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EXHIBIT 10.1
FIRST LONDON SECURITIES CORPORATION
Dallas - New York - Toronto
0000 Xxxxx Xxxxxx - Xxxxxx, Xxxxx 00000
000-000-0000 Voice Member NASD - SIPC
000-000-0000
000-000-0000 Fax
CONFIDENTIAL
September 13, 1996
Board of Directors
RailAmerica, Inc.
000 Xxxxxx Xxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxx, Chairman of the Board, President, and CEO
Gentlemen:
This letter outlines the terms upon which First London Securities
Corporation ("FLSC" or the "Agent") proposes to be engaged by RailAmerica,
Inc. (the "Company") to act as the exclusive agent (except as otherwise
provided herein) in connection with the placement of securities (the
"Offering") for the Company. It is currently contemplated that the Offering,
subject to satisfactory completion of our due diligence, will be structured as
an offering of common stock in the range of 250,000 and 1,250,000 shares, at a
negotiated discount to the then current market price. The Agent will conduct
all sales and solicitation efforts of the Offering to institutional and
accreditated individual investors. The anticipated completion of the Offering
is expected by September 30, 1996.
1. The Company, with the Agent's assistance, will prepare a
Confidential Offering Memorandum (the "Memorandum"). The
Company represents that the Memorandum will not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading. Additionally,
representatives of the Company shall be available at reasonable
times to answer questions of, and to provide additional
information to, any potential investors.
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Board or Directors
RailAmerica, Inc.
000 Xxxxxx Xxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxxxx 00000
09/13/96
Page 2
2. The Agent agrees to use its best efforts to complete the
private placement of securities contemplated here. The terms of
the Offering shall be subject to mutual agreement of the
Company and each investor in the Offering. The Agent will
contact potential investors, assist in the negotiation and the
structuring of the investment in the Company, and provide
related services that may facilitate the successful completion
of the Offering. The Agent will conduct all sales and
solicitation efforts in a manner consistent with your intent
that the Offering be an exempt transaction pursuant to Section
4(2) of the Securities Act of 1933, as amended (the "Act").
The Company shall advise use of those states in which the
securities have been qualified or exempted under the
appropriate securities laws.
3. As compensation for its services under this Agreement, the
Agent will receive a placement fee equal to five percent of
the gross proceeds raised on behalf of the Company (the
"Placement Fee") and a unaccountable expense fee equal to one
percent of the gross proceeds raised on behalf of the Company
(the "Expense Fee"). Payment of such Placement Fee and the
Expense Fee shall be subject to and a condition of the closing
of the Offering. If more than one closing is required to
complete the Offering, only the pro rata portion of the
Placement and Expense Fees applicable to each closing shall be
payable at such closing. In addition, at the initial closing
and any subsequent closings, the Company agrees to issue to its
Agent one year warrants to purchase additional Securities of
the Company equal to 10% of the total number of Securities
placed by the Agent as a purchase price per Security equal to
115% of the market bid price of the Securities at the time of
the pricing of the Offering.
Upon the execution of this agreement by the Company, the Company
agrees to pay FLSC a unaccountable expense advance of $5,000.00,
to be deducted from the Expense Fee at closing. In addition,
whether or not the Offering is completed, the Company agrees to
reimburse the Agent for its out-of-pocket expenses including
fees and expenses of our counsel, if any, in connection with
the Offering. Agent will not incur any reimbursable expenses
in excess of $1,000.00 without prior written approval from the
Company. If the Offering is completed, such expenses will
be deducted from the Expense Fee.
4. The Company represents and warrants that no person or
organization other than FLSC is, as a result of any action by
the Company, entitled to compensation for
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Board of Directors
RailAmerica, Inc.
000 Xxxxxx Xxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxxxx 00000
09/13/96
Page 3
services as a finder, broker, placement agent, or investment
banker in connection with the Offering.
5. The Company agrees to indemnify and hold harmless the Agent and
each person, if any, who controls the Agent within the meaning
of the Securities Act of 1933, as amended, against any lawsuits,
claims, damages or liabilities (or actions or proceedings in
respect thereof) to which the Agent or such controlling person
may become subject related to or arising out of our engagement
hereunder including, without limitation, the use and content of
the Memorandum, and will reimburse the Agent and each such
controlling person for all legal and other expenses incurred in
connection with investigating or defending any such lawsuit,
claim, damage, liability, action or proceeding whether or not
in connection with pending or threatened litigation in which
the Agent or any of its directors, officers, agents, employees
and controlling persons is a party; provided, however, that the
Company will not be liable in any case (except cases arising
out of the use or content of the Memorandum) for losses,
claims, damages, liabilities or expenses that a court of
competent jurisdiction shall have found in a final judgment to
have arisen primarily from the gross negligence or willful
misconduct of the Agent or the party claiming a right to
indemnification. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
In case any proceeding shall be instituted involving any person
in respect to whom indemnity may be sought, such person (the
"indemnified party") shall promptly notify the Company, and the
Company, upon the request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party
to represent the indemnified party and any others the Company
may designate in such proceedings and shall pay as incurred the
fees and expenses of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the
right to retain its own counsel at its own expense, except that
the Company shall pay as incurred the fees and expenses of
counsel retained by the indemnified party in the vent that (i)
the Company and the indemnified party shall have mutually
agreed to the retention of such counsel or, (ii) the named
parties to any such proceeding including both the Company and
the indemnified party and representation of both parties by the
same counsel would be inappropriate, in the reasonable opinion
of the indemnified party, due to actual or potential differing
interests between them. The Company shall not be liable
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Board of Directors
RailAmerica, Inc.
000 Xxxxxx Xxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxxxx 00000
09/13/96
Page 4
for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there
be a final judgment for the plaintiff, the Company agrees to
indemnify the indemnified party to the extent set forth in this
letter.
Delivered herewith are two identical copies of this letter. If the
foregoing accurately reflects our mutual agreement with respect to the matters
set forth herein, please confirm your agreement to the foregoing by signing
both of the enclosed copies of this letter and returning to us one executed
copy of this letter via overnight express delivery and effecting, by
wire-transfer or certified check, payment of the non-accountable expense
advance in accordance with Section 3 hereof. This letter shall expire and be
null and void unless it has been executed by you and delivered to us on or
prior to September 17, 1996.
Acceptance of this letter by the Company is subject to approval by the
Company's Board of Directors.
We appreciate the opportunity to work with you and we look forward to a
successful transaction as a continuation of our mutually beneficial
relationship.
FIRST LONDON SECURITIES CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx, XX
-----------------------------
Xxxxx X. Xxxxxxxx, XX
Director, Investment Banking
Agreed to and Accepted as of the
date first above written:
RAILAMERICA, INC.
By: /s/ Xxxx X. Xxxxxx
-----------------------------
Xx. Xxxx X. Xxxxxx
Chairman of the Board, President and CEO
