-----------------------------
(Name of Selling Stockholder)
CUSTODY AGREEMENT AND POWER OF ATTORNEY
for Sale of Common Stock of
NAL FINANCIAL GROUP INC.
Attorney-in-Fact:
Xxxxxx X. Xxxxxxxxx
c/o NAL Financial Group Inc.
000 Xxxxxxx Xxxxx Xxxx Xxxx, Xxxxx 000
Xx. Xxxxxxxxxx, XX 00000
Custodian:
Xxxxxxxx Xxxxxx
c/o StockTrans, Inc.
0 X. Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Dear Xx. Xxxxxxxxx and Xx. Xxxxxx:
NAL Financial Group Inc., a Delaware corporation (the "Company") and the
undersigned (the "Selling Stockholder") propose to sell certain shares
of Common Stock, $.15 par value per share, of the Company (the "Common
Stock" ) to underwriters (the "Underwriters" ) for whom Prudential
Securities Incorporated, Xxxxx Xxxxxxx Inc. and Sands Brothers & Co.,
Ltd., will act as representatives (the "Representatives" ) for
distribution under a Registration Statement on Form SB-2 (the
"Registration Statement") to the public at a price and on terms to be
hereafter determined. It is understood that at this time there is no
commitment on the part of the Underwriters to purchase any shares of
Common Stock and no assurance that an offering of Common Stock will take
place. The shares of Common Stock that the undersigned proposes to sell
to the Underwriters pursuant to the Underwriting Agreement hereinafter
mentioned are referred to herein as the "Shares."
1. Appointment and Powers of Attorney-in-Fact.
A. The undersigned hereby irrevocably constitutes and appoints Xxxxxx X.
Xxxxxxxxx (the "Attorney-in-Fact"), as his agent and attorney-in-fact,
with full power of substitution, with respect to all matters arising in
connection with the public offering and sale of the Shares, including,
but not limited to, the power and authority on behalf of the undersigned
to do or cause to be done any of the following things:
(i) assist in the preparation of an Underwriting Agreement (the
"Underwriting Agreement"), substantially in the form of the draft dated
, 1996, delivered to the undersigned herewith, receipt of
which is acknowledged, but with such insertions, changes, additions or
deletions as the undersigned shall approve, such approval to be
conclusively evidenced by the delivery of the Underwriting Agreement by
the undersigned, including the making of all representations and
agreements provided in the Underwriting Agreement to be made by, and the
exercise of all authority thereunder vested in, the undersigned;
(ii) sell, assign, transfer and deliver the Shares to the Underwriters
pursuant to the Underwriting Agreement and deliver to the Underwriters
certificates for the Shares so sold (the price for such shares to be the
same as that paid by the Underwriters to the Company);
(iii) take any and all steps deemed necessary or desirable by the
Attorney-in-Fact in connection with the registration of the Shares under
the Securities Act of 1933, as amended (the "Securities Act" ), the
Securities Exchange Act of 1934, as amended, and under the securities or
"blue sky" laws of various states and jurisdictions, including, without
limitation, the giving or making of such undertakings, representations
and agreements and the taking of such other steps as the
Attorney-in-Fact may deem necessary or advisable;
(iv) instruct the Company and the Custodian, as hereinafter defined, on
all matters pertaining to the sale of the Shares and delivery of
certificates therefor;
(v) provide, in accordance with the Underwriting Agreement, for the
payment of expenses of the offering and sale of the Common Stock covered
by the Registration Statement; and
(vi) otherwise take all actions and do all things necessary or proper,
required, contemplated or deemed advisable or desirable by the
Attorney-in-Fact in his discretion, including the execution and delivery
of any documents, and generally act for and in the name of the
undersigned respect to the sale of the Shares to the Underwriters and
the reoffering of the Shares by the Underwriters as fully as could the
undersigned if then personally present and acting.
B. The Attorney-in-Fact may act alone in exercising the rights and
powers conferred on the Attorney-in-Fact by this Custody Agreement and
Power of Attorney ("this Agreement"). The Attorney-in-Fact is hereby
empowered to determine, in his sole and absolute discretion, the
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time or times when, the purposes for which, and the manner in which, any
power herein conferred upon the Attorney-in-Fact shall be exercised.
C. The Custodian (as defined below), the Representatives, the Company
and all other persons dealing with the Attorney-in-Fact as such may rely
and act upon any writing believed in good faith to be signed by the
Attorney-in-Fact.
D. The Attorney-in-Fact shall not receive any compensation for his
services rendered hereunder, except that he shall be entitled to cause
the Custodian to pay, from the proceeds payable to the undersigned, the
undersigned's proportionate share of any out-of-pocket expenses incurred
under this Agreement.
2. Appointment of Custodian: Deposit of Shares.
A. In connection with and to facilitate the sale of the Shares to the
Underwriters, the undersigned hereby appoints Xxxxxxxx Xxxxxx as custodian (the
"Custodian") and herewith deposits with the Custodian one or more certificates
for Common Stock that represent not less than the total number of Shares to be
sold by the undersigned to the Underwriters, which number is set forth on
Schedule I hereto. Each such certificate so deposited is in negotiable and
proper deliverable form endorsed in blank with the signature of the undersigned
thereon guaranteed by a commercial bank or trust company in the United States or
by a member firm of the New York Stock Exchange, or is accompanied by a duly
executed stock power or powers in blank, bearing the signature of the
undersigned so guaranteed. The Custodian is hereby authorized and directed,
subject to the instructions of the Attorney-in-Fact, (a) to hold in custody the
certificate or certificates deposited herewith, (b) to deliver or to authorize
the Company's Transfer Agent to deliver the certificate or certificates
deposited hereunder (or replacement certificate(s) for the Shares) to or at the
direction of the Attorney-in-Fact in accordance with the terms of the
Underwriting Agreement and (c) to return or cause the Company's Transfer Agent
to return to the undersigned new certificate(s) for the shares of Common Stock
represented by any certificate deposited hereunder which are not sold pursuant
to the Underwriting Agreement. The Custodian shall be entitled to customary
compensation for the services to be rendered hereunder as set forth in Schedule
II attached hereto. Such compensation shall be paid to the Custodian by the
Company.
B. Until the Shares have been delivered to the Underwriters against payment
therefor in accordance with the Underwriting Agreement, the undersigned shall
retain all rights of ownership with respect to the Shares deposited hereunder,
including the right to vote and to receive all dividends and payment thereon,
except the right to retain custody of or dispose of such Shares, which right is
subject to this Agreement and the Underwriting Agreement.
3. Sale of Shares: Remitting Net Proceeds.
A. The Attorney-in-Fact is hereby authorized and directed to deliver or cause
the Custodian or the Company's Transfer Agent to deliver certificates for the
Shares to the Representatives, as provided in the Underwriting Agreement,
against delivery to the Attorney-in-
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Fact for the accounts of the undersigned of the purchase price of the Shares, at
the time and in the funds specified in the Underwriting Agreement. The
Attorney-in-Fact is authorized, on behalf of the undersigned, to accept and
acknowledge receipt of the payment of the purchase price for the Shares and
shall promptly remit to the undersigned his proportionate share of the proceeds.
4. Representations. Warranties and Agreements. The undersigned represents and
warrants to, and agrees with, the Company, the Attorney-in-Fact, the Custodian
and the Underwriters as follows:
A. The undersigned has full legal right, power and authority to enter
into and perform this Agreement and the Underwriting Agreement.
B. The undersigned has reviewed the representations and warranties to be made by
the undersigned as a Selling Stockholder contained in the Underwriting
Agreement, and hereby represents, warrants and covenants that each of such
representations and warranties is true and correct as of the date hereof and,
except as the undersigned shall have notified the Attorney-in-Pact pursuant to
paragraph F of the attached instructions, will be true and correct at all times
from the date hereof through and including the time of the closing of the sale
of the Shares to the Underwriters. The undersigned will promptly notify the
Attorney-in-Fact of any development that would make any such representation and
warranty untrue.
C. The undersigned is not directly or indirectly an affiliate of or associated
with any member of the National Association of Securities Dealers, Inc.
D. Upon execution and delivery of the Underwriting Agreement by the undersigned,
the undersigned agrees to indemnify and hold harmless the Company, each of its
directors, each of its officers who signs the Registration Statement, each
Underwriter and each person who controls the Company or any Underwriter, and to
contribute to amounts paid as a result of losses, claims, damages, liabilities
and expenses, as provided in Section 8 of the Underwriting Agreement.
E. Upon execution and delivery of the Underwriting Agreement by the undersigned,
the undersigned agrees to be bound by and to perform each of the covenants and
agreements of the undersigned as a Selling Stockholder in the Underwriting
Agreement.
F. The undersigned agrees to deliver to the Attorney-in-Fact such documentation
as the Attorney-in-Fact, the Company or the Underwriters or any of their
respective counsel may reasonably request in order to effectuate any of the
provisions hereof or of the Underwriting Agreement, all of the foregoing to be
in form and substance satisfactory in all respects to the Attorney-in-Fact.
The foregoing representations, warranties and agreements are made for the
benefit of, and may be relied upon by, the Attorney-in-Fact, the Company, the
Custodian, the Underwriters and their respective representatives, agents and
counsel and are in addition to, and not in limitation of, the representations,
warranties and agreements of the Selling Stockholder in the Underwriting
Agreement.
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5. Irrevocability of Instruments: Termination of this Agreement.
A. This Agreement, the deposit of the Shares pursuant hereto and all authority
hereby conferred, is granted, made and conferred subject to and in consideration
of (i) the interests of the Attorney-in-Fact, the Underwriters and the Company
in and for the purpose of completing the transactions contemplated hereunder and
by the Underwriting Agreement and (ii) the completion of the registration of
Common Stock pursuant to the Registration Statement and the other acts of the
above-mentioned parties from the date hereof to and including the execution and
delivery of the Underwriting Agreement in anticipation of the sale of Common
Stock, including the Shares, to the Underwriters; and the Attorney-in-Fact is
hereby further vested with an estate, right, title and interest in and to the
Shares deposited herewith for the purpose of irrevocably empowering and securing
to him authority sufficient to consummate said transactions. Accordingly, this
Agreement shall be irrevocable prior to March 31, 1997, and shall remain in full
force and effect until that date. The undersigned further agrees that this
Agreement shall not be terminated by operation of law or upon the occurrence of
any event whatsoever, including the death, disability or incompetence of any of
the undersigned. If any event referred to in the preceding sentence shall occur,
whether with or without notice thereof to the Attorney-in-Fact, any of the
Underwriters or any other person, the Attorney-in-Fact shall nevertheless be
authorized and empowered to deliver and deal with the Shares deposited under the
Agreement by the undersigned in accordance with the terms and provisions of the
Underwriting Agreement and this Agreement as if such event had not occurred.
B. If the sale of the Shares contemplated by this Agreement is not completed by
March 31, 1997, this Agreement shall terminate (without affecting any lawful
action of the Attorney-in-Fact or the Custodian prior to such termination), and
the Attorney-in-Fact shall cause the Custodian to return to the undersigned all
certificates for the Shares deposited hereunder, but only after having received
payment of any expenses to be paid or borne by the Selling Stockholder. The
undersigned hereby covenants with the Attorney-in-Fact that if for any reason
the sale of the Shares contemplated hereby shall not be consummated, the
undersigned shall pay all expenses payable by the Selling Stockholder hereunder
or under the Underwriting Agreement.
6. Liability and Indemnification of the Attorney-in-Fact and Custodian. The
Attorney-in-Fact and the Custodian assume no responsibility or liability to the
undersigned or to any other person, other than to deal with the Shares, the
proceeds from the sale of the Shares and any other shares of Common Stock
deposited with the Custodian pursuant to the terms of this Agreement in
accordance with the provisions hereof The duties and obligations of the
Custodian shall be limited to and determined solely by the express provisions of
this Agreement, and no implied duties or obligations shall be read into this
Agreement against the Custodian. The undersigned hereby agrees to indemnify and
hold harmless the Attorney-in-Fact and the Custodian, and their respective
officers, agents, successors, assigns and personal representatives with respect
to any act or omission of or by any of them in good faith in connection with any
and all matters within the scope of this Agreement or the Underwriting
Agreement; provided, however, that the Attorney-in-Fact and the Custodian may be
liable for the undersigned for any such act or omission to the extent
attributable to gross negligence or fraud. The Custodian may consult with
counsel
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of its own choice and shall have full and complete authorization and protection
for any action taken or suffered by it hereunder in good faith and in accordance
with the opinion of such counsel.
7. Interpretation.
A. The representations, warranties and agreements of the undersigned contained
herein and in the Underwriting Agreement shall survive the sale and delivery of
the Shares and the termination of this Agreement.
B. The validity, enforceability, interpretation and construction of this
Agreement shall be determined in accordance with the laws of the State of New
York applicable to contracts made and to be performed within the State of New
York, and this Agreement shall inure to the benefit of, and be binding upon, the
undersigned and the undersigned's heirs, executors, administrators, successors
and assigns, as the case may be.
C. Wherever possible each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any such
provision shall be prohibited by or invalid under applicable law, it shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
D. The use of the masculine gender in this Agreement includes the feminine and
neuter, and the use of the singular includes the plural, wherever appropriate.
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IN WITNESS WHEREOF, the undersigned has executed this Custody Agreement
and Power of Attorney this day of , 1996.
Signature of Selling Stockholder (Please sign exactly as your
Guaranteed by Stockholder name appears on
your stock certificate(s).)
Name and address to which
notices and funds shall
be sent.
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(NAME)
----------------------------
(STREET)
----------------------------
(CITY, STATE, ZIP CODE)
(NOTE: The signature of the Selling Stockholder must be guaranteed by a
commercial bank or trust company in the United States or by a member firm of the
New York Stock Exchange.)
ACCEPTED by the Attorney-in-Fact ACCEPTED by the Custodian
as of the date above set forth: as of the date above set forth:
------------------------------- ----------------------------
------------------------------- By:
----------------------------
SEE THE ATTACHED INSTRUCTIONS
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INSTRUCTIONS
(For completing the Custody Agreement and Power of Attorney)
A. You have been sent five copies of the Custody Agreement and Power of Attorney
(the "Agreement"). Please complete and return four copies of the Agreement and
stock certificate(s) as set forth in paragraph D below. A fully executed copy of
the Agreement will be returned to you; a fully executed copy of the Agreement
and your stock certificate(s) will be retained by the Custodian; and a fully
executed copy of the Agreement will be delivered to the Attorney-in-Fact and to
the Representatives.
B. Complete Schedule I attached hereto.
C. Each copy of this Agreement and each stock certificate or stock power
deposited hereunder must be executed by you with your signature on this
Agreement and the stock certificate(s) or the accompanying stock power
guaranteed by a commercial bank or trust company in the United States or any
broker that is a member firm of the New York Stock Exchange. Please sign the
stock certificate(s) or stock power and the Agreement exactly as your name
appears on your stock certificate(s).
D. Endorsed stock certificate(s) or stock certificate(s) with stock powers
attached along with all four executed copies of the completed Agreement should
be promptly returned by hand delivery or by certified mail appropriately insured
to:
Xxxxxxxx Xxxxxx
c/o StockTrans, Inc.
0 X. Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
If sent through the mail, it is recommended that the certificate(s) not be
endorsed, but an executed stock power be sent under separate cover from the
certificate(s).
E. If any certificate that you submit represents a greater number of Shares than
the aggregate number of Shares that you agree to sell pursuant to the
Underwriting Agreement, the Custodian will cause to be delivered to you in due
course, but not earlier than ten days after the closing for the purchase of
Shares by the Underwriters, a certificate for the excess number of shares.
F. For purposes of discharging your obligations under the Underwriting
Agreement, please contact Xxxx X. Xxxxxx of Prudential Securities
Incorporated if any information or representation included in the
foregoing Agreement or the Underwriting Agreement should change, or if
you become aware of any new information, at any time prior to
termination of the period referred to in the Underwriting Agreement.
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(Name of Selling Stockholder)
SCHEDULE I
Certificate(s) for Shares of Common Stock of
NAL FINANCIAL GROUP INC.
deposited under
Custody Agreement and Power of Attorney
Number of Shares of Number of Shares of
Common Stock Common Stock from this
Certificate Number Represented by Certificate Certificate to Be Sold*
------------------ -------------------------- -----------------------
------------------ -------------------------- -----------------------
------------------ -------------------------- -----------------------
------------------ -------------------------- -----------------------
------------------ -------------------------- -----------------------
------------------ -------------------------- -----------------------
Total: -----------------------
*If fewer than all shares represented by a certificate are to be sold,
indicate below, if desired for income tax purposes, the date of purchase
or purchase price of the particular shares to be sold.
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SCHEDULE II
Fees of Custodian
Custodial Fees .........................................
Wire Transfer Fees.............................$ per wire transfer
10
