1
EXHIBIT 4.2
2
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement") dated as of January 15, 1997
between RailAmerica, Inc., a Delaware corporation (the "Company") and First
London Securities Corporation, a Texas corporation (the "Holder").
WITNESSETH:
WHEREAS, the Holder agreed pursuant to a Placement Agency Agreement (the
"Placement Agreement") with the Company to act as the exclusive agent of the
Company in connection with the private placement of securities for the Company,
as set forth in the Placement Agreement dated December 16, 1996 between the
Holder and the Company attached hereto as Exhibit A; and
WHEREAS, in connection with the execution and delivery of, in
consideration for, and as part of the Holder's compensation in connection with
the Placement Agreement, the Company agreed to issue to the Holder warrants
(the "Warrants") to purchase one hundred sixty-seven thousand (167,000) shares
(the "Shares") of common stock, par value $.001 per share (the "Common Stock")
of the Company; and
WHEREAS, the Holder has agreed to execute and deliver to the Company the
Access Letter attached hereto as Exhibit B upon the issuance of the Warrants.
NOW, THEREFORE, in consideration of the premises and the agreements herein
set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Grant. Subject to the terms and conditions hereof, the Holder is
hereby granted the right to purchase, at any time from January 15, 1997 until
5:00 P.M., Miami, Florida time, on January 15, 1998 (the "Warrant Exercise
Term"), up to 167,000 shares of Common Stock.
2. Warrant Certificates. The warrant certificate (the "Warrant
Certificate") delivered and to be delivered pursuant to this Agreement shall be
in the form set forth as Exhibit C attached hereto with such appropriate
insertions, omissions, substitutions and other variations as required or
permitted by this Agreement.
3
3. Exercise of Warrants. The Warrants are exercisable at a price of $5.75
per share, payable in cash or by check to the order of the Company, or any
combination of cash or check, subject to adjustment as provided in Articles 6
and 7 hereof. Subject to the terms and conditions hereof, upon surrender of
the Warrant Certificate with the annexed Form of Election to Purchase duly
executed, together with payment of the Exercise Price (as hereinafter defined)
for the Shares purchased, at the Company's principal offices (presently located
at 000 Xxxxxx Xxxx, Xxxxx 0000, Xxxx Xxxxx, Xxxxxxx 33431) the Holder shall be
entitled to receive a certificate or certificates for such shares of Common
Stock so purchased. The purchase rights represented by each Warrant
Certificate are exercisable at the option of the Holder hereof, in whole or in
part (but not as to fractional shares of the Common Stock). In the case of the
purchase of less than all the Shares purchasable under any Warrant Certificate,
the Company shall cancel said Warrant Certificate upon the surrender thereof
and shall execute and deliver a new Warrant Certificate of like tenor for the
balance of the Shares purchasable thereunder.
4. Issuance of Certificates. Upon the exercise of the Warrants in
accordance with the terms of this Agreement, the issuance of certificates for
the Shares so purchased shall be made within ten business days thereafter
without charge to the Holder including, without limitation, any tax which may
be payable in respect of the issuance thereof, and such certificates shall
(subject to the provisions of Article 5 hereof) be issued in the name of the
Holder.
The Warrant Certificates and the certificates representing the Shares
shall be executed on behalf of the Company by the manual or facsimile signature
of the present or any future Chairman or Vice Chairman of the Board of
Directors or President or Vice President of the Company under its corporate
seal reproduced thereon, attested to by the manual or facsimile signature of
the present or any future Secretary or Assistant Secretary of the Company.
The Warrant Certificates and, upon exercise of the Warrants, in part or in
whole, the certificates representing the Shares shall bear a legend
substantially similar to the following:
"The securities represented by this certificate
have not been registered under the Securities Act of
1933, as amended (the "Act"), and may not be offered
or sold except (i) pursuant to an effective
registration statement under the Act, (ii) to the
extent applicable, pursuant to Rule 144 under the Act
(or any similar rule under such Act relating to the
disposition of securities), or (iii) upon the
2
4
delivery by the holder to the Company of an opinion of counsel,
reasonably satisfactory to counsel to the issuer, stating that
an exemption from registration under such Act is available."
5. Restriction on Transfer of Warrants. The Holder of the Warrant
Certificate covenants and agrees that the Warrants are being acquired as an
investment and not with a view to the distribution thereof and that the Holder
will comply with all applicable securities laws, rules and regulations in
connection therewith.
6. Price.
6.1 Initial and Adjusted Purchase Price. The initial purchase price of
each Warrant shall be $5.75 per Share ("Exercise Price"). The adjusted
purchase price shall be the price which shall result from time to time from any
and all adjustments of the initial purchase price in accordance with the
provisions of Article 7 hereof.
6.2 Purchase Price. The term "Exercise Price" herein shall mean the
initial purchase price or the adjusted purchase price, depending upon the
context.
7. Adjustments of Exercise Price and Number of Shares.
7.1 Subdivision and Combination. In case the Company shall at any time
subdivide or combine the outstanding shares of Common Stock, the Exercise Price
shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination. Upon each adjustment of the Exercise
Price pursuant to the provisions of this Section 7.1, the number of Shares
issuable upon the exercise of each Warrant shall be adjusted to the nearest
full Share by multiplying a number equal to the Exercise Price in effect
immediately prior to such adjustment by the number of Shares issuable upon
exercise of the Options immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price.
7.2 Reclassification, Consolidation, Merger, etc. In case of any
reclassification of the outstanding shares of Common Stock (other than a change
in par value to no par value, or from no par value to par value, or as a result
of a subdivision or combination), or in the case of any consolidation of the
Company with, or merger of the Company into, another corporation (excluding a
consolidation or merger in which the Company is the surviving corporation and
which does not result in any reclassification or change of the outstanding
shares of Common Stock, except a change as a result of a subdivision or
combination of such shares or a change in par
3
5
value, as aforesaid), or in the case of a sale or conveyance to another
corporation of the property of the Company as an entirety, the Holder shall
thereafter have the right to purchase the kind and number of shares of stock and
other securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance as if the Holder was the owner of the
shares of Common Stock underlying the Warrants immediately prior to any such
events, at a price equal to the product of (x) the number of shares issuable
upon exercise of the Warrants and (y) the Exercise Price in effect immediately
prior to the record date for such reclassification, change, consolidation,
merger, sale or conveyance.
8. Exchange and Replacement of Warrant Certificates. The Warrant
Certificate is exchangeable without expense, upon the surrender thereof by the
Holder at the principal executive office of the Company, for a new Warrant
Certificate of like tenor and date representing in the aggregate the right to
purchase the same number of Shares in such denominations as shall be designated
by the Holder thereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of any Warrant Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrants, if
mutilated, the Company will make and deliver a new Warrant Certificate of like
tenor, in lieu thereof to the Holder.
9. Elimination of Fractional Interests. The Company shall not be required
to issue certificates representing fractions of shares of Common Stock and
shall not be required to issue scrip or pay cash in lieu of fractional
interests, it being the intent of the parties that all fractional interests
shall be eliminated by rounding any fraction up to the nearest whole number of
shares of Common Stock.
10. Reservation and Listing of Securities. The Company shall at all times
reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issuance upon the exercise of the Warrants, such number of
shares of Common Stock as shall be issuable upon the exercise thereof. The
Company covenants and agrees that, upon exercise of the Warrants and payment of
the Exercise Price therefor, all Shares of Common Stock issuable upon such
exercise shall be duly and validly issued, fully paid, non-assessable and not
subject to the preemptive rights of any shareholder. Although the Common Stock
is currently quoted on the Nasdaq SmallCap
4
6
Market, as long as the Warrants shall be outstanding, the Company shall
continue its efforts to cause all Shares of Common Stock issuable upon the
exercise of the Warrants to be quoted on the Nasdaq National Market.
11. Piggyback Registration.
(a) For a period of one year from the date of this Agreement,
if the Company proposes to register any of its securities under the
Securities Act of 1933, as amended (the "Act"), other than in
connection with a merger or pursuant to Form S-8, it will give
written notice to the Holder at least fifteen days prior to the
filing of each such registration statement of its intention to do
so. If the Holder notifies the Company within five days after
receipt of any such notice of its desire to include the Warrants
and/or the Shares of Common Stock issuable upon the exercise of the
Warrants in such proposed registration statement, the Company shall
afford the Holder the opportunity to do so. The obligation of the
Company to give such notice shall be limited to the Holder.
(b) Notwithstanding the provisions of this Section 11, the
Company shall have the right at any time after it shall have given
written notice pursuant to this Section 11 (irrespective of whether
a written request for inclusion of any such securities shall have
been made) to elect not to file any such proposed registration
statement, or to withdraw same after the filing but prior to the
effective date thereof.
(c) The obligations of the Company identified in this Section
11 shall be suspended and tolled for such periods of time (the
"Registration Suspension Period") as is necessary so that under no
circumstances shall the registered resale of Shares of Common Stock
issuable upon the exercise of the Warrants commence within ninety
days after the commencement of an underwritten primary public
offering of the Company's equity securities (a "Public Offering").
The Holder acknowledges and agrees that during the Registration
Suspension Period it shall not resell the Shares issuable upon the
exercise of the Warrants.
12. Covenants of the Company with Respect to Registration.
5
7
(a) In connection with any registration under Section 11
hereof the Company agrees as follows:
(i) to prepare and file with the SEC a registration
statement with respect to such securities and use its best
efforts to cause such registration statement to become and
remain effective;
(ii) to prepare and file with the SEC such amendments
and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary
to keep such registration statement effective and to comply
with the requirements of the Act and the rules and
regulations promulgated by the SEC thereunder relating to the
sale or other disposition of the securities covered by such
registration statement;
(iii) to furnish to Holder such numbers of copies of a
prospectus, including a preliminary prospectus, complying
with the requirements of the Act, and such other documents as
the Holder may reasonably request in order to facilitate the
public sale or other disposition of the securities owned by
Holder, but the Holder shall not be entitled to use any
selling materials other than a prospectus and such other
materials as may be approved by the Company, which approval
will not be unreasonably withheld; and
(iv) to use its best efforts to register or qualify the
securities covered by such registration statement under the
Securities Acts of such states as the Holder shall reasonably
request ("State Acts"), and do any and all such other acts
and things as may be necessary or advisable to enable the
Holder to consummate the public sale or other disposition of
the securities owned by such Holder in such states; provided,
however, that the Company shall not be obligated to register
or qualify such securities in any jurisdiction in which such
registration or qualification would require the Company to
qualify as a foreign corporation or file any general consent
to service of process where it is not then so qualified or
has not theretofore so consented.
(b)Except as provided below in this Section 12, the expenses
incurred by the Company in connection with action taken by the
Company to comply with this Section 12, including, without
limitation, all registration and filing fees, printing and delivery
expenses, accounting fees, fees and disbursements of counsel,
consultant and expert fees, premiums for liability insurance, if
the Company chooses to obtain such insurance, obtained in
connection with a registration statement filed to effect such
compliance and all expenses, including counsel fees, of complying
with State Acts, shall be paid by the Company, provided, however,
that all such expenses in connection with any amendment or
supplement to any registration statement filed by the Company
hereunder or the related prospectus which is required to be filed
more than nine months after the effective date of such registration
statement because the Holder or any
6
8
underwriter of the Holder's securities has not effected the
disposition of the securities required to be registered shall be
paid by the Holder pro rata. All fees and disbursements of any
counsel, experts, or consultants employed by the Holder shall be
borne by the Holder. The Company shall not be obligated in any way
in connection with any registration pursuant to this Section 12 for
any selling commissions or discounts payable by the Holder to any
underwriter of securities to be sold by the Holder. It shall be a
condition precedent to the obligation of the Company to take any
action pursuant to this Section 12 that the Company shall have
received an undertaking satisfactory to it from the Holder to pay
all expenses required to be borne by the Holder and to furnish or
cause to be furnished to the Company specifically for use in the
preparation of the registration statement and prospectus written
information concerning the securities held by the Holder and also
concerning any underwriter of such securities and the intended
method of disposition thereof and any additional information or
documentation as the Company shall reasonably request and as may be
required by administrators of the Act or State Acts in connection
with the action to be taken by the Company hereunder pursuant to
such registration.
(c) In the event of any registration of the Holder's
securities under the Act pursuant to this Section 12, the
Company will indemnify and hold harmless the Holder, its officers,
directors and each underwriter of such securities, and any person
who controls the Holder or any underwriter within the meaning of
Section 15 of the Act, against all claims, actions, losses, damages,
liabilities and expenses, joint or several, to which any of such
persons may become subject under the Act or otherwise, insofar as
such losses, claims, damages, liabilities, or actions arise out of
or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any registration statement under
which such securities were registered under the Act, any preliminary
prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Holder, its officers,
directors and
7
9
each underwriter of such securities, and each such controlling
person or entity for any legal and any other expenses reasonably
incurred by the Holder, such underwriter, or such controlling
person or entity in connection with investigating or defending any
such loss, action, claim, damage, liability, or action; provided,
however, that the Company will not be liable in any such case to
the extent that any such loss, claim, damage, liability or action
arises out of or its based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in said
registration statement, said preliminary prospectus or said
prospectus, or said amendment or supplement in reliance upon and in
conformity with written information furnished to the Company
through an instrument duly executed by the Holder or such
underwriter specifically for use in the preparation thereof.
(d) In the event of any registration of any securities under
the Act pursuant to this Section 12, the Holder will, or will
furnish the written undertaking of such other person or entity as
shall be acceptable to the Company to, indemnify and hold harmless
the Company, its officers, directors and any person who controls
such Company within the meaning of Section 15 of the Act, against
losses, claims, damages, liabilities, or actions, joint or several,
to which the Company, its officers, directors, or such controlling
person or entity may become subject under the Act or otherwise,
insofar as such losses, claims, damages, liabilities, or actions
arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration
statement under which such securities were registered under the
Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent
and only to the extent that any such loss, claim, damage,
liability, or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged
omission made in said registration statement, said preliminary
prospectus or said prospectus or said amendment or supplement in
reliance upon and in conformity with
8
10
written information furnished to the Company through an instrument
duly executed by the Holder or any underwriter of such Holder's
securities specifically for use in the preparation thereof.
13. Notices to Holder. Nothing contained in this Agreement shall be
construed as conferring upon the Holder the right to vote or to consent or to
receive notice as a shareholder in respect of any meetings of shareholders for
the election of directors or any other matter, or as having any rights
whatsoever as a shareholder of the Company. If, however, at any time prior to
the expiration of the Warrants and their exercise, any of the following events
shall occur:
(a) the Company shall take a record of the holders of its
shares of Common Stock for the purpose of entitling them to receive
a dividend or distribution payable otherwise than in cash, or a
cash dividend or distribution payable otherwise than out of current
or retained earnings, as indicated by the accounting treatment of
such dividend or distribution on the books of the Company; or
(b) the Company shall offer to all the holders of its Common
Stock any additional shares of capital stock of the Company or
securities convertible into or exchangeable for shares of capital
stock of the Company, or any option, right or warrant to subscribe
therefor, including the occurrence of any of the events set forth
in Section 7.2 hereof; or
(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale
of all or substantially all of its property, assets and business as
an entirety shall be proposed;
then, in any one or more of said events, the Company shall give written
notice of such event at least fifteen (15) days prior to the date fixed as a
record date or the date of closing the transfer books for the determination of
the shareholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, options or warrants, or entitled
to vote on such proposed dissolution, liquidation, winding up or sale. Such
notice shall specify such record date or the date of closing the transfer books,
as the case may be. Failure to give such notice or any defect therein shall not
affect the validity of any action taken in connection with the declaration or
9
11
payment of any such dividend or distribution, or the issuance of any
convertible or exchangeable securities or subscription rights, options or
warrants, or any proposed dissolution, liquidation, winding up or sale.
14. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to the Holder of the Warrants, to the address of such
Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Section 3
of this Agreement or to such other address as the Company may
designate by notice to the Holders.
15. Supplements and Amendments. The Company and the Holder may from time
to time supplement or amend this Agreement in order to cure any ambiguity, to
correct or supplement any provision contained herein which may be defective or
inconsistent with any provisions herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and the
Holder may deem necessary or desirable.
16. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company and the Holder inure to the benefit of their
respective successors and assigns hereunder.
17. Termination. This Agreement shall terminate at the close of business
on January 15, 1998.
18. Governing Law. This Agreement and each Warrant Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Florida and for all purposes shall be construed in accordance with the laws of
the State of Florida. The Company and the Holder do hereby confer exclusive
jurisdiction to enforce or resolve any problems or disputes arising in
connection with this Agreement, each Warrant Certificate and all matters
arising out of or in connection therewith, upon the Florida State courts or the
Federal courts sitting in Dade County, Florida and the Company and the Holder
hereby consent to personal jurisdiction in such jurisdiction, consent to
service of process by certified mail in such jurisdiction, waive any objections
to venue in such jurisdiction, and waive any claim that any such court is an
inconvenient forum.
10
12
19. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Holder any legal or equitable right, remedy or claim under this Agreement, and
this Agreement shall be for the sole and exclusive benefit of the Company and
the Holder.
20. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
11
13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
THE COMPANY:
[SEAL] RAIL AMERICA, INC.
By: /s/Xxxx X. Xxxxxx
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Chairman of the Board,
President and Chief
Executive Officer
THE HOLDER:
[SEAL] FIRST LONDON SECURITIES CORPORATION
By: /s/Xxxxxxx Xxxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: President
12
14
EXHIBIT A
TO
WARRANT AGREEMENT
A-1
15
EXHIBIT B
TO
WARRANT AGREEMENT
ACCESS LETTER
January 15, 1997
RailAmerica, Inc.
000 Xxxxxx Xxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Chairman of the Board,
President and Chief
Executive Officer
Dear Xx. Xxxxxx:
This letter is in reference to the acquisition by First London Securities
Corporation ("Holder") of certain warrants (the "Warrants") to purchase shares
(the "Shares") of common stock, par value $.001 per share, of RailAmerica, Inc.
(the "Company"), pursuant to a Warrant Agreement (the "Agreement") with the
Company. In connection with such Warrant purchase and any purchase of Shares
pursuant to the execution of the Warrants, the following acknowledgments,
representations and agreements are hereby made by the undersigned on behalf of
the Holder:
I currently serve as the _____________________, of the Holder.
I represent and acknowledge that all matters relating to the Company, the
Agreement and the Holder's investment in the Warrants have been explained to
the Holder to its satisfaction and that Holder understands the speculative
nature and risks involved in this investment.
I understand that the Company has relied on the information and
representations with respect to the Holder set forth in this letter in
determining whether an investment in the Company is suitable for the Holder,
and I represent and warrant that all such information is true and correct as of
the date hereof.
Holder is acquiring the Warrants for investment solely for its own account
and not for distribution, transfer, or resale to others.
Holder understands that it must bear the economic risk of the acquisition
of the Warrants and any Shares for the foreseeable future because (a) neither
the offer and sale of the Warrants nor the offer and sale of the Shares has
been registered under the Securities Act of 1933, as amended (the "Act"), and
applicable state securities laws; (b) the Warrants and the Shares may therefore
not be sold, transferred, pledged, or otherwise disposed of unless subsequently
so registered or, an opinion satisfactory to the Company and to counsel for the
Company rendered to the Company that registration under the Act or any
applicable state securities laws is not required; (c) the Company does not have
an obligation to register a resale of the Warrants or the Shares; and (d) the
Company is under no obligation to perfect any exemption for resale of the
Warrants or the Shares.
In the event the Shares purchasable pursuant to the exercise of the
Warrants have not been registered under the Act or the securities laws of any
state or other jurisdiction, at the time the Warrants are exercised, Holder
agrees to make any investment representation and warranty to the Company as the
Company may reasonably require to ensure compliance with any applicable federal
or state securities law or regulation.
B-1
16
Holder understands that the certificates evidencing the Warrants and the
Shares will bear a restrictive legend prohibiting the transfer thereof except
in compliance with applicable state and federal securities laws and may not be
transferred of record except in compliance therewith.
Holder understands that the certificates evidencing the Warrants and the
Shares will contain provisions limiting the transfer thereof.
Holder has been afforded the opportunity to ask questions of, and receive
answers from, the Company and to obtain any additional information, to the
extent that the Company possesses such information or could have acquired it
without unreasonable effort or expense, necessary to verify the accuracy of the
information contained in the documents delivered to Holder and has in general
had access to all information deemed material to an investment decision with
respect to Holder's acquisition of the Warrants.
Holder is an "Accredited Investor" as defined in Rule 501 of Regulation X.
Xxxxxx has adequate means of providing for its current financial needs and
possible contingencies and has no need for liquidity in its investment in the
Company.
Holder is able to bear the economic risks inherent in its investment in
the Company. Holder further acknowledges that an important consideration
bearing on its ability to bear the economic risk of its acquisition of the
Warrants is whether Holder can afford a complete loss of its entire investment
in the Company, and that Holder can afford a complete loss of its entire
investment in the Company.
Holder has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of an investment in the
Company and of making an informed investment decision.
Holder acknowledges that it has discussed this letter with counsel and
understands the meaning and legal consequences of the representations and
warranties hereof, and Holder hereby agrees to indemnify and hold harmless the
Company and its controlling persons from and against any and all loss, damage
or liability due to or arising out of any misrepresentation or a breach of any
warranties contained herein.
This letter and the representations herein shall be governed by and
construed under the laws of the State of Florida and shall be binding upon
Holder's successors and assigns, and inure to the benefit of the Company's
successors and assigns.
Holder further acknowledges and understands the following:
THE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR THE
SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH
LAWS. THE WARRANTS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THE SHARES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT
AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE
X-0
00
XXXXXXXXX XXXXXX XX AWARE THAT IT MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
THE PURCHASER SHOULD REVIEW EXHIBIT B.1 TO THIS AGREEMENT WHEREIN NOTICES
TO RESIDENTS OF CERTAIN STATES ARE SET FORTH IN ACCORDANCE WITH SECURITIES LAWS
OF SUCH STATES.
FIRST LONDON SECURITIES CORPORATION
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
B-3
18
EXHIBIT C
TO
WARRANT AGREEMENT
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (i)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE
EXTENT APPLICABLE, PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE
UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) UPON THE
DELIVERY BY THE HOLDER TO THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO COUNSEL FOR THE ISSUER, STATING THAT AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:00 P.M., MIAMI, FLORIDA TIME, JANUARY 15, 1998
No. W-1 167,000 Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that FIRST LONDON SECURITIES
CORPORATION (the "Holder") is the registered holder of 167,000 Warrants to
purchase, at any time from January 15, 1997 until 5:00 P.M. Miami, Florida time
on January 15, 1998 ("Expiration Date"), up to 167,000 shares (the "Shares") of
fully-paid and non-assessable common stock, par value $.001 (the "Common
Stock"), of RailAmerica, Inc., a Delaware corporation (the "Company"), at the
initial exercise price, subject to adjustment in certain events (the "Exercise
Price"), of $5.75 per Share upon surrender of this Warrant Certificate and
payment of the Exercise Price at an office or agency of the Company, but
subject to the conditions set forth herein and in the Warrant Agreement dated
as of January 15, 1997 between the Company and the Holder (the "Warrant
Agreement"). Payment of the Exercise Price may be made in cash, or by
certified or official bank check in New York Clearing House funds payable to
the order of the Company, or any combination of cash or check.
No Warrant may be exercised after 5:00 P.M., Miami, Florida time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall expire and thereafter be null and void.
The Warrants evidenced by this Warrant Certificate are issued pursuant to
the Warrant Agreement, which Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument and is hereby referred to for a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Company and the Holder.
The Warrant Agreement provides that upon the occurrence of certain events,
the Exercise Price and/or number of the Company's securities issuable thereupon
may, subject to certain conditions, be adjusted. In such event, the Company
will, at the request of the Holder, issue a new Warrant Certificate evidencing
the adjustment in the Exercise Price and the number and/or type of securities
issuable upon the exercise of the Warrants.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall issue to the Holder hereof a new Warrant
Certificate representing such number of unexercised Warrants.
The Company may deem and treat the Holder as the absolute owner of this
Warrant Certificate (notwithstanding any notation of ownership or other writing
hereon made by anyone), for the purpose of any exercise hereof, and of any
distribution to the Holder hereof, and for all other purposes, and the Company
shall not be affected by any notice to the contrary.
C-1
19
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
Dated: As of January 15, 1997 RAILAMERICA, INC.
[SEAL] By:
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Chairman of the Board,
President and Chief
Executive Officer
Attest:
------------------------------
C-2
20
FORM OF ELECTION TO PURCHASE SHARES OF COMMON STOCK
OF
RAILAMERICA, INC.
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase _______________________
(___________) shares ("Shares") of Common Stock, par value $.001 per share of
RailAmerica, Inc. and herewith tenders in payment for such Shares, cash or a
certified or official bank check payable in New York Clearing House Funds to
the order of RailAmerica, Inc. in the amount of $________, all in accordance
with the terms hereof. The undersigned requests that a certificate for such
Shares be registered in the name of the undersigned, whose address is
________________________________________, and that such Certificate be
delivered to ________________________, whose address is
____________________________________.
Dated: Signature:
--------------------------
(Signature must conform
in all respects to name
of holder as specified
on the face of the
Warrant Certificate.)
------------------------------
------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
C-3
21
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED
---------------------------------------------------------
hereby sells, assigns and transfers unto
--------------------------------------------------------------------------------
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ,
------------------------
Attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution.
Dated: Signature:
-----------------------------
(Signature must conform in
all respects to name of
holder as specified on the
face of the Warrant
Certificate)
--------------------------------
--------------------------------
(Insert Social Security or Other
Identifying Number of Assignee)
C-4
