Selling Securityholders hold
Unit Purchase Warrants entitling them to purchase in the aggregate 39,852 Units,
each Unit consisting of two shares of Common Stock (the "Representatives'
Shares") and one Class B Warrant (the "Representatives' Warrants"). The original
exercise price of the Units was $11.55 per Unit. The original amount of Units
issuable to the Selling Securityholders was 27,500 Units. Pursuant to the terms
of the Unit Purchase Warrants, the exercise price per share has been adjusted to
$7.97, and the number of Units issuable to the Selling Securityholders has been
adjusted to 39,852 Units. The exercise price of the Unit Purchase Warrants and
the number of Representatives' Shares and Representatives' Warrants issuable
upon exercise of the Unit Purchase Warrants is subject to an adjustment based on
the occurrence of certain events described in the Unit Purchase Warrants.
The Company is offering for issuance from time to time to the holders
of the Representatives' Warrants up to 51,807 shares of Common Stock (the
"Warrant Shares") at an exercise price of $3.50 per Class B Warrant. At the time
of the original issuance, the Class B Warrants entitled its holder to purchase
one share of Common Stock at an exercise price of $4.55 per share. As a result
of certain adjustments to the exercise price and the number of shares
exercisable per Class B Warrant, as of the date of this Prospectus, each Class B
Warrant entitles its holder to purchase 1.3 shares of Common Stock at an
exercise price of $3.50 per share. Upon the exercise of all of the Unit
10
<PAGE> 13
Purchase Warrants, 39,852 Representatives' Warrants will be issued which are
convertible into an aggregate of 51,807 Warrant Shares. The Class B Warrants may
be exercised at any time prior to November 9, 1997.
The Company may pay a fee of up to four percent (4%) of the aggregate
exercise price of each Class B Warrant exercised if (i) the market price of the
Common Stock on the date of such exercise is greater than the exercise price of
the Class B Warrant, (ii) the exercise price of the Class B Warrant was
solicited by an NASD member, (iii) the Class B Warrant is not held in a
discretionary account and (iv) the solicitation was not in violation of Rule
10b-6 (or Regulation M upon its effective date) under the Exchange Act. The
Company has retained Rickel & Associates, Inc. ("Rickel"), a registered
broker-dealer with its principal place of business at 45 Essex Street, Millburn,
New Jersey, to act as its solicitation agent in connection with the exercise of
its outstanding Class B Warrants. For the purpose of encouraging the holders of
the Company's warrants to exercise such warrants, the Company agreed to have
Rickel act as its exclusive solicitation agent. The Company has entered into an
agreement (the "Agreement") to pay Rickel 4% of the aggregate exercise price of
the Class B Warrants, the exercise of which is solicited by Rickel, and to
reimburse Rickel for all accountable expenses incurred in connection with the
Class B Warrant solicitation. Rickel may allow to certain dealers who are
members of the NASD and who participate in the solicitation of the Class B
Warrants a portion of such fee. The Agreement contains certain provisions
between the Company and Rickel regarding indemnity and contribution against
certain liabilities, including liabilities under the Securities Act.
In accordance with the terms of the Class B Warrants, the Company
announced that it would redeem the Class B Warrants that were not exercised by
April 15, 1997. Thereafter, substantially all of such Class B Warrants, other
than the Class B Warrants described herein, were exercised by the holders
thereof and the unexercised Class B Warrants were redeemed. See "Description of
Capital Stock -- Class B Warrants." The Class B Warrants issuable to the
Selling Securityholders upon the exercise of the Unit Purchase Warrants are not
callable and, therefore, were not exercised or redeemed on April 15, 1996. In
connection with such exercises of Class B Warrants, Rickel neither acted as a
solicitation agent nor received any fees from the Company, and the Company does
not intend to pay Rickel any fees in connection with the warrants held by the
Selling Securityholders.
No fractional shares of Common Stock or warrants of the Securities will
be issued upon exercise of the Unit Purchase Warrants or the Representatives'
Warrants. If a fractional share of Common Stock or warrant of the Securities is
issuable upon the exercise of the Unit Purchase Warrants or the Representatives'
Warrants, the Company will, within twenty days after the exercise date, deliver
to the purchaser a check payable to purchaser, in lieu of such fractional share
or warrant, in the amount of the market price for such fractional share or
warrant as of the close of business on the exercise date.
The Company has reserved for issuance a number of shares of Common
Stock and Class B Warrants sufficient to provide for the exercise of the Unit
Purchase Warrants and Class B Warrants.
The Class B Warrants may be exercised by surrender of the Class B
Warrant certificate on or prior to expiration of the Class B Warrants, with the
form of "Exercise Agreement" on the reverse side of the certificate executed as
indicated, and accompanied by payment of the full exercise price of the number
of Class B Warrants being exercised. Payment must be by certified funds payable
to the order of the American Stock Transfer & Trust Company, the warrant agent.
In order for a holder to exercise a Class B Warrant, there must be a current and
effective registration statement on file with the Securities and Exchange
Commission and with various state securities commissions registering the
distribution of the shares of Common Stock issuable upon exercise of the Class B
Warrants. The Company will be required to file post-effective amendments to the
Registration Statement of which this Prospectus forms a part when events require
such amendments. Although it is the Company's intention to file post-effective
amendments when necessary, there is no assurance that the Registration Statement
will be kept effective. If the Registration Statement is not kept current for
any reason, the Class B Warrants will not be exercisable, and holders thereof
may be deprived of any value.
The Company has agreed to indemnify the Selling Securityholders and any
underwriters against certain liabilities, including liabilities under the
Securities Act. The Selling Securityholders have also agreed to indemnify the
Company, its directors, officers, agents and representatives against certain
liabilities, including liabilities under the Securities Act.
DESCRIPTION OF CAPITAL STOCK
The following summary is qualified in its entirety by reference to the
Company's Amended and Restated Certificate of Incorporation (the "Certificate of
Incorporation") and by-laws.
The Company is authorized to issue 30,000,000 shares of Common Stock,
par value $.001 per share and 1,000,000 shares of Preferred Stock, par value
$.001 per share. As of the date of this Prospectus, the Company had 8,428,229
shares of Common Stock outstanding and no shares of Preferred Stock outstanding.
COMMON STOCK
Each share of Common Stock entitles the holder thereof to vote on all
matters submitted to a vote of the stockholders. Each share of Common Stock
entitles its holder to one vote. Since the holders of Common Stock do not have
cumulative voting rights, holders of more than 50% of the outstanding shares can
elect on an annual
11
<PAGE> 14
basis the entire class of Directors then standing for election and holders of
the remaining shares by themselves cannot elect any Directors. The holders of
Common Stock have no preemptive rights or rights to convert their Common Stock
into other securities. The holders of Common Stock are entitled to receive
dividends when, as and if declared by the Board of Directors out of funds
legally available therefor. In the event of a liquidation, dissolution or
winding up of the Company, holders of the Common Stock have the right to a
ratable portion of the assets remaining after payment of liabilities and after
provision has been made for each class of stock, if any, having preference over
the Common Stock. All shares of Common Stock outstanding and to be outstanding
upon completion of this Offering are and will be fully paid and non-assessable.
The transfer agent for the Common Stock is American Stock Transfer and Trust
Company, 40 Wall Street, New York, New York 10005.
PREFERRED STOCK
The Board of Directors has the authority to issue up to 1,000,000
shares of Preferred Stock in one or more series and to fix the number of shares
constituting any such series, the voting powers, designations, preferences and
relative participation, optional or other special rights and qualifications,
limitations or restrictions thereof, including the dividend rights and dividend
rate, terms of redemption (including sinking fund provisions), redemption price
or prices, conversion rights and liquidation preferences of the shares
constituting any series, without any further vote or action by the shareholders.
The issuance of Preferred Stock by the Board of Directors could affect the
rights of the holders of the Common Stock. For example, such issuance could
result in a class of securities outstanding that would have preferences with
respect to voting rights and dividends, and in liquidation, over the Common
Stock, and could (upon conversion or otherwise) enjoy all the rights appurtenant
to Common Stock. Because the Board of Directors is authorized to determine the
rights, preferences, privileges and restrictions granted to and imposed on any
series of Preferred Stock (without stockholder approval), the issuance of any
series of Preferred Stock could adversely affect the voting power and other
rights of the holders of Common Stock and could be used as an anti-takeover
measure by the Company without any further action by the holders of Common
Stock.
CLASS B WARRANTS
There were initially 576,886 Class B Warrants issued in connection with
the Company's initial public offering on November 9, 1992. At the time of
issuance, each Class B Warrant entitled its holder to purchase one share of
Common Stock at an exercise price of $4.55 per share. Class B Warrants were
initially exercisable until November 9, 1997. Under the Statement of Rights,
Terms and Conditions for Class B Callable Stock Purchase Warrants ("Statement of
Rights") dated November 9, 1992, the exercise price and the number of shares
exercisable per Class B Warrant is subject to adjustment in the event of certain
occurrences. The Class B Warrants were adjusted to their present terms as of
September 2, 1994, based on a series of events that involved the sale and
issuance of Common Stock and securities convertible into Common Stock, which
occurred in connection with the Company's acquisition of Kalyn.
The Class B Warrants were issued in registered form under a Warrant
Agreement (the "Warrant Agreement"), between the Company and American Stock
Transfer & Trust Company (the "Warrant Agent"). The following summary of the
provisions of the Class B Warrants is qualified in its entirety by reference to
the Warrant Agreement, a copy of which is incorporated by reference as an
exhibit to the Company's Registration Statement of which this Prospectus is a
part.
The Class B Warrants are redeemable, in whole or in part, at the
election of the Company on at least 30 days' written notice to the Warrant
Agent, at a redemption price of $.05 per Class B Warrant. The notice of
redemption must be given within ten days following any period of 20 consecutive
trading days during which the closing bid price for the Common Stock exceeds
$5.6875 per share. Any Class B Warrant so called for redemption may be exercised
until the close of business on the business day preceding the redemption date
specified in such notice of redemption. On redemption of the Class B Warrants,
the Class B Warrants will be canceled and the right to purchase the shares of
Common Stock underlying the Class B Warrants will be forfeited if not exercised
before the date specified in the notice of redemption.
As of February 20, 1997, the Common Stock traded at a closing price
exceeding $5.6875 per share for 20 consecutive trading days. The Company has
given written notice to the holders of Class B Warrants that it would purchase
all Class B Warrants available for repurchase on March 30, 1997, as extended to
April 15, 1997. As of April 16, 1997, 611,302 Class B Warrants had been
exercised by the holders thereof, resulting in the issuance of 794,691 shares of
Common Stock to such holders, and 3,759 Class B Warrants expired unexercised by
the holders thereof and were redeemed. In connection with the exercise of such
Class B Warrants, the Company received gross proceeds in the amount of
$2,781,422. The Class B Warrants issuable to the Selling Securityholders in
connection with their exercise of the Unit Purchase Warrants, however, are not
subject to the Company's repurchase.
The Class B Warrants may be exercised on surrender of the Class B
Warrant certificate on or prior to expiration of the Class B Warrants, with the
form of "Exercise Agreement" on the reverse side of the certificate
12
<PAGE> 15
executed as indicated, and accompanied by payment of the full exercise price of
the number of Class B Warrants being exercised. Payment must be by certified
funds payable to the order of the Warrant Agent. In order for a holder to
exercise a Class B Warrant, there must be a current and effective registration
statement on file with the Securities and Exchange Commission and with various
state securities commissions registering the distribution of the shares of
Common Stock issuable upon exercise of the Class B Warrants. The Company will be
required to file post-effective amendments to the Registration Statement of
which this Prospectus forms a part when events require such amendments. Although
it is the Company's intention to file post-effective amendments when necessary,
there is no assurance that the Registration Statement will be kept effective. If
the Registration Statement is not kept current for any reason, the Class B
Warrants will not be exercisable, and holders thereof may be deprived of any
value.
UNITS
Each Unit is comprised of two shares of Common Stock and one Class B
Warrant, each such security being received by the holder of a Unit Purchase
Warrant upon the exercise of such Unit Purchase Warrant. The Unit Purchase
Warrants are exercisable for a term having commenced on November 9, 1992, and
ending November 9, 1997. Each Unit Purchase Warrant was originally exercisable
for $11.55 per Unit, however, due to certain adjustments, each Unit is currently
exercisable for $7.97 per Unit. Each Representatives' Warrant issued upon
exercise of a Unit Purchase Warrant entitles its holder to 1.3 shares of Common
Stock at an exercise price of $3.50 per share. All other terms of the
Representatives' Warrants are the same as those governing the Class B Warrants
as set forth above.
DELAWARE LAW AND CERTAIN CHARTER AND BYLAW PROVISIONS
The Certificate of Incorporation contains the following special
provisions that may delay, defer or prevent a change in control of the Company:
The Board of Directors is divided into three classes, with members
serving three-year terms ending in successive years. An objective of the
classified Board of Directors is to facilitate continuity and stability of the
Company's management and policies, since a majority of the Directors at any
given time will have prior experience as Directors of the Company. However,
classification also moderates the pace of any change in control of the Company,
because it makes it more difficult for the stockholders to change a majority of
the Board of Directors, for whatever reason. It would take at least two annual
meetings to elect a majority of the Board of Directors, unless the Certificate
of Incorporation were amended to eliminate provisions for a classified Board of
Directors
The Certificate of Incorporation also provides that Directors may only
be removed, with cause, by the vote of the holders of at least two-thirds (66%)
of the voting power of the outstanding voting stock of the Company or 51% of
such voting power, together with the vote of a majority of "Disinterested
Directors" as defined in the Certificate of Incorporation. In addition, the
Certificate of Incorporation provides that the Board of Directors may, from time
to time, fix the number of Directors constituting the Board of Directors and
fill vacancies on the Board of Directors.
The Certificate of Incorporation limits the liability of Directors to
the maximum extent permitted by the General Corporation Law of Delaware (the
"Delaware Corporate Code"). Such Delaware law provides that the Directors of a
corporation will not be personally liable to such corporation or its
stockholders for monetary damages for breach of their fiduciary duties as
Directors, except for liability (i) for any breach of their duty of loyalty to
the corporation or its stockholders; (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law;
(iii) for unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware Corporate Code; or (iv)
for any transaction from which the Director derives an improper personal
benefit. The Certificate of Incorporation also provides that the Company shall
indemnify its Directors and Officers to the fullest extent permitted by Delaware
law, except against actions by the Company approved by the Board of Directors,
and requires the Company to advance expenses to such Directors and Officers to
defend any action for which rights of indemnification are provided in the
Certificate of Incorporation, and also permits the Board of Directors to grant
such rights to its employees and agents. The Company believes that these
provisions will assist the Company in attracting and retaining qualified
individuals to serve as Directors, Officers and employees.
The Company is subject to the provisions of Section 203 of the Delaware
Corporate Code. In general, Section 203 prohibits certain publicly-held Delaware
corporations from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person or entity became an interested stockholder, unless the business
combination is approved in a prescribed manner or certain other exceptions
apply. For purposes of Section 203, a "business combination" is defined broadly
to include
13
<PAGE> 16
mergers, asset sales and other transactions resulting in a financial benefit to
the interested stockholder. Subject to certain exceptions, an "interested
stockholder" is a person or entity who, together with affiliates and associates,
owns, or within the three immediately preceding years of a business combination
did own, 15% or more of the corporation's outstanding voting stock.
In addition to being subject to Section 203, the Certificate of
Incorporation also provides that where a vote of stockholders is otherwise
required under Delaware law to approve a merger or consolidation, dissolution,
reorganization, recapitalization or sale of substantially all of the Company's
assets, no such action can be taken unless approved by a vote of two-thirds (66
2/3%) of the voting power of the shares entitled to vote thereon (the "Special
Voting Provision"). The Special Voting Provision could make it more difficult
for a third party, or could discourage a third party from attempting, to
takeover the Company and therefore may limit the price that certain investors
might be willing to pay in the future for shares of the Company's Common Stock.
In accordance with the Certificate of Incorporation, for nominations of
the Board of Directors or for other business to be properly brought by a
stockholder before an annual meeting of stockholders, the stockholder must first
have given timely notice thereof in writing to the Secretary of the Company. To
be timely, a stockholder's notice generally must be delivered not less than
sixty days nor more than ninety days prior to the annual meeting. The notice
must contain, among other things, certain information about the stockholder
delivering the notice and as applicable, background about the nominee or a
description of the proposed business to be brought before the meeting.
The Certificate of Incorporation provides that, if the Company has 10
or more stockholders, no action is permitted to be taken by the stockholders of
the Company by written consent. Special meetings may be called only by the Board
of Directors, the Chairman of the Board or the President of the Company. These
provisions could have the effect of delaying until the next annual stockholders'
meeting stockholder actions which are favored by the holders of a majority of
the outstanding voting securities of the Company. These provisions may also
discourage another person or entity from making a tender offer for the Company's
Common Stock, because such person or entity, even if it acquired a majority of
the outstanding voting securities of the Company, would be able to take action
as a stockholder (such as electing new Directors or approving a merger) only at
a duly called stockholders' meeting, and not by written consent.
The Delaware Corporate Code provides generally that the affirmative
vote of a majority of the shares entitled to vote on any matter is required to
amend a corporation's certificate of incorporation or by-laws, unless a
corporation's certificate of incorporation or by-laws, as the case may be,
requires a greater percentage. The affirmative vote of the holders of at least
two-thirds of the outstanding voting stock of the Company is required to amend
or repeal any of the foregoing provisions in the Certificate of Incorporation,
or, in the case of each of the foregoing provisions other than the vote required
for a merger or consolidation, etc., 51% of the voting stock and a majority of
"Disinterested Directors." Such stockholder vote would be in addition to any
separate class vote that might in the future be required pursuant to the terms
of any Preferred Stock that might be outstanding at the time any such amendments
are submitted to stockholders.
LEGAL MATTERS
The validity of the issuance of the Securities offered hereby has been
passed upon for the Company by Greenberg, Traurig, Hoffman, Lipoff, Rosen &
Quentel, P.A., Miami, Florida.
EXPERTS
The financial statements of the Company and its consolidated
subsidiaries as of December 31, 1996 and 1995, and for each of the years in the
two-year period ended December 31, 1996, have been incorporated by reference in
this prospectus and registration statement from the Company's Annual Report on
Form 10-KSB in reliance upon the report of Coopers & Lybrand L.L.P, independent
certified public accountants, which is incorporated herein by reference, and
upon the authority of said firm as experts in accounting and auditing.
14
<PAGE> 17
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has authority under Section 145 of the Delaware General
Corporation Law to indemnify its directors and officers to the extent provided
for in such statute. The Company's Certificate of Incorporation provides for
indemnification of the Company's officers and directors to the fullest extent
permitted under the Delaware General Corporation Law.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or controlling persons of the
Company, pursuant to the foregoing provisions or otherwise, the Company has been
advised that, in the opinion of the Securities and Exchange Commission (the
"Commission"), such indemnification is against public policy as expressed in the
Securities Act, and is therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered hereunder, the Company will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
15
<PAGE> 18
NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR
TO MAKE ANY REPRESENTATION OTHER THAN AS CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, BY ANY PERSON IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
-----------------
TABLE OF CONTENTS
<TABLE>
Page
----
<S> <C>
Available Information ..................................................... 1
Incorporation Of Certain Information By Reference ......................... 1
Risk Factors .............................................................. 2
The Company ............................................................... 7
Use Of Proceeds ........................................................... 9
Selling Securityholders ................................................... 10
Plan Of Distribution ...................................................... 10
Description Of Capital Stock .............................................. 13
Legal Matters ............................................................. 16
Experts ................................................................... 16
Indemnification Of Directors And Officers ................................. 17
</TABLE>
39,852 UNITS CONSISTING OF
79,704 SHARES OF COMMON STOCK,
39,852 CLASS B WARRANTS &
51,807 SHARES OF COMMON STOCK
UPON THE EXERCISE OF THE CLASS B WARRANTS
RAILAMERICA, INC.
- -----------------
PROSPECTUS
- -----------------
May 7, 1997
<PAGE> 19
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses, excluding solicitation fees, in connection with
this offering are as follows:
<TABLE>
<CAPTION>
AMOUNT
-------
<S> <C>
Registration Fee ........................................... $ 270
Legal fees and expenses .................................... $20,000
Blue Sky fees and expenses ................................. $ 2,000
Accounting fees and expenses ............................... $ 1,000
Miscellaneous .............................................. $ 2,000
Total ............................................. $25,270
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has authority under Section 145 of the Delaware General
Corporation Law to indemnify its directors and officers to the extent provided
for in such statute. The Company's Amended and Restated Certificate of
Incorporation provides for indemnification of the Company's officers and
directors to the extent permitted under the Delaware General Corporation Law.
The Registrant's Amended and Restated Certificate of Incorporation
limits the liability of Directors to the maximum extent permitted by Delaware
General Corporation Law. Delaware law provides that the directors of a
corporation will not be personally liable to such corporation or its
stockholders for monetary damages for breach of their fiduciary duties as
directors, except for liability (i) for any breach of their duty of loyalty to
the corporation or its stockholders; (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law;
(iii) for unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware General Corporation Law;
or (iv) for any transaction from which the director derives an improper personal
benefit. The Registrant's Amended and Restated Certificate of Incorporation
provides that the Registrant shall indemnify its Directors and officers to the
fullest extent permitted by Delaware law, except against actions by the
Registrant approved by the Board of Directors, and requires the Registrant to
advance expenses to such Directors and officers to defend any action for which
rights of indemnification are provided in the Certificate of Incorporation, and
also permits the Board of Directors to grant such rights to its employees and
agents.
II-2
<PAGE> 20
ITEM 16. EXHIBITS
The following exhibits are included as a part of this Registration
Statement:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------------------------------------------------------------------------------------------
<S> <C>
1.1 Underwriting Agreement(1)
1.2 Soliciting Agent Agreement with Rickel & Associates, Inc.(4)
3.1 Amended and Restated Articles of Incorporation of Registrant(10)
3.2 By-laws of Registrant(10)
4.2 Class B Warrant(2)
4.3 Unit Purchase Warrants(2)
5.1 Opinion of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A.(17)
10.10 Third Party Agreement, dated December 19, 1990, between HESR and TSBY(1)
10.14 RailAmerica, Inc. 1992 Stock Option Plan(1)+
10.18 Equipment Finance Lease, dated March 8, 1993, among Charter Financial, Inc., the Company,
HESR, SGVY and RSC(2)
10.19 Purchase Money Security Agreement, dated March 8, 1993, as amended, among Charter Financial,
Inc., the Company, HESR, SGVY and RSC(2)
10.21 Purchase Money Loan and Security Agreement, dated April 1993, among Charter Financial, Inc.,
Tilden Financial Corp., the Company, HESR, SGVY, and RSC(2)
10.23 Loan Agreement among RailAmerica, Inc., South Central Tennessee Railroad Corporation, South
Central Tennessee Railroad Company, Inc. and Charter Financial, Inc., dated as of December 31,
1993(5)
10.24 Lease Agreement between South Central Tennessee Railroad Authority and South Central
Tennessee Railroad Company, Inc. dated October 16, 1984(3)
10.32 Stock Purchase Agreement between Steel City Truck Lines Limited, Josef Bichler and
RailAmerica, Inc. dated December 19, 1994(11)
10.33 Stock Purchase Agreement between 823215 Ontario, Inc. and RailAmerica, Inc. dated February 6,
1995(11)
10.34 Loan documents in connection with RailAmerica's acquisition of Kalyn/Siebert Incorporated(6)
10.35 Employment Agreement between Robert B. Coward and Kalyn/Siebert Incorporated(6)
10.37 Stock Purchase Agreement, dated July 11, 1995, among RailAmerica, Inc., Brain E. Muir, Elli
M.A. Mills and Kimberly Hughes, Prairie Holding Corporation and Dakota Rail, Inc.(8)
10.38 Settlement Agreement (including Warrant Agreement), entered into March 15, 1995, by Eric D.
Gerst and RailAmerica, Inc., RailAmerica Services Corporation and Huron and Eastern Railway
Company, Inc.(8)
10.39 Loan Agreement, dated September 29, 1995, by and between RailAmerica, Inc., Kalyn/Siebert
Incorporated, RailAmerica Intermodal Services, Inc., RailAmerica Carriers, Inc., Steel City
Carriers, Inc., Saginaw Valley Railway Company, Inc., Huron and Eastern Railway Company, Inc.
and National Bank of Canada(10)
10.40 Asset Purchase Agreement, dated October 11, 1995, by and among Seagraves, Whiteface &
Lubbock Railroad Co., American Railway Corporation, TEMCO Corporation and RailAmerica,
Inc.(9)
10.41 Employment Agreement between Gary O. Marino and RailAmerica, Inc.(10)+
10.42 Employment Agreement between John H. Marino and RailAmerica, Inc.(10)+
10.43 Stock Option Agreement, dated November 11, 1994, between RailAmerica, Inc. and Gary O.
Marino (10)+
10.44 RailAmerica, Inc. 1995 Stock Incentive Plan(10)+
10.45 RailAmerica, Inc. 1995 Non-Employee Director Stock Option Plan(10)
10.46 RailAmerica, Inc. 1995 Employee Stock Purchase Plan(10)
</TABLE>
II-3
<PAGE> 21
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------------------------------------------------------------------------------------------
<S> <C>
10.47 RailAmerica, Inc. Corporate Senior Executive Bonus Plan(10)+
10.49 Purchase and Sale Agreement dated November 30, 1995, by and between CSX Transportation, Inc.
and Saginaw Valley Railway Company, Inc.(11)
10.50 Stock Purchase Agreement dated October 1, 1995 by and between RailAmerica, Inc. and the
holders of all the issued and outstanding shares of the Company's Preferred Stock(11)
10.51 Asset Purchase Agreement dated January 26, 1996 by and between TEMCO Corporation and
RailAmerica Equipment Corporation(11)
10.52 Agreement of Sale dated July 18, 1996 by and between the Commonwealth's Department of
Transportation and Delaware Valley Railway Company, Inc., a wholly owned subsidiary of
RailAmerica, Inc.(12)
10.53 Agreement entered into by and between R. Frank Unger, Trustee of Sagamore National
Corporation, Indiana HiRail Corporation and RailAmerica, Inc.(12)
10.54 Asset Purchase Agreement, dated August 5, 1996, by and among Burlington Northern Railroad
Company and Cascade and Columbia River Railroad Company, a subsidiary of RailAmerica,
Inc.(13)
10.56 Stock Purchase Agreement, dated as of September 20, 1996, by and among Otter Tail Valley
Railroad Company, Inc. and the shareholders of Otter Tail Valley Railroad Company, Inc. and
Dakota Rail, Inc.(15)
10.62 Form of the Warrant Agent Agreement (1) (see exhibit 28.3 thereto)
11 Statement Regarding Computation of Per Share Earnings (16)
21 List of Current Subsidiaries of the Company (16)
23.1 Consent of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. (contained in exhibit 5.1)(17)
23.2 Consent of Coopers & Lybrand L.L.P.(17)
24.1 Power of Attorney: Previously filed
27 Financial Data Schedule (16) (for SEC use only)
</TABLE>
- ------------------------------
(1) Incorporated by reference to the same exhibit number filed as part of
the Registrant's Registration Statement on Form S-1, Registration No.
33-49026.
(2) Incorporated by reference to the same exhibit number filed as part of
the Registrant's Post-Effective Amendment No. 3 on Form SB-2 dated
November 25,1994, Registration No. 33-49026.
(3) Incorporated by reference to the same exhibit number filed as part of
the Company's annual report on Form 10-KSB, filed with the Securities
and Exchange Commission on March 31, 1993.
(4) Incorporated by reference to the same exhibit number filed as part of
the Registrant's Post-Effective Amendment No. 4 on Form SB-2 dated
December 14, 1994, Registration No. 33-49026.
(5) Incorporated by reference to the same exhibit number filed as part of
the Company's Form 10-KSB for the year ended December 31, 1993, filed
with the Securities and Exchange Commission on April 15, 1994.
(6) Incorporated by reference to the same exhibit number filed as a part of
the Registrant's Post-Effective Amendment No. 2 on Form SB-2, dated
October 17,1994, Registration No. 33-49026.
(7) Incorporated by reference to the same exhibit number filed as part of
the Company's Form 10-KSB for the year ended December 31, 1994, filed
with the Securities and Exchange Commission on March 30, 1995.
(8) Incorporated by reference to the same exhibit number filed as part of
the Company's Form 10-QSB for the quarter ended June 30,1995, filed
with the Securities and Exchange Commission on August 9, 1995.
(9) Incorporated by reference to the exhibit 2.1 filed as part of the
Company's Form 8-K as of November 1, 1995, filed with the Securities
and Exchange Commission on November 3, 1995.
(10) Incorporated by reference to the same exhibit number filed as part of
the Company's Form 10-QSB for the quarter ended September 30, 1995,
filed with the Securities and Exchange Commission on November 12, 1995.
(11) Incorporated by reference to the same exhibit number filed as part of
the Company's Form 10-KSB for the year ended December 31, 1995, filed
with the Securities and Exchange Commission on April 12, 1996.
(12) Incorporated by reference to the same exhibit number filed as part of
the Company's Form 10-QSB for the quarter ended June 30, 1996, filed
with the Securities and Exchange Commission on August 12, 1996
(13) Incorporated by reference to the exhibit 2.1 filed as part of the
Company's Form 8-K as of September 6, 1996, filed with the Securities
and Exchange Commission on September 12, 1996.
(14) Incorporated by reference to the exhibit A filed as part of the Company
Form 8-K as of September 30, 1996, filed with the Securities and
Exchange Commission on October 17, 1996.
(15) Incorporated by reference to the exhibit 2.1 filed as part of the
Company's Form 8-K as of October 11, 1996, filed with the Securities
and Exchange Commission on October 25, 1996.
(16) Incorporated by reference to the financial statements and footnotes
included in the Company's Form 10-KSB/A for the year ended December 31,
1996, filed with the Securities and Exchange Commission on May 7,
1997.
(17) Filed Herewith.
+ Executive Compensation Plan or Arrangement.
II-4
<PAGE> 22
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high and of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim of indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
II-5
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-2 and has duly caused this
Amendment No. 2 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Boca Raton, Florida, as of May, 7,
1997.
RAILAMERICA, INC.
By: /s/ Gary O. Marino
-----------------------------------
Gary O. Marino
Chairman, Chief Executive Officer,
President and Treasurer
(Duly Authorized Representative)
/s/ Gary O. Marino*
-----------------------------------
John H. Marino
President, Chief Operating Officer
and Director
/s/ Gary O. Marino*
-----------------------------------
Donald D. Redfearn
Executive Vice President, Secretary
and Director
/s/ Gary O. Marino*
------------------------------------
Larry Bush, Assistant Vice President
and Controller
(Principal Accounting Officer)
/s/ Gary O. Marino*
------------------------------------
Richard Rampell
Director
/s/ Gary O. Marino*
-----------------------------------
John M. Sullivan
Director
/s/ Gary O. Marino*
-----------------------------------
Chares Swinburn
Director
/s/ Gary O. Marino*
-----------------------------------
Robert F. Toia
Director
/s/ Gary O. Marino*
-----------------------------------
Douglas R. Nichols
Director
* Pursuant to a Power of Attorney granted to Gary O. Marino by such person.
<PAGE> 1
EXHIBIT 5.1
<PAGE> 2
OPINION OF GREENBERG, TRAURIG, HOFFMAN, LIPOFF, ROSEN & QUENTEL, P.A.
May 7, 1997
RailAmerica, Inc.
301 Yamato Road, Suite 1190
Boca Raton, Florida 33431
Ladies and Gentlemen:
We have acted as counsel for RailAmerica, Inc., a Delaware corporation
(the "Company"), in connection with the Company's Amendment No. 2 to the
Registration Statement on Form S-2 (the "Registration Statement") being filed by
the Company under the Securities Act of 1933, as amended, with respect to the
Company's issuance of (i) 38,176 Units (the "Units"), consisting of 76,352
shares (the "Shares") of the Company's common stock, par value $.001 per share
(the "Common Stock"), and 38,176 Class B Warrants (the "Warrants") and (ii)
49,629 shares (the "Warrant Shares") of Common Stock issuable upon the exercise
of the Warrants. The Registration Statement also registers the proposed resale
from time to time by the selling securityholders (the "Selling Securityholders")
named therein of the Shares, Warrants and Warrant Shares (collectively, the
"Securities"). The Units are issuable upon the exercise of certain unit purchase
warrants (the "Unit Purchase Warrants") held by the Selling Securityholders.
In connection with the preparation of the Registration Statement and
this letter, we have examined, considered and relied upon the following
documents (collectively, the "Documents"): the Registration Statement; the Unit
Purchase Warrants issued to the Selling Securityholders; the terms of the Class
B Warrants; the Company's Certificate of Incorporation (as amended) as filed
with the Secretary of State of the State of Delaware; the Company's Bylaws and
corporate minute book; a certificate of good standing of the Company issued on
May 7, 1997, by the Secretary of State of the State of Delaware; and such
matters of law as we have considered necessary or appropriate for the expression
of the opinions contained herein.
In rendering the opinions set forth below, we have assumed without
investigation the genuineness of all signatures and the authenticity of all
documents submitted to us as originals, the conformity to authentic original
documents of all documents submitted to us as copies, and the veracity of the
Documents. As to questions of fact material to the opinions hereinafter
expressed, we have relied upon the representations and warranties of the Company
made in the Documents.
Based solely upon and subject to the Documents, and subject to the
qualifications set forth below, we are of the opinion that the Securities have
been duly authorized and when the Securities have been duly delivered against
payment therefor, as contemplated in the Unit Purchase Warrants and pursuant to
the terms of the Class B Warrants, the Securities will be validly issued, fully
paid and nonassessable.
Although we have acted as counsel to the Company in connection with
certain other matters, our engagement is limited to certain matters about which
we have been consulted. Consequently, there may exist matters of a legal nature
involving the Company in connection with which we have not been consulted and
have not represented the Company. This opinion letter is limited to the matters
stated herein and no opinions may be implied or inferred beyond the matters
expressly stated herein. The opinions expressed herein are as of the date
hereof, and we assume no obligation to update or supplement such opinions to
reflect any facts or circumstances that may hereafter come to our attention or
any changes in law that may hereafter occur.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Matters" in the prospectus contained in the Registration Statement. In giving
such consent, we do not admit that we come within the category of persons whose
consent is required by Section 7 of the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
Very truly yours,
GREENBERG, TRAURIG, HOFFMAN, LIPOFF,
ROSEN & QUENTEL, P.A.
By:/s/Gary M. Epstein
-------------------------------------
Gary M. Epstein
<PAGE> 1
EXHIBIT 23.2
<PAGE> 2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Amendment No. 2 to the
Registration Statement on Form S-2 of our report dated March 21, 1997, on our
audits of the consolidated financial statements of RailAmerica, Inc. and
Subsidiaries as of December 31, 1996 and 1995 and for the years then ended,
appearing in the Company's Annual Report on Form 10-KSB/A for the year ended
December 31, 1996. We also consent to the reference to our firm under the
caption "Experts."
/s/ Coopers & Lybrand
- ------------------------------
COOPERS & LYBRAND
West Palm Beach, Florida
May 7, 1997
