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Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
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)
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DELAWARE 4011 65-0328006
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
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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 the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
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, other than securities offered only in connection with dividend or
interest reinvestment plans, 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. [ ]
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PROPOSED MAXIMUM PROPOSED
TITLE OF SHARES AMOUNT TO BE AGGREGATE PRICE MAXIMUM AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE REGISTRATION FEE
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Common Stock (par
value $.001 per
share).............. 3,656,440 shares $4.56(1) $16,673,366.00 $5,053.00
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Total Registration Fee......................................................... $5,053.00
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(1) Estimated solely for the purpose of calculating the registration fee on
the basis of the average of the high and low prices of the Company's
Common Stock as of April 11, 1997, as reported by the National Association
of Securities Dealers Automated Quotation National Market System.
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.
3,656,440 SHARES OF COMMON STOCK
This Prospectus relates to an aggregate of 3,656,440 shares (the
"Securities") of Common Stock, par value $.001 per share (the "Common Stock"),
of RailAmerica, Inc., a Delaware corporation (together with its consolidated
subsidiaries, the "Company"), proposed to be sold from time to time by certain
shareholders of the Company (the "Selling Securityholders"). See "Selling
Securityholders." The Company will not receive any proceeds from the sale of
the Securities by the Selling Securityholders.
The Company has registered the Securities under the Securities Act of
1933, as amended (the "Securities Act"), for sale by the Selling
Securityholders. See "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 National Association of
Securities Dealers Automated Quotation System, Inc. ("NASDAQ")(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.
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 $20,000, in
connection with this offering, other than underwriting and brokerage
commissions, discounts, fees and counsel fees and expenses incurred by the
Selling Securityholders.
The Company's Common Stock is listed on the NASDAQ National Market System
under the symbol "RAIL". On April 11, 1997, the average of the high and low
prices for the Common Stock as reported by the NASDAQ National Market System
was $4.56 per share.
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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.
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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.
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The date of this Prospectus is April 17, 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.
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 for the year ended
December 31, 1996, filed on March 31, 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.
- The discussion of the Registrant's Common Stock in the
section entitled "Description of Capital Stock" contained in the
Registrant's Registration Statement on Form S-2 (File No.
333-22479), first filed with the Securities and Exchange Commission
on February 27, 1997, as amended.
In addition, all documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Securities
offered hereby shall be deemed to be incorporated herein by reference and to be
a part hereof from the date of filing of such documents.
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.
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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 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
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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
21,490,004 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 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 has, 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.
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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 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
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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 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.
SHARES ELIGIBLE FOR FUTURE SALE. On the date of this Prospectus, the
Company had 8,272,996 shares of Common Stock issued and outstanding and
2,972,281 shares of Common Stock reserved for issuance, including: (1) 211,927
shares of Common Stock reserved for issuance upon exercise of the Class B
Warrants (exercise price $3.50 per share); (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
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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). Of the 8,272,996 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, and may be resold thereafter in compliance with Rule
144.
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
6
<PAGE> 9
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.
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 Company will not receive any of the proceeds from the sale of any of
the Securities being offered by Selling Securityholders hereunder.
Expenses expected to be incurred by the Company in connection with this
offering are estimated to be approximately $20,000.
SELLING SECURITYHOLDERS
Of the 3,656,440 shares of Common Stock offered hereby, (i) 1,250,000 and
1,670,000 shares of Common Stock were acquired by certain investors in
connection with the Company's private placements dated September 30, 1996 and
January 15, 1997, respectively, (ii) 292,000 shares of Common Stock are
issuable to First London Securities Corporation ("First London") upon the
exercise of warrants issued to First London in connection with its role as the
placement agent during the Company's private placements dated September 30,
1996 and January 15, 1997, and (iii) the remaining 444,440 shares of Common
Stock are issuable upon the exercise of conversion rights under certain
convertible subordinated promissory notes, which were issued to certain Selling
Securityholders in connection with the Company's acquisition of Kalyn in August
1994.
Except as noted, 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 of his or
her warrants or conversion rights; and (ii) sells all of his or her Securities.
<TABLE>
<CAPTION>
OWNERSHIP OF SHARES NUMBER OWNERSHIP OF SHARES
SELLING OF COMMON STOCK OF SECURITIES OF COMMON STOCK
STOCKHOLDER PRIOR TO OFFERING OFFERED HEREBY AFTER OFFERING**
- -------------------------- ---------------------- -------------- ----------------------
SHARES PERCENTAGE SHARES PERCENTAGE
------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C>
The Apogee Fund L.P. 100,000 1.2% 100,000 0 0
Davis S. Barnard 44,444 * 44,444 0 0
James E. and Hong Z. 10,000 * 10,000 0 0
Bass
Bev Partners L.P. 63,000 * 63,000 0 0
H. Boyajian, Jr. 5,000 * 3,000 0 0
Jane E. Brokaw 10,000 * 10,000 0 0
Emil A. Budnitz, Jr. 10,000 * 10,000 0 0
A. Baron Cass III IRA 80,000 * 80,000 0 0
Rollover
A. Baron Cass III 38,000 * 13,000 0 0
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
OWNERSHIP OF SHARES NUMBER OWNERSHIP OF SHARES
SELLING OF COMMON STOCK OF SECURITIES OF COMMON STOCK
STOCKHOLDER PRIOR TO OFFERING OFFERED HEREBY AFTER OFFERING**
- -------------------------- ---------------------- -------------- ----------------------
SHARES PERCENTAGE SHARES PERCENTAGE
------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C>
Trustee for the benefit
of the A. Baron Cass III
Children's Trust
A. Baron & Darlene Cass 7,000 * 7,000 0 0
Family Foundation
Comreve Investments 12,500 * 12,500 0 0
Limited
Robert B. Coward (1) 100,000 1.2% 100,000 0 0
Jeff Lane Coward (2) 17,777 * 17,777 0 0
Mary Jill Coward (3) 17,777 * 17,777 0 0
D.C. Investment Partners 25,000 * 25,000 0 0
Opportunity Fund L.P.
Ann Kathleen Dahlson 5,000 * 5,000 0 0
Lenna H. Dersham DLSJC 2,500 * 2,500 0 0
as Custodian
Richard M. Dersham DLSJC 5,000 * 5,000 0 0
as Custodian
Richard M. Dersham DLSJC 2,500 * 2,500 0 0
as Custodian (SEP IRA)
Thomas J. Donavan, Jr. 35,000 * 15,000 0 0
Marybeth Drake 27,000 * 27,000 0 0
EFO Fund Ltd. 225,000 2.7% 225,000 0 0
EGS Associates L.P. 157,000 1.8% 157,000 0 0
Lucia A. Englander 15,000 * 15,000 0 0
First London Securities 292,000 3.5% 292,000 0 0
Corporation(4)
Louis D. Francis 14,000 * 10,000 0 0
Estate of Charles T. 20,000 * 20,000 0 0
Gaines
Meg Garland 31,111 * 31,111 0 0
Richard J. and Carol H. 50,000 * 50,000 0 0
Giddings
Stephen R. Gohlke or 4,444 * 4,444 0 0
Lynn B. Gohlke (5)
Gryphon Partners Co. 63,500 * 25,000 0 0
Byra Hemingway Estate 5,000 * 5,000 0 0
Trust
Brian King & Mason King 12,500 * 12,500 0 0
Livestock Partnership
John Brian King 277,500 3.3% 12,500 0 0
LKCM Investment 75,000 * 300,000 0 0
Partnership
LKCM Small Cap Equity 375,000 4.5% 375,000 0 0
Portfolio
John S. Lemak 37,000 * 37,000 0 0
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
OWNERSHIP OF SHARES NUMBER OWNERSHIP OF SHARES
SELLING OF COMMON STOCK OF SECURITIES OF COMMON STOCK
STOCKHOLDER PRIOR TO OFFERING OFFERED HEREBY AFTER OFFERING**
- -------------------------- ---------------------- -------------- ----------------------
SHARES PERCENTAGE SHARES PERCENTAGE
------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C>
Lawrence Lipton 11,000 * 6,000 0 0
N. Martin Co. 50,000 * 50,000 0 0
Nick Martin 50,000 * 50,000 0 0
Sheri Mathis 5,000 * 5,000 0 0
Ewalt Arnold Menn Jr., 40,000 * 40,000 0 0
IRA Rollover
Ray Nixon, Jr. 15,000 * 15,000 0 0
Susan S. Oelson 25,000 * 25,000 0 0
John W. Peavy III 60,000 * 60,000 0 0
John W. Pierson 10,000 * 10,000 0 0
Brian Price 6,500 * 6,500 0 0
Prime Petroleum, Inc. 100,000 1.2% 100,000 0 0
Profit Sharing Trust
Gary Rado 20,000 * 10,000 0 0
Sherman Robertson (6) 8,000 * 8,000 0 0
Don C. Russell 153,333 1.8% 153,333 0 0
Karen C. Samis 31,000 * 25,000 0 0
Raymond A. Schakel or 5,333 * 5,333 0 0
Sally B. Schakel (7)
Charles T. Smith, Jr (8). 17,777 * 17,777 0 0
Lewis A. Smith (9) 232,644 2.8% 44,444 0 0
Peter P. & Bonnie B. 15,000 * 10,000 0 0
Smith
John L. Strauss 380,000 4.5% 280,000 0 0
Robert L. Swisher, Jr. 380,000 4.5% 380,000 0 0
Charles C. Taylor 50,000 * 50,000 0 0
Titan Indemnity Co. 50,000 * 50,000 0 0
Dorothy Winchester 18,000 * 18,000 0 0
Windcrest Fund 20,000 * 20,000 0 0
</TABLE>
- -------------------------
*Indicates less than 1%
**Assumes all of the Securities registered hereby are sold.
(1) Robert B. Coward serves as the Company's Senior Vice President,
Manufacturing Group. Mr. Coward has been the General Manager of Kalyn
since the Company acquired Kalyn in August 1994.
(2) Jeff Lane Coward is the son of Robert B. Coward and not an employee of
the Company.
(3) Mary Jill Coward is the daughter of Robert B. Coward and not an employee
of the Company.
(4) First London, a securities broker-dealer specializing in equity trading
and investment banking, served as the exclusive placement agent for the
Company's private placements dated September 30, 1996, and January 15,
1997. Douglas R. Nichols, who is the President and principal shareholder
of First London, has served as a director of the Company since July 1996.
(5) Lynn B. Gohlke is an employee of Kalyn and provides accounting services
to Kalyn since the Company acquired Kalyn in August 1994.
9
<PAGE> 12
(6) Sherman Robertson has been a marketing and sales representative for Kalyn
since the Company acquired Kalyn in August 1994.
(7) Raymond A. Schakel has been Senior Staff Engineer at Kalyn since the
Company acquired Kalyn in August 1994.
(8) Charles T. Smith has been Vice President of Operations at Kalyn since the
Company acquired Kalyn in August 1994.
(9) Lewis A. Smith has been a marketing and sales representative for Kalyn
since the Company acquired Kalyn in August 1994.
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 National Market System, on
the National Association of Securities Dealers Automated Quotation System, Inc.
("NASDAQ"), (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. 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.
The Company will pay all the expenses, estimated to be approximately
$20,000, 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 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.
The Selling Shareholders and other persons participating in the
distribution of the Securities offered hereby are subject to the applicable
requirements of Rule 10b-6 (as amended by Regulation M) promulgated under the
Exchange Act in connection with the sale of the Securities.
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.
10
<PAGE> 13
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.
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.
11
<PAGE> 14
================================================================================
NO DEALER, SALESPERSON OR ANY 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
page
----
Available Information 1
Incorporation of Certain Information by Reference 1
Risk Factors 2
The Company 6
Use of Proceeds 7
Selling Securityholders 7
Plan of Distribution 10
Legal Matters 10
Experts 10
Indemnification Of Directors And Officers 11
================================================================================
================================================================================
RAILAMERICA, INC.
--------------------------
PROSPECTUS
--------------------------
April 17, 1997
================================================================================
12
<PAGE> 15
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............ $ 5,050
Legal fees and expenses..... $ 8,000
Accounting fees and expenses $ 4,000
Miscellaneous............... $ 2,000
Total...................... $20,050
=======
</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-1
<PAGE> 16
ITEM 16. EXHIBITS
The following exhibits are included as a part of this Registration
Statement:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ ----------------------------------------------------------------------------
<S> <C>
3.1 Amended and Restated Articles of Incorporation of Registrant(1), at pp. 1-4.
3.2 By-laws of Registrant(1), at pp. 5-16.
4.1 Warrant Agreement dated as of September 30, 1996 between the Company and
First London Securities Corporation with Form of Warrant (2)
4.2 Warrant Agreement dated as of January 15, 1997 between the Company and
First London Securities Corporation with Form of Warrant (2)
5.1 Opinion of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A.
11 Statement regarding Computation of Per Share Earnings (3)
23.1 Consent of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A.
(contained in exhibit 5.1)
23.2 Consent of Coopers & Lybrand L.L.P.
24.1 Power of Attorney: Included Herein
</TABLE>
- -------------------
(1) 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.
(2) Filed herewith.
(3) Incorporated by reference to the footnotes to the financial statements
and to Exhibit 11 included in the Company's Form 10-KSB for the year ended
December 31, 1996, filed with the Securities and Exchange Commission March
31, 1997.
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.
II-2
<PAGE> 17
(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-3
<PAGE> 18
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-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Boca Raton, Florida, as of April 17, 1997.
RAILAMERICA, INC.
By: /s/ Gary O. Marino
-------------------------------------
Gary O. Marino
Chairman, Chief Executive Officer
and Treasurer
(Duly Authorized Representative)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Gary O. Marino and Larry Bush his true
and lawful attorneys-in-fact, each acting alone, with full powers of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign any or all amendments, including any
post-effective amendments, to this registration statement, and to file the
same, with exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, hereby ratifying and confirming all
that said attorneys-in-fact or their substitutes, each acting alone, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated as of April 17, 1997.
/s/ Gary O. Marino
-------------------------------------
Gary O. Marino, Chairman, Chief
Executive Officer, President, Chief
Operating Officer and Treasurer
(Principal Executive and Financial
Officer)
/s/ John H. Marino
-------------------------------------
John H. Marino, Vice Chairman
and Senior Transportation Officer
/s/ Donald D. Redfearn
-------------------------------------
Donald D. Redfearn, Executive Vice
President, Secretary and Director
/s/ Larry Bush
-------------------------------------
Larry Bush, Assistant Vice President
and Controller
(Principal Accounting Officer)
/s/ Richard Rampell
-------------------------------------
Richard Rampell, Director
/s/ John M. Sullivan
-------------------------------------
John M. Sullivan, Director
/s/ Charles Swinburn
-------------------------------------
Charles Swinburn, Director
/s/ Robert F. Toia
-------------------------------------
Robert F. Toia, Director
/s/ Douglas R. Nichols
-------------------------------------
Douglas R. Nichols, Director
II-4
<PAGE> 1
EXHIBIT 4.1
<PAGE> 2
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement") dated as of September 30, 1996
between RailAmerica, Inc., a Delaware corporation (the "Company") and First
London Securities Corporation, a Texas corporation (the "Holder").
WITNESSETH:
WHEREAS, the Holder agreed pursuant to a Placement Agency Agreement (the
"Placement Agreement") with the Company to act as the exclusive agent of the
Company in connection with the private placement of securities for the Company,
as set forth in the Placement Agreement dated September 13, 1996 between the
Holder and the Company attached hereto as Exhibit A; and
WHEREAS, in connection with the execution and delivery of, in
consideration for, and as part of the Holder's compensation in connection with
the Placement Agreement, the Company agreed to issue to the Holder warrants
(the "Warrants") to purchase one hundred twenty-five thousand (125,000) shares
(the "Shares") of common stock, par value $.001 per share (the "Common Stock")
of the Company; and
WHEREAS, the Holder has agreed to execute and deliver to the Company the
Access Letter attached hereto as Exhibit B upon the issuance of the Warrants.
NOW, THEREFORE, in consideration of the premises and the agreements herein
set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Grant. Subject to the terms and conditions hereof, the Holder is
hereby granted the right to purchase, at any time from September 30, 1996 until
5:00 P.M., Miami, Florida time, on September 30, 1997 (the "Warrant Exercise
Term"), up to 125,000 shares of Common Stock.
2. Warrant Certificates. The warrant certificate (the "Warrant
Certificate") delivered and to be delivered pursuant to this Agreement shall be
in the form set forth as Exhibit C attached hereto with such appropriate
insertions, omissions, substitutions and other variations as required or
permitted by this Agreement.
<PAGE> 3
3. Exercise of Warrants. The Warrants are exercisable at a price of $4.60
per share, payable in cash or by check to the order of the Company, or any
combination of cash or check, subject to adjustment as provided in Articles 6
and 7 hereof. Subject to the terms and conditions hereof, upon surrender of
the Warrant Certificate with the annexed Form of Election to Purchase duly
executed, together with payment of the Exercise Price (as hereinafter defined)
for the Shares purchased, at the Company's principal offices (presently located
at 301 Yamato Road, Suite 1190, Boca Raton, Florida 33431) the Holder shall be
entitled to receive a certificate or certificates for such shares of Common
Stock so purchased. The purchase rights represented by each Warrant
Certificate are exercisable at the option of the Holder hereof, in whole or in
part (but not as to fractional shares of the Common Stock). In the case of the
purchase of less than all the Shares purchasable under any Warrant Certificate,
the Company shall cancel said Warrant Certificate upon the surrender thereof
and shall execute and deliver a new Warrant Certificate of like tenor for the
balance of the Shares purchasable thereunder.
4. Issuance of Certificates. Upon the exercise of the Warrants in
accordance with the terms of this Agreement, the issuance of certificates for
the Shares so purchased shall be made within ten business days thereafter
without charge to the Holder including, without limitation, any tax which may
be payable in respect of the issuance thereof, and such certificates shall
(subject to the provisions of Article 5 hereof) be issued in the name of the
Holder.
The Warrant Certificates and the certificates representing the Shares
shall be executed on behalf of the Company by the manual or facsimile signature
of the present or any future Chairman or Vice Chairman of the Board of
Directors or President or Vice President of the Company under its corporate
seal reproduced thereon, attested to by the manual or facsimile signature of
the present or any future Secretary or Assistant Secretary of the Company.
The Warrant Certificates and, upon exercise of the Warrants, in part or in
whole, the certificates representing the Shares shall bear a legend
substantially similar to the following:
"The securities represented by this certificate have
not been registered under the Securities Act of 1933,
as amended (the "Act"), and may not be offered or sold
except (i) pursuant to an effective registration
statement under the Act, (ii) to the extent
applicable, pursuant to Rule 144 under the Act (or any
similar rule under such Act relating to the
disposition of securities), or (iii) upon the
2
<PAGE> 4
delivery by the holder to the Company of an opinion of counsel,
reasonably satisfactory to counsel to the issuer, stating that an
exemption from registration under such Act is available."
5. Restriction on Transfer of Warrants. The Holder of the Warrant
Certificate covenants and agrees that the Warrants are being acquired as an
investment and not with a view to the distribution thereof and that the Holder
will comply with all applicable securities laws, rules and regulations in
connection therewith.
6. Price.
6.1 Initial and Adjusted Purchase Price. The initial purchase price of
each Warrant shall be $4.60 per Share ("Exercise Price"). The adjusted
purchase price shall be the price which shall result from time to time from any
and all adjustments of the initial purchase price in accordance with the
provisions of Article 7 hereof.
6.2 Purchase Price. The term "Exercise Price" herein shall mean the
initial purchase price or the adjusted purchase price, depending upon the
context.
7. Adjustments of Exercise Price and Number of Shares.
7.1 Subdivision and Combination. In case the Company shall at any time
subdivide or combine the outstanding shares of Common Stock, the Exercise Price
shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination. Upon each adjustment of the Exercise
Price pursuant to the provisions of this Section 7.1, the number of Shares
issuable upon the exercise of each Warrant shall be adjusted to the nearest
full Share by multiplying a number equal to the Exercise Price in effect
immediately prior to such adjustment by the number of Shares issuable upon
exercise of the Options immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price.
7.2 Reclassification, Consolidation, Merger, etc. In case of any
reclassification of the outstanding shares of Common Stock (other than a change
in par value to no par value, or from no par value to par value, or as a result
of a subdivision or combination), or in the case of any consolidation of the
Company with, or merger of the Company into, another corporation (excluding a
consolidation or merger in which the Company is the surviving corporation and
which does not result in any reclassification or change of the outstanding
shares of Common Stock, except a change as a result of a subdivision or
combination of such shares or a change in par
3
<PAGE> 5
value, as aforesaid), or in the case of a sale or conveyance to another
corporation of the property of the Company as an entirety, the Holder shall
thereafter have the right to purchase the kind and number of shares of stock and
other securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance as if the Holder was the owner of the
shares of Common Stock underlying the Warrants immediately prior to any such
events, at a price equal to the product of (x) the number of shares issuable
upon exercise of the Warrants and (y) the Exercise Price in effect immediately
prior to the record date for such reclassification, change, consolidation,
merger, sale or conveyance.
8. Exchange and Replacement of Warrant Certificates. The Warrant Certificate
is exchangeable without expense, upon the surrender thereof by the
Holder at the principal executive office of the Company, for a new Warrant
Certificate of like tenor and date representing in the aggregate the right to
purchase the same number of Shares in such denominations as shall be designated
by the Holder thereof at the time of such surrender. Upon receipt by the Company
of evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of any Warrant Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it, and
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of the Warrants, if mutilated, the Company will
make and deliver a new Warrant Certificate of like tenor, in lieu thereof to the
Holder.
9. Elimination of Fractional Interests. The Company shall not be required
to issue certificates representing fractions of shares of Common Stock
and shall not be required to issue scrip or pay cash in lieu of fractional
interests, it being the intent of the parties that all fractional interests
shall be eliminated by rounding any fraction up to the nearest whole number of
shares of Common Stock.
10. Reservation and Listing of Securities. The Company shall at all times
reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issuance upon the exercise of the Warrants,
such number of shares of Common Stock as shall be issuable upon the exercise
thereof. The Company covenants and agrees that, upon exercise of the Warrants
and payment of the Exercise Price therefor, all Shares of Common Stock issuable
upon such exercise shall be duly and validly issued, fully paid, non-assessable
and not subject to the preemptive rights of any shareholder. Although the
Common Stock is currently quoted on the Nasdaq SmallCap
4
<PAGE> 6
Market, as long as the Warrants shall be outstanding, the Company shall
continue its efforts to cause all Shares of Common Stock issuable upon the
exercise of the Warrants to be quoted on the Nasdaq National Market.
11. Piggyback Registration.
(a) For a period of one year from the date of this Agreement, if the
Company proposes to register any of its securities under the Securities Act of
1933, as amended (the "Act"), other than in connection with a merger or
pursuant to Form S-8, it will give written notice to the Holder at least
fifteen days prior to the filing of each such registration statement of its
intention to do so. If the Holder notifies the Company within five days after
receipt of any such notice of its desire to include the Warrants and/or the
Shares of Common Stock issuable upon the exercise of the Warrants in such
proposed registration statement, the Company shall afford the Holder the
opportunity to do so. The obligation of the Company to give such notice shall
be limited to the Holder.
(b) Notwithstanding the provisions of this Section 11, the Company shall
have the right at any time after it shall have given written notice pursuant to
this Section 11 (irrespective of whether a written request for inclusion of any
such securities shall have been made) to elect not to file any such proposed
registration statement, or to withdraw same after the filing but prior to the
effective date thereof.
(c) The obligations of the Company identified in this Section 11 shall be
suspended and tolled for such periods of time (the "Registration Suspension
Period") as is necessary so that under no circumstances shall the registered
resale of Shares of Common Stock issuable upon the exercise of the Warrants
commence within ninety days after the commencement of an underwritten primary
public offering of the Company's equity securities (a "Public Offering"). The
Holder acknowledges and agrees that during the Registration Suspension Period
it shall not resell the Shares issuable upon the exercise of the Warrants.
12. Covenants of the Company with Respect to Registration.
(a) In connection with any registration under Section 11 hereof the
Company agrees as follows:
(i) to prepare and file with the SEC a registration statement
with respect to such securities and use its best efforts to
cause such registration statement to become and remain
effective;
5
<PAGE> 7
(ii) to prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the
requirements of the Act and the rules and regulations
promulgated by the SEC thereunder relating to the sale or
other disposition of the securities covered by such
registration statement;
(iii) to furnish to Holder such numbers of copies of a
prospectus, including a preliminary prospectus, complying
with the requirements of the Act, and such other documents as
the Holder may reasonably request in order to facilitate the
public sale or other disposition of the securities owned by
Holder, but the Holder shall not be entitled to use any
selling materials other than a prospectus and such other
materials as may be approved by the Company, which approval
will not be unreasonably withheld; and
(iv) to use its best efforts to register or qualify the
securities covered by such registration statement under the
Securities Acts of such states as the Holder shall reasonably
request ("State Acts"), and do any and all such other acts
and things as may be necessary or advisable to enable the
Holder to consummate the public sale or other disposition of
the securities owned by such Holder in such states; provided,
however, that the Company shall not be obligated to register
or qualify such securities in any jurisdiction in which such
registration or qualification would require the Company to
qualify as a foreign corporation or file any general consent
to service of process where it is not then so qualified or
has not theretofore so consented.
(b) Except as provided below in this Section 12, the expenses
incurred by the Company in connection with action taken by the Company to
comply with this Section 12, including, without limitation, all
registration and filing fees, printing and delivery expenses, accounting
fees, fees and disbursements of counsel, consultant and expert fees,
premiums for liability insurance, if the Company chooses to obtain such
insurance, obtained in connection with a registration statement filed to
effect such compliance and all expenses, including counsel fees, of
complying with State Acts, shall be paid by the Company, provided,
however, that all such expenses in connection with any amendment or
supplement to any registration statement filed by the Company hereunder
or the related prospectus which is required to be filed more than nine
months after the effective date of such registration statement because
the Holder or any underwriter of the Holder's securities has not effected
the disposition of the securities required to be registered shall be paid
by the Holder pro rata. All fees and disbursements of any counsel,
experts, or consultants employed by the Holder shall be borne by the
Holder. The Company shall not be obligated in any way in connection with
any registration pursuant to this Section 12 for any selling commissions
or discounts payable by the Holder to any underwriter of securities to be
sold by the Holder. It shall be a
6
<PAGE> 8
condition precedent to the obligation of the Company to take any action
pursuant to this Section 12 that the Company shall have received an
undertaking satisfactory to it from the Holder to pay all expenses
required to be borne by the Holder and to furnish or cause to be
furnished to the Company specifically for use in the preparation of the
registration statement and prospectus written information concerning the
securities held by the Holder and also concerning any underwriter of such
securities and the intended method of disposition thereof and any
additional information or documentation as the Company shall reasonably
request and as may be required by administrators of the Act or State Acts
in connection with the action to be taken by the Company hereunder
pursuant to such registration.
(c) In the event of any registration of the Holder's securities
under the Act pursuant to this Section 12, the Company will indemnify and
hold harmless the Holder, its officers, directors and each underwriter of
such securities, and any person who controls the Holder or any
underwriter within the meaning of Section 15 of the Act, against all
claims, actions, losses, damages, liabilities and expenses, joint or
several, to which any of such persons may become subject under the Act or
otherwise, insofar as such losses, claims, damages, liabilities, or
actions arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration
statement under which such securities were registered under the Act, any
preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Holder, its officers, directors and
each underwriter of such securities, and each such controlling person or
entity for any legal and any other expenses reasonably incurred by the
Holder, such underwriter, or such controlling person or entity in
connection with investigating or defending any such loss, action, claim,
damage, liability, or action; provided, however, that the Company will
not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of or its based upon an untrue
statement or alleged untrue statement or omission or alleged omission
made in said registration statement, said preliminary prospectus or said
prospectus, or said amendment or supplement in reliance upon and in
conformity with written information
7
<PAGE> 9
furnished to the Company through an instrument duly executed by the
Holder or such underwriter specifically for use in the preparation
thereof.
(d) In the event of any registration of any securities under the Act
pursuant to this Section 12, the Holder will, or will furnish the written
undertaking of such other person or entity as shall be acceptable to the
Company to, indemnify and hold harmless the Company, its officers,
directors and any person who controls such Company within the meaning of
Section 15 of the Act, against losses, claims, damages, liabilities, or
actions, joint or several, to which the Company, its officers, directors,
or such controlling person or entity may become subject under the Act or
otherwise, insofar as such losses, claims, damages, liabilities, or
actions arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration
statement under which such securities were registered under the Act, any
preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, in each case to the extent and only to the extent that any
such loss, claim, damage, liability, or action arises out of or is based
upon an untrue statement or alleged untrue statement or omission or
alleged omission made in said registration statement, said preliminary
prospectus or said prospectus or said amendment or supplement in reliance
upon and in conformity with written information furnished to the Company
through an instrument duly executed by the Holder or any underwriter of
such Holder's securities specifically for use in the preparation thereof.
13. Notices to Holder. Nothing contained in this Agreement shall be
construed as conferring upon the Holder the right to vote or to consent or to
receive notice as a shareholder in respect of any meetings of shareholders for
the election of directors or any other matter, or as having any rights
whatsoever as a shareholder of the Company. If, however, at any time prior to
the expiration of the Warrants and their exercise, any of the following events
shall occur
(a) the Company shall take a record of the holders of its shares of Common
Stock for the purpose of entitling them to receive a dividend or
8
<PAGE> 10
distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or retained earnings, as
indicated by the accounting treatment of such dividend or distribution on the
books of the Company; or
(b) the Company shall offer to all the holders of its Common Stock any
additional shares of capital stock of the Company or securities convertible
into or exchangeable for shares of capital stock of the Company, or any option,
right or warrant to subscribe therefor, including the occurrence of any of the
events set forth in Section 7.2 hereof; or
(c) a dissolution, liquidation or winding up of the Company (other than in
connection with a consolidation or merger) or a sale of all or substantially
all of its property, assets and business as an entirety shall be proposed;
then, in any one or more of said events, the Company shall give written notice
of such event at least fifteen (15) days prior to the date fixed as a record
date or the date of closing the transfer books for the determination of the
shareholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, options or warrants, or
entitled to vote on such proposed dissolution, liquidation, winding up or sale.
Such notice shall specify such record date or the date of closing the transfer
books, as the case may be. Failure to give such notice or any defect therein
shall not affect the validity of any action taken in connection with the
declaration or payment of any such dividend or distribution, or the issuance of
any convertible or exchangeable securities or subscription rights, options or
warrants, or any proposed dissolution, liquidation, winding up or sale.
14. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to the Holder of the Warrants, to the address of such Holder as
shown on the books of the Company; or
(b) If to the Company, to the address set forth in Section 3 of this
Agreement or to such other address as the Company may designate by notice to
the Holders.
15. Supplements and Amendments. The Company and the Holder may from time
to time supplement or amend this Agreement in order to cure any ambiguity, to
correct or supplement any provision
9
<PAGE> 11
contained herein which may be defective or inconsistent with any
provisions herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Holder may deem necessary
or desirable.
16. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company and the Holder inure to the benefit of their
respective successors and assigns hereunder.
17. Termination. This Agreement shall terminate at the close of business
on September 30, 1997.
18. Governing Law. This Agreement and each Warrant Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Florida and for all purposes shall be construed in accordance with the laws of
the State of Florida. The Company and the Holder do hereby confer exclusive
jurisdiction to enforce or resolve any problems or disputes arising in
connection with this Agreement, each Warrant Certificate and all matters
arising out of or in connection therewith, upon the Florida State courts or the
Federal courts sitting in Dade County, Florida and the Company and the Holder
hereby consent to personal jurisdiction in such jurisdiction, consent to
service of process by certified mail in such jurisdiction, waive any objections
to venue in such jurisdiction, and waive any claim that any such court is an
inconvenient forum.
19. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Holder any legal or equitable right, remedy or claim under this Agreement, and
this Agreement shall be for the sole and exclusive benefit of the Company and
the Holder.
20. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
THE COMPANY:
[SEAL] RAIL AMERICA, INC.
By: /s/Gary O. Marino
----------------------------------
Name: Gary O. Marino
10
<PAGE> 12
Title: Chairman of the Board,
President and Chief Executive
Officer
THE HOLDER:
[SEAL] FIRST LONDON SECURITIES CORPORATION
By: /s/Douglas Nichols
----------------------------------
Name: Douglas Nichols
Title: President
11
<PAGE> 13
EXHIBIT A
TO
WARRANT AGREEMENT
EXHIBIT B
TO
WARRANT AGREEMENT
ACCESS LETTER
September 30, 1996
RailAmerica, Inc.
301 Yamato Road
Suite 1190
Boca Raton, Florida 33431
Attn: Chairman of the Board,
President and Chief
Executive Officer
Dear Mr. Marino:
This letter is in reference to the acquisition by First London Securities
Corporation ("Holder") of certain warrants (the "Warrants") to purchase shares
(the "Shares") of common stock, par value $.001 per share, of RailAmerica, Inc.
(the "Company"), pursuant to a Warrant Agreement (the "Agreement") with the
Company. In connection with such Warrant purchase and any purchase of Shares
pursuant to the execution of the Warrants, the following acknowledgments,
representations and agreements are hereby made by the undersigned on behalf of
the Holder:
I currently serve as the _____________________, of the Holder.
I represent and acknowledge that all matters relating to the Company, the
Agreement and the Holder's investment in the Warrants have been explained to
the Holder to its satisfaction and that Holder understands the speculative
nature and risks involved in this investment.
I understand that the Company has relied on the information and
representations with respect to the Holder set forth in this letter in
determining whether an investment in the Company is suitable for the Holder,
and I represent and warrant that all such information is true and correct as of
the date hereof.
Holder is acquiring the Warrants for investment solely for its own account
and not for distribution, transfer, or resale to others.
Holder understands that it must bear the economic risk of the acquisition
of the Warrants and any Shares for the foreseeable future because (a) neither
the offer and sale of the Warrants nor the offer and sale of the Shares has
been registered under the Securities Act of 1933, as amended (the "Act"), and
applicable state securities laws;
A-1
<PAGE> 14
(b) the Warrants and the Shares may therefore not be sold, transferred,
pledged, or otherwise disposed of unless subsequently so registered or, an
opinion satisfactory to the Company and to counsel for the Company rendered to
the Company that registration under the Act or any applicable state securities
laws is not required; (c) the Company does not have an obligation to register a
resale of the Warrants or the Shares; and (d) the Company is under no
obligation to perfect any exemption for resale of the Warrants or the Shares.
In the event the Shares purchasable pursuant to the exercise of the
Warrants have not been registered under the Act or the securities laws of any
state or other jurisdiction, at the time the Warrants are exercised, Holder
agrees to make any investment representation and warranty to the Company as the
Company may reasonably require to ensure compliance with any applicable federal
or state securities law or regulation.
Holder understands that the certificates evidencing the Warrants and the
Shares will bear a restrictive legend prohibiting the transfer thereof except
in compliance with applicable state and federal securities laws and may not be
transferred of record except in compliance therewith.
Holder understands that the certificates evidencing the Warrants and the
Shares will contain provisions limiting the transfer thereof.
Holder has been afforded the opportunity to ask questions of, and receive
answers from, the Company and to obtain any additional information, to the
extent that the Company possesses such information or could have acquired it
without unreasonable effort or expense, necessary to verify the accuracy of the
information contained in the documents delivered to Holder and has in general
had access to all information deemed material to an investment decision with
respect to Holder's acquisition of the Warrants.
Holder is an "Accredited Investor" as defined in Rule 501 of Regulation D.
Holder has adequate means of providing for its current financial needs and
possible contingencies and has no need for liquidity in its investment in the
Company.
Holder is able to bear the economic risks inherent in its investment in
the Company. Holder further acknowledges that an important consideration
bearing on its ability to bear the economic risk of its acquisition of the
Warrants is whether Holder can afford a complete loss of its entire investment
in the Company, and that Holder can afford a complete loss of its entire
investment in the Company.
Holder has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of an investment in the
Company and of making an informed investment decision.
Holder acknowledges that it has discussed this letter with counsel and
understands the meaning and legal consequences of the representations and
warranties hereof, and Holder hereby agrees to indemnify and hold harmless the
Company and its controlling persons from and against any and all loss, damage
or liability due to or arising out of any misrepresentation or a breach of any
warranties contained herein.
This letter and the representations herein shall be governed by and
construed under the laws of the State of Florida and shall be binding upon
Holder's successors and assigns, and inure to the benefit of the Company's
successors and assigns.
Holder further acknowledges and understands the following:
THE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR THE
SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH
LAWS. THE WARRANTS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY
B-7
<PAGE> 15
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THE SHARES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT
AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE PURCHASER SHOULD BE AWARE THAT IT MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
B-8
<PAGE> 16
THE PURCHASER SHOULD REVIEW EXHIBIT B.1 TO THIS AGREEMENT WHEREIN NOTICES
TO RESIDENTS OF CERTAIN STATES ARE SET FORTH IN ACCORDANCE WITH SECURITIES LAWS
OF SUCH STATES.
FIRST LONDON SECURITIES CORPORATION
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
B-9
<PAGE> 17
EXHIBIT C
TO
WARRANT AGREEMENT
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (i)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE
EXTENT APPLICABLE, PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE
UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) UPON THE
DELIVERY BY THE HOLDER TO THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO COUNSEL FOR THE ISSUER, STATING THAT AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:00 P.M., MIAMI, FLORIDA TIME, SEPTEMBER 30, 1997
No. W-1 125,000 Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that FIRST LONDON SECURITIES
CORPORATION (the "Holder") is the registered holder of 125,000 Warrants to
purchase, at any time from September 30, 1996 until 5:00 P.M. Miami, Florida
time on September 30, 1997 ("Expiration Date"), up to 125,000 shares (the
"Shares") of fully-paid and non-assessable common stock, par value $.001 (the
"Common Stock"), of RailAmerica, Inc., a Delaware corporation (the "Company"),
at the initial exercise price, subject to adjustment in certain events (the
"Exercise Price"), of $4.60 per Share upon surrender of this Warrant
Certificate and payment of the Exercise Price at an office or agency of the
Company, but subject to the conditions set forth herein and in the Warrant
Agreement dated as of September 30, 1996 between the Company and the Holder
(the "Warrant Agreement"). Payment of the Exercise Price may be made in cash,
or by certified or official bank check in New York Clearing House funds payable
to the order of the Company, or any combination of cash or check.
No Warrant may be exercised after 5:00 P.M., Miami, Florida time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall expire and thereafter be null and void.
The Warrants evidenced by this Warrant Certificate are issued pursuant to
the Warrant Agreement, which Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument and is hereby referred to for a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Company and the Holder.
The Warrant Agreement provides that upon the occurrence of certain events,
the Exercise Price and/or number of the Company's securities issuable thereupon
may, subject to certain conditions, be adjusted. In such event, the Company
will, at the request of the Holder, issue a new Warrant Certificate evidencing
the adjustment in the Exercise Price and the number and/or type of securities
issuable upon the exercise of the Warrants.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall issue to the Holder hereof a new Warrant
Certificate representing such number of unexercised Warrants.
The Company may deem and treat the Holder as the absolute owner of this
Warrant Certificate (notwithstanding any notation of ownership or other writing
hereon made by anyone), for the purpose of any exercise hereof, and of any
distribution to the Holder hereof, and for all other purposes, and the Company
shall not be affected by any notice to the contrary.
C-1
<PAGE> 18
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
C-2
<PAGE> 19
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
Dated: As of September 30, 1996 RAILAMERICA, INC.
[SEAL] By:
----------------------------------
Name: Gary O. Marino
Title: Chairman of the Board,
President and Chief
Executive Officer
Attest:
- --------------------------------
C-3
<PAGE> 20
FORM OF ELECTION TO PURCHASE SHARES OF COMMON STOCK
OF
RAILAMERICA, INC.
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase _______________________
(___________) shares ("Shares") of Common Stock, par value $.001 per share of
RailAmerica, Inc. and herewith tenders in payment for such Shares, cash or a
certified or official bank check payable in New York Clearing House Funds to
the order of RailAmerica, Inc. in the amount of $________, all in accordance
with the terms hereof. The undersigned requests that a certificate for such
Shares be registered in the name of the undersigned, whose address is
________________________________________, and that such Certificate be
delivered to ________________________, whose address is
____________________________________.
Dated: Signature:
---------------------------
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant Certificate.)
------------------------------
------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
C-4
<PAGE> 21
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED
---------------------------------------------------------
hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ,
------------------------
Attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution.
Dated: Signature:
--------------------------
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant Certificate)
- --------------------------------
- --------------------------------
(Insert Social Security or Other
Identifying Number of Assignee)
C-5
<PAGE> 1
EXHIBIT 4.2
<PAGE> 2
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement") dated as of January 15, 1997
between RailAmerica, Inc., a Delaware corporation (the "Company") and First
London Securities Corporation, a Texas corporation (the "Holder").
WITNESSETH:
WHEREAS, the Holder agreed pursuant to a Placement Agency Agreement (the
"Placement Agreement") with the Company to act as the exclusive agent of the
Company in connection with the private placement of securities for the Company,
as set forth in the Placement Agreement dated December 16, 1996 between the
Holder and the Company attached hereto as Exhibit A; and
WHEREAS, in connection with the execution and delivery of, in
consideration for, and as part of the Holder's compensation in connection with
the Placement Agreement, the Company agreed to issue to the Holder warrants
(the "Warrants") to purchase one hundred sixty-seven thousand (167,000) shares
(the "Shares") of common stock, par value $.001 per share (the "Common Stock")
of the Company; and
WHEREAS, the Holder has agreed to execute and deliver to the Company the
Access Letter attached hereto as Exhibit B upon the issuance of the Warrants.
NOW, THEREFORE, in consideration of the premises and the agreements herein
set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Grant. Subject to the terms and conditions hereof, the Holder is
hereby granted the right to purchase, at any time from January 15, 1997 until
5:00 P.M., Miami, Florida time, on January 15, 1998 (the "Warrant Exercise
Term"), up to 167,000 shares of Common Stock.
2. Warrant Certificates. The warrant certificate (the "Warrant
Certificate") delivered and to be delivered pursuant to this Agreement shall be
in the form set forth as Exhibit C attached hereto with such appropriate
insertions, omissions, substitutions and other variations as required or
permitted by this Agreement.
<PAGE> 3
3. Exercise of Warrants. The Warrants are exercisable at a price of $5.75
per share, payable in cash or by check to the order of the Company, or any
combination of cash or check, subject to adjustment as provided in Articles 6
and 7 hereof. Subject to the terms and conditions hereof, upon surrender of
the Warrant Certificate with the annexed Form of Election to Purchase duly
executed, together with payment of the Exercise Price (as hereinafter defined)
for the Shares purchased, at the Company's principal offices (presently located
at 301 Yamato Road, Suite 1190, Boca Raton, Florida 33431) the Holder shall be
entitled to receive a certificate or certificates for such shares of Common
Stock so purchased. The purchase rights represented by each Warrant
Certificate are exercisable at the option of the Holder hereof, in whole or in
part (but not as to fractional shares of the Common Stock). In the case of the
purchase of less than all the Shares purchasable under any Warrant Certificate,
the Company shall cancel said Warrant Certificate upon the surrender thereof
and shall execute and deliver a new Warrant Certificate of like tenor for the
balance of the Shares purchasable thereunder.
4. Issuance of Certificates. Upon the exercise of the Warrants in
accordance with the terms of this Agreement, the issuance of certificates for
the Shares so purchased shall be made within ten business days thereafter
without charge to the Holder including, without limitation, any tax which may
be payable in respect of the issuance thereof, and such certificates shall
(subject to the provisions of Article 5 hereof) be issued in the name of the
Holder.
The Warrant Certificates and the certificates representing the Shares
shall be executed on behalf of the Company by the manual or facsimile signature
of the present or any future Chairman or Vice Chairman of the Board of
Directors or President or Vice President of the Company under its corporate
seal reproduced thereon, attested to by the manual or facsimile signature of
the present or any future Secretary or Assistant Secretary of the Company.
The Warrant Certificates and, upon exercise of the Warrants, in part or in
whole, the certificates representing the Shares shall bear a legend
substantially similar to the following:
"The securities represented by this certificate
have not been registered under the Securities Act of
1933, as amended (the "Act"), and may not be offered
or sold except (i) pursuant to an effective
registration statement under the Act, (ii) to the
extent applicable, pursuant to Rule 144 under the Act
(or any similar rule under such Act relating to the
disposition of securities), or (iii) upon the
2
<PAGE> 4
delivery by the holder to the Company of an opinion of counsel,
reasonably satisfactory to counsel to the issuer, stating that
an exemption from registration under such Act is available."
5. Restriction on Transfer of Warrants. The Holder of the Warrant
Certificate covenants and agrees that the Warrants are being acquired as an
investment and not with a view to the distribution thereof and that the Holder
will comply with all applicable securities laws, rules and regulations in
connection therewith.
6. Price.
6.1 Initial and Adjusted Purchase Price. The initial purchase price of
each Warrant shall be $5.75 per Share ("Exercise Price"). The adjusted
purchase price shall be the price which shall result from time to time from any
and all adjustments of the initial purchase price in accordance with the
provisions of Article 7 hereof.
6.2 Purchase Price. The term "Exercise Price" herein shall mean the
initial purchase price or the adjusted purchase price, depending upon the
context.
7. Adjustments of Exercise Price and Number of Shares.
7.1 Subdivision and Combination. In case the Company shall at any time
subdivide or combine the outstanding shares of Common Stock, the Exercise Price
shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination. Upon each adjustment of the Exercise
Price pursuant to the provisions of this Section 7.1, the number of Shares
issuable upon the exercise of each Warrant shall be adjusted to the nearest
full Share by multiplying a number equal to the Exercise Price in effect
immediately prior to such adjustment by the number of Shares issuable upon
exercise of the Options immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price.
7.2 Reclassification, Consolidation, Merger, etc. In case of any
reclassification of the outstanding shares of Common Stock (other than a change
in par value to no par value, or from no par value to par value, or as a result
of a subdivision or combination), or in the case of any consolidation of the
Company with, or merger of the Company into, another corporation (excluding a
consolidation or merger in which the Company is the surviving corporation and
which does not result in any reclassification or change of the outstanding
shares of Common Stock, except a change as a result of a subdivision or
combination of such shares or a change in par
3
<PAGE> 5
value, as aforesaid), or in the case of a sale or conveyance to another
corporation of the property of the Company as an entirety, the Holder shall
thereafter have the right to purchase the kind and number of shares of stock and
other securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance as if the Holder was the owner of the
shares of Common Stock underlying the Warrants immediately prior to any such
events, at a price equal to the product of (x) the number of shares issuable
upon exercise of the Warrants and (y) the Exercise Price in effect immediately
prior to the record date for such reclassification, change, consolidation,
merger, sale or conveyance.
8. Exchange and Replacement of Warrant Certificates. The Warrant
Certificate is exchangeable without expense, upon the surrender thereof by the
Holder at the principal executive office of the Company, for a new Warrant
Certificate of like tenor and date representing in the aggregate the right to
purchase the same number of Shares in such denominations as shall be designated
by the Holder thereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of any Warrant Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrants, if
mutilated, the Company will make and deliver a new Warrant Certificate of like
tenor, in lieu thereof to the Holder.
9. Elimination of Fractional Interests. The Company shall not be required
to issue certificates representing fractions of shares of Common Stock and
shall not be required to issue scrip or pay cash in lieu of fractional
interests, it being the intent of the parties that all fractional interests
shall be eliminated by rounding any fraction up to the nearest whole number of
shares of Common Stock.
10. Reservation and Listing of Securities. The Company shall at all times
reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issuance upon the exercise of the Warrants, such number of
shares of Common Stock as shall be issuable upon the exercise thereof. The
Company covenants and agrees that, upon exercise of the Warrants and payment of
the Exercise Price therefor, all Shares of Common Stock issuable upon such
exercise shall be duly and validly issued, fully paid, non-assessable and not
subject to the preemptive rights of any shareholder. Although the Common Stock
is currently quoted on the Nasdaq SmallCap
4
<PAGE> 6
Market, as long as the Warrants shall be outstanding, the Company shall
continue its efforts to cause all Shares of Common Stock issuable upon the
exercise of the Warrants to be quoted on the Nasdaq National Market.
11. Piggyback Registration.
(a) For a period of one year from the date of this Agreement,
if the Company proposes to register any of its securities under the
Securities Act of 1933, as amended (the "Act"), other than in
connection with a merger or pursuant to Form S-8, it will give
written notice to the Holder at least fifteen days prior to the
filing of each such registration statement of its intention to do
so. If the Holder notifies the Company within five days after
receipt of any such notice of its desire to include the Warrants
and/or the Shares of Common Stock issuable upon the exercise of the
Warrants in such proposed registration statement, the Company shall
afford the Holder the opportunity to do so. The obligation of the
Company to give such notice shall be limited to the Holder.
(b) Notwithstanding the provisions of this Section 11, the
Company shall have the right at any time after it shall have given
written notice pursuant to this Section 11 (irrespective of whether
a written request for inclusion of any such securities shall have
been made) to elect not to file any such proposed registration
statement, or to withdraw same after the filing but prior to the
effective date thereof.
(c) The obligations of the Company identified in this Section
11 shall be suspended and tolled for such periods of time (the
"Registration Suspension Period") as is necessary so that under no
circumstances shall the registered resale of Shares of Common Stock
issuable upon the exercise of the Warrants commence within ninety
days after the commencement of an underwritten primary public
offering of the Company's equity securities (a "Public Offering").
The Holder acknowledges and agrees that during the Registration
Suspension Period it shall not resell the Shares issuable upon the
exercise of the Warrants.
12. Covenants of the Company with Respect to Registration.
5
<PAGE> 7
(a) In connection with any registration under Section 11
hereof the Company agrees as follows:
(i) to prepare and file with the SEC a registration
statement with respect to such securities and use its best
efforts to cause such registration statement to become and
remain effective;
(ii) to prepare and file with the SEC such amendments
and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary
to keep such registration statement effective and to comply
with the requirements of the Act and the rules and
regulations promulgated by the SEC thereunder relating to the
sale or other disposition of the securities covered by such
registration statement;
(iii) to furnish to Holder such numbers of copies of a
prospectus, including a preliminary prospectus, complying
with the requirements of the Act, and such other documents as
the Holder may reasonably request in order to facilitate the
public sale or other disposition of the securities owned by
Holder, but the Holder shall not be entitled to use any
selling materials other than a prospectus and such other
materials as may be approved by the Company, which approval
will not be unreasonably withheld; and
(iv) to use its best efforts to register or qualify the
securities covered by such registration statement under the
Securities Acts of such states as the Holder shall reasonably
request ("State Acts"), and do any and all such other acts
and things as may be necessary or advisable to enable the
Holder to consummate the public sale or other disposition of
the securities owned by such Holder in such states; provided,
however, that the Company shall not be obligated to register
or qualify such securities in any jurisdiction in which such
registration or qualification would require the Company to
qualify as a foreign corporation or file any general consent
to service of process where it is not then so qualified or
has not theretofore so consented.
(b)Except as provided below in this Section 12, the expenses
incurred by the Company in connection with action taken by the
Company to comply with this Section 12, including, without
limitation, all registration and filing fees, printing and delivery
expenses, accounting fees, fees and disbursements of counsel,
consultant and expert fees, premiums for liability insurance, if
the Company chooses to obtain such insurance, obtained in
connection with a registration statement filed to effect such
compliance and all expenses, including counsel fees, of complying
with State Acts, shall be paid by the Company, provided, however,
that all such expenses in connection with any amendment or
supplement to any registration statement filed by the Company
hereunder or the related prospectus which is required to be filed
more than nine months after the effective date of such registration
statement because the Holder or any
6
<PAGE> 8
underwriter of the Holder's securities has not effected the
disposition of the securities required to be registered shall be
paid by the Holder pro rata. All fees and disbursements of any
counsel, experts, or consultants employed by the Holder shall be
borne by the Holder. The Company shall not be obligated in any way
in connection with any registration pursuant to this Section 12 for
any selling commissions or discounts payable by the Holder to any
underwriter of securities to be sold by the Holder. It shall be a
condition precedent to the obligation of the Company to take any
action pursuant to this Section 12 that the Company shall have
received an undertaking satisfactory to it from the Holder to pay
all expenses required to be borne by the Holder and to furnish or
cause to be furnished to the Company specifically for use in the
preparation of the registration statement and prospectus written
information concerning the securities held by the Holder and also
concerning any underwriter of such securities and the intended
method of disposition thereof and any additional information or
documentation as the Company shall reasonably request and as may be
required by administrators of the Act or State Acts in connection
with the action to be taken by the Company hereunder pursuant to
such registration.
(c) In the event of any registration of the Holder's
securities under the Act pursuant to this Section 12, the
Company will indemnify and hold harmless the Holder, its officers,
directors and each underwriter of such securities, and any person
who controls the Holder or any underwriter within the meaning of
Section 15 of the Act, against all claims, actions, losses, damages,
liabilities and expenses, joint or several, to which any of such
persons may become subject under the Act or otherwise, insofar as
such losses, claims, damages, liabilities, or actions arise out of
or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any registration statement under
which such securities were registered under the Act, any preliminary
prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Holder, its officers,
directors and
7
<PAGE> 9
each underwriter of such securities, and each such controlling
person or entity for any legal and any other expenses reasonably
incurred by the Holder, such underwriter, or such controlling
person or entity in connection with investigating or defending any
such loss, action, claim, damage, liability, or action; provided,
however, that the Company will not be liable in any such case to
the extent that any such loss, claim, damage, liability or action
arises out of or its based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in said
registration statement, said preliminary prospectus or said
prospectus, or said amendment or supplement in reliance upon and in
conformity with written information furnished to the Company
through an instrument duly executed by the Holder or such
underwriter specifically for use in the preparation thereof.
(d) In the event of any registration of any securities under
the Act pursuant to this Section 12, the Holder will, or will
furnish the written undertaking of such other person or entity as
shall be acceptable to the Company to, indemnify and hold harmless
the Company, its officers, directors and any person who controls
such Company within the meaning of Section 15 of the Act, against
losses, claims, damages, liabilities, or actions, joint or several,
to which the Company, its officers, directors, or such controlling
person or entity may become subject under the Act or otherwise,
insofar as such losses, claims, damages, liabilities, or actions
arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration
statement under which such securities were registered under the
Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent
and only to the extent that any such loss, claim, damage,
liability, or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged
omission made in said registration statement, said preliminary
prospectus or said prospectus or said amendment or supplement in
reliance upon and in conformity with
8
<PAGE> 10
written information furnished to the Company through an instrument
duly executed by the Holder or any underwriter of such Holder's
securities specifically for use in the preparation thereof.
13. Notices to Holder. Nothing contained in this Agreement shall be
construed as conferring upon the Holder the right to vote or to consent or to
receive notice as a shareholder in respect of any meetings of shareholders for
the election of directors or any other matter, or as having any rights
whatsoever as a shareholder of the Company. If, however, at any time prior to
the expiration of the Warrants and their exercise, any of the following events
shall occur:
(a) the Company shall take a record of the holders of its
shares of Common Stock for the purpose of entitling them to receive
a dividend or distribution payable otherwise than in cash, or a
cash dividend or distribution payable otherwise than out of current
or retained earnings, as indicated by the accounting treatment of
such dividend or distribution on the books of the Company; or
(b) the Company shall offer to all the holders of its Common
Stock any additional shares of capital stock of the Company or
securities convertible into or exchangeable for shares of capital
stock of the Company, or any option, right or warrant to subscribe
therefor, including the occurrence of any of the events set forth
in Section 7.2 hereof; or
(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale
of all or substantially all of its property, assets and business as
an entirety shall be proposed;
then, in any one or more of said events, the Company shall give written
notice of such event at least fifteen (15) days prior to the date fixed as a
record date or the date of closing the transfer books for the determination of
the shareholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, options or warrants, or entitled
to vote on such proposed dissolution, liquidation, winding up or sale. Such
notice shall specify such record date or the date of closing the transfer books,
as the case may be. Failure to give such notice or any defect therein shall not
affect the validity of any action taken in connection with the declaration or
9
<PAGE> 11
payment of any such dividend or distribution, or the issuance of any
convertible or exchangeable securities or subscription rights, options or
warrants, or any proposed dissolution, liquidation, winding up or sale.
14. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to the Holder of the Warrants, to the address of such
Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Section 3
of this Agreement or to such other address as the Company may
designate by notice to the Holders.
15. Supplements and Amendments. The Company and the Holder may from time
to time supplement or amend this Agreement in order to cure any ambiguity, to
correct or supplement any provision contained herein which may be defective or
inconsistent with any provisions herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and the
Holder may deem necessary or desirable.
16. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company and the Holder inure to the benefit of their
respective successors and assigns hereunder.
17. Termination. This Agreement shall terminate at the close of business
on January 15, 1998.
18. Governing Law. This Agreement and each Warrant Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Florida and for all purposes shall be construed in accordance with the laws of
the State of Florida. The Company and the Holder do hereby confer exclusive
jurisdiction to enforce or resolve any problems or disputes arising in
connection with this Agreement, each Warrant Certificate and all matters
arising out of or in connection therewith, upon the Florida State courts or the
Federal courts sitting in Dade County, Florida and the Company and the Holder
hereby consent to personal jurisdiction in such jurisdiction, consent to
service of process by certified mail in such jurisdiction, waive any objections
to venue in such jurisdiction, and waive any claim that any such court is an
inconvenient forum.
10
<PAGE> 12
19. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Holder any legal or equitable right, remedy or claim under this Agreement, and
this Agreement shall be for the sole and exclusive benefit of the Company and
the Holder.
20. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
11
<PAGE> 13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
THE COMPANY:
[SEAL] RAIL AMERICA, INC.
By: /s/Gary O. Marino
----------------------------------
Name: Gary O. Marino
Title: Chairman of the Board,
President and Chief
Executive Officer
THE HOLDER:
[SEAL] FIRST LONDON SECURITIES CORPORATION
By: /s/Douglas Nichols
----------------------------------
Name: Douglas Nichols
Title: President
12
<PAGE> 14
EXHIBIT A
TO
WARRANT AGREEMENT
A-1
<PAGE> 15
EXHIBIT B
TO
WARRANT AGREEMENT
ACCESS LETTER
January 15, 1997
RailAmerica, Inc.
301 Yamato Road
Suite 1190
Boca Raton, Florida 33431
Attn: Chairman of the Board,
President and Chief
Executive Officer
Dear Mr. Marino:
This letter is in reference to the acquisition by First London Securities
Corporation ("Holder") of certain warrants (the "Warrants") to purchase shares
(the "Shares") of common stock, par value $.001 per share, of RailAmerica, Inc.
(the "Company"), pursuant to a Warrant Agreement (the "Agreement") with the
Company. In connection with such Warrant purchase and any purchase of Shares
pursuant to the execution of the Warrants, the following acknowledgments,
representations and agreements are hereby made by the undersigned on behalf of
the Holder:
I currently serve as the _____________________, of the Holder.
I represent and acknowledge that all matters relating to the Company, the
Agreement and the Holder's investment in the Warrants have been explained to
the Holder to its satisfaction and that Holder understands the speculative
nature and risks involved in this investment.
I understand that the Company has relied on the information and
representations with respect to the Holder set forth in this letter in
determining whether an investment in the Company is suitable for the Holder,
and I represent and warrant that all such information is true and correct as of
the date hereof.
Holder is acquiring the Warrants for investment solely for its own account
and not for distribution, transfer, or resale to others.
Holder understands that it must bear the economic risk of the acquisition
of the Warrants and any Shares for the foreseeable future because (a) neither
the offer and sale of the Warrants nor the offer and sale of the Shares has
been registered under the Securities Act of 1933, as amended (the "Act"), and
applicable state securities laws; (b) the Warrants and the Shares may therefore
not be sold, transferred, pledged, or otherwise disposed of unless subsequently
so registered or, an opinion satisfactory to the Company and to counsel for the
Company rendered to the Company that registration under the Act or any
applicable state securities laws is not required; (c) the Company does not have
an obligation to register a resale of the Warrants or the Shares; and (d) the
Company is under no obligation to perfect any exemption for resale of the
Warrants or the Shares.
In the event the Shares purchasable pursuant to the exercise of the
Warrants have not been registered under the Act or the securities laws of any
state or other jurisdiction, at the time the Warrants are exercised, Holder
agrees to make any investment representation and warranty to the Company as the
Company may reasonably require to ensure compliance with any applicable federal
or state securities law or regulation.
B-1
<PAGE> 16
Holder understands that the certificates evidencing the Warrants and the
Shares will bear a restrictive legend prohibiting the transfer thereof except
in compliance with applicable state and federal securities laws and may not be
transferred of record except in compliance therewith.
Holder understands that the certificates evidencing the Warrants and the
Shares will contain provisions limiting the transfer thereof.
Holder has been afforded the opportunity to ask questions of, and receive
answers from, the Company and to obtain any additional information, to the
extent that the Company possesses such information or could have acquired it
without unreasonable effort or expense, necessary to verify the accuracy of the
information contained in the documents delivered to Holder and has in general
had access to all information deemed material to an investment decision with
respect to Holder's acquisition of the Warrants.
Holder is an "Accredited Investor" as defined in Rule 501 of Regulation D.
Holder has adequate means of providing for its current financial needs and
possible contingencies and has no need for liquidity in its investment in the
Company.
Holder is able to bear the economic risks inherent in its investment in
the Company. Holder further acknowledges that an important consideration
bearing on its ability to bear the economic risk of its acquisition of the
Warrants is whether Holder can afford a complete loss of its entire investment
in the Company, and that Holder can afford a complete loss of its entire
investment in the Company.
Holder has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of an investment in the
Company and of making an informed investment decision.
Holder acknowledges that it has discussed this letter with counsel and
understands the meaning and legal consequences of the representations and
warranties hereof, and Holder hereby agrees to indemnify and hold harmless the
Company and its controlling persons from and against any and all loss, damage
or liability due to or arising out of any misrepresentation or a breach of any
warranties contained herein.
This letter and the representations herein shall be governed by and
construed under the laws of the State of Florida and shall be binding upon
Holder's successors and assigns, and inure to the benefit of the Company's
successors and assigns.
Holder further acknowledges and understands the following:
THE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR THE
SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH
LAWS. THE WARRANTS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THE SHARES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT
AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE
B-2
<PAGE> 17
PURCHASER SHOULD BE AWARE THAT IT MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
THE PURCHASER SHOULD REVIEW EXHIBIT B.1 TO THIS AGREEMENT WHEREIN NOTICES
TO RESIDENTS OF CERTAIN STATES ARE SET FORTH IN ACCORDANCE WITH SECURITIES LAWS
OF SUCH STATES.
FIRST LONDON SECURITIES CORPORATION
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
B-3
<PAGE> 18
EXHIBIT C
TO
WARRANT AGREEMENT
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (i)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE
EXTENT APPLICABLE, PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE
UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) UPON THE
DELIVERY BY THE HOLDER TO THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO COUNSEL FOR THE ISSUER, STATING THAT AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:00 P.M., MIAMI, FLORIDA TIME, JANUARY 15, 1998
No. W-1 167,000 Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that FIRST LONDON SECURITIES
CORPORATION (the "Holder") is the registered holder of 167,000 Warrants to
purchase, at any time from January 15, 1997 until 5:00 P.M. Miami, Florida time
on January 15, 1998 ("Expiration Date"), up to 167,000 shares (the "Shares") of
fully-paid and non-assessable common stock, par value $.001 (the "Common
Stock"), of RailAmerica, Inc., a Delaware corporation (the "Company"), at the
initial exercise price, subject to adjustment in certain events (the "Exercise
Price"), of $5.75 per Share upon surrender of this Warrant Certificate and
payment of the Exercise Price at an office or agency of the Company, but
subject to the conditions set forth herein and in the Warrant Agreement dated
as of January 15, 1997 between the Company and the Holder (the "Warrant
Agreement"). Payment of the Exercise Price may be made in cash, or by
certified or official bank check in New York Clearing House funds payable to
the order of the Company, or any combination of cash or check.
No Warrant may be exercised after 5:00 P.M., Miami, Florida time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall expire and thereafter be null and void.
The Warrants evidenced by this Warrant Certificate are issued pursuant to
the Warrant Agreement, which Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument and is hereby referred to for a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Company and the Holder.
The Warrant Agreement provides that upon the occurrence of certain events,
the Exercise Price and/or number of the Company's securities issuable thereupon
may, subject to certain conditions, be adjusted. In such event, the Company
will, at the request of the Holder, issue a new Warrant Certificate evidencing
the adjustment in the Exercise Price and the number and/or type of securities
issuable upon the exercise of the Warrants.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall issue to the Holder hereof a new Warrant
Certificate representing such number of unexercised Warrants.
The Company may deem and treat the Holder as the absolute owner of this
Warrant Certificate (notwithstanding any notation of ownership or other writing
hereon made by anyone), for the purpose of any exercise hereof, and of any
distribution to the Holder hereof, and for all other purposes, and the Company
shall not be affected by any notice to the contrary.
C-1
<PAGE> 19
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
Dated: As of January 15, 1997 RAILAMERICA, INC.
[SEAL] By:
------------------------------------
Name: Gary O. Marino
Title: Chairman of the Board,
President and Chief
Executive Officer
Attest:
- ------------------------------
C-2
<PAGE> 20
FORM OF ELECTION TO PURCHASE SHARES OF COMMON STOCK
OF
RAILAMERICA, INC.
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase _______________________
(___________) shares ("Shares") of Common Stock, par value $.001 per share of
RailAmerica, Inc. and herewith tenders in payment for such Shares, cash or a
certified or official bank check payable in New York Clearing House Funds to
the order of RailAmerica, Inc. in the amount of $________, all in accordance
with the terms hereof. The undersigned requests that a certificate for such
Shares be registered in the name of the undersigned, whose address is
________________________________________, and that such Certificate be
delivered to ________________________, whose address is
____________________________________.
Dated: Signature:
--------------------------
(Signature must conform
in all respects to name
of holder as specified
on the face of the
Warrant Certificate.)
------------------------------
------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
C-3
<PAGE> 21
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED
---------------------------------------------------------
hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ,
------------------------
Attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution.
Dated: Signature:
-----------------------------
(Signature must conform in
all respects to name of
holder as specified on the
face of the Warrant
Certificate)
- --------------------------------
- --------------------------------
(Insert Social Security or Other
Identifying Number of Assignee)
C-4
<PAGE> 1
EXHIBIT 5.1
<PAGE> 2
OPINION OF GREENBERG, TRAURIG, HOFFMAN, LIPOFF, ROSEN & QUENTEL, P.A.
April 17, 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 Registration Statement on
Form S-3 (the "Registration Statement") being filed by the Company under the
Securities Act of 1933, as amended, with respect to 3,656,440 shares of the
Company's common stock, par value $.001 per share (the "Common Stock"), which
may be disposed of from time to time by the selling securityholders (the
"Selling Securityholders") named therein. Of the 3,656,440 shares of Common
Stock offered by the Selling Securityholders, (i) 1,250,000 and 1,670,000
shares (the "Private Placement Shares") of Common Stock were acquired by
certain Selling Securityholders in connection with the Company's private
placements dated September 30, 1996 and January 15, 1997, respectively, (ii)
292,000 shares (the "First London Shares") of Common Stock are issuable to
First London Securities Corporation ("First London") upon the exercise of
warrants issued to First London in connection with its role as the placement
agent during the Company's private placements dated September 30, 1996 and
January 15, 1997, and (iii) the remaining 444,440 shares (the "Kalyn Shares")
of Common Stock are issuable upon the exercise conversion rights under certain
convertible subordinated promissory notes dated August 31, 1994 (the "Notes"),
which were issued to certain Selling Securityholders in connection with
Company's acquisition of Kalyn/Siebert, Inc.
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 Warrant
Agreements between the Company and First London dated September 30, 1996 and
January 15, 1997 (the "Warrants"); the Subscription Agreements between the
Company and each of the Selling Securityholders who were investors in the
Company's private placements dated September 30, 1996, and January 15, 1997;
the Agreement for Purchase and Sale of Shares dated as of June 21, 1994,
between the Company and Kalyn/Siebert, Inc.; 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 April 7, 1997, by the Secretary of State of
the State of Delaware; and such other documents and 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 (i) the Private
Placement Shares to be sold by the Selling Shareholders pursuant to the
Registration Statement have been duly authorized and validly issued and are
fully paid and nonassessable, and (ii) when the First London Shares and the
Kalyn Shares have been duly delivered in accordance with the terms of the
Warrants and the Notes, respectively, such 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
<PAGE> 3
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.
Very truly yours,
GREENBERG, TRAURIG, HOFFMAN, LIPOFF,
ROSEN & QUENTEL, P.A.
By: /s/Gary M. Epstein
----------------------------------
Gary M. Epstein
2
<PAGE> 1
EXHIBIT 23.2
<PAGE> 2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement on Form S-3 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 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
April 16, 1997
1
