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Exhibit 10.7
LEHIGH ACRES FIRST NATIONAL BANCSHARES, INC.
SALES AGENCY AGREEMENT
June 23, 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ FINANCIAL SERVICES, INC.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
This letter sets forth and confirms the terms and conditions of the
engagement (the "Agreement") of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Financial Services, Inc.
("▇▇▇▇▇▇▇ ▇▇▇▇▇▇") by Lehigh Acres First National Bancshares, Inc. (the
"Company") as exclusive selling agent of the Company with respect to the
Company's proposed public offering (the "Offering") of its common stock. The
Offering will be made pursuant to a registration statement on Form SB-2 (the
"Registration Statement"), filed with the Securities and Exchange Commission
(the "Commission") and by means of a prospectus (the "Prospectus"), which will
be provided to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to, and agrees with, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
as follows:
(a) The Registration Statement and the Prospectus do not and will
not contain any untrue statements of material fact or omit to
state any material facts required to be stated therein or
necessary to make the statements therein are, in the light of
the circumstances under which they were made, not misleading.
(b) The Company is a corporation validly existing and in good
standing under the laws of the state of its incorporation; has
full corporate and other power and authority under such laws
to own its properties and conduct its business as described in
the Prospectus; and is duly qualified to do business as a
foreign corporation in each other jurisdiction in which it
owns or leases properties or conducts it business so as to
require qualification and is in good standing in each
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such jurisdiction, except where failure to be so qualified
would not have a material adverse effect on the condition,
financial or otherwise, results of operations, affairs or
business prospects of the Company.
(c) The shares of common stock to be issued and sold by the
Company hereunder (the "Shares"), when issued and delivered
against payment therefor as provided herein, will be duly and
validly authorized and issued and fully paid and will conform
to the description thereof contained in the Prospectus.
(d) Except as disclosed in the Prospectus or information
incorporated therein by reference, there are no (i)
outstanding securities or obligations of the Company
convertible into or exchangeable for any capital stock of the
Company, (ii) warrants, rights or options to subscribe for or
purchase from the Company any such capital stock or any such
convertible or exchangeable securities or obligations (iii)
obligations of the Company to issue any such convertible or
exchangeable securities or obligations, or any such warrants,
rights or options.
(e) The Company has the full legal right, power and authority to
enter into and perform this Agreement and sell and deliver the
Shares as provided herein, and this Agreement has been duly
authorized by its Board of Directors and duly executed and
delivered on behalf of the Company.
(f) Other than filings with, and any necessary registrations,
qualifications or exemptions from the Commission and
applicable state securities and "blue sky" authorities, no
consent, approval, authorization or order, registration or
qualification of or with any court or governmental agency or
body is required for the issuance and sale of the Shares or
for the consummation of the other transactions contemplated by
this Agreement.
(g) Except as provided in Section 2, there are no contracts,
agreements or understanding between the Company and any person
which would give rise to a valid claim against the Company for
a brokerage commission, finder's fee or other like payment in
connection with the offering of the Shares, other than
compensation due and payable to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
(h) No action, suit or proceeding at law or in equity is pending
or, to the Company's knowledge, threatened to which the
Company is a party, and no proceedings are pending or, to the
Company's knowledge, threatened against or affecting the
Company before or by any governmental official, commission,
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board or other administrative agency, (other than in
connection with required regulatory approvals) wherein an
unfavorable decision, ruling or finding could have a material
adverse effect on the consummation of this Agreement or the
condition, financial or otherwise, results of operations,
affairs or business prospects of the Company.
(i) The Company has such permits, licenses, franchises, and
governmental and regulatory authorizations ("permits") as are
necessary to own its properties and conduct its business in
the manner described in the Prospectus, subject to such
qualifications as may be set forth in the Prospectus, and
except where the failure to have such permits would not have a
material adverse effect on the consummation of this Agreement
or the condition, financial or otherwise, results of
operations, affairs, or business prospects of the Company.
(j) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940.
(k) The Company agrees as follows:
(i) The Company will notify ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ immediately,
and confirm such notice in writing, of the receipt of
any comments from any state securities commission or
regulatory authority that relate to the Prospectus or
any amendment thereto or requests by any state
securities commission or regulatory authority for
amendments to the Prospectus or amendments or
supplements to the Prospectus or for additional
information;
(ii) The Company will use the net proceeds from the sale
of the Shares received by it in the manner specified
in the Prospectus under the caption "Use of
Proceeds."
(iii) The Company will supply ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ with such
number of Prospectuses as ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall
reasonably request.
(iv) For three years from the date of this Agreement, the
Company will furnish to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ copies of all
reports and communications (financial or otherwise)
furnished by the Company to its stockholders, copies
of all reports or financial statements filed with the
regulatory
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agencies as soon as such are available, and such
other publicly available documents, reports and
information concerning the business and financial
condition of the Company as ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ may
reasonably request.
(l) The Registration Statement, the Prospectus and all other
documents previously filed or filed after the date hereof with
the Commission conform and will conform with all of the
requirements of the Securities Act of 1933 (the "Act") in all
material respects.
(m) The Company has obtained a CUSIP number for its common stock
and the Company has used its reasonable best efforts to
qualify the Shares for offering in every state reasonably
designated by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇. The materials previously filed
or filed after the date hereof with any state do not and will
not contain any untrue statements of material fact nor are
there or will there be any omissions of material facts
required to be stated therein or that are necessary to make
the statements therein not misleading.
(n) With respect to the offer to sell, sale, offer to purchase or
purchase of any of its securities, the Company has not made
any intentional or reckless violations of the anti-fraud
provisions of the federal securities laws, rules or
regulations promulgated thereunder or the laws, rules or
regulations of any jurisdiction wherein such securities
transactions or solicitations occurred.
(o) During the period of the offering of the Shares and for one
year from the date the Commission declares the Registration
Statement to be effective ("Effective Date"), the Company will
not sell any securities (except any shares issued upon the
exercise of (i) warrants issued pursuant to the warrant
agreements with our organizers to purchase one share of common
stock at $10.00 per share for each share purchased in the
offering, (ii) options issued pursuant to the stock option
plan which the Company anticipates adopting for up to 15% of
its shares outstanding after the offering, or (iii) options or
warrants outstanding on the Effective Date) without ▇▇▇▇▇▇▇
▇▇▇▇▇▇'▇ prior written consent, which will not be unreasonably
withheld.
(p) Other than as disclosed in the Prospectus, the Company has no
subsidiaries nor contemplates acquiring subsidiaries or
engaging in mergers with or the acquisition of any companies.
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(q) The financial statements, together with related schedules and
notes, included in the Registration Statement and Prospectus
present fairly the financial condition of the Company and are
reported upon by independent public accountants according to
generally accepted accounting principles and as required by
the rules and regulations of the Commission.
(r) Except as disclosed in the Registration Statement and the
Prospectus, the Company does not have any contingent
liabilities, obligations, or claims nor has it received
threats of claims or regulatory action. Further, except as
disclosed in the Registration Statement and the Prospectus,
subsequent to the date information is given in the
Registration Statement and definitive Prospectus, and prior to
the close of the offering: (a) there shall not be any material
adverse change in the management or condition, financial or
otherwise, of the Company or in its business taken as a whole;
(b) there shall not have been any material transaction entered
into by the Company other than transactions in the ordinary
course of business; (c) the Company shall not have incurred
any material obligations, contingent or otherwise, which are
not disclosed in the Registration Statement and the
Prospectus; (d) there shall not have been nor will there be
any change in the capital or long term debt (except current
payments) of the Company; and (e) the Company has not and will
not have paid or declared any dividends or other distributions
on its common shares.
(s) The Company's securities, however characterized, are not
subject to preemptive rights.
(t) The Company is eligible to use Form SB-2 for the offering of
the Shares.
(u) The Company and its affiliates are not currently offering any
securities nor has the Company or its affiliates offered or
sold any securities except as described in the Registration
Statement.
(v) The Company will not file any amendment or supplement to the
Registration Statement, Prospectus, or exhibits if ▇▇▇▇▇▇▇
▇▇▇▇▇▇ and its counsel have not been previously furnished a
copy, or if ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or its counsel have objected in
writing to the filing of the amendment or supplement.
(w) The Company has filed all tax returns required to be filed and
is not in default in the payment of any taxes which have
become due pursuant to any law or any assessment.
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(x) The Company has marketable title to all properties including
intellectual properties described in the Registration
Statement or Prospectus as owned by it. The properties are
free and clear of all liens, charges, encumbrances, or
restrictions, however characterized, except as described in
the Registration Statement or Prospectus. All of the
contracts, leases, subleases, patents, copyrights, licenses
and agreements, however characterized, under which the Company
holds its properties as described in the Registration
Statement or Prospectus are in full force and effect. The
Company is not in default under any of the material terms or
provisions of any contracts, leases, subleases, patents,
copyrights, licenses or agreements under which the Company
holds its properties. There are no known claims against the
Company concerning the Company's rights under the leases,
subleases, patents, copyrights, licenses and agreements and
concerning its right to continued possession of its
properties.
(y) All original documents and other information relating to the
Company's affairs have and will continue to be made available
upon request to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and to its counsel at ▇▇▇▇▇▇▇
▇▇▇▇▇▇'▇ office or at the office of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇'▇ counsel
and copies of any such documents will be furnished upon
request to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and to its counsel. Included within
the documents made available have been at least the Articles
of Incorporation and any Amendments, Minutes of all of the
meetings of the Incorporators, Directors and Shareholders, all
financial statements and copies of all contracts, leases,
patents, copyrights, licenses or agreements to which the
Company is a party or in which the Company has an interest.
(z) The Company has appointed ___________________ as the Company's
transfer agent. The Company will continue to retain a transfer
agent reasonably satisfactory to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ for so long as
the Company is subject to the reporting requirements under
Section 12(g) or Section 15(d) of the Securities Exchange Act
of 1934. The Company will make arrangements to have available
at the office of the transfer agent sufficient quantities of
the Company's common stock certificates as may be needed for
the quick and efficient transfer of the Shares.
(aa) The Company is not in material default under any of the
contracts, leases, licenses or agreements to which it is a
party. The proposed offering of the Shares will not cause the
Company to become in material default under any of its
contracts, leases, subleases, patents, copyrights, licenses or
agreements nor will it create a conflict between the Company
and any of the contracting parties to the contracts, leases
and other agreements. Further, the Company is not in material
default in the performance of the any obligation, agreement or
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condition contained in any debenture, note or other evidence
of indebtedness or any indenture or loan agreement of the
Company. The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated and
compliance with the terms of this Agreement will not conflict
with or result in a breach of any of the material terms,
conditions or provisions of, or constitute a material default
under, the Articles of Incorporation or Bylaws of the Company,
as amended, or any note, indenture, mortgage, deed of trust,
or other agreement or instrument to which the Company is a
party or by which it or any of its property is bound, or any
existing law, order, rule, regulation, writ, injunction, or
decree of any government, governmental instrumentality, agency
or body, arbitration tribunal or court, domestic or foreign,
having jurisdiction over the Company or its property. The
consent, approval, authorization, or order of any court or
governmental instrumentality, agency or body is not required
for the consummation of the transactions herein contemplated
except such as may be required under the Act, under the Blue
Sky or securities laws of any state or jurisdiction, or the
rules of the NASD, or except as has already been obtained, or
must be obtained, from the Company's, and its proposed
national bank subsidiary's, banking regulators
(bb) There are no contracts or other documents which are required
to be filed as exhibits to the Registration Statement by the
Act or its rules and regulations which have not been so filed.
Each contract to which the Company is a party has been duly
and validly executed, and is in full force and effect in all
material respects in accordance with its respective terms, and
no contracts have been assigned by the Company, except as
disclosed in the Registration Statement and Prospectus. The
Company knows of no present situation, condition or fact which
would prevent compliance with the terms of such contracts.
Except for amendments or modifications of contracts in the
ordinary course of business and except as disclosed in the
Registration Statement and Prospectus, the Company has no
intention of exercising any right which would cancel any of
its obligations under any contract, and has no knowledge that
any other party to any contract, in which the Company has an
interest, has any intention not to render full performance
under such contract.
(cc) Except as contemplated in accordance with Section 2, the
Company has not made any representation, whether oral or in
writing, to anyone, whether an existing shareholder or not,
that any of the Shares will be reserved for or directed to
them during the proposed public offering.
(dd) None of the executive officers or directors of the Company has
ever (i) been convicted of a criminal felony or misdemeanor,
other than a traffic violation; (ii) been sanctioned or
disciplined by any professional body or association;(iii) been
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sanctioned or disciplined by any regulatory body or authority;
or (iv) filed a petition under federal bankruptcy laws.
2. EMPLOYMENT OF ▇▇▇▇▇▇▇ ▇▇▇▇▇▇. In reliance upon the
representations and warranties and subject to the terms and conditions of this
Agreement:
(a) The Company employs ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ as its exclusive agent to
sell for the Company's account, as many of the Shares as the
Company shall allot, but in no case less than 600,000 shares
or more than 1,000,000 shares, on a cash basis only, at a
price of $10.00 per Share. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ agrees to use its
best efforts, as agent for the Company, to sell the Shares
subject to the terms and conditions set forth in this
Agreement. It is understood between the parties that there is
no firm commitment by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ to purchase any or all of
the Shares.
(b) The obligation of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ to offer the Shares is
subject to receipt by it of advice from the Commission that
the Registration Statement is effective, is subject to the
Shares being qualified for offering under applicable laws in
the states as may be reasonably designated by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
is subject to the absence of any prohibitory action by any
governmental body, agency or official, and is subject to the
terms and conditions contained in this Agreement and in the
Registration Statement covering the offering to which this
Agreement relates.
(c) The Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ agree that unless 600,000 of
the Shares to be offered are sold within _______ (____) days
after the Effective Date (which period may be extended for any
additional period not to exceed _________ (____) days by
mutual agreement between the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇), the
agency between the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ will terminate.
If the agency between the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
terminates, the full proceeds which have been paid for the
Shares shall be returned to the purchasers. Prior to the sale
of all of the Shares to be offered, all proceeds received from
the sale of the Shares will be deposited in an escrow account
entitled _________________________* with
_____________________*(the "Escrow Agent").
(d) The Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and _________________*, the Escrow
Agent, will, prior to the beginning of the offering of the
Shares, enter into a fund escrow agreement in form
satisfactory to the parties. The parties mutually agree to
faithfully perform their obligations under the fund escrow
agreement. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ will promptly deliver the funds into
the escrow account in accordance with Rule 15(c)2-4 of the
Securities Exchange Act of 1934 and the rules and regulations
of the National Association of Securities Dealers.
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(e) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall have the right to associate with other
underwriters and dealers as it may determine and shall have
the right to grant to such persons such concessions out of the
commission to be received by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ as ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
may determine, under and pursuant to a Soliciting Dealer
Agreement in the form filed as an exhibit to the Registration
Statement.
(f) In exchange for the services of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ pursuant to
this Agreement, the Company agrees to pay ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ a
commission on all Shares sold in the Offering based on the
following: (i) no commission on shares sold in the Offering to
our organizers; (ii) $.50 per share on shares sold to
investors who are (a) residents of the City of Lehigh Acres or
(b) whose names are provided to the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ by our
organizers; provided, however, that the $.50 per share
commission will not apply to shares sold by selected dealers
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, but instead commissions shall be payable on
such sales pursuant to Section 2(f)(iii); and (iii) $.80 per
share commission on all other shares sold to the public,
including any shares sold by selected dealers of the ▇▇▇▇▇▇▇
▇▇▇▇▇▇. The selling commission shall be payable at such time
as the subscription Shares sold by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ as selling
agent are accepted by and payment in full is received therefor
by the Company and the funds are released from escrow.
3. EXPENSES OF ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
(a) The Company shall pay ▇▇▇▇▇▇ ▇▇▇▇▇▇ a monthly expense
allowance of $5,000 starting on the effective date of the
offering and every 30 days thereafter. The monthly expense
allowance shall be limited to four months or $20,000 and shall
be deducted from the commission at closing, minus actual
out-of-pocket expenses.
(b) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ agrees that out of its nonaccountable expense
allowance ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ will pay all costs incurred or to be
incurred by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or by its personnel in connection
with the offering of the Shares, except those to be paid by
the Company as described in Section 4 hereof.
4. EXPENSES OF THE COMPANY. The Company agrees that it will pay the
following fees and expenses:
(a) All fees and expenses of its legal counsel who will be engaged
to prepare certain information, documents and papers for
filing with the Commission and with state or local securities
authorities.
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(b) All fees and expenses of its accountants incurred in
connection with the offering of the Shares and the preparation
of all documents and filings made as part of the offering;
(c) All costs in issuing and delivering the Shares;
(d) All costs of printing and delivering to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and
dealers as many copies of the Registration Statement and
amendments, preliminary Prospectuses and definitive
Prospectuses as reasonably requested by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇;
(e) All of the Company's mailing, telephone, travel, clerical and
other office costs incurred or to be incurred in connection
with the offering of the Shares;
(f) All fees and costs which may be imposed by the Commission, the
various state or local securities authorities and the NASD for
review of the offering of the Shares;
(g) All other expenses incurred by the Company in performance of
its obligations under this Agreement.
5. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF ▇▇▇▇▇▇▇ ▇▇▇▇▇▇. All
obligations of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ under this Agreement are subject to the following
conditions precedent:
(a) Counsel for ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall have completed a review of
the form and content of the Registration Statement and
Prospectus, of the organization and present legal status of
the Company, and of the legality and validity of the
authorization and issuance of the issued and outstanding stock
of the Company and of the Shares.
(b) The Company shall have performed all of its obligations under
this Agreement. All of the statements, representations and
warranties contained in this Agreement shall be complete and
true.
(c) From the date of this Agreement until the completion of the
offering, no material adverse changes shall have occurred in
the business, properties and assets of the Company other than
changes occurring in the ordinary course of business.
(d) From the date of this Agreement until the completion of the
offering, no claims or litigation shall have been instituted
or threatened against the Company for substantial amounts or
which would materially adversely affect the Company, its
business or its property and no reasonable basis exists for
such claims or threats.
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Further, no proceeding shall have been instituted or
threatened against the Company before any regulatory body
wherein an unfavorable ruling would have a material adverse
effect on the Company.
(e) From the date of this Agreement until the completion of the
offering of the Shares, no material adverse change shall have
occurred in the operation, financial condition, management or
credit of the Company or in any conditions affecting the
prospects of its business.
(f) From the date of this Agreement until the completion of the
offering, the Company shall not have sustained any loss on
account of fire, flood, accident or calamity of such character
as materially adversely affects its business or property,
regardless of whether or not the loss has been insured.
(g) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall have received from the independent public
accountants for the company two letters addressed to ▇▇▇▇▇▇▇
▇▇▇▇▇▇, one dated the Effective Date and one dated the date of
the release of the funds from the Escrow Account to the
Company, to the effect that:
(i) With respect to the Company they are independent
public accountants within the meaning of the Act and
the published rules and regulations.
(ii) In their opinion, the financial statements and
supporting schedules and notes examined by them of
the Company at all dates and for all periods referred
to in their opinion included in the definitive
Prospectus comply as to form in all material respects
with the applicable accounting requirements of the
Act and the published rules and regulations.
(i) Upon the basis of a reading of the related available
interim financial statements and the financial data
and accounting records of the Company, inquiries of
officers of the Company responsible for financial and
accounting matters, a reading of the minute books of
the Company and other specified procedures and
inquiries satisfactory to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, if any,
nothing has come to their attention which causes them
to believe that during the period from the last
audited balance sheet included in the Registration
Statement to a specified date not more than five (5)
days prior to the date of such letter (a) there has
been any change in the capital shares or other
securities of the Company or any payment or
declaration of any dividend or other distribution in
respect thereof or exchange therefor from that shown
in its audited balance sheets or in the debt of the
Company from that shown or contemplated under
"Capitalization" in the Registration Statement or
definitive Prospectus
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(other than as set forth in or contemplated by the
Registration Statement or definitive Prospectus); (b)
there have been any material decreases in net current
assets or net assets as compared with amounts shown
in the last audited balance sheet included in the
definitive Prospectus (other than in the ordinary
course of business), except in all instances the
changes disclosed in or contemplated by the
Registration Statement and definitive Prospectus; and
(c) on the basis of their examinations referred to in
their opinion, report, and consent included in the
Registration Statement and definitive Prospectus and
the indicated procedures and discussions referred to
above, nothing has come to their attention which, in
their judgment, would cause them to believe or
indicate that the financial statements and schedules
set forth in the Registration Statement and
definitive Prospectus do not present fairly the
financial position and results of operations of the
Company, for the periods indicated, in conformity
with generally accepted accounting principles applied
on a consistent basis, and are not in all material
respects a fair presentation of the information
purported to be shown.
(h) On the date of the release of the funds in the Escrow Account
to the Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall have received from the
president of the Company and the treasurer of the Company
certificates dated as of such date, in form satisfactory to
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ to the effect that:
(i) The representations and warranties of the Company
contained in Section 1 of this Agreement are complete
and true.
(ii) All of the conditions precedent in Sections 5(b)-5(f)
of this Agreement have been performed and the
representations of these conditions precedent are
true.
(iii) No stop order or other proceedings have been
instituted or threatened by the Commission or any
state authority which would adversely affect the
offering of the Shares.
(iv) This Agreement has been duly authorized and executed
and constitutes a valid agreement of the Company.
(v) The respective signers have each carefully examined
the Registration Statement and definitive Prospectus
and any amendments and supplements, and to the best
of their knowledge the Registration Statement and
definitive Prospectus and any amendments and
supplements contain all statements required to be
stated therein. All
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statements contained therein are true and correct,
neither the Registration Statement, definitive
Prospectus or any amendment, supplement or sticker
thereto includes any untrue statement of a material
fact or omits to state any material fact required to
be stated therein or necessary to make the statements
therein not misleading. Since the Effective Date of
the Registration Statement, there has occurred no
event required to be stated therein or necessary to
make the statements therein not misleading, and since
the Effective Date of the Registration Statement,
there has occurred no event required to be set forth
in an amended or supplemented Prospectus which has
not been so set forth.
(i) On the date the funds in the Escrow Account are released to
the Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall have received a written
opinion from the Company's counsel stating that:
(i) The Company has filed a Registration Statement on
Form SB-2 relating to the Shares with the Commission
pursuant to the Act, the Registration Statement has
become effective under the Act and the Registration
Statement, Prospectus and all other documents filed
with the Commission comply as to form with all
requirements of the Act in all material respects
(except for the financial statements and other
financial data included therein, as to which counsel
need express no opinion).
(ii) Counsel is unaware of any contracts or other
documents required to be described in the
Registration Statement or in the Prospectus or to be
filed as exhibits to the Registration Statement which
have not been described or filed as required.
(iii) Counsel is unaware of any contracts or documents that
have not been disclosed in the Prospectus that are
material to the representations in the Prospectus and
that would require disclosure in order to make
statements made not misleading.
(iv) To the knowledge of counsel, the Company is not in
default of any material contracts to which it is a
party and the proposed offering of Shares will not
cause the Company to become in default of any of its
material contracts, nor will it create a conflict
between the Company and any of the contracting
parties to the material contracts.
(v) This Agreement has been duly authorized and executed
by the Company and constitutes a valid agreement of
the Company except that no opinion need be expressed
as to the validity of the indemnification provisions
insofar as they are or may be held to be violative of
public policy (under either state or federal law),
the availability of specific performance or other
equitable remedies, the effects of bankruptcy,
insolvency,
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14
moratorium and all other similar laws and decisions
affecting the rights of creditors generally and as to
whether or not this Agreement may be an illusory
contract.
(v) To the knowledge of counsel, no claim or litigation
has been instituted or threatened against the
Company.
(vi) To the knowledge of counsel, no stop order or other
proceedings have been instituted or threatened by the
Commission or any state or local authority which
would adversely affect the offering of the Shares.
(viii) To the knowledge of counsel, the Company possesses
adequate licenses, certificates, authorizations or
permits issued by the appropriate federal, state and
local regulatory authorities necessary to conduct its
business as described in the Registration Statement
and to retain possession of its properties. Counsel
is unaware of any notice of any proceeding relating
to the revocation or modification of any of these
certificates or permits having been received by the
Company.
(ix) To the knowledge of counsel, neither the Company nor
its affiliates is currently offering any securities
for sale except as described in the Registration
Statement.
(vii) No preemptive rights exist with respect to the
Company's securities.
(viii) Counsel is unaware of any subsidiaries of the Company
other than as described in the Registration
Statement.
(ixii) Counsel has participated in the preparation of the
Registration Statement and Prospectus and no facts
have come to the attention of such counsel to lead
counsel to believe that either the Registration
Statement or the Prospectus or any amendment or
supplement thereto (except for the financial
statements and other financial data included therein,
as to which such counsel need express no opinion)
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.
(xiii) The Company has an authorized capitalization as
described in the Registration Statement, and there
are no outstanding options, warrants or other rights
to purchase shares of the Company's common stock
known to counsel other than as described in the
Registration Statement.
(xiv) The Company has been incorporated and is a validly
existing corporation under the laws of the state of
Florida and has full corporate power and authority
under such laws to own its properties and to conduct
its
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business as described in the Registration Statement.
To the best of counsel's knowledge, the Company is
qualified to conduct business as a foreign
corporation in each jurisdiction where the nature of
its business activities requires such qualification
except where failure to so qualify would not have a
material adverse effect upon the business or
financial condition of the Company.
(xv) The Company's shares of common stock that are issued
and outstanding are fully paid and nonassessable and
the Shares when issued and paid for in accordance
with their terms will be fully paid and
non-assessable. The Shares conform to the description
thereof contained in the Registration Statement. The
Company has authorized the issuance of the Shares and
has full power and authority to issue and sell the
Shares on the terms and conditions herein set forth.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless ▇▇▇▇▇▇▇
▇▇▇▇▇▇ and each person, if any, who controls ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
within the meaning of Section 15 of the Securities Act of 1933
(the "1933 Act"), against any and all losses, claims, damages,
liabilities and expenses (including reasonable cost of
investigation and counsel's fees) arising out of or based upon
any untrue statement or alleged untrue statement of a material
fact contained in the Prospectus, or in any amendment or
supplement thereto, or arising out of or based upon any
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading or arising out of any breach
of this Agreement except insofar as such losses, claims,
damages, liabilities and expenses arise out of or are based
upon any untrue statement or omission or alleged untrue
statement or omission made by any means by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or
its agents, directors or employees in connection with the
offer and sale of the Shares. The foregoing indemnity shall
not, with respect to untrue statements or omissions in the
Prospectus inure to the benefit of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or any
affiliate or person who controls ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, from whom the
person asserting any such loss, liability, claim, damage or
expense purchased any of the Shares that are the subject
hereof, if such person was not sent or given a copy of the
Prospectus (as amended or supplemented).
(b) If any action or claim shall be brought or asserted against
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or any person controlling ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in
respect of which indemnity may be sought from the Company,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or such controlling person shall promptly
notify the Company in writing, enclosing copies of all papers
served on or delivered to such party, and the Company shall
assume the defense thereof, including the employment of a
single law firm to act as counsel for all parties identified
hereunder, and the payment of all expenses. The failure to
notify an indemnifying party shall not relieve the
indemnifying party from any liability
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16
hereunder to the extent it is not materially prejudiced as a
result of such failure. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or any such controlling
person shall have the right to employ separate counsel in any
such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the sole expense
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or such controlling person unless (i) the
employment thereof has been specifically authorized in advance
by the Company in writing, (ii) the Company failed to assume
the defense and employ counsel as described above, or (iii)
the named parties to any such action (including any impleaded
parties) include both ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or such controlling
person and the Company, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or such controlling
person shall have been advised by such counsel that there may
be one or more legal defenses available to it that are
different from or in addition to those available to the
Company (in which case, if ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or such controlling
person notifies the Company in writing that it elects to
employ separate counsel at the expense of the Company, the
Company shall not have the right to assume the defense of such
action on behalf of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or such controlling
person). No indemnified party shall settle, compromise or
consent to the entry of any judgment with respect to any
litigation, any investigation or proceeding by any
governmental agency or body, commenced or threatened, or claim
whatsoever in respect of which indemnification or contribution
can be sought under this Section 6(whether or not the
indemnified parties are actual or potential parties), unless
the indemnified party gives prior written notification to the
indemnifying party and such settlement, compromise or consent
does not include any statement or admission of fault,
culpability or failure to act on behalf of, or with respect
to, any indemnified party.
(c) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ agrees individually, and not jointly with any
other selling agent for the Shares, to indemnify and hold
harmless the Company and its respective directors and each
person, if any who controls the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the Securities
Exchange Act of 1934 against, any and all loss, liability,
claim, damage and expenses described in the indemnity
contained in subsection (a) of this Section 6 but only with
respect to untrue statements or omissions, or alleged untrue
statements or omissions made in the Prospectus (as amended or
supplemental) based upon information furnished to the Company
by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, in writing.
(d) If the indemnification provided for in this Section 6 is
unavailable to an indemnified party under subsections (a), (b)
or (c) hereof in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the
Company on the one hand and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ on the other from
the Offering or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits
referred to in
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17
clause (i) above but also the relative fault of the Company on
the one hand and of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ on the other in connection
with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits
received by the Company on the one hand and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ on
the other shall be deemed to be in the same proportion as the
total net proceeds received by the Company from the Shares
sold by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in the Offering (before deducting
expenses), and the total selling commission received by
▇▇▇▇▇▇▇ ▇▇▇▇▇▇. The relative fault of the Company on the one
hand and of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ on the other shall be determined by
references to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to
state a material fact relates to information supplied by the
Company, or by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and the parties relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company on the one hand and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ on the other
agree that it would not be just and equitable if contribution
be made pursuant to this Section 6 were determined by pro rata
allocation or by any other method of allocation that does not
take account of the equitable considerations referred to in
the immediately preceding paragraph. The amount paid or
payable by, an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in the
immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in
connection with defending any such action or claim.
Notwithstanding the provisions of this Section 6, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ shall not be required to contribute any amount in
excess of the amount by which the total price at which the
Shares sold by it exceeds the amount of any damages that
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be
entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
7. TERMINATION.
(a) This Agreement may be terminated by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ by notice
to the Company in the event that the Company shall have failed
or been unable to comply with any of the terms, conditions or
provisions of this Agreement on the part of the Company to be
performed, complied with or fulfilled within the respective
times herein provided for, unless compliance therewith or
performance or satisfaction thereof shall have been expressly
waived by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in writing.
(b) This Agreement may be terminated by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ by notice
to the Company if ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ believes in its sole judgment
that any adverse changes have occurred in the management of
the Company, that material adverse changes
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18
have occurred in the financial condition or obligations of the
Company or if the Company shall have sustained a loss by
strike, fire, flood, accident or other calamity of such a
character as, in the sole judgment of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, may
interfere materially with the conduct of the Company's
business and operations regardless of whether or not such loss
shall have been insured.
(c) This Agreement may be terminated by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ by notice
to the Company at any time if, in the sole judgment of ▇▇▇▇▇▇▇
▇▇▇▇▇▇, completion of the sale of the Shares is rendered
impracticable or inadvisable because (i) additional material
governmental restrictions not in force and effect on the date
hereof shall have been imposed upon the trading in securities
generally, or trading in securities generally on the
over-the-counter bulletin board shall have been suspended, or
a general moratorium shall have been established by federal or
state authorities, or (ii) a war or other national calamity
shall have occurred, or (iii) substantial and material changes
in the condition of the market (either generally or with
reference to the sale of the Shares to be offered hereby)
beyond normal fluctuations are such that it would be
undesirable, impracticable or inadvisable in the sole judgment
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ to proceed with this Agreement or with the
public offering or (iv) of any matter materially adversely
affecting the Company.
(d) In the event any action or proceeding shall be instituted or
threatened against ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, either in any court of
competent jurisdiction, before the Commission or any state
securities commission concerning its activities as a broker or
dealer that would prevent ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ from acting as such,
at any time prior to the effective date hereunder, or in any
court pursuant to any federal, state, local or municipal
statute, a petition in bankruptcy or insolvency or for
reorganization or for the appointment of a receiver or trustee
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇'▇ assets or if ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ makes an
assignment for the benefit of creditors, the Company shall
have the right on three days' written notice to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
to terminate this Agreement without any liability to ▇▇▇▇▇▇▇
▇▇▇▇▇▇ of any kind except for the payment of expenses as
specifically provided herein.
(e) Any termination of this Agreement pursuant to this Section 7
shall be without liability of any character (including, but
not limited to, loss of anticipated profits or consequential
damages) on the part of any party thereto, except that in such
event (i) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall provide the Company with a
statement of its accountable expenses, which shall include but
are not limited to, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇'▇ counsel fees,
consultants' fees, entertainment expenses, travel expenses,
postage expenses, office costs, advertising costs, clerical
costs, due diligence meeting expenses, duplication expenses,
long-distance telephone expenses, and general and
administrative expenses incurred in connection with the
proposed offering and (ii) if such accountable expenses are
more than the amount of the nonaccountable expense payments
the Company has made to
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▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall bear such excess or if
such accountable expenses are less than the amount of the
nonaccountable expense payments ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ has received
from the Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall return the difference
to the Company.
8. REPRESENTATION, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
The representations, warranties, indemnities, agreements and
other statements of the Company set forth in or made pursuant
to this Agreement shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or the Company or controlling person of the
Company, and shall survive delivery of and payment for the
Shares.
9. GOVERNING LAW; ASSIGNMENTS.
This Agreement shall be governed by the laws of the State of
Florida. Neither party may assign this Agreement without the
prior written consent of the other party.
10. COUNTERPARTS.
This Agreement may be executed in one or more counterparts,
and when a counterpart has been executed by each party hereto
all such counterparts taken together shall constitute one and
the same Agreement. Signatures sent by facsimile shall have
the same effect as if manually signed copies had been
delivered, and shall be binding upon the parties.
11. NO PERSONAL LIABILITY.
In no event shall any officer or director of the Company have
any personal liability to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or to any other
person under this Agreement.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us a counterpart
hereof, whereupon this shall become a binding agreement
between the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
Very truly yours,
Lehigh Acres First National Bank
(In Organization)
By:
-----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
CONFIRMED AND ACCEPTED,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co.
By:
-----------------------------
Name:
Title:
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