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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) SEPTEMBER 3, 1998
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RAILAMERICA, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
0-20618 65-0328006
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(Commission File Number) (IRS Employer Identification No.)
301 YAMATO ROAD, SUITE 1190
BOCA RATON, FLORIDA 33431
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(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code (561) 994-6015
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N/A
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On September 3, 1998, RailAmerica, Inc. (the "Company") entered into a
standstill agreement (the "Standstill Agreement") with a major investor group of
the Company that owns, in the aggregate, 1,552,900 shares of the Company's
common stock, $.001 par value (the "Common Stock"), or 15.9% of the shares of
Common Stock currently outstanding. The investor group is comprised of EGS
Associates, L.P., EGS Partners, L.L.C., Bev Partners, L.P., Jonas Partners, L.P.
and several other affiliated individuals (collectively, the "Investor Group").
The Standstill Agreement provides that the Investor Group will not
acquire, individually or in the aggregate, more than 19.9% of the outstanding
Common Stock. Additionally, while such shareholders own 15% or more of the
outstanding Common Stock, they will not participate in proxy contests adverse to
the Company, take or attempt to take control of the Company, nor otherwise
interfere with the current management or operations of the Company.
Concurrently with the consummation of the Standstill Agreement, the
Company amended its 1998 Common Stock Purchase Rights Agreement (the "Rights
Agreement") to provide that the ownership position held by the Investor Group
will not trigger the exercise of the common stock purchase rights unless and
until such shareholders, individually or in the aggregate, acquire 20% or more
of the Common Stock.
Reference is made to the press release filed as Exhibit 99 hereto. The
information set forth in Exhibit 99 is hereby incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
EXHIBIT
NUMBER DESCRIPTION
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4.1 First Amendment to the Rights Agreement, dated as of
September 3, 1998, between the Company and American Stock
Transfer & Trust Company.(1)
4.2 Form of Agreement among the Company and the Investor
Group.
99 Press release, dated as of September 3, 1998.
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(1) Incorporated by reference to the exhibit of the same number filed as
part of the Registrant's Registration Statement on Form 8-A/A, filed on
September 16, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RAILAMERICA, INC.
Dated: September 15, 1998 By: /s/ Donald D. Redfearn
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Donald D. Redfearn
Executive Vice President
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INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
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4.2 Form of Agreement among the Company and the Investor
Group.
99 Press release, dated as of September 3, 1998.
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Exhibit 4.2
FORM OF AGREEMENT
AGREEMENT dated _________, 1998 among RAILAMERICA, INC., a Delaware
corporation (the "Company"), EGS ASSOCIATES, L.P., a Delaware limited
partnership ("EGS Associates"), EGS PARTNERS, L.L.C., a Delaware limited
liability company ("EGS Partners"), BEV PARTNERS, L.P., a Delaware limited
partnership ("Bev Partners"), JONAS PARTNERS, L.P., a Delaware limited
partnership ("Jonas Partners"), WILLIAM EHRMAN ("Ehrman"), FREDERIC GREENBERG
("Greenberg"), FREDERICK KETCHER ("Ketcher"), JONAS GERSTL ("Gerstl"), JAMES
McLAREN ("McLaren") and WILLIAM LAUTMAN ("Lautman"), (EGS Associates, EGS
Partners, Bev Partners, Jonas Partners, Ehrman, Greenberg, Ketcher, Gerstl,
McLaren and Lautman are sometimes hereinafter referred to individually as a
"Shareholder", and collectively as the "Shareholders").
W I T N E S S E T H:
WHEREAS, as of August 4, 1998, the Shareholders were the beneficial
owners of an aggregate of 1,552,900 shares of the Company's Common Stock, par
value $.001 per share (the "Common Stock"), representing approximately 15.9% of
the 9,757,538 shares of Common Stock outstanding as of such date; and
WHEREAS, the Company has agreed to modify certain terms of the
Company's 1998 Common Stock Purchase Rights Agreement as set forth on Exhibit A
attached hereto, on the condition that the Shareholders enter into this
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the Company and each of the Shareholders agree as follows:
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1. COMPANY SECURITIES. Each of the Shareholders represents and agrees
that Schedule 1 attached hereto accurately and completely sets forth as of
August 4, 1998 the number of shares of Common Stock owned of record or
beneficially by any Shareholder. No Shareholder owns of record or beneficially
any other securities of the Company not set forth on Schedule 1 for such
Shareholder or any other Shareholder. Each of the Shareholders agrees that they
will not acquire beneficially or of record, individually or in the aggregate, in
excess of 19.9% of the outstanding shares of Common Stock.
2. INVESTMENT INTENT. Each of the Shareholders represents and agrees
that such Shareholder owns any shares of Common Stock without any view to
exercising control over the Company, merging or otherwise combining it with any
other person or effecting any change in the corporate structure of the Company
or the manner in which the Company conducts its business.
3. RESTRICTIONS ON CERTAIN ACTIONS. For any period during which the
Shareholders own beneficially and/or of record, individually or in the
aggregate, 15% or more of the outstanding shares of Common Stock, none of the
Shareholders, without the prior written consent of the Company's Board of
Directors, shall:
(a) directly or indirectly seek, or permit any person over
whom or which such Shareholder has control (a "Controlled Person") to seek or
encourage or assist any associate, partner or affiliate of such Shareholder to
seek representation on the Board of Directors of the Company or otherwise seek
to participate in or influence the Company's management, management decisions,
operating policies, or governing corporate instruments;
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(b) instigate or join in any attempt to change the Company's
management, management decisions, operating policies, governing corporate
instruments or conduct of its business and affairs;
(c) solicit or permit any Controlled Person to solicit, or
encourage or assist any associate, partner or affiliate of such Shareholder to
solicit proxies with respect to any shares of Common Stock or other securities
of the Company entitled to vote generally for the election of directors or
otherwise ("Voting Securities") under any circumstance, or become a
"participant", or permit any Controlled Person, or encourage or assist any
associate, partner or affiliate of such Shareholder to become a "participant",
in any "election contest" relating to the election of directors of the Company,
changes in governing corporate instruments or otherwise (as such terms are used
in Rule 14a-11 of Regulation 14A under the Act);
(d) deposit, or permit any Controlled Person, or encourage or
assist any associate, partner or affiliate of such Shareholder to deposit, any
Voting Securities in a voting trust or similar arrangement, or subject or permit
any Controlled Person, or encourage or assist any associate, partner or
affiliate of such Shareholder to subject any Voting Securities to a voting or
similar agreement;
(e) take any action alone or in concert with any other person
to acquire or affect the control of the Company or, directly or indirectly,
participate in, or encourage the formation of, any group seeking to obtain or
take control of the Company; or
(f) directly or indirectly seek to influence any of the
Company's contractual relationships, whether orally, in writing or otherwise
(including, without limitation, the Company's contractual relationships with its
auditors, its investment bankers and its lenders).
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4. SPECIFIC ENFORCEMENT. Each of the Shareholders acknowledges and
agrees that the Company would be irreparably damaged in the event that any of
the provisions of this Agreement were not performed by any of the Shareholders
in accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the Company shall be entitled to an injunction or
injunctions to prevent breaches of such provisions and to specifically enforce
such provisions in any action instituted in any court of the United States or
any state thereof having subject matter jurisdiction, in addition to any other
remedy to which the Company may be entitled, at law or in equity. Each of the
Shareholders consents to personal jurisdiction in any such action brought in the
United States District Court for the Southern District of Florida, or in any
court of the State of Florida having subject matter jurisdiction, and to service
of process upon it in the manner set forth in paragraph 6(f) hereof.
5. AUTHORITY. Each party to this Agreement represents to the other
parties that (i) it has the authority to, and has taken all action necessary to
execute and deliver this Agreement and to carry out its obligations set forth
herein, and (ii) that this Agreement has been duly executed and delivered by it,
and assuming due authorization, execution and delivery by the other parties,
constitutes a valid and binding obligation of such party.
6. MISCELLANEOUS.
(a) SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the
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remaining terms, provisions, covenants and restrictions without including any of
such which may be hereafter declared invalid, void or unenforceable.
(b) EXPENSES. Each party hereto shall pay its own expenses
incurred in connection with this Agreement.
(c) SUCCESSORS AND ASSIGNS. No party shall assign his or its
rights hereunder, without the prior written consent of all parties hereto. This
Agreement shall be binding upon and shall inure to the benefit of and be
enforceable by the successors and assigns of the parties hereto.
(d) SURVIVAL OF REPRESENTATIONS, WARRANTIES, AND AGREEMENTS.
All representations, warranties, covenants and agreements made herein shall
survive the execution and delivery of this Agreement without limitation as to
time.
(e) AMENDMENTS. This Agreement may not be modified, amended,
altered or supplemented except upon the execution and delivery of a written
agreement executed by the parties hereto.
(f) NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given if given) by delivery, by cable, facsimile
transmission, telegram or telex, or by mail (registered or certified mail,
postage prepaid, return receipt requested) to the respective parties at their
addresses set forth below on the signature pages hereof or to such other address
as any party may have furnished to the other parties in writing in accordance
herewith, except that notices of change of address shall only be effective upon
receipt.
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(g) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the substantive law of the State of Delaware
without giving effect to the principles of conflict of laws thereof.
(h) COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
RAILAMERICA, INC.
301 Yamato Road, Suite 1190
Boca Raton, Florida 33431
By:
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EGS ASSOCIATES, L.P., a Delaware limited
partnership
By:
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EGS PARTNERS, L.L.C., a Delaware limited
liability company
By:
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BEV PARTNERS, L.P., a Delaware limited
partnership
By:
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JONAS PARTNERS, L.P., a Delaware limited
partnership
By:
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William Ehrman
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Frederic Greenberg
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Frederick Ketcher
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Jonas Gerstl
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James McLaren
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William Lautman
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SCHEDULE 1
OWNERSHIP AS OF AUGUST 4, 1998*
NAME COMMON STOCK
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EGS Associates L.P. 457,518
EGS Overseas Fund Limited 3,500
BEV Partners, L.P. 176,067
EGS Partners, L.L.C. - Managed Account A 12,603
Jonas Partners, L.P. 33,000
EGS Partners, L.L.C. - Managed Account B 830,212
William Ehrman 15,000
Beverly Ehrman (spouse of W. Ehrman) 15,000
Frederick Ketcher 10,000
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*Other Shareholders may also be deemed to have beneficial ownership of the
shares listed next to the name of a particular Shareholder.
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EXHIBIT 99
RAILAMERICA, INC. REACHES AGREEMENT
WITH MAJOR INVESTOR GROUP
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Boca Raton, Florida, September 3, 1998 - RailAmerica, Inc. (NASDAQ:
RAIL) announced today that it has entered into a standstill agreement with a
major investor group of the Company that owns, in the aggregate, 1,552,900
shares of the Company's common stock, or 15.9% of the shares currently
outstanding. The investor group is comprised of EGS Associates, L.P., EGS
Partners, L.L.C., Bev Partners, L.P., Jonas Partners, L.P. and several other
affiliated individuals.
The standstill agreement provides that the named shareholders will not
acquire, individually or in the aggregate, more than 19.9% of the outstanding
common stock of RailAmerica. Additionally, while such shareholders own 15% or
more of the Company's outstanding common stock, they will not participate in
proxy contests adverse to the Company, take or attempt to take control of the
Company, nor otherwise interfere with the current management or operations of
the Company.
Concurrently with the consummation of the standstill agreement, the
Company amended its 1998 Common Stock Purchase Rights Agreement to provide that
the ownership position held by the investor group will not trigger the exercise
of the Rights unless and until such shareholders, individually or in the
aggregate, acquire 20% or more of the Company's common. The amended 20%
threshold relates specifically to the investor group, whereas otherwise the
acquisition of 15% of the outstanding stock of the Company would trigger the
exercise of the Rights.
The Rights Agreement was initially implemented to enable all
RailAmerica shareholders to realize the long-term value of their investment in
the Company by encouraging anyone seeking to acquire the Company to negotiate
with the Board of Directors prior to attempting a takeover.
Gary O. Marino, Chairman, President and Chief Executive Officer of the
Company said, "We are pleased to reach this agreement with one of RailAmerica's
most supportive groups of shareholders. This group, lead by principal investor
William Erhman, has demonstrated through its past investment in the Company that
it has full confidence in our management team and the direction in which we are
moving the Company."
RailAmerica, Inc. is a diversified international transportation company
operating 12 railroads over approximately 2,400 route miles in eight U.S. states
and the Republic of Chile. The Company holds a minority equity interest in the
Great Southern Railway Limited consortium, which operates the 4,000-mile
transcontinental Australian passenger rail service. The Company also owns
Kalyn/Siebert, Inc., a specialty truck trailer manufacturer with production
facilities in Gatesville, Texas and Trois-Riveres, Quebec, Canada.
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