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EXHIBIT 4.1
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WARRANT AGREEMENT
Between
RAILAMERICA, INC.
and
WELLS FARGO BANK MINNESOTA, N.A.,
as
Warrant Agent
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Dated as of August 14, 2000
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TABLE OF CONTENTS
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SECTION 1. Appointment of Warrant Agent .......................................................................... 4
SECTION 2. Warrant Certificates .................................................................................. 4
SECTION 3. Execution of Warrant Certificates ..................................................................... 5
SECTION 4. Registration and Countersignature ..................................................................... 5
SECTION 5. Transfer and Exchange of Warrants ..................................................................... 6
SECTION 6. Registration of Transfers and Exchanges ............................................................... 6
(a) Transfer and Exchange of Warrants ........................................................ 6
(b) Restrictions on Transfer of a Definitive Warrant for a Beneficial Interest in a Global
Warrant ............................................................................. 8
(c) Transfer or Exchange of Global Warrants .................................................. 9
(d) Transfer or Exchange of a Beneficial Interest in a Global Warrant for a Definitive
Warrant ............................................................................. 9
(e) Restrictions on Transfer or Exchange of Global Warrants .................................. 10
(f) Countersignature of Definitive Warrants in Absence of Depositary ......................... 11
(g) Cancellation or Adjustment of a Global Warrant ........................................... 11
(h) Legends .................................................................................. 11
(i) Obligations with Respect to Transfers and Exchanges of Definitive and Global Warrants .... 12
SECTION 7. Terms of Warrants; Exercise of Warrants .............................................................. 12
SECTION 8. Payment of Taxes ...................................................................................... 16
SECTION 9. Rules 144 and 144A .................................................................................... 16
SECTION 10. Mutilated or Missing Warrant Certificates ............................................................ 16
SECTION 11. Reservation of Warrant Shares ........................................................................ 16
SECTION 12. Obtaining Stock Exchange Listings .................................................................... 17
SECTION 13. Adjustment of Number of Warrant Shares Issuable ...................................................... 17
(a) Adjustment for Change in Capital Stock ................................................... 17
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(b) Adjustment for Certain Sales of Common Stock Below Current Market Value .................. 18
(c) Adjustment upon Certain Distributions .................................................... 20
(d) Notice of Adjustment ..................................................................... 22
(e) Reorganization of Company; Fundamental Transaction ....................................... 22
(f) Other Events ............................................................................. 23
(g) Company Determination Final .............................................................. 23
(h) Warrant Agent's Adjustment Disclaimer .................................................... 23
(i) Specificity of Adjustment ................................................................ 24
(j) Voluntary Adjustment ..................................................................... 24
(k) Multiple Adjustments ..................................................................... 24
(l) When De Minimis Adjustment May Be Deferred ............................................... 24
(m) Amendments of the Certificate of Incorporation ........................................... 24
SECTION 14. Fractional Interests ................................................................................. 24
SECTION 15. Notice of Certain Distributions; Certain Rights ...................................................... 25
SECTION 16. Notices to the Company and Warrant Agent ............................................................. 25
SECTION 17. Supplements and Amendments ........................................................................... 26
SECTION 18. Concerning the Warrant Agent ......................................................................... 27
SECTION 19. Change of Warrant Agent .............................................................................. 29
SECTION 20. Identity of Transfer Agent ........................................................................... 30
SECTION 21. SEC Reports and Other Information .................................................................... 30
SECTION 22. Successors ........................................................................................... 31
SECTION 23. Termination .......................................................................................... 31
SECTION 24. Governing Law ........................................................................................ 31
SECTION 25. Benefits of This Agreement ........................................................................... 31
SECTION 26. Counterparts ......................................................................................... 31
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Exhibit A Common Stock Purchase Warrant of RailAmerica, Inc.
Exhibit B(1) Global Warrant Legend
Exhibit B(2) Unit Legend
Exhibit C Certificate to be Delivered upon Exchange or Registration of
Transfer of Warrants
Exhibit D Form of Transferee Letter of Representation in Connection with
Transfers to Institutional Accredited Investors
Exhibit E Form of Transferee Letter of Representation in Connection with
Transfers Pursuant to Regulation S
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WARRANT AGREEMENT (the "AGREEMENT"), dated as of August 14, 2000,
between RAILAMERICA, INC., a Delaware corporation (together with any successors
and assigns, the "COMPANY"), and Wells Fargo Bank Minnesota, N.A., as warrant
agent (with any successor warrant agent, the "WARRANT AGENT").
A. Pursuant to a purchase agreement (the "PURCHASE AGREEMENT") dated
August 9, 2000 among the Company, RailAmerica Transportation Corp. ("RAILAMERICA
TRANSPORTATION," and together with the Company, the "UNIT ISSUERS"), the
Guarantors named therein (the "GUARANTORS"), and Donaldson, Lufkin & Jenrette
Securities Corporation, Barclays Bank PLC and Scotia Capital (USA) Inc. (the
"INITIAL PURCHASERS"), the Unit Issuers have agreed to sell to the Initial
Purchasers 130,000 units (the "UNITS"), each consisting of (i) $1,000 principal
amount of 12 7/8% Senior Subordinated Notes due 2010 (the "NOTES") of
RailAmerica Transportation and (ii) one warrant (collectively, the "WARRANTS"),
each Warrant initially entitling the holder thereof to purchase 10.8570307
shares of Common Stock (as defined herein) of the Company.
B. The Notes and the Warrants comprising the Units shall not be
separately transferable until the Separability Date (as defined herein).
C. The holders of the Warrants are entitled to the benefits of a
Warrant Registration Rights Agreement dated as of August 14, 2000 by and between
the Company and the Initial Purchasers (the "WARRANT REGISTRATION RIGHTS
AGREEMENT").
D. The Company desires the Warrant Agent as warrant agent to assist the
Company in connection with the issuance, exchange, cancellation, replacement and
exercise of the Warrants, and in this Agreement wishes to set forth, among other
things, the terms and conditions on which the Warrants may be issued, exchanged,
canceled, replaced and exercised.
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein, the Company and the Warrant Agent hereby agree as follows:
Defined terms used in this Agreement shall, unless the context
otherwise requires, have the meanings specified below. Certain additional terms
are set forth elsewhere in this Agreement. Any reference to any section of
applicable law shall be deemed to include successor provisions thereto.
"AFFILIATE" has the meaning given to it in the Indenture.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or a day on
which banking institutions in New York are authorized or required by law to be
closed.
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"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, participations, rights in or other equivalents (however designated
and whether voting or non-voting) of such Person's capital stock, whether
outstanding on the Issue Date or issued after the Issue Date, and any and all
rights (other than any evidence of indebtedness), warrants or options
exchangeable for or convertible into such capital stock.
"CLASS" means, when referring to any Capital Stock, any class or series
of such Capital Stock.
"CLEARSTREAM" means Clearstream Banking, Societe Anonyme, Luxembourg.
"COMMON STOCK" means the Common Stock of the Company, par value $0.001
per share.
"CONVERTIBLE SECURITY" shall mean any securities convertible or
exercisable or exchangeable into Common Stock of the Company of the same class
as Warrant Shares, whether outstanding on the Issue Date or thereafter issued.
"DIRECT PARTICIPANT" means, with respect to the Depositary, Euroclear
or Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to The Depository Trust Company,
shall include Euroclear and Clearstream).
"EUROCLEAR" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE OFFER REGISTRATION STATEMENT" means the registration
statement to be filed by RailAmerica Transportation and the Guarantors under the
Securities Act with respect to the exchange of the Notes for Series B Notes (as
defined in the Notes Registration Rights Agreement).
"GUARANTORS" means the Company, Palm Beach Rail Holding, Inc., each
Restricted Subsidiary of RailAmerica Transportation as of the date of the
Indenture that is a Domestic Subsidiary and any other Subsidiary that executes a
guarantee in accordance with the provisions of the Indenture.
"INDENTURE" means the indenture dated as of August 14, 2000, among
RailAmerica Transportation, the Guarantors and Wells Fargo Bank Minnesota, N.A.,
as trustee, relating to the Notes.
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"INDEPENDENT FINANCIAL EXPERT" means a nationally recognized
independent investment banking, appraisal or accounting firm.
"INDIRECT PARTICIPANT" means a person who holds a beneficial interest
in a Global Warrant through a Direct Participant.
"ISSUE DATE" means August 14, 2000, the date of the Indenture.
"NOTES REGISTRATION RIGHTS AGREEMENT" means the Notes Registration
Rights Agreement dated as of August 14, 2000 among RailAmerica Transportation,
the Guarantors and the Initial Purchasers relating to the registration of the
Notes.
"ONE YEAR RESTRICTED PERIOD" means the one year "distribution
compliance period" as defined in rule 902(f) of Regulation S.
"PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SEPARABILITY DATE" means the earliest to occur of: (1) 180 days after
the date of this Agreement; (2) the date on which a registration statement for a
registered exchange offer with respect to the Notes is declared effective under
the Securities Act; (3) the date a shelf registration statement with respect to
the Notes or the Warrants is declared effective under the Securities Act; (4)
such date as Donaldson, Lufkin & Jenrette Securities Corporation in its sole
discretion shall determine; and (5) the date on which an Event of Default has
occurred or, in the event of a Change of Control (each as such term is defined
in the Indenture), the date the Company mails the requisite notice to the
holders.
"TIME OF DETERMINATION" means (i) in the case of any distribution of
securities or other property to existing shareholders to which Section 13(b) or
13(c) applies, the time and date of the determination of shareholders entitled
to receive such securities or property or (ii) in the case of any other issuance
and sale to which Section 13(b) or 13(c) applies, the time and date of such
issuance or sale.
"WARRANT SHARES" means the shares of Common Stock issuable upon
exercise of Warrants from time to time.
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SECTION 1. APPOINTMENT OF WARRANT AGENT. The Company hereby appoints
the Warrant Agent to act as agent for the Company in accordance with the
instructions hereinafter set forth in this Agreement, and the Warrant Agent
hereby accepts such appointment.
SECTION 2. WARRANT CERTIFICATES. (a) The certificates representing the
Warrants ("WARRANT CERTIFICATES") will initially be issued in the form of one or
more registered global warrants (the "GLOBAL WARRANTS") substantially in the
form of EXHIBIT A attached hereto, which shall be deposited with the Warrant
Agent, as custodian for the Depositary (as defined below), and registered in the
name of DTC (as defined below) or the nominee of DTC for credit to the accounts
of DTC's Direct and Indirect Participants. Any Global Warrants to be delivered
pursuant to this Agreement shall bear the legend set forth in EXHIBIT B(1)
attached hereto. The Global Warrants shall represent such of the outstanding
Warrants as shall be specified therein, and each Global Warrant shall provide
that it shall represent the aggregate amount of outstanding Warrants from time
to time endorsed thereon and that the aggregate amount of outstanding Warrants
represented thereby may from time to time be reduced or increased, as
appropriate. Any endorsement of a Global Warrant to reflect the amount of any
increase or decrease in the amount of outstanding Warrants represented thereby
shall be made by the Warrant Agent and the Depositary in accordance with
instructions given by the holder thereof. The Depository Trust Company ("DTC")
shall act as the "DEPOSITARY" with respect to the Global Warrants until a
successor shall be appointed by the Company and the Warrant Agent. Upon written
request, a holder of Warrants may receive from the Warrant Agent or the
Depositary definitive Warrant Certificates ("DEFINITIVE WARRANTS") as set forth
in Section 6 hereof.
(b) Warrants sold in offshore transactions in reliance on Regulation S
will initially be represented by one or more temporary, registered, global
book-entry Warrants (each a "REGULATION S TEMPORARY GLOBAL WARRANT") and shall
bear a legend substantially to the effect set forth in EXHIBIT A, which shall be
deposited with the Warrant Agent, as custodian for the Depositary, and
registered in the name of a nominee of DTC for credit to the accounts of
Indirect Participants participating in DTC through Euroclear and Clearstream.
During the One Year Restricted Period commencing on the day after the later of
the offering date and the original Issue Date of the Units in the case of
transfers by an owner of a beneficial interest in a Regulation S Temporary
Global Warrants, beneficial interests in the Regulation S Temporary Global
Warrant may be held only through Euroclear or Clearstream, and, pursuant to
DTC's procedures, Indirect Participants that hold a beneficial interest in the
Regulation S Temporary Global Warrant will not be able to transfer such interest
to a person that takes delivery thereof in the form of a beneficial interest in
the Global Warrant. Within a reasonable time after the expiration of the One
Year Restricted Period, the Regulation S Temporary Global Warrants will be
exchanged for one or more permanent global securities (the "REGULATION S
PERMANENT GLOBAL WARRANTS", upon delivery to DTC of certification of compliance
with the transfer restrictions
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applicable to the Warrants and pursuant to Regulation S as provided in this
Agreement. After the One Year Restricted Period, (i) beneficial interests in the
Regulation S Permanent Global Warrants may be transferred to a person that takes
delivery in the form of an interest in the Global Warrants and (ii) beneficial
interests in the Global Warrants may be transferred to a person that takes
delivery in the form of an interest in the Regulation S Permanent Global
Warrants, PROVIDED, in each case, that the certification requirements described
in Section 6 hereof are complied with.
SECTION 3. EXECUTION OF WARRANT CERTIFICATES. Warrant Certificates
shall be signed on behalf of the Company by its Chairman of the Board,
President, Chief Executive Officer, a Vice President, Treasurer, an Assistant
Treasurer or Chief Financial Officer and by a Vice President its Secretary or an
Assistant Secretary. Each such signature upon the Warrant Certificates may be in
the form of a facsimile signature of any such present or future officer and may
be imprinted or otherwise reproduced on the Warrant Certificates.
In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned by the Warrant Agent, or
disposed of by the Company, such Warrant Certificates nevertheless may be
countersigned and delivered or disposed of as though such person had not ceased
to be such officer of the Company; and any Warrant Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Warrant Certificate, shall be a proper officer of the Company to sign such
Warrant Certificate, although at the date of the execution of this Warrant
Agreement any such person was not such officer.
Warrant Certificates shall be dated the date of countersignature by the
Warrant Agent.
SECTION 4. REGISTRATION AND COUNTERSIGNATURE. The Warrants shall be
numbered and shall be registered on the books of the Company maintained at the
principal office of the Warrant Agent in the Borough of Manhattan, City of New
York (the "WARRANT REGISTER") as they are issued.
Warrant Certificates shall be manually countersigned by the Warrant
Agent and shall not be valid for any purpose unless so countersigned. The
Warrant Agent shall, upon written instructions of the Chairman of the Board, the
President, Chief Executive Officer, a Vice President, the Treasurer, an
Assistant Treasurer, Chief Financial Officer, Secretary or an Assistant
Secretary of the Company, initially countersign and deliver Warrants entitling
the holders thereof to purchase not more than the number of Warrant Shares
referred to above in the first recital hereof and shall thereafter countersign
and deliver Warrants as otherwise provided in this Agreement.
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The Company and the Warrant Agent may deem and treat the registered
holders (the "HOLDERS" or "WARRANTHOLDERS") of the Warrant Certificates as the
absolute owners thereof (notwithstanding any notation of ownership or other
writing thereon made by anyone) for all purposes, and neither the Company nor
the Warrant Agent shall be affected by any notice to the contrary.
SECTION 5. TRANSFER AND EXCHANGE OF WARRANTS. The Warrant Agent shall
from time to time, subject to the limitations of Section 6, register the
transfer of any outstanding Warrants upon the records to be maintained by it for
that purpose, upon surrender thereof duly endorsed or accompanied (if so
required by it) by a written instrument or instruments of transfer in form
satisfactory to the Warrant Agent, duly executed by the registered Holder or
Holders thereof or by the duly appointed legal representative thereof or by a
duly authorized attorney. Subject to the terms of this Agreement, each Warrant
Certificate may be exchanged for another certificate or certificates entitling
the Holder thereof to purchase a like aggregate number of Warrant Shares as the
certificate or certificates surrendered then entitle each Holder to purchase.
Any Holder desiring to exchange a Warrant Certificate or Certificates shall make
such request in writing delivered to the Warrant Agent, and shall surrender,
duly endorsed or accompanied (if so required by the Warrant Agent) by a written
instrument or instruments of transfer in form satisfactory to the Warrant Agent,
the Warrant Certificate or Certificates to be so exchanged.
Upon registration of transfer, the Company shall execute and the
Warrant Agent shall countersign and deliver by certified mail a new Warrant
Certificate or Certificates to the persons entitled thereto. The Warrant
Certificates may be exchanged at the option of the Holder thereof, when
surrendered at the office or agency of the Company maintained for such purpose,
which initially will be the corporate trust office of the Warrant Agent in New
York, New York for another Warrant Certificate, or other Warrant Certificates of
different denominations, of like tenor and representing in the aggregate the
right to purchase a like number of Warrant Shares.
No service charge shall be made for any exchange or registration of
transfer of Warrant Certificates, but the Company may require payment of a sum
sufficient to cover any stamp or other tax or other governmental charge that is
imposed in connection with any such exchange or registration of transfer.
SECTION 6. REGISTRATION OF TRANSFERS AND EXCHANGES.
(a) TRANSFER AND EXCHANGE OF WARRANTS. When Warrants are presented to
the Warrant Agent with a request:
(i) to register the transfer of the Warrants; or
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(ii) to exchange such Definitive Warrants for an equal
number of Warrants of other authorized denominations,
the Warrant Agent shall register the transfer or make the exchange as requested
if (and may refuse to register any transfer or exchange unless) the requirements
under this Agreement as set forth in this Section 6 for such transactions are
met; PROVIDED, HOWEVER, that the Warrants presented or surrendered for
registration of transfer or exchange:
(x) shall be duly endorsed or accompanied by a written instruction
of transfer in form satisfactory to the Company and the
Warrant Agent, duly executed by the holder thereof or by his
or her attorney, duly authorized in writing; and
(y) in the case of Warrants the offer and sale of which have not
been registered under the Securities Act, such Warrants shall
be accompanied, in the sole discretion of the Company, by the
following additional information and documents, as applicable,
it being understood, HOWEVER, that the Warrant Agent need not
determine which clause (A) through (F) below is applicable:
(A) if such Warrant is being delivered to the Warrant
Agent by a holder for registration in the name of
such holder, without transfer, a certification from
such holder to that effect (in substantially the form
of EXHIBIT C HERETO); or
(B) if such Warrant is being transferred to a qualified
institutional buyer (as defined in Rule 144A under
the Securities Act ("RULE 144A")) (a "QIB") in
accordance with Rule 144A or pursuant to an exemption
from registration in accordance with Rule 144 or
Regulation S under the Securities Act, a
certification to that effect (in substantially the
form of EXHIBIT C HERETO); or
(C) if such Warrant is being transferred to an
institutional accredited investor within the meaning
of subparagraph (a)(1), (a)(2), (a)(3) or (a)(7) of
Rule 501 under the Securities Act (an "INSTITUTIONAL
ACCREDITED INVESTOR"), delivery by the transferor of
a certification to that effect (in substantially the
form of EXHIBIT C hereto), and delivery of a
Transferee Letter of Representation in connection
with Transfers to Institutional Accredited Investors
(in substantially the form of EXHIBIT D HERETO) and
an opinion of counsel and/or other information
reasonably acceptable to the Company to the effect
that such transfer is in compliance with the
Securities Act; or
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(D) if such Warrant is being transferred in reliance on
Regulation S under the Securities Act, delivery by
the transferor of a certification to that effect (in
substantially the form of EXHIBIT C hereto), and a
Transferee Letter of Representation in connection
with Transfers pursuant to Regulation S in the form
of EXHIBIT E hereto; or
(E) if such Warrant is being transferred in reliance on
Rule 144 under the Securities Act, delivery by the
transferor of (i) a certification from the transferor
to that effect (in substantially the form of EXHIBIT
C hereto), and (ii) an opinion of counsel reasonably
satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(F) if such Warrant is being transferred in reliance on
another exemption from the registration requirements
of the Securities Act, a certification to that effect
from the transferee or transferor (in substantially
the form of EXHIBIT C HERETO), and an opinion of
counsel from the transferee or transferor reasonably
acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act.
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE WARRANT FOR A BENEFICIAL
INTEREST IN A GLOBAL WARRANT. A Definitive Warrant may not be transferred by a
holder for a beneficial interest in a Global Warrant except upon satisfaction of
the requirements set forth below. Upon receipt by the Warrant Agent of a
Definitive Warrant, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Warrant Agent, together with:
(i) certification from such holder (in substantially the
form of EXHIBIT C HERETO) that such Definitive
Warrant is being transferred to a QIB in accordance
with Rule 144A under the Securities Act; and
(ii) written instructions directing the Warrant Agent to
make, or to direct the Depositary to make, an
endorsement on the Global Warrant to reflect an
increase in the aggregate amount of the Warrants
represented by the Global Warrant,
then the Warrant Agent shall cancel such Definitive Warrant and cause, or direct
the Depositary to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Warrant Agent, the number of
Warrant Shares represented by the Global Warrant to be increased accordingly. If
no Global Warrant is then outstanding, the
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Company shall issue and the Warrant Agent shall upon written instructions from
the Company authenticate a new Global Warrant in the appropriate amount.
(c) TRANSFER OR EXCHANGE OF GLOBAL WARRANTS. The transfer or exchange
of Global Warrants or beneficial interests therein shall be effected through the
Depositary, in accordance with this Section 6, the Private Placement Legend set
forth in EXHIBIT A, the other provisions of this Agreement (including the
restrictions on transfer set forth herein) and the procedures of the Depositary
therefor.
(d) TRANSFER OR EXCHANGE OF A BENEFICIAL INTEREST IN A GLOBAL WARRANT
FOR A DEFINITIVE WARRANT.
(i) Any Person having a beneficial interest in a Global
Warrant may transfer or exchange such beneficial
interest for a Definitive Warrant upon receipt by the
Warrant Agent of written instructions or such other
form of instructions as is customary for the
Depositary from the Depositary or its nominee on
behalf of any Person having a beneficial interest in
a Global Warrant, including a written order
containing registration instructions and the
following additional information and documents:
(A) if such beneficial interest is being transferred to
the Person designated by the Depositary as being the
beneficial owner, a certification from such Person to
that effect (in substantially the form of EXHIBIT C);
or
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities
Act, a certification from the transferor to that
effect (in substantially the form of EXHIBIT C); or
(C) if such beneficial interest is being transferred to
an Institutional Accredited Investor, delivery by the
transferor of a certification to that effect (in
substantially the form of EXHIBIT C hereto), and
delivery of a Transferee Letter of Representation in
connection with Transfers to Institutional Accredited
Investors to that effect (in substantially the form
of EXHIBIT D) and an opinion of counsel and/or other
information reasonably acceptable to the Company to
the effect that such transfer is in compliance with
the Securities Act; or
(D) if such beneficial interest is being transferred in
reliance on Regulation S under the Securities Act,
delivery of (i) a certification to that effect (in
substantially the form of EXHIBIT C hereto) and (ii)
a Transferee
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Letter of Representation in connection with Transfers
pursuant to Regulation S in the form of EXHIBIT E
hereto; or
(E) if such beneficial interest is being transferred in
reliance on Rule 144 under the Securities Act,
delivery by the transferor of (i) a certification to
that effect (in substantially the form of EXHIBIT C
hereto) and (ii) an opinion of counsel reasonably
satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(F) if such beneficial interest is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification
to that effect from the transferee or transferor (in
substantially in the form of EXHIBIT C) and an
opinion of counsel and/or other information
reasonably acceptable to the Company to the effect
that such transfer is in compliance with the
Securities Act (if such transfer is made specifically
pursuant to Regulation S, the transferor must also
deliver a Letter of Representation in connection with
Transfers pursuant to Regulation S in substantially
the form of EXHIBIT E),
then the Warrant Agent will cause, in accordance with the standing instructions
and procedures existing between the Depositary and the Warrant Agent, the
aggregate amount of the Global Warrant to be reduced and, following such
reduction, the Company will execute and, upon receipt of an countersignature
order in the form of an officers' certificate (a certificate signed by two
officers of the Company, one of whom must be the principal executive officer,
principal financial officer or principal accounting officer) (an "OFFICERS'
CERTIFICATE"), the Warrant Agent will countersign and deliver to the transferee
a Definitive Warrant.
(ii) Definitive Warrants issued in exchange for a
beneficial interest in a Global Warrant pursuant to
this Section 6 shall be registered in such names and
in such authorized denominations as the Depositary,
pursuant to instructions from its Direct or Indirect
Participants or otherwise, shall instruct the Warrant
Agent in writing. The Warrant Agent shall deliver
such Definitive Warrants to the Persons in whose
names such Warrants are so registered and adjust the
Global Warrant pursuant to paragraph (g) of this
Section 6.
(e) RESTRICTIONS ON TRANSFER OR EXCHANGE OF GLOBAL WARRANTS.
Notwithstanding any other provisions of this Agreement (other than the
provisions set forth in subsection (f) of this Section 6), a Global Warrant may
not be transferred or exchanged as a whole except by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to
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the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.
(f) COUNTERSIGNATURE OF DEFINITIVE WARRANTS IN ABSENCE OF
DEPOSITARY. If at any time:
(i) the Depositary for the Global Warrants notifies the
Company that the Depositary is unwilling or unable to
continue as Depositary for the Global Warrants and a
successor Depositary for the Global Warrant is not
appointed by the Company within 90 days after
delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the
Warrant Agent in writing that it elects to cause the
issuance of Definitive Warrants for all Global
Warrants under this Agreement,
then the Company will execute, and the Warrant Agent will, upon receipt of an
Officers' Certificate requesting the countersignature and delivery of Definitive
Warrants, countersign and deliver Definitive Warrants, in an aggregate number
equal to the aggregate number of Warrants represented by the Global Warrant, in
exchange for such Global Warrant.
(g) CANCELLATION OR ADJUSTMENT OF A GLOBAL WARRANT. At such time as all
beneficial interests in a Global Warrant have either been exchanged for
Definitive Warrants, redeemed, repurchased or canceled, such Global Warrant
shall be returned to the Company or, upon written order to the Warrant Agent in
the form of an Officers' Certificate from the Company, retained and canceled by
the Warrant Agent. At any time prior to such cancellation, if any beneficial
interest in a Global Warrant is exchanged for Definitive Warrants, redeemed,
repurchased or canceled, the number of Warrants represented by such Global
Warrant shall be reduced and an endorsement shall be made on such Global Warrant
by the Warrant Agent to reflect such reduction.
(h) LEGENDS.
(i) PRIVATE PLACEMENT LEGEND. Except as permitted by the
following sentence, each Warrant Certificate
evidencing the Warrants (and all Warrants issued in
exchange therefor or substitution thereof and, if the
Company deems appropriate, Warrant Shares issuable
upon exercise of the Warrants) shall bear a legend
substantially to the effect set forth in EXHIBIT A.
Upon any sale or transfer of a Warrant or Warrant
Share pursuant to Rule 144 under the Securities Act
in accordance with this Section 6 or under an
effective registration statement under the Securities
-12-
<PAGE> 16
Act, the Warrant Agent shall permit the holder of a
Warrant to exchange such Warrant for a Definitive
Warrant and the Company shall permit the holder of a
Warrant Share to exchange such Warrant Share for a
share of Common Stock, in each case, that does not
bear the legend set forth in EXHIBIT A.
(ii) UNIT LEGEND. Each Warrant issued prior to the
Separability Date shall bear a legend substantially
to the effect set forth in EXHIBIT B(2).
(i) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF DEFINITIVE
AND GLOBAL WARRANTS.
(i) To permit registrations of transfers and exchanges,
the Company shall execute, at the Warrant Agent's
request, and the Warrant Agent shall authenticate
Definitive and Global Warrants.
(ii) All Definitive and Global Warrants issued upon any
registration, transfer or exchange of Definitive and
Global Warrants shall be the valid obligations of the
Company, entitled to the same benefits under this
Agreement as the Definitive and Global Warrants
surrendered upon the registration of transfer or
exchange.
(iii) Prior to due presentment for registration of transfer
of any Warrant, the Warrant Agent and the Company may
deem and treat the Person in whose name any Warrant
is registered as the absolute owner of such Warrant,
and neither the Warrant Agent nor the Company shall
be affected by notice to the contrary.
SECTION 7. TERMS OF WARRANTS; EXERCISE OF WARRANTS. Subject to the
terms of this Agreement, each Warrantholder shall have the right, which may be
exercised commencing on or after the earlier of February 15, 2001 and the
Separability Date and until 5:00 p.m., New York City time, on August 15, 2010
(the "EXPIRATION DATE"), to receive from the Company upon the exercise of each
Warrant the number of fully paid and nonassessable Warrant Shares which the
holder may at the time be entitled to receive on exercise of such Warrants and
payment of the Exercise Price (as defined) for such Warrant Shares. Each Warrant
not exercised prior to the Expiration Date shall become void and all rights
thereunder and all rights in respect thereof under this Agreement shall cease as
of such time. No adjustments as to dividends will be made upon exercise of the
Warrants.
The price per share at which Warrant Shares shall be purchasable upon
exercise of Warrants (the "EXERCISE PRICE") shall be equal to $6.60. The
Exercise Price shall
<PAGE> 17
-13-
(except as set forth in Section 13(a)) not be affected by the Exercise Rate (as
defined) then in effect. A Warrant may be exercised upon surrender at the office
or agency of the Company maintained for such purpose, which initially will be at
the principal office of the Company, of the Warrant Certificate or Certificates
evidencing the Warrants to be exercised with the form of election to purchase on
the reverse thereof (the "ELECTION TO EXERCISE") duly filled in and signed,
which signature shall be guaranteed by a participant in a recognized Signature
Guarantee Medallion Program.
The "EXERCISE DATE" for a Warrant shall be the date when all of the
items referred to in the immediately preceding sentence and the next paragraph
are received by the Warrant Agent at or prior to 11:00 a.m., New York City time,
on a Business Day and the exercise of the Warrants will be effective as of such
Exercise Date. If any items referred to in such sentence are received after
11:00 a.m., New York City time, on a Business Day, the exercise of the Warrants
to which such item relates will be effective on the next succeeding Business
Day. Notwithstanding the foregoing, in the case of an exercise of Warrants on
the Expiration Date, if all of the items referred to in such sentence are
received by the Warrant Agent at or prior to 5:00 p.m., New York City time, on
the Expiration Date, the exercise of the Warrants to which such items relate
will be effective on the Expiration Date.
The Warrants may be exercised by surrendering to the Company the
Warrants to be exercised with the accompanying form of election to purchase
properly completed and executed, together with payment of the Exercise Price.
Payment of the Exercise Price may be made at the Holder's election (i) in cash
in United States dollars by wire transfer or by certified or official bank check
to the order of the Company or (ii) by the surrender of one or more Warrant
Certificates (and without the payment of the Exercise Price in cash) in exchange
for a number of shares of the Company's Common Stock equal to the product of (a)
the number of shares of the Company's Common Stock for which such Warrant is
exercisable as of the Exercise Date (if the Exercise Price were being paid in
cash), and (b) the Cashless Exercise Ratio (the "CASHLESS EXERCISE"). The
"CASHLESS EXERCISE RATIO" shall equal a fraction, the numerator of which is the
excess of the Current Market Value per share of the Company's Common Stock on
the Exercise Date over the Exercise Price per share as of the Exercise Date and
the denominator of which is the Current Market Value per share of the Company's
Common Stock on the Exercise Date. Upon surrender of a Warrant Certificate
representing more than one Warrant, the number of shares of the Company's Common
Stock deliverable upon a Cashless Exercise shall be equal to the product of the
number of shares of the Company's Common Stock issuable in respect of those
Warrants that the Holder specifies are to be exercised pursuant to a Cashless
Exercise multiplied by the Cashless Exercise Ratio. All provisions of this
Agreement shall be applicable with respect to an exercise of a Warrant
Certificate pursuant to a Cashless Exercise for less than the full number of
Warrants represented thereby.
<PAGE> 18
-14-
"CURRENT MARKET VALUE" per share of any class of Common Stock of the
Company at any date shall mean:
(1) if no class of Common Stock is then registered under the
Exchange Act and traded on a national securities exchange or on the
Nasdaq National Market System,
(a) the value of such class of Common Stock,
determined in good faith by the board of directors of the
Company and certified in a board resolution, taking into
account the most recently completed arms-length transaction
between the Company and a Person other than an Affiliate of
the Company and the closing of which occurs on such date or
shall have occurred within the six-month period preceding such
date, or
(b) if no such transaction shall have occurred on
such date or within such six-month period, the fair market
value of the security as determined by a nationally recognized
Independent Financial Expert; PROVIDED, HOWEVER, that, in the
case of the calculation of Current Market Value for
determining the cash value of fractional shares, any such
determination within six months that is, in the good faith
judgment of the board of directors, a reasonable determination
of value may be utilized, or
(2) (a) if any class of Common Stock is then registered under
the Exchange Act and traded on a national securities exchange or on the
Nasdaq National Market System, the average of the daily closing sales
prices of such class of Common Stock for the 20 consecutive trading
days immediately preceding such date, or
(b) if such class of Common Stock has been registered
under the Exchange Act and traded on a national securities
exchange or on the Nasdaq National Market System for less than
20 consecutive trading days before such date, then the average
of the daily closing sales prices for all of the trading days
before such date for which closing sales prices are available,
in the case of each of (2)(a) and (2)(b), as certified to the
Warrant Agent by the Chief Executive Officer, the President,
any Executive Vice President or the Chief Financial Officer or
Treasurer of the Company. The closing sales price of each such
trading day shall be the closing sales price, regular way, on
such day or, if no sale takes place on such day, the average
of the closing bid and asked prices on such day.
Subject to the provisions of Section 6 hereof, upon such
surrender of Warrants, the Company shall issue and cause to be delivered with
all reasonable dispatch to or upon the
<PAGE> 19
-15-
written order of the Holder and in such name or names as the Warrantholder may
designate a certificate or certificates for the number of Warrant Shares
issuable upon the exercise of such Warrants. Such certificate or certificates
shall be deemed to have been issued and any Person so designated to be named
therein shall be deemed to have become a holder of record of such Warrant Shares
as of the Exercise Date. At the election of the Company with the consent of the
holder of record of the relevant Warrant Shares, Warrant Shares may initially be
issued in global form (the "GLOBAL SHARES"). Such Global Shares shall represent
such of the outstanding Warrant Shares as shall be specified therein and each
Global Share shall provide that it represents the aggregate amount of
outstanding Warrant Shares from time to time endorsed thereon and that the
aggregate amount of outstanding Warrant Shares represented thereby may from time
to time be reduced or increased, as appropriate. Any endorsement of a Global
Share to reflect any increase or decrease in the amount of outstanding Warrant
Shares represented thereby shall be made by the registrar for the Warrant Shares
and the Depositary (referred to below) in accordance with instructions given by
the holder thereof. DTC shall (if possible) act as the Depositary with respect
to the Global Shares until a successor shall be appointed by the Company and the
registrar for the Warrant Shares.
The Warrants shall be exercisable only in whole. In the event that a
certificate evidencing Warrants is exercised in respect of fewer than all of the
Warrants evidenced thereby at any time prior to the date of expiration of the
Warrants, a new certificate evidencing the remaining Warrant or Warrants will be
issued, and the Warrant Agent is irrevocably authorized to countersign and to
deliver the required new Warrant Certificate or Certificates pursuant to this
Agreement, and the Company, whenever required by the Warrant Agent, will
promptly supply the Warrant Agent with Warrant Certificates duly executed on
behalf of the Company for such purpose. Holders of Warrants will be able to
exercise their Warrants only if a registration statement relating to the Warrant
Shares underlying the Warrants is then in effect, or the exercise of such
Warrants is exempt from the registration requirements of the Securities Act, and
such securities are qualified for sale or exempt from qualification under the
applicable securities laws of the states in which the various holders of
Warrants or other persons to whom it is proposed that Warrant Shares be issued
on exercise of the Warrants reside.
All Warrant Certificates surrendered upon exercise of Warrants shall be
canceled by the Warrant Agent. Such canceled Warrant Certificates shall then be
disposed of by the Warrant Agent in a manner consistent with the Warrant Agent's
customary procedure for such disposal and in a manner reasonably satisfactory to
the Company. The Warrant Agent shall account promptly to the Company with
respect to Warrants exercised.
The Warrant Agent shall keep copies of this Agreement and any notices
given or received hereunder available for inspection by the Holders during
normal business hours at
<PAGE> 20
-16-
its office. The Company shall supply the Warrant Agent from time to time with
such numbers of copies of this Agreement as the Warrant Agent may request.
SECTION 8. PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes attributable to the initial issuance of Warrant Shares upon the exercise
of Warrants; PROVIDED, HOWEVER, that the Company shall not be required to pay
any tax or taxes which may be payable in respect of any transfer involved in the
issue of any Warrant Certificates or any certificates for Warrant Shares in a
name other than that of the registered holder of a Warrant Certificate
surrendered upon the exercise of a Warrant, and the Company shall not be
required to issue or deliver such Warrant Certificates unless or until the
Person or Persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
SECTION 9. RULES 144 AND 144A. The Company covenants that it will file
the reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted by the SEC thereunder in a timely
manner in accordance with the requirements of the Securities Act and the
Exchange Act and, if at any time the Company is not required to file such
reports, it will, upon the request of any holder or beneficial owner of
warrants, make available such information necessary to permit sales pursuant to
Rule 144A under the Securities Act.
SECTION 10. MUTILATED OR MISSING WARRANT CERTIFICATES. In case any of
the Warrant Certificates shall be mutilated, lost, stolen or destroyed, the
Company may at its discretion issue and the Warrant Agent may countersign, in
exchange and substitution for and upon cancellation of the mutilated Warrant
Certificate, or in lieu of and substitution for the Warrant Certificate lost,
stolen or destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence satisfactory to
the Company and the Warrant Agent of such loss, theft or destruction of such
Warrant Certificate and indemnity also satisfactory to them.
SECTION 11. RESERVATION OF WARRANT SHARES. The Company will at all
times authorize and reserve and keep available, free from preemptive rights and
free from all taxes, liens, charges and security interests, out of the aggregate
of its authorized but unissued Common Stock or its authorized and issued Common
Stock held in its treasury, for the purpose of enabling it to satisfy its
obligation to issue Warrant Shares upon exercise of Warrants, the maximum number
of shares of Common Stock which may then be deliverable upon the exercise of all
outstanding Warrants.
The Company or, if appointed, the transfer agent for the Common Stock
(the "TRANSFER AGENT") and every subsequent transfer agent for any shares of the
Company's Capital Stock issuable upon the exercise of any of the rights of
purchase aforesaid will be irrevocably
<PAGE> 21
-17-
authorized and directed at all times to reserve such number of authorized shares
as shall be required for such purpose. The Company will keep a copy of this
Agreement on file with the Transfer Agent and with every subsequent transfer
agent for any shares of the Company's Capital Stock issuable upon the exercise
of the rights of purchase represented by the Warrants. The Warrant Agent is
hereby irrevocably authorized to requisition from time to time from such
Transfer Agent the stock certificates required to honor outstanding Warrants
upon exercise thereof in accordance with the terms of this Agreement. The
Company will supply such Transfer Agent with duly executed certificates for such
purposes and will provide or otherwise make available any cash which may be
payable as provided in Section 14. The Company will furnish such Transfer Agent
a copy of all notices of adjustments and certificates related thereto
transmitted to each holder pursuant to Section 15 hereof.
The Company covenants that all Warrant Shares which may be issued upon
exercise of Warrants made in accordance with the terms of this Agreement will,
upon issuance, be duly and validly authorized and issued, fully paid,
nonassessable, free of preemptive rights and free from all taxes, liens, charges
and security interests with respect to the issuance thereof. The Company will
take no action to increase the par value of the Common Stock to an amount in
excess of the Exercise Price, and the Company will not enter into any agreements
inconsistent with the rights of Holders hereunder. The Company will use its
reasonable best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Agreement.
SECTION 12. OBTAINING STOCK EXCHANGE LISTINGS. The Company will from
time to time take all action which may be necessary so that the Warrant Shares,
immediately upon their issuance upon the exercise of Warrants, will be listed on
the principal securities exchanges and markets within the United States of
America (including the Nasdaq National Market System), if any, on which the
Company's Common Stock is then listed. In the event that, at any time during the
period in which the Warrants are exercisable, the Common Stock is not listed on
any principal securities exchanges or markets within the United States of
America, the Company will use its best efforts to permit the Warrant Shares to
be designated Portal securities in accordance with the rules and regulations
adopted by the National Association of Securities Dealers, Inc. relating to
trading in The Portal Market.
SECTION 13. ADJUSTMENT OF NUMBER OF WARRANT SHARES ISSUABLE. The number
of Warrant Shares purchasable upon the exercise of each Warrant (the "EXERCISE
RATE") and the Exercise Price is subject to adjustment from time to time upon
<PAGE> 22
-18-
the occurrence of the events enumerated in this Section 13. The Exercise Rate
shall initially be 10.8570307 to 1.
(a) ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If, after the Issue Date,
the Company:
(i) pays a dividend or makes a distribution on shares of any
class of its Common Stock payable in shares of its Common Stock or
other Capital Stock of the Company (except to the extent any such
dividend results in the grant, issuance, sale or making of Distribution
Rights or Distributions to holders of Warrants pursuant to Section
13(c));
(ii) subdivides or splits any of its outstanding shares of any
class of Common Stock into a greater number of shares;
(iii) combines any of its outstanding shares of Common Stock
into a smaller number of shares; and
(iv) issues by reclassification of any class of its Common
Stock any shares of any of its Capital Stock.
then the Exercise Rate in effect immediately prior to such action for each
Warrant then outstanding shall be adjusted by multiplying the Exercise Rate in
effect immediately prior to such action by a fraction (A) the numerator of which
shall be the number of shares of Common Stock outstanding immediately after such
action and (B) the denominator of which shall be the number of shares of Common
Stock outstanding immediately prior to such action or the record date applicable
to such action, if any (regardless of whether the Warrants then outstanding are
then exercisable); and the Exercise Price for each Warrant shall be adjusted to
a number determined by dividing the Exercise Price immediately prior to such
event by such fraction. The adjustment shall become effective immediately after
the record date in the case of a dividend or distribution and immediately after
the effective date in the case of a subdivision, combination or
reclassification. In the event that such dividend or distribution is not so paid
or made or such subdivision, combination or reclassification is not effected,
the Exercise Rate shall again be adjusted to be the Exercise Rate which would
then be in effect if such record date or effective date had not been so fixed.
If after an adjustment a holder of a Warrant upon exercise of such
Warrant may receive shares of two or more classes of Capital Stock of the
Company, the Exercise Rate shall thereafter be subject to adjustment upon the
occurrence of an action taken with respect to any such class of Capital Stock as
is contemplated by this Section 13 with respect to the Common Stock, on terms
comparable to those applicable to Common Stock in this Section 13.
(b) ADJUSTMENT FOR CERTAIN SALES OF COMMON STOCK BELOW CURRENT MARKET
VALUE. If, after the Issue Date, the Company (i) grants or sells to any
Affiliate of the Company (other than a subsidiary of the Company) or (ii)
grants, sells or offers to grant or sell to all holders of Common Stock, any
shares of Common Stock or any securities convertible into
<PAGE> 23
-19-
or exchangeable or exercisable for Common Stock or of rights, options or
warrants entitling them to subscribe for the Company's Common Stock or
securities convertible into, or exchangeable or exercisable for, the Company's
Common Stock (other than (1) pursuant to the exercise of the Warrants, (2)
pursuant to any security convertible into, or exchangeable or exercisable for,
shares of Common Stock outstanding as of the Issue Date, (3) upon the
conversion, exchange or exercise of any convertible, exchangeable or exercisable
security as to which upon the issuance thereof an adjustment pursuant to this
Section 13 has been made or (4) upon the conversion, exchange or exercise of
convertible, exchangeable or exercisable securities of the Company outstanding
on the Issue Date (to the extent in accordance with the terms of such securities
as in effect on such date), at a price below the then Current Market Value, the
Exercise Rate for each Warrant then outstanding shall be adjusted in accordance
with the formula:
E(1) = E X (O+N)
---------------
(O + (N x P/M))
where:
E(1) = the adjusted Exercise Rate for each Warrant then outstanding;
E = the then current Exercise Rate for each Warrant then outstanding;
O = the number of shares of Common Stock outstanding immediately
prior to the sale of such Common Stock or issuance of securities
convertible, exchangeable or exercisable for Common Stock;
N = the number of shares of Common Stock so sold or the maximum
stated number of shares of Common Stock issuable upon the
conversion, exchange or exercise of any such convertible,
exchangeable or exercisable securities, as the case may be;
P = the proceeds per share of Common Stock received by the Company,
which (i) in the case of shares of Common Stock is the amount
received by the Company in consideration for the sale and
issuance of such shares; and (ii) in the case of securities
convertible into or exchangeable or exercisable for shares of
Common Stock is the amount received by the Company in
consideration for the sale and issuance of such convertible or
exchangeable or exercisable securities, plus the minimum
aggregate amount of additional consideration, other than the
surrender of such convertible or exchangeable securities, payable
to the Company upon exercise, conversion or exchange thereof; and
<PAGE> 24
-20-
M = the Current Market Value as of the Time of Determination or at
the time of sale, as the case may be, of a share of Common Stock.
The adjustment shall become effective immediately after the record date
for the determination of shareholders entitled to receive the rights, warrants
or options to which this paragraph (b) applies or upon consummation of the sale
of Common Stock, as the case may be. To the extent that shares of Common Stock
are not delivered after the expiration of such rights, warrants or options, the
Exercise Rate for each Warrant then outstanding shall be readjusted to the
Exercise Rate which would otherwise be in effect had the adjustment made upon
the issuance of such rights, warrants or options been made on the basis of
delivery of only the number of shares of Common Stock actually delivered. In the
event that such rights, warrants or options are not so issued, the Exercise Rate
for each Warrant then outstanding shall again be adjusted to be the Exercise
Rate which would then be in effect if such date fixed for determination of
shareholders entitled to receive such rights, warrants or options had not been
so fixed.
No adjustment shall be made under this paragraph (b) if the application
of the formula stated above in this paragraph (a) would result in a value of E1
that is lower than the value of E.
No adjustment shall be made under this paragraph (b) for any adjustment
which is the subject of paragraphs (a) and (d) of this Section 13.
Notwithstanding the foregoing, no adjustment in the Exercise Rate will
be required in respect of: (a) the grant of any stock option or other stock
incentive award pursuant to any stock option or stock incentive plan or
arrangement as disclosed in the Offering Memorandum dated August 9, 2000
relating to the Units, (b) the grant of any stock option or stock incentive
award at an exercise price at least equal to the then Current Market Value, (c)
the grant of any other stock option or stock incentive award to any officer,
director or employee of the Company or any of its Subsidiaries pursuant to any
compensatory plan or arrangement that has been approved by the Company's board
of directors, or (d) the exercise of any such option or award.
(c) ADJUSTMENT UPON CERTAIN DISTRIBUTIONS.
(i) If at any time after the Issue Date the Company grants, issues or
sells options, any Convertible Security, or rights to purchase Capital Stock or
other securities (other than Common Stock) PRO RATA to the record holders or
series of Common Stock ("DISTRIBUTION RIGHTS") or, without duplication, makes
any distribution (other than a distribution pursuant to a plan of liquidation)
(a "DISTRIBUTION") on shares of Common Stock (whether in
<PAGE> 25
-21-
cash, property, evidences of indebtedness, or otherwise), then the Exercise Rate
shall be adjusted in accordance with the formula:
E1 = E x (M/(M-F))
where:
E1 = the adjusted Exercise Rate;
E the current Exercise Rate for each Warrant;
M = the Current Market Value per Warrant Share at the Time of
Determination;
F = the fair market value at the Time of Determination of such
portion of the options, Convertible Securities, Capital Stock or
other securities, cash, property or assets distributable pursuant
to such Distribution Rights or Distribution per share of
outstanding Common Stock.
The adjustment shall become effective immediately after the Time of
Determination with respect to the shareholders entitled to receive the options,
Convertible Securities, warrants, cash, property, evidences of indebtedness or
other securities or assets to which this paragraph (c)(i) applies. No adjustment
shall be made under this paragraph (c) if the application of the formula stated
above in this paragraph (c)(i) would result in a value of E1 that is lower than
the value of E. This paragraph (c)(i) does not apply to any securities or
distributions which result in an adjustment pursuant to paragraphs (a) or (b) of
this Section 13.
(ii) Notwithstanding the provisions of paragraph (c)(i) of this Section
13, an event which would otherwise give rise to an adjustment pursuant to
Section 13(c)(i) shall not give rise to such adjustment if the Company grants,
issues or sells Distribution Rights to the Holders of Warrants or includes the
holders of the Warrants in such Distribution, in each case on a PRO RATA basis,
assuming for the purpose of this Section 13(c)(ii) that (x) all outstanding
shares of Common Stock are of one class and (y) the Warrants had been exercised.
(iii) Notwithstanding anything to the contrary set forth in this
Section 13(c), if, at any time, the Company makes any distribution pursuant to
any plan of liquidation (a "LIQUIDATING DISTRIBUTION") on shares of Common Stock
(whether in cash, property, evidences of indebtedness or otherwise), then,
subject to applicable law, the Company shall make to each Holder of Warrants the
aggregate Liquidating Distribution which such Holder would have acquired if such
Holder had held the maximum number of shares of Common Stock acquirable upon the
complete exercise of each Holder's Warrants (regardless of whether the
<PAGE> 26
-22-
Warrants are then exercisable) immediately before the Time of Determination of
shareholders entitled to receive Liquidating Distributions.
(d) NOTICE OF ADJUSTMENT. Whenever the Exercise Rate is adjusted, the
Company shall promptly mail to holders of Warrants then outstanding at the
addresses appearing on the Warrant Register a notice of the adjustment. The
Company shall file with the Warrant Agent and any other Registrar such notice
and a certificate from the Company's independent public accountants briefly
stating the facts requiring the adjustment and the manner of computing it. The
certificate shall be conclusive evidence that the adjustment is correct, absent
manifest error. Neither the Warrant Agent nor any such Registrar shall be under
any duty or responsibility with respect to any such certificate except to
exhibit the same during normal business hours to any holder desiring inspection
thereof.
(e) REORGANIZATION OF COMPANY; FUNDAMENTAL TRANSACTION.
(i) If the Company, in a single transaction or through a
series of related transactions, consolidates with or merges with or into any
other person or sells, assigns, transfers, leases, conveys or otherwise disposes
of all or substantially all of its properties and assets to another person or
group of affiliated persons or is a party to a merger or binding share exchange
which reclassifies or changes its outstanding Common Stock (a "FUNDAMENTAL
TRANSACTION"), as a condition to consummating any such transaction the person
formed by or surviving any such consolidation or merger if other than the
Company or the person to whom such transfer has been made (the "SURVIVING
PERSON") shall enter into a supplemental warrant agreement. The supplemental
warrant agreement shall provide (a) that the holder of a Warrant then
outstanding may exercise the Warrant for the kind and amount of securities, cash
or other assets which such holder would have received immediately after the
Fundamental Transaction if such holder had exercised the Warrant immediately
before the effective date of the transaction (regardless of whether the Warrants
are then exercisable and without giving effect to the Cashless Exercise option),
assuming (to the extent applicable) that such holder (i) was not a constituent
person or an affiliate of a constituent person to such transaction, (ii) made no
election with respect thereto, and (iii) was treated alike with the plurality of
non-electing holders, and (b) that the Surviving Person shall succeed to and be
substituted to every right and obligation of the Company in respect of this
Agreement and the Warrants. The supplemental warrant agreement shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 13. The Surviving Person shall mail to
holders of Warrants at the addresses appearing on the Warrant Register a notice
briefly describing the supplemental warrant agreement. If the issuer of
securities deliverable upon exercise of Warrants is an affiliate of the
Surviving Person, that issuer shall join in the supplemental warrant agreement.
<PAGE> 27
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(ii) Notwithstanding the foregoing, if the Company enters into
a Fundamental Transaction with another Person (other than a subsidiary of the
Company) and consideration is payable to holders of shares of Capital Stock (or
other securities or property) issuable or deliverable upon exercise of the
Warrants that are exercisable in exchange for such shares in connection with
such Fundamental Transaction which consideration consists solely of cash
assuming (to the extent applicable) that each such holder (i) was not a
constituent person or an affiliate of a constituent person to such transaction,
(ii) made no election with respect thereto, and (iii) was treated alike with the
plurality of non-electing holders), then the holders of Warrants shall be
entitled to receive distributions on the date of such event on an equal basis
with holders of such shares (or other securities issuable upon exercise of the
Warrants) as if the Warrants had been exercised immediately prior to such event,
less the aggregate Exercise Price therefor. Upon receipt of such payment, if
any, the rights of a holder of such Warrant shall terminate and cease and such
holder's Warrants shall expire.
(iii) If this paragraph (e) applies, it shall supersede the
application of paragraph (a) of this Section 13.
(f) OTHER EVENTS. If any event occurs as to which the provisions of
this Section 13 are not strictly applicable or, if strictly applicable, would
not, in the good faith judgment of the board of directors of the Company, fairly
and adequately protect the rights of the Warrantholders in accordance with the
essential intent and principles of such provisions, then such board of directors
shall make such adjustments in the application of such provisions, in accordance
with such essential intent and principles, as shall be reasonably necessary, in
the good faith opinion of such board of directors, to protect such rights as
aforesaid, but in no event shall any such adjustment have the effect of
decreasing the Exercise Rate or decreasing the number of Warrant Shares issuable
upon exercise of the Warrants. In addition, in the event that the Company has
redeemed its outstanding 6% junior convertible subordinated debentures due 2004
in whole prior to the conversion of any such debentures, the Exercise Rate then
in effect shall be adjusted downward to reflect 5.0% of the outstanding common
stock of the Company on a fully diluted basis after giving effect to such
redemption.
(g) COMPANY DETERMINATION FINAL. Any determination that the Company or
the board of directors of the Company must make pursuant to this Section 13
shall be conclusive, absent manifest error.
(h) WARRANT AGENT'S ADJUSTMENT DISCLAIMER. The Warrant Agent shall have
no duty to determine when an adjustment under this Section 13 should be made,
how it should be made or what it should be. The Warrant Agent shall have no duty
to determine whether a supplemental warrant agreement under paragraph (e) need
be entered into or whether any provisions of any supplemental warrant agreement
are correct. The Warrant Agent shall not be accountable for and makes no
representation as to the validity or value
<PAGE> 28
-24-
of any securities or assets issued upon exercise of Warrants. The Warrant Agent
shall not be responsible for the Company's failure to comply with this
Section 13.
(i) SPECIFICITY OF ADJUSTMENT. Regardless of any adjustment in the
number or kind of shares purchasable upon the exercise of the Warrants, Warrant
Certificates theretofore or thereafter issued may continue to express the same
number and kind of Warrant Shares per Warrant as are stated on the Warrant
Certificates initially issuable pursuant to this Agreement.
(j) VOLUNTARY ADJUSTMENT. The Company from time to time may increase
the Exercise Rate by any number and for any period of time; PROVIDED, HOWEVER,
that such period is not less than 20 Business Days. Whenever the Exercise Rate
is so increased, the Company shall mail to holders at the addresses appearing on
the Warrant Register and file with the Warrant Agent a notice of the increase.
The Company shall give the notice at least 15 days before the date the increased
Exercise Rate takes effect. The notice shall state the increased Exercise Rate
and the period it will be in effect. A voluntary increase in the Exercise Rate
shall not change or adjust the Exercise Rate otherwise in effect as determined
by this Section 13.
(k) MULTIPLE ADJUSTMENTS. After an adjustment to the Exercise Rate for
outstanding Warrants under this Section 13, any subsequent event requiring an
adjustment under this Section 13 shall cause an adjustment to the Exercise Rate
for outstanding Warrants as so adjusted.
(l) WHEN DE MINIMIS ADJUSTMENT MAY BE DEFERRED. No adjustment in the
Exercise Rate shall be required unless such adjustment would require an increase
or decrease of at least 1% in such rate; PROVIDED, HOWEVER, that any adjustments
which by reason of the foregoing are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
shall be made by the Company and shall be rounded to the sixth decimal place. No
adjustment need be made for a change in the par value of the Common Stock and no
adjustment shall be deferred beyond the date on which a Warrant is exercised.
(m) AMENDMENTS OF THE CERTIFICATE OF INCORPORATION. The Company shall
not amend its Certificate of Incorporation in a manner that adversely affects
the holders of Warrants, without the prior consent of the holders of a majority
of the Warrants outstanding (excluding Warrants held by the Company or any of
its Affiliates), as determined in good faith by the Company's board of
directors.
SECTION 14. FRACTIONAL INTERESTS. The Company shall not be required to
issue fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be
<PAGE> 29
-25-
presented for exercise in full at the same time by the same holder, the number
of full Warrant Shares which shall be issuable upon the exercise thereof shall
be computed on the basis of the aggregate number of Warrant Shares purchasable
on exercise of the Warrants so presented. If any fraction of a Warrant Share
would, except for the provisions of this Section 14, be issuable on the exercise
of any Warrants (or specified portion thereof), the Company shall pay an amount
in cash equal to the Current Market Value per Warrant Share on the day
immediately preceding the date the Warrant is presented for exercise, multiplied
by such fraction.
SECTION 15. NOTICE OF CERTAIN DISTRIBUTIONS; CERTAIN RIGHTS. The
Company shall give prompt written notice to the Warrant Agent and shall cause
the Warrant Agent, on behalf of and at the expense of the Company to give to
each Holder written notice of any determination to make a distribution to the
holders of its Common Stock of any cash dividends, assets, debt securities,
preferred stock, or any rights or warrants to purchase debt securities,
preferred stock, assets or other securities (other than Common Stock, or rights,
options, or warrants to purchase Common Stock) of the Company, which notice
shall state the nature and amount of such planned dividend or distribution and
the record date therefor, and shall be received by the Holders at least 20 days
prior to such record date therefor.
Except as expressly provided in this Agreement or in any Warrant
Certificate, the holders of unexercised Warrants shall have no right to vote, to
consent, to exercise any preemptive rights or to receive notice as shareholders
of the Company in respect of the meetings of shareholders or the election of
directors of the Company or any other matter, or to exercise any rights
whatsoever as shareholders of the Company.
SECTION 16. NOTICES TO THE COMPANY AND WARRANT AGENT. Any
notice or demand authorized by this Agreement to be given or made by the Warrant
Agent or by any Holder to or on the Company shall be sufficiently given or made
when received at the office of the Company expressly designated by the Company
as its office for purposes of this Agreement (until the Warrant Agent is
otherwise notified in accordance with this Section 16 by the Company), as
follows:
RailAmerica, Inc. copies to:
5300 Broken Sound Boulevard, N.W. Greenberg Traurig, P.A.
Boca Raton, Florida 33487 1221 Brickell Avenue
Attn: General Counsel Miami, Florida 33131
Attn: Fern S. Watts
Any notice pursuant to this Agreement to be given by the Company or by
any Holder(s) to the Warrant Agent shall be sufficiently given when received by
the Warrant Agent at the address appearing below (until the Company is otherwise
notified in accordance with this Section by the Warrant Agent).
<PAGE> 30
-26-
Wells Fargo Bank Minnesota, N.A.
Sixth & Marquette
MAC N9303-120
Minneapolis, MN 55479
Attn: Corporate Trust Services
Any notice or communication to a holder shall be mailed by first class
mail, postage prepaid, to its address shown on the register kept by Warrant
Agent.
SECTION 17. SUPPLEMENTS AND AMENDMENTS. (a) From time to time, the
Company and the Warrant Agent, without the consent of the Holders of the
Warrants, may amend or supplement this Agreement for certain purposes, including
curing ambiguities, defects or inconsistencies or making any change that does
not adversely affect the legal rights of any Holder. Any amendment or supplement
to this Agreement that adversely affects the legal rights of the Holder of the
Warrants will require the written consent of the Holders of a majority of the
then outstanding Warrants (excluding Warrants held by the Company or any of its
Affiliates). The consent of each Holder of the Warrants affected will be
required for any amendment pursuant to which the Exercise Price would be
increased or the number of Warrant Shares purchasable upon exercise of Warrants
would be decreased (other than pursuant to adjustments provided in this
Agreement) or any of the adjustment provisions in this Agreement would be
changed in a manner that would have any such effect.
(b) After an amendment or modification under this Section 17 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing such amendment or modification. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such amendment or modification.
In connection with any amendment or modification under this Section 17,
the Company may offer, but shall not be obligated to offer, to any Holder who
consents to such amendment or modification, consideration for such Holder's
consent, so long as such consideration is offered to all Holders.
(c) Executed or true and correct copies of any amendment or
modification effected pursuant to the provisions of this Section 17 shall be
delivered by the Company to each Holder of outstanding Warrants or Warrant
Shares forthwith following the date on which the same shall have been executed
and delivered by the Holder or Holders of the requisite percentage of
outstanding Warrant Shares (but only to the extent the Company has been provided
with the addresses for the Holders).
<PAGE> 31
-27-
SECTION 18. CONCERNING THE WARRANT AGENT. The Warrant Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the Holders, by their acceptance
of Warrants, shall be bound:
(a) The statements contained herein and in the Warrant
Certificate shall be taken as statements of the Company, and the
Warrant Agent assumes no responsibility for the correctness of any of
the same except such as describe the Warrant Agent or any action taken
by it. The Warrant Agent assumes no responsibility with respect to the
distribution of the Warrants except as herein otherwise provided.
(b) The Warrant Agent shall be protected and shall not be
responsible for and shall incur no liability to the Company or any
Holder for any failure of the Company to comply with the covenants
contained in this Agreement or in the Warrants to be complied with by
the Company.
(c) The Warrant Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself (through its employees) or by or through its attorneys or
agents (which shall not include its employees) and shall not be
responsible for the misconduct of any attorney or agent appointed with
due care.
(d) The Warrant Agent may consult at any time with legal
counsel satisfactory to it (who may be counsel for the Company), and
the Warrant Agent shall incur no liability or responsibility to the
Company or to any Holder in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with the
opinion or the advice of such counsel.
(e) Whenever in the performance of its duties under this
Agreement the Warrant Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
such evidence in respect thereof be herein specifically prescribed) may
be deemed conclusively to be proved and established by a certificate
signed by the Chairman of the Board, the President, one of the Vice
Presidents, the Treasurer or the Secretary of the Company and delivered
to the Warrant Agent; and such certificate shall be full authorization
to the Warrant Agent for any action taken or suffered in good faith by
it under the provisions of this Agreement in reliance upon such
certificate.
(f) The Company agrees to pay the Warrant Agent such
compensation for all services rendered by the Warrant Agent in the
performance of its duties under this
<PAGE> 32
-28-
Agreement as may be separately agreed in writing, to reimburse the
Warrant Agent for all expenses, taxes and governmental charges and
other charges of any kind and nature incurred by the Warrant Agent in
the performance of its duties under this Agreement (including, without
limitation, reasonable fees and expenses of counsel), and to indemnify
the Warrant Agent and its agents, employees, directors, officers and
affiliates and save it and them harmless against any and all
liabilities, losses and expenses, including, without limitation,
judgments, costs and counsel fees, for anything done or omitted by the
Warrant Agent in the acceptance and performance of its duties under
this Agreement, except as a result of the Warrant Agent's gross
negligence or bad faith, including, without limitation, the costs and
expenses of defending against any claim (whether asserted by the
Company, a Holder or any other Person) of liability in the premises
including reasonable attorneys' fees and expenses. The provisions of
this paragraph shall survive the resignation or removal of the Warrant
Agent and the termination of this Agreement.
(g) The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any other
action likely to involve expense unless the Company or one or more
holders shall furnish the Warrant Agent with reasonable security and
indemnity for any costs and expenses which may be incurred, but this
provision shall not affect the power of the Warrant Agent to take such
action as the Warrant Agent may consider proper, whether with or
without any such security or indemnity. All rights of action under this
Agreement or under any of the Warrants may be enforced by the Warrant
Agent without the possession of any of the Warrants or the production
thereof at any trial or other proceeding relative thereto, and any such
action, suit or proceeding instituted by the Warrant Agent shall be
brought in its name as Warrant Agent, and any recovery of judgment
shall be for the ratable benefit of the holders, as their respective
rights or interests may appear.
(h) The Warrant Agent and any stockholder, director, officer
or employee ("RELATED PARTIES") of the Warrant Agent may buy, sell or
deal in any of the Warrants or other securities of the Company or
become pecuniarily interested in any transactions in which the Company
may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Warrant Agent
under this Agreement or such director, officer or employee. Nothing
herein shall preclude the Warrant Agent or any Related Party from
acting in any other capacity for the Company or for any other legal
entity including, without limitation, acting as Transfer Agent or as a
lender to the Company or an affiliate thereof.
(i) The Warrant Agent shall act hereunder solely as agent, and
its duties shall be determined solely by the provisions thereof. The
Warrant Agent shall not be liable for anything which it may do or
refrain from doing in connection with this
<PAGE> 33
-29-
Agreement except for its own negligence or bad faith. No implied duties
or obligations shall be read into this Agreement against the Warrant
Agent.
(j) The Warrant Agent will be protected and will not incur any
liability or responsibility to the Company or to any holder for any
action taken, suffered or omitted by it in reliance on any notice,
resolution, waiver, consent, order, certificate, or other paper,
document or instrument reasonably believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties.
(k) The Warrant Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the President, Chief
Financial Officer, Treasurer, any Vice President or the Secretary of
the Company, and to apply to such officers for advice or instructions
in connection with its duties, and shall not be liable for any action
taken or suffered to be taken by it in good faith and without
negligence in accordance with instructions of any such officer or
officers.
(l) By countersigning Warrant Certificates or by any other act
hereunder the Warrant Agent shall not be deemed to make any
representations as to validity or authorization of the Warrants or the
Warrant Certificates (except as to its countersignature thereon) or of
any securities or other property delivered upon exercise or tender of
any Warrant, or as to the accuracy of the computation of the Exercise
Price or the number or kind or amount of stock or other securities or
other property deliverable upon exercise of any Warrant or the
correctness of the representations of the Company made in any
certifications that the Warrant Agent receives. The Warrant Agent shall
not have any duty to calculate or determine any adjustments with
respect either to the Exercise Price or the kind and amount of shares
or other securities or any property receivable by holders of Warrants
upon the exercise or tender of Warrants required from time to time, and
the Warrant Agent shall have no duty or responsibility in determining
the accuracy or correctness of any such calculation.
(m) No provision of this Agreement shall require the Warrant
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
SECTION 19. CHANGE OF WARRANT AGENT. The Warrant Agent may resign and
be discharged from its duties under this Agreement by giving to the Company 30
days' notice in writing. The Warrant Agent may be removed by like notice to the
Warrant Agent from the Company. If the Warrant Agent shall resign or be removed
or shall otherwise become incapable
<PAGE> 34
-30-
of acting, the Company shall appoint a successor to the Warrant Agent. If the
Company shall fail to make such appointment within a period of 30 days after
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Warrant Agent or by any holder (who
shall with such notice submit his Warrant for inspection by the Company), then
any holder or the resigning or removed Warrant Agent may apply to any court of
competent jurisdiction for the appointment of a successor to the Warrant Agent.
Pending appointment of a successor to the Warrant Agent, either by the Company
or by such court, the duties of the Warrant Agent shall be carried out by the
Company. Any successor warrant agent, whether appointed by the Company or such a
court, shall be a bank or trust company in good standing, incorporated under the
laws of the United States of America or any State thereof or the District of
Columbia and having at the time of its appointment as warrant agent a combined
capital and surplus of at least $50,000,000. After appointment, the successor
warrant agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Warrant Agent without
further act or deed; but the former Warrant Agent shall deliver and transfer to
the successor warrant agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
such purpose. Failure to file any notice provided for in this Section 19,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Warrant Agent or the appointment of the successor
warrant agent, as the case may be. In the event of such resignation or removal,
the Company or the successor warrant agent shall mail by first class mail,
postage prepaid, to each Holder, written notice of such removal or resignation
and the name and address of such successor warrant agent.
SECTION 20. IDENTITY OF TRANSFER AGENT. Forthwith, the Transfer Agent
for the Common Stock, or any other shares of the Company's Capital Stock
issuable upon the exercise of the Warrants shall be American Stock Transfer and
Trust Company.
SECTION 21. SEC REPORTS AND OTHER INFORMATION. The Company shall at all
times make available to the Warrant Agent and Holders of Warrants such annual
reports and such information, documents and other reports as are specified in
Sections 13 and 15(d) of the Exchange Act of documents and other reports to be
so provided at the times specified for the filing of such information, documents
and reports under such Sections of the Exchange Act. In addition, for so long as
any Warrants remain outstanding, the Company will make available to the Holders
and to securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act, and, to beneficial holders of Warrants, if not obtainable from
the SEC, information of the type that would be filed with the SEC pursuant to
the foregoing provisions, upon the request of any such holder. Availability of
such reports, information and documents to the Warrant Agent is for
informational purposes only and the Warrant Agent's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information
<PAGE> 35
-31-
contained therein, including the Company's compliance with any of its covenants
hereunder (as to which the Warrant Agent is entitled to rely exclusively on
Officers' Certificates).
SECTION 22. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company, the Warrant Agent or any holder
of Warrants shall bind and inure to the benefit of their respective successors
and assigns hereunder.
SECTION 23. TERMINATION. This Agreement shall terminate on the
Expiration Date. Notwithstanding the foregoing, this Agreement will terminate on
any earlier date if all Warrants have been exercised or redeemed pursuant to
this Agreement or the Company's Certificate of Incorporation.
SECTION 24. 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 New York and shall be governed by and construed in accordance with the
laws of said State, without regard to the conflict of law rules thereof.
SECTION 25. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of the Warrant Certificates from time
to time any legal or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of the Company, the
Warrant Agent and the registered holders of the Warrant Certificates.
SECTION 26. 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 all such counterparts shall together constitute but one
and the same instrument.
<PAGE> 36
-32-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
RAILAMERICA, INC.
By: /s/ Bennett Marks
-----------------------------------
Name: Bennett Marks
Title: Senior Vice President and Chief
Financial Officer
WELLS FARGO BANK MINNESOTA, N.A.,
as Warrant Agent
By: /s/ Timothy P. Mowdy
-----------------------------------
Name: Timothy P. Mowdy
Title: Corporate Trust Officer
<PAGE> 37
Exhibit A
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN
THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT
AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"),
(B) IT HAS ACQUIRED THIS SECURITY IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI")),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES
ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER,
FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THE
SECURITIES (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND IF
SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES
LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY), (F) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO
THE COMPANY) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
A-1
<PAGE> 38
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION,
AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES"
HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES
ACT.
A-2
<PAGE> 39
No. [ ] CUSIP # [ ]
COMMON STOCK PURCHASE WARRANT
OF
RAILAMERICA, INC.
THIS CERTIFIES THAT [ ], or its registered assigns, is the registered
holder of ______________ Warrants (the "WARRANTS"). Each Warrant entitles the
holder thereof (the "HOLDER"), at its option at any time on or after the
Separability Date and subject to the provisions contained herein and in the
Warrant Agreement referred to below, to purchase from RailAmerica, Inc., a
Delaware corporation (the "COMPANY"), 10.8570307 shares of Common Stock, par
value $0.001 per share, of the Company at an exercise price per share equal to
$6.60 (the "EXERCISE PRICE").
This Warrant Certificate shall terminate and become void as of the
close of business on August 15, 2010 (the "EXPIRATION DATE") or, if earlier,
upon the exercise hereof as to all the shares of Common Stock subject hereto.
The number of shares issuable upon exercise of the Warrants shall be subject to
adjustment from time to time as set forth in the Warrant Agreement (as defined).
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement dated as of August 14, 2000 (the "WARRANT AGREEMENT"), between
the Company and Wells Fargo Bank Minnesota, N.A., as Warrant Agent, and is
subject to the terms and provisions contained in the Warrant Agreement, to all
of which terms and provisions the Holder of this Warrant Certificate consents by
acceptance hereof. The Warrant Agreement is hereby incorporated herein by
reference and made a part hereof. Reference is hereby made to the Warrant
Agreement for a full statement of the respective rights, limitations of rights,
duties and obligations of the Company and the Warrantholders. Capitalized terms
used but not defined herein shall have the meanings ascribed thereto in the
Warrant Agreement. A copy of the Warrant Agreement may be obtained for
inspection by the Holder hereof upon written request to the Company at 5300
Broken Sound Boulevard, N.W., Boca Raton, Florida 33487, Attn: General Counsel.
Subject to the terms of the Warrant Agreement, the Warrants may be
exercised upon surrender at the office or agency of the Company maintained for
such purpose, which initially will be the corporate trust office of the Warrant
Agent in New York, New York, of the certificate or certificates evidencing the
Warrants to be exercised with the form of election to purchase on the reverse
thereof duly filled in and signed, and upon payment to the Warrant Agent for the
account of the Company of the Exercise Price for the number of Warrant Shares in
respect of which such Warrants are then exercised. The Exercise Price may be
paid at the
A-3
<PAGE> 40
holder's election (i) in cash in United States dollars by wire transfer or by
certified or official bank check to the order of the Company or (ii) by the
surrender of one or more Warrant Certificates (and without the payment of the
Exercise Price in cash) in exchange for a number of shares of the Company's
Common Stock equal to the product of (a) the number of shares of the Company's
Common Stock for which such Warrant is exercisable as of the Exercise Date (if
the Exercise Price were being paid in cash), and (b) the Cashless Exercise
Ratio. The "Cashless Exercise Ratio" shall equal a fraction, the numerator of
which is the excess of the Current Market Value per share of the Company's
Common Stock on the Exercise Date over the Exercise Price per share as of the
Exercise Date and the denominator of which is the Current Market Value per share
of the Company's Common Stock on the Exercise Date. Upon surrender of a Warrant
Certificate representing more than one Warrant, the number of shares of the
Company's Common Stock deliverable upon a Cashless Exercise shall be equal to
the product of the number of shares of the Company's Common Stock issuable in
respect of those Warrants that the holder specifies are to be exercised pursuant
to a Cashless Exercise multiplied by the Cashless Exercise Ratio. All provisions
of the Warrant Agreement shall be applicable with respect to an exercise of a
Warrant Certificate pursuant to a Cashless Exercise for less than the full
number of Warrants represented thereby.
The Warrants shall be exercisable only in whole. In the event that a
certificate evidencing Warrants is exercised in respect of fewer than all of the
Warrants evidenced thereby at any time prior to the date of expiration of the
Warrants, a new certificate evidencing the remaining Warrant or Warrants will be
issued, and the Warrant Agent is irrevocably authorized to countersign and to
deliver the required new Warrant Certificate or Certificates pursuant to the
Warrant Agreement, and the Company, whenever required by the Warrant Agent, will
promptly supply the Warrant Agent with Warrant Certificates duly executed on
behalf of the Company for such purpose.
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent as such term is used in the Warrant Agreement.
As provided in the Warrant Agreement, the Exercise Rate and the
Exercise Price are subject to adjustment upon the happening of certain events.
The Company will pay all documentary stamp taxes attributable to the
initial issuance of Warrant Shares upon the exercise of Warrants; PROVIDED,
HOWEVER, that the Company shall not be required to pay any tax or taxes which
may be payable in respect of any transfer involved in the issue of any Warrant
Certificates or any certificates for Warrant Shares in a name other than that of
the registered holder of a Warrant Certificate surrendered upon the exercise of
a Warrant, and the Company shall not be required to issue or deliver such
Warrant Certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
A-4
<PAGE> 41
The Company shall not be required to issue fractional Warrant Shares on
the exercise of Warrants. If more than one Warrant shall be presented for
exercise in full at the same time by the same holder, the number of full Warrant
Shares which shall be issuable upon the exercise thereof shall be computed on
the basis of the aggregate number of Warrant Shares purchasable on exercise of
the Warrants so presented. If any fraction of a Warrant Share would be issuable
on the exercise of any Warrants (or specified portion thereof), the Company
shall pay an amount in cash equal to the Current Market Value per Warrant Share
on the day immediately preceding the date the Warrant is presented for exercise,
multiplied by such fraction.
All Warrant Shares issuable by the Company upon the exercise of the
Warrants shall, upon such issue, be duly and validly issued and fully paid and
non-assessable.
The Company and the Warrant Agent may deem and treat Holders of the
Warrant Certificates as the absolute owners thereof (notwithstanding any
notation of ownership or other writing thereon made by anyone) for all purposes,
and neither the Company nor the Warrant Agent shall be affected by any notice to
the contrary.
A-5
<PAGE> 42
The Warrants do not entitle any Holder hereof to any of the rights of a
stockholder of the Company.
RAILAMERICA, INC.
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
DATED:
COUNTERSIGNED:
WELLS FARGO BANK MINNESOTA, N.A.,
as Warrant Agent
By:
----------------------------------
Authorized Signature
A-6
<PAGE> 43
FORM OF ELECTION TO PURCHASE WARRANT SHARES
(to be executed only upon exercise of Warrants)
RAILAMERICA, INC.
The undersigned hereby irrevocably elects to exercise
__________________ Warrants on the terms and conditions specified in the Warrant
Certificate and the Warrant Agreement, surrenders this Warrant Certificate and
all right, title and interest therein to RailAmerica, Inc. and directs that the
Warrant Shares deliverable upon the exercise of such Warrants be registered or
placed in the name and at the address specified below and delivered thereto.
Date: ____________, ____
Your Signature.
----------------------------------------------------------------
(Sign exactly as your name appears on the face of this Warrant
Certificate)
--------------------------------------------------------------------------------
(Street Address)
--------------------------------------------------------------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
-----------------------------------------
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements
of the Registrar, which requirements include
membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as
may be determined by the Registrar in addition
to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
<PAGE> 44
Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
-2-
<PAGE> 45
ASSIGNMENT FORM
To assign this Warrant, fill in the form below:
I or we assign and transfer this Warrant to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Warrant on the books
of the Company. The agent may substitute another to act for him.
---------------------------------------------------------------------------
Date: _____________________
Your Signature:
-----------------------------------------------------------------
(Sign exactly as your name appears on the face of this
Warrant Certificate)
Signature Guaranteed by:
-----------------------------------------
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements
of the Registrar, which requirements include
membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be
determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
<PAGE> 46
Exhibit B(1)
[GLOBAL WARRANT LEGEND]
Any Global Warrant countersigned and delivered hereunder shall
bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL WARRANT WITHIN THE MEANING OF THE WARRANT
AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT EXCHANGEABLE
FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE WARRANT AGREEMENT, AND NO TRANSFER OF THIS SECURITY (OTHER THAN
A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE
OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY
OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE WARRANT AGREEMENT. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
B-1
<PAGE> 47
Exhibit B(2)
[UNIT LEGEND]
Any Warrant issued on or after the Issue Date and prior to the
Separability Date shall bear the legend set forth in the following paragraph:
THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE INITIALLY
ISSUED AS PART OF AN ISSUANCE OF UNITS, EACH OF WHICH CONSISTS OF $1,000
PRINCIPAL AMOUNT OF THE 12 7/8% SENIOR SUBORDINATED NOTES DUE 2010 OF
RAILAMERICA TRANSPORTATION CORP. (THE "NOTES") AND ONE WARRANT (EACH, A
"WARRANT" AND COLLECTIVELY, THE "WARRANTS"), EACH WARRANT INITIALLY ENTITLING
THE HOLDER THEREOF TO PURCHASE 10.8570307 SHARES OF COMMON STOCK, $0.001 PAR
VALUE, OF RAILAMERICA, INC. (THE "COMMON STOCK"). PRIOR TO THE SEPARABILITY
DATE, THE WARRANTS EVIDENCED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED OR
EXCHANGED SEPARATELY FROM, AND MAY BE TRANSFERRED OR EXCHANGED ONLY TOGETHER
WITH, THE NOTES.
B-2
<PAGE> 48
Exhibit C
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Common Stock (the "WARRANTS")
of RailAmerica, Inc.
This Certificate relates to __________ Warrants held by
________________ (the "TRANSFEROR").
The Transferor has requested the Warrant Agent by written order to
exchange or register the transfer of a Warrant or Warrants.
In connection with such request and in respect of each such Warrant,
the Transferor hereby certifies that the Transferor is familiar with the Warrant
Agreement dated as of August 14, 2000, between RailAmerica, Inc., a Delaware
corporation, and Wells Fargo Bank Minnesota, N.A., as warrant agent (the
"WARRANT AGREEMENT"), relating to the above captioned Warrants and the
restrictions on transfers thereof as provided in Section 6 of such Warrant
Agreement, and that the transfer of this Warrant does not require registration
under the Securities Act of 1933, as amended (the "ACT"), because*:
[ ] Such Warrant is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 6(a)(y)(A) of the Warrant
Agreement).
[ ] Such Warrant is being transferred to a qualified institutional
buyer (as defined in Rule 144A under the Act) in reliance on Rule 144A or is
being transferred in accordance with Regulation S under the Act.
[ ] Such Warrant is being transferred in accordance with Rule 144 under
the Act.
[ ] Such Warrant is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Act, other than Rule
144A or Rule 144 or Regulation S under the Act. An opinion of counsel to the
effect that such transfer does not require registration under the Act
accompanies this Certificate.
C-1
<PAGE> 49
-------------------------------
[INSERT NAME OF TRANSFEROR]
By:
----------------------------
Date:
-------------------------------
*Check applicable box.
C-2
<PAGE> 50
Exhibit D
[Form of Transferee Letter of Representation
in Connection with Transfers to Institutional Accredited Investors]
Wells Fargo Bank Minnesota, N.A.
Sixth & Marquette
MAC N9303-120
Minneapolis, Minnesota 55479
Ladies and Gentlemen:
In connection with our proposed purchase of warrants to purchase Common
Stock, par value $0.001 per share (the "SECURITIES"), RailAmerica, Inc. (the
"COMPANY"), we confirm that:
1. We understand that the Securities have not been registered
under the Securities Act of 1933, as amended (the "SECURITIES ACT"),
and, unless so registered, may not be offered, sold or otherwise
transferred except as permitted in the following sentence. We agree on
our own behalf and on behalf of any investor account for which we are
purchasing Securities to offer, sell or otherwise transfer such
Securities prior to the date which is two years after the later of the
date of original issue and the last date on which the Company or any
affiliate of the Company was the owner of such Securities (or any
predecessor Securities) (the "RESALE RESTRICTION TERMINATION DATE")
only (a) to the Company, (b) pursuant to a registration statement which
has been declared effective under the Securities Act, (c) for so long
as the Securities are eligible for resale pursuant to Rule 144A under
the Securities Act, to a person we reasonably believe is a qualified
institutional buyer as defined in Rule 144A (a "QIB") that purchases
for its own account or for the account of a QIB and to whom notice is
given that the transfer is being made in reliance on Rule 144A, (d)
pursuant to offers and sales that occur outside the United States
within the meaning of Regulation S under the Securities Act, (e) to an
institutional "accredited investor" within the meaning of subparagraph
(a)(1), (a)(2), (a)(3) or (a)(7) of Rule 501 under the Securities Act
that is acquiring the Securities for its own account or for the account
of such an institutional "accredited investor", for investment purposes
and not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act, or (f) pursuant to
another available exemption from the registration requirements of the
Securities Act, subject in each of the foregoing cases to any
requirement of law that the disposition of our property or the property
of such investor account or accounts be at all times within our or
D-1
<PAGE> 51
their control and to compliance with any applicable state securities
laws. The foregoing restrictions on resale will not apply subsequent to
the Resale Restriction Termination Date. If any resale or other
transfer of the Securities is proposed to be made pursuant to clause
(e) above prior to the Resale Restriction Termination Date, the
transferor shall deliver a letter from the transferee substantially in
the form of this letter to the warrant agent under the Warrant
Agreement pursuant to which the Securities were issued (the "WARRANT
AGENT") which shall provide, among other things, that the transferee is
an institutional "accredited investor" within the meaning of
subparagraph (a)(1), (a)(2), (a)(3) or (a)(7) of Rule 501 under the
Securities Act and that it is acquiring such Securities for investment
purposes and not for distribution in violation of the Securities Act.
The Warrant Agent and the Company reserve the right prior to any offer,
sale or other transfer prior to the Resale Restriction Termination Date
of the Securities pursuant to clause (c), (d), (e) or (f) above to
require the delivery of a written opinion of counsel, certifications,
and or other information satisfactory to the Company and the Warrant
Agent.
2. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (a)(2), (a)(3) or (a)(7) of Regulation D under the
Securities Act) purchasing for our own account or for the account of
such an institutional "accredited investor", and we are acquiring the
Securities for investment purposes and not with a view to, or for offer
or sale in connection with, any distribution in violation of the
Securities Act and we have such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and
risks of our investment in the Securities, and we and any accounts for
which we are acting are each able to bear the economic risk of our or
its investment for an indefinite period.
3. We are acquiring the Securities purchased by us for our own
account or for one or more accounts as to each of which we exercise
sole investment discretion.
D-2
<PAGE> 52
4. You and your counsel are entitled to rely upon this letter
and you are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered
hereby.
Very truly yours,
-------------------------------
(Name of Purchaser)
By:
----------------------------
Date:
--------------------------
Upon transfer the Securities would be registered in the name
of the new beneficial owner as follows:
Name:
----------------------------
Address:
-------------------------
Taxpayer ID Number:
--------------
D-3
<PAGE> 53
Exhibit E
[Form of Transferee Letter of Representation
in Connection with Transfers Pursuant to Regulation S]
Wells Fargo Bank Minnesota, N.A.
Sixth & Marquette
MAC N9303-120
Minneapolis, Minnesota 55479
Ladies and Gentlemen:
In connection with our proposed purchase of warrants (the "SECURITIES")
to purchase Common Stock, par value $0.001 per share, of RailAmerica, Inc. (the
"COMPANY"), we confirm that such sale has been effected pursuant to and in
accordance with Regulation S under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), and, accordingly, we represent that:
(1) The undersigned certifies that it is not a U.S. person and is
not acquiring the Securities for the account or benefit of any
U.S. person.
(2) The undersigned agrees to resell the Securities only in
accordance with the provisions of Regulation S, pursuant to
registration under the Securities Act of 1933 or pursuant to
an available exemption from registration.
(3) The undersigned agrees not to engage in hedging transactions
with regard to the Securities unless in compliance with the
Securities Act.
You and your counsel are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S under the
Securities Act.
Very truly yours,
(Name of Purchaser)
By:
----------------------------
E-1
<PAGE> 54
Upon transfer the Securities would be registered in the name of the new
beneficial owner as follows:
Name:
----------------------------
Address:
-------------------------
Taxpayer ID Number:
--------------
E-2
