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Exhibit 10.1
FIRST LONDON SECURITIES CORPORATION
Dallas - New York - Toronto
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CONFIDENTIAL
December 16, 1996
Board of Directors
RailAmerica, Inc.
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Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇, 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 private 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 to 1,500,000 shares, at a discount to
current market pricing. The Agent will conduct all sales and solicitation
efforts of the Offering will be made only to accredited investors. The
anticipated completion of the Offering is expected by January 7, 1997.
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 to answer questions
of, and to provide additional information to, any potential investors.
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 us 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 management
fee equal to one percent of the gross proceeds raised on behalf of the
Company (the "Management Fee"). Payment of such Placement Fee and the
Management 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 Management
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 at a purchase price per Security
equal to 115% of the market bid price of the Securities at
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Board of Directors
RailAmerica, Inc.
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the time of the pricing of the Offering.
Upon the execution of this agreement by the Company, the
Company agrees to pay FLSC a non-accountable expense allowance
of $5,000.00. 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.
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 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, damages, 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 such 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 and 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 event 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 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.
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Board of Directors
RailAmerica, Inc.
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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
allowance 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 December 24, 1996.
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/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇
Managing Director, Investment Banking
Agreed to and Accepted as
of the date first above written:
RAILAMERICA, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman of the Board, President and CEO
