EXHIBIT 10.10
March ___, 2006
North American Insurance Leaders, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
FORM OF SHARE PURCHASE & SALE, D&O RIGHTS AND COMPANY CALL RIGHT
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Ladies and Gentlemen:
This letter agreement (the "Letter") is being delivered to you in
connection with the Registration Statement on Form S-1 (File No. 333-127871) (as
it may be amended and supplemented from time to time, the "Registration
Statement") filed by North American Insurance Leaders, Inc., a Delaware
corporation (the "Company"), with the Securities and Exchange Commission (the
"SEC") on August 26, 2005, relating to an initial public offering (the "IPO") of
the Company's units (the "Units"). Each Unit is comprised of one share of the
Company's common stock, par value $0.0001 per share (the "Common Stock"), and
one warrant exercisable for one share of Common Stock (each, a "Warrant") to be
underwritten by CRT Capital Group LLC (the "Underwriter").
Each of the undersigned hereby agrees with the Company as follows:
I. Share Purchase & Sale.
A. Purchase & Sale. Effective as of November 22, 2005, the
sellers (the "Sellers") listed on Schedule 1 hereto
collectively own all of the outstanding shares (the "Shares")
of Common Stock, and each of the Sellers agrees to sell,
transfer, convey, assign and deliver to E. Miles Prentice III
(the "Purchaser"), and the Purchaser agrees to purchase from
each of the Sellers, the proportionate amount of the right,
title and interest of each Seller in and to the Shares as set
forth in Schedule 2, free and clear of all liens subject to
certain restrictions (including restrictions on the right to
vote, transfer or otherwise dispose of such Shares).
B. Purchase Price. The aggregate purchase price for the Shares
is $73.06 ($0.0053333 per Share) payable in United States
funds to each of the Sellers in proportion to the number of
Shares purchased from each Seller.
C. Representations and Warranties of the Seller. Each of the
Sellers hereby represents and warrants as follows:
1. The Seller has the requisite power and authority to
execute and deliver this Letter and to perform its
obligations hereunder and to consummate the
transactions contemplated hereby;
2. All of the outstanding Shares of the Seller is
owned beneficially and of record by the Seller;
3. The Seller's Shares are free and clear of all liens
and encumbrances and the Seller has good and valid
title to the Seller's Shares and the right to
convey the its Shares in accordance herewith. Upon
delivery of this Letter, good and valid title to
the certain portion of the Seller's Shares, free
and clear of all liens and encumbrances, will pass
to the Purchaser; and
4. Simultaneously with the delivery hereof, the Seller
shall return its original Share Certificate to the
Company to be re-issued evidencing that the certain
portion of the Seller's Shares is duly transferred
to the Purchaser.
D. Representations and Warranties of the Purchaser. The
Purchaser hereby represents and warrants he has the requisite
power and authority to execute and deliver this Letter and to
perform its obligations hereunder and to consummate the
transactions contemplated hereby.
E. Closing. The closing will take place at the offices of
Shearman & Sterling LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, or at such other place as the Purchaser and the
Sellers mutually agree, at 10:00 A.M. local time, on the date
of this Letter. At the closing, on the terms and subject to
the conditions set forth in this Letter, the Purchaser will
pay to each of the Sellers the appropriate purchase price as
set forth in Schedule II by check or wire transfer of
immediately available funds to such account as Seller directs
by written notice delivered to Purchaser by Seller at least
two Business Days before the Closing Date. Simultaneously,
each of the Sellers will transfer, convey, assign and deliver
to the Purchaser all of Seller's right, title and interest in
and to that certain number of Shares by delivering to the
Purchaser such duly executed instruments of conveyance,
assignment and transfer, in form and substance reasonably
satisfactory to the Purchaser, as shall be effective to vest
in the Purchaser good, valid and marketable title to the
Shares, free and clear of all liens subject to certain
restrictions (including restrictions on the right to vote,
transfer or otherwise dispose of such Shares).
II. D&O Rights.
A. Purchase Commitment. The Company agrees to issue and sell to
each of the undersigned directors and officers, their
affiliates and/or their designees, and each of the
undersigned directors and officers, their affiliates and/or
their designees agrees to purchase from the Company, an
aggregate of 1,700,000 rights ("D&O Rights") convertible into
warrants ("D&O Warrants"). Each D&O Right will be purchased
at a price of $1.00 per right on the closing date of IPO.
B. D&O Warrants. The D&O Rights will be automatically converted
into D&O Warrants on the 120th day following the effective
date of the IPO as described in the Registration Statement.
During the period prior to this automatic conversion and for
30 days thereafter, the undersigned agrees not to purchase,
sell or enter into any derivative security transaction with
respect to any of the Company's outstanding warrants. The
conversion ratio of D&O Rights into D&O Warrants will be
calculated by dividing $1.00 by the conversion price. The
conversion price is equal to the weighted average of all sale
prices of the warrants as reported on the American Stock
Exchange or elsewhere during the 20 trading
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days prior to the conversion date. In no event will a D&O
Right be converted into more than three D&O Warrants.
C. Representations and Warranties. Each of the undersigned
hereby represents and warrants to the Company with respect to
himself or herself that: (1) the undersigned is an
"accredited investor" as that term is defined in Rule 501 of
Regulation D promulgated under the Securities Act; (2) the
D&O Rights and D&O Warrants are being acquired for the
undersigned's own account, only for investment purposes and
not with a view to, or for resale in connection with, any
distribution or public offering thereof within the meaning of
the Securities Act; and (3) the undersigned has the full
right, power and authority to enter into this Agreement and
this Agreement is a valid and legally binding obligation of
the undersigned enforceable against the undersigned in
accordance with its terms.
D. Payment. Payment for the D&O Rights shall be made to the
escrow account at JPMorgan Chase Bank, NA (the "Escrow
Account") by 12:00 P.M., New York time, on or before the
effective date of the IPO (the "Escrow Date") by wire
transfer in immediately available Federal funds payable for
each of the undersigned's accounts in accordance with
Schedule 3. Notwithstanding the foregoing, to the extent one
or more of the undersigned deposits less than the full amount
required to be paid by him or her (each, a "Partial D&O
Rights Holder") into the Escrow Account by the Escrow Date,
such Partial D&O Rights Holder agrees to sell to one or more
of the other holders of the Common Stock prior to the IPO
(the "Existing Stockholders"), and one or more of the
Existing Stockholders agree to purchase, at a price equal to
$0.0053333 per Share, that proportion of the Partial D&O
Rights Holder's Shares of Common Stock owned by him or her on
the Escrow Date that is equal to the percentage of the
outstanding payment due and not paid in respect of the D&O
Rights; provided that each of the Existing Stockholders who
purchases Shares from the Partial D&O Rights Holder agrees to
deposit into the Escrow Account that outstanding amount due
and not paid by the Partial D&O Rights Holder in proportion
to the percentage of such Shares purchased from the Partial
D&O Rights Holder.
E. Delivery. On the closing date of the IPO, the Company shall
deliver the D&O Rights to or for the account of each of the
undersigned in accordance with Schedule 1 and section II.C.
of this Letter.
F. Escrow Account. The $1.7 million proceeds received by the
Company for the D&O Rights shall be held in the Escrow
Account until the earliest to occur of (1) the closing of the
IPO, (2) the withdrawal of the Registration Statement or (3)
May 1, 2006. The proceeds in the Escrow Account shall only be
released in accordance with the following:
1. Upon the closing of the IPO, the proceeds held in
the Escrow Account shall be immediately deposited
in the trust account at JPMorgan Chase Bank, N.A.
established by the Company for the benefit of its
public stockholders of the IPO Common Stock as
described in the Registration Statement. The $1.7
million proceeds will become part of the
liquidating distribution to the Company's public
stockholders in the event of liquidation prior to
the Company's initial business combination; or
2. Upon May 1, 2006, or upon the withdrawal of the
Registration Statement prior to May 1, 2006, the
proceeds in the Escrow Account shall be released as
soon as practicable and disbursed to those persons
from whom such amounts in respect of the D&O Rights
were received.
G. Waiver of Claims; Indemnification. Each of the undersigned
hereby waives any and all rights to assert any present or
future claims, including any right of rescission, against the
Company, or the underwriters in the IPO with respect to his
or her purchase of the D&O Rights, and each of the
undersigned agrees jointly and severally to indemnify and
hold the Company, and the underwriters in the IPO harmless
from all losses, damages or expenses that relate to claims or
proceedings brought against the Company, or the underwriters
by any of the undersigned or their transferees, heirs,
assigns or any subsequent holders of the D&O Rights.
III. Company Call Right. In the event that the Underwriter does not exercise
all or a portion of the Over-allotment Option, the Company will have a
right to purchase up to 468,750 shares of Common Stock (the "Call
Right"), subject to adjustment, from the Existing
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Stockholders. The Company shall exercise this Call Right to purchase
shares only in an amount sufficient to cause the Existing Stockholders
to maintain control over 20% of Common Stock then outstanding after
giving effect to the Offering and the exercise, if any, of the
Over-Allotment Option. The Call Right shall be exercisable for a
five-day period following expiration or termination of the
Over-Allotment Option, and the price for each share of Common Stock
pursuant to this Call Right shall be $0.0046 per share, subject to
adjustment.
IV. Miscellaneous.
A. Affiliates and Designees. Each of the undersigned may notify
the Company that all or part of his or her D&O Rights
purchase commitment will be made by an affiliate of the
undersigned (or another person or entity introduced to the
Company by the undersigned (a "Designee"), and in such event,
the Company will sell such D&O Rights to said affiliate or
Designee; provided, however, that each of the undersigned
hereby agrees to make payment of the purchase price of such
D&O Rights purchase in the event that the affiliate or
Designee fails to make such payment.
B. Requests from the Division. Upon request of the Division of
Market Regulation (the "Division") of the SEC, each of the
undersigned agrees to make himself or herself available to
respond to inquiries from the Division regarding purchases of
D&O Rights, conversions of D&O Rights into D&O Warrants
and/or the exercise of D&O Warrants for shares of Common
Stock.
C. Transfer Restrictions. Each of the undersigned shall not
offer, pledge, sell, transfer or otherwise dispose of,
either directly or indirectly, any Shares, D&O Rights or D&O
Warrants until after the later of one year or the
consummation of an initial business combination in
accordance with the Insider Letter, dated as of March ___,
2006 by and among the Company's directors and officers,
their affiliates and/or their designees, the Company and the
Underwriter. Notwithstanding the foregoing, the purchasers
of the Shares or D&O Rights are permitted to effect the
following transfers of the Shares, D&O Rights or D&O
Warrants: (a) transfers resulting from the death of any of
the purchasers, (b) transfers by operation of law, (c) any
transfer for estate planning purposes to persons immediately
related to the transferor by blood, marriage or adoption, or
(d) transfers to any trust solely for the benefit of such
transferor and/or the persons described in the preceding
clause; provided that the transferees receiving such Shares,
D&O Rights or D&O Warrants will be subject to the same sale
restrictions imposed on the Company's directors and
officers, their affiliates and/or their designees who
initially purchased the Shares or D&O Rights from the
Company.
D. Severability. If any provision of this Letter, or the
application of such provision to any person or circumstance,
shall be held invalid, the remainder of this Letter, or the
application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be
affected thereby.
E. Governing Law. This Letter shall be governed by and construed
in accordance with the laws of the State of New York.
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F. Successors and Assigns. This Letter shall be binding on each
of the undersigned and its successors and assigns.
G. Amendments. This Letter may only be amended by a written
instrument executed by each of the parties hereto.
H. Entire Agreement. This Letter (together with the other
agreements and documents being delivered pursuant to or in
connection with this Letter) constitutes the entire agreement
of the parties hereto with respect to the subject matter
hereof and thereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect
to the subject matter hereof.
I. Execution in Counterparts. This Letter may be executed in one
or more counterparts, and by the different parties hereto in
separate counterparts, each of which shall be deemed to be an
original, but all of which taken together shall constitute
one and the same agreement, and shall become effective when
one or more counterparts has been signed by each of the
parties hereto and delivered to each of the other parties
hereto.
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Very truly yours,
__________________________________ __________________________________
▇▇▇▇▇▇▇ ▇. de Jonge ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Trust
By:
__________________________________ __________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust
By:
__________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇. __________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust
By:
__________________________________ __________________________________
▇▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇▇▇ Revocable Trust Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust
By: By:
__________________________________
__________________________________ Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ de Jonge Trust
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By:
__________________________________ __________________________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
__________________________________ __________________________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, a Corporation ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By:
__________________________________
__________________________________ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, III
SHARE PURCHASE & SALE, D&O RIGHTS AND COMPANY CALL RIGHT
_____________________________ __________________________________
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 2005 Irrevocable Trust
By:
_____________________________ __________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 2005 Irrevocable Trust
Trustee of the Separate Property By:
Portion of the ▇▇▇▇▇▇▇▇▇/
▇▇▇▇▇▇▇▇▇▇ Revocable Trust,
dated December 15, 2003
By:
__________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 2005 Irrevocable Trust
Accepted and agreed as of the date hereof:
NORTH AMERICAN INSURANCE LEADERS, INC.
______________________________
By: ▇▇▇▇▇▇▇ ▇. de Jonge
Title: President
SHARE PURCHASE & SALE, D&O RIGHTS AND COMPANY CALL RIGHT
WARRANT PURCHASE ORDER
I:\▇▇▇▇▇\North American Insurance Leaders, Inc. (NAIL)\s1a_030906\ex10-10.rtf
SCHEDULE 1
THE SELLERS
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Trust
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust
▇▇▇▇▇▇▇ ▇. de Jonge
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇▇▇ Revocable Trust
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, a Corporation
SCHEDULE 2
NUMBER OF SHARES PURCHASED & SOLD
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# OF SHARES # OF SHARES # OF SHARES
NAME OF STOCKHOLDER OWNED # OF SHARES PRICE OF OWNED OWNED
PRE-SALE SOLD SHARES POST-SALE POST-SPLIT
------------------- -------- ---- ------ --------- ----------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Trust 216,797 634 $3.38 216,163 144,109
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust 216,797 634 3.38 216,163 144,109
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust 216,797 634 3.38 216,163 144,109
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust 216,797 634 3.38 216,163 144,108
▇▇▇▇▇▇▇ ▇. de Jonge 881,250 3,219 17.17 878,031 585,354
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 876,562 3,219 17.17 873,343 582,229
▇▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇▇▇ Revocable Trust 876,562 3,219 17.17 873,343 582,229
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, a Corporation 515,625 1,507 8.04 514,118 342,745
E. Miles Prentice, III 0 0 0 13,700 9,133
--------- ------ ------ --------- ---------
TOTAL 4,017,187 13,700 $73.06 4,017,187 2,678,125
--------------------------------------------- --------------- -------------- --------------- ---------------- -----------------
(1) $100,000/$7.30 per share = 13,699 shares.
(2) $25,000/4,687,500 outstanding shares = $0.0053333/share; $0.0053333/share x
13,699 = $73.06.
(3) Sale effected on November 22, 2005.
(4) Two-for-three reverse stock split effected on March [14], 2006.
SCHEDULE 3
DIRECTOR/OFFICER* D&O RIGHTS COMMITMENT
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# OF D&O RIGHTS
PERCENTAGE PURCHASED AMOUNT PAID
---------- --------- -----------
▇▇▇▇▇▇▇ ▇. de Jonge 23.4% 397,800 $397,800
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 18.4 312,800 312,800
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.(1) 23.4 397,800 397,800
▇▇▇▇▇ ▇. ▇▇▇▇▇▇(2) 23.4 397,800 397,800
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇(3) 11.0 187,000 187,000
E. Miles Prentice, III 0.4 6,800 6,800
---- --------- ----------
TOTAL 100% 1,700,000 $1,700,000
________________
* Includes the affiliates and/or designees, as defined in the prospectus, of
the directors and officers.
1 All or a portion of the D&O Rights to be purchased by ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇., Trustee of the Separate Property Portion of The
▇▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇▇▇ Revocable Trust, dated December 15, 2003.
2 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, husband of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, will purchase up to 125,000
D&O Rights of her 397,800 D&O Rights.
3 All or a portion of the D&O Rights to be purchased by ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
a Corporation.