EXHIBIT 1.1
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Form of Sales Agency Agreement
with Banc Stock Financial Services, Inc.
[GRAPHIC OMITTED]
August 13, 1998
Mr. Xxxx Xxx
President and Chief Executive Officer
Citrus Financial Services, Inc.
0000 Xxxxxx Xxxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Dear Xx. Xxx:
The following is to set forth Banc Stock Financial Services, Inc.'s
("Banc Stock" or "Sales Agent") proposal to serve as the broker-dealer for
Citrus Financial Services, Inc. ("Company"). This letter agreement ("Agreement")
hereby confirms the interest of Banc Stock, a subsidiary of the Banc Stock
Group, Inc., to serve as the Company's exclusive underwriter/stock marketing
agent in connection with the Offering, (as defined herein) which is contemplated
to be a minimum offering of $10,000,000 and a maximum of $12,000,000. For
purposes of this Agreement, it is understood that employees of Banc Stock will
be actively involved in the Offering and that references to the Sales Agent
shall include employees and agents of Banc Stock. This Agreement sets forth
selected terms of our engagement.
1. Offering Services. Banc Stock will act as lead manager in the
Offering to be conducted on a best efforts basis. Banc Stock may form a
syndicate of selected broker-dealers to assist in the sale of the common stock.
The decision to utilize selected broker-dealers will be made by Banc Stock upon
consultation with the Company.
As the Company's sales/stock marketing agent, Banc Stock will
provide the Company with a comprehensive program of services designated to
promote an orderly, efficient and cost-effective distribution. Banc Stock will
provide financial and logistical advice to the Company concerning the Offering
and related issues.
For the purpose of covering over allotments, if any, in the sale
of common stock in the Public Offering ("Offering"), the Company will grant to
Banc Stock an option to purchase all or any portion of a number of shares of
common stock not to exceed 15% of the total number of shares sold. The option
will be exercisable for a period of 90 days following the offering date.
2. Preparation of Offering Documents. The Company and its counsel will
draft the Registration Statement and other materials to be used in connection
with the Offering. Banc Stock and its counsel will review these documents and
assist your counsel with their preparation. The Registration Statement will be
in a form reasonably satisfactory to each of us and our respective counsel.
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3. Due Diligence Review. Prior to the filing of the Form SB-2
Registration Statement ("Registration Statement") or any other documents naming
Banc Stock as the Company's underwriter/stock marketing agent or sales agent,
Banc Stock and its representatives will undertake substantial investigations to
learn about the Company's proposed business and operations ("due diligence
review") in order to confirm information provided to us and to evaluate
information to be contained in the Company's Registration Statement. The Company
agrees that it will make available to Banc Stock all relevant information,
whether or not publicly available, which the Underwriter reasonably requests.
The Company acknowledges that Banc Stock will rely upon the accuracy and
completeness of all information received from the Company, its officers,
directors, employees, agents and representatives, accountants and counsel.
Banc Stock shall furnish, as soon as practicable, to the Company
such information regarding Banc Stock as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification or compliance with state and federal securities laws.
4. Regulatory Filings. Upon satisfactory completion of Banc Stock's due
diligence review, the Company will cause a Registration Statement with respect
to the Offering to be filed with the Securities and Exchange Commission ("SEC")
and such state securities commissioners as may be determined by Banc Stock. No
filings naming Banc Stock will be made without the prior consent of Banc Stock.
5. Agency or Underwriting Agreement. The specific terms of the Offering
and any broker- assisted sales services contemplated in this Agreement shall be
set forth in a Sales Agency Agreement ("Agency Agreement") between Banc Stock
and the Company to be executed prior to commencement of the Offering. Sales of
common stock in the Offering will be contingent upon, among other things, the
absence of material adverse developments and the completion of the Offering. The
Agency Agreement and any Selected Dealer Agreement shall be prepared by counsel
for Banc Stock, and such counsel shall make all required filings with the
National Association of Securities Dealers, Inc. and the Blue Sky commissions
(the Company shall pay the legal fees and costs of such Blue Sky filings). The
Company, its officers and directors will agree not to offer, sell, contract to
sell or grant any option to purchase or otherwise dispose of any common stock
for at least 180 days after the Offering without first obtaining the Sales
Agent's written consent.
6. Representations, Warranties and Covenants. The Agency Agreement will
provide for customary representations, warranties and covenants by the Company,
including, without limitation, with respect to indemnification and contribution
by the Company. This will be consistent with the indemnification set forth in
paragraph 9 herein.
7. Fees. For the services hereunder, the Company shall pay the
following fees to Banc Stock at closing, unless stated otherwise:
(a) Directors of existing Company or shareholders who exercise
their pro-rata rights within the first twenty (20) days of the offering may
purchase stock at no commission; Company agrees that existing Directors will not
sell shares of Company for a period of 24 months from the date of Offering.
(b) 2.5% of the purchase price of the stock sold to individuals
designated 'friends of the board' or to shareholders in excess of their pro-rata
portion to a maximum of $4,000,000.
(c) 7% of the purchase price of the securities sold to persons
other than those persons qualifying as purchasers in Section 7(a) and 7(b)
above. In the event that a syndicate of selected broker-dealers are used to
assist in the Offering, Banc Stock will pass onto such selected broker-dealers
who assist in the Offering an amount competitive with gross underwriting
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discounts charged at such time for comparable stock sold at a comparable price
per share in a similar market environment. Fees with respect to purchases
affected through selected broker-dealers other than Banc Stock shall be
transmitted by Banc Stock to such selected broker-dealer. The decision to
utilize selected broker-dealers will be made by Banc Stock upon consultation
with the Company.
8. Expenses. The Company will bear those expenses of the proposed
offering customarily borne by issuers, including, without limitation, SEC, "Blue
Sky," and NASD filing and registration fees; the fees of the Company's
accountants, attorneys, transfer agent and registrar, printing, mailing and
marketing expenses associated with the Offering; Banc Stock counsel's legal fees
which will be capped at $25,000; the fees set forth in Section 7, including fees
for "Blue Sky" legal work performed by counsel. The Company shall reimburse Banc
Stock for its actual out-of-pocket expenses up to a maximum of $40,000. Upon
execution of this Agreement, the Company will advance $5,000 to Banc Stock for
expected out-of-pocket expenses. In the event the Company terminates the
Offering for any reason, except in the event of a default by the Sales Agent of
its obligations hereunder, the Company will reimburse Banc Stock for the fees
and expenses incurred to the date of termination. Should Banc Stock be required
to retain the services of other professionals for purposes of this Offering, the
expenses of such professionals shall be billed separately by the Company. The
engagement of such professionals shall require the consent of the parties
hereto.
9. Indemnification.
(a) In connection with this agreement (which engagement may have
commenced prior to the date hereof), the Company agrees to indemnify and hold
harmless Banc Stock and its affiliates and the respective directors, officers,
employees, agents and partners of the Sales Agent and its affiliates, and each
other person controlling Banc Stock or any of affiliates within the meaning of
either Section 15 of the Securities Act of 1933 or Section 30 of the Securities
Exchange Act of 1934 (collectively, "Sales Agent Indemnified Parties") to the
full extent lawful, from and against all losses, claims, damages or liabilities
resulting from any legal action, investigation or other proceeding to which any
Indemnified Party may become subject as a result of or arising out of this
engagement and will reimburse any Sales Agent Indemnified Party for all
reasonable expense (including reasonable counsel fees) incurred by such Sales
Agent Indemnified Party in connection with investigating, defending or settling
any such matter or enforcing any rights hereunder. Notwithstanding the
foregoing, the Company shall not be liable to a Sales Agent Indemnified Party in
respect of any loss, claim, damage, liability or expense to the extent the same
is determined, in a trial judgment by a court of competent jurisdiction, to have
resulted from the gross negligence or bad faith of such Sales Agent Indemnified
Party. The Company also agrees that neither the Sales Agent, or any of its
affiliates, nor any person controlling Sales Agent or any of its affiliates,
shall have any liability to the Company for or in connection with such
engagement except for any liability for losses, claims, damages, liabilities or
expenses incurred by the Company that if finally judicially determined to have
resulted primarily from the Sales Agent's gross negligence or bad faith.
Notwithstanding the foregoing, Banc Stock shall not be required to indemnify or
reimburse the Company for expenses hereunder in an amount, in the aggregate, in
excess of any fees paid pursuant to Section 7 above. The foregoing shall be in
addition to any rights the Banc Stock or any Sales Agent Indemnified Party may
have at common law or otherwise.
(b) Upon receipt of notice of any claim or the commencement of any
such action with respect to which indemnity is to be sought, the Sales Agent
Indemnified Party shall notify the indemnifying party of such claim or the
commencement of such action. The Sales Agent Indemnified Party shall have the
right to employ counsel reasonably acceptable to the Company to defend such
claim or action.
(c) If for any reason the foregoing indemnification is unavailable
to any Sales Agent Indemnified Party or insufficient to hold it harmless as
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contemplated herein, then the Company shall contribute to the amount payable by
the Sales Agent Indemnified Party as a result of such loss, claim, damage,
liability or expense in such proportion as is appropriate to reflect not only
the relative benefits received by the Company and its affiliates, on the one
hand, but also the relative fault of the Company and its affiliates and the
Sales Agent or any Sales Agent Indemnified Party, as the case may be, as well as
any other relevant equitable considerations; provided, however, that in no event
shall the Sales Agent be required to contribute any amount in excess of any fees
paid to it pursuant to Section 7 above.
(d) The reimbursement, indemnity and contribution by the Company
or the Sales Agent hereunder shall be in addition to any liability which any
party may otherwise have, and shall be binding upon and accrue to the benefit of
any successors, assigns, heirs and personal representatives of the Company, and
any Sales Agent Indemnified Party. The foregoing provisions relating to
reimbursement, indemnification and contribution shall survive any termination of
the Sales Agent's engagement under this Agreement.
10. Conditions. The Sales Agent's willingness and obligation to proceed
hereunder shall be subject to, among other things, satisfaction of the following
conditions in the Sales Agent's opinion, which opinion shall have been formed in
good faith by the Sales Agent after reasonable determination and consideration
of all relevant factors: (a) full and satisfactory disclosure of all relevant
material, financial and other information in the disclosure documents; (b) no
material adverse change in the condition of the Company subsequent to the Sales
Agent due diligent review; (c) no market conditions at the time of Offerings
which in the Sales Agent's opinion make the sale of the common stock by the
Company inadvisable; and (d) the execution of a Sales Agency Agreement by the
parties hereto.
11. Benefit. No party to this Agreement may assign its duties and
obligations hereunder without the prior written consent of the other party. This
Agreement shall inure to the benefit of the parties hereto and their respective
successor and assigns and to the parties indemnified hereunder and their
successors and assigns, and the obligations and liabilities assumed hereunder by
the parties hereto shall be binding upon their respective successors and
assigns.
12. Termination. This Agreement may be terminated by either party
hereto with written notice, without any further obligation, other than for the
payment of any fees specifically set forth herein. If terminated, all fees paid
previously will be deemed to have been earned when paid.
13. Governing Law/Venue/Arbitration. In case of a dispute under this
Agreement, it shall be governed by the laws of the State of Florida. Any and all
disputes arising out of or in connection with this Agreement shall be submitted
to arbitration, and finally settled, under the Rules of the American Arbitration
Association ("AAA") by one arbitrator appointed in accordance with the said
Rules. Any such arbitration shall be conducted in Tampa, Florida. Each party to
this Agreement shall be bound by the result of such arbitration. Each party
shall bear its own expenses relating to such disputes or disagreements so
arbitrated, and the parties hereto shall share equally the fees and charges of
the arbitrator for conducting such arbitration. Such arbitration shall be
governed by the Federal Arbitration Act, 9 U.S.C. Section I et seq.: provided,
however, that the substantive law of the State of Florida shall govern any and
all such disputes. The parties agree that any action to confirm any arbitration
award shall be brought in any competent court in Tampa, Florida, and that such
court may enforce or compel compliance with such award.
The foregoing reflects Banc Stock's intention of proceeding to
work with the Company on its proposed Offering. It does not constitute an
agreement to underwrite securities or to serve as sales or marketing agent to
the Company, or to perform any other service, nor is it an agreement to enter
into any such agreement or a representation that market conditions will support
an offering of the Company's securities. Such obligations will be included and
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specifically set forth in the Sales Agency Agreement which the parties hereto
intend to negotiate. It also does not constitute a commitment on the part of the
Company or Banc Stock, except as to the payment of certain fees as set forth in
Section 7, the assumption of expenses as set forth in Section 8 and
indemnification as set forth in Section 9, all of which shall constitute the
binding obligations of the parties hereto and which shall survive the
termination of this Agreement or the completion of the services furnished
hereunder and shall remain operative and in full force and effect. It is further
understood that any report or analysis rendered by Banc Stock pursuant to this
engagement is rendered for use solely by the management of the Company and its
agents in connection with the Offering. Accordingly, you agree that you will not
provide any such information to any other person without prior written consent.
Banc Stock acknowledges that in offering the Company's securities, no person
will be authorized to give any information or to make any representation not
contained in the Prospectus and related offering materials to be filed as part
of the Registration Statement to be declared effective in connection with the
Offering. Accordingly, Banc Stock agrees that in connection with the Offering,
it will not give any unauthorized information or make any unauthorized
representation. We will be pleased to elaborate on any of the matters discussed
in this Agreement at your convenience.
If the foregoing correctly sets forth our mutual understanding,
please so indicate by signing and returning the original copy of this Agreement
to the undersigned with a check in the amount of $5,000 payable to Banc Stock
Financial Services, Inc.
Sincerely,
BANC STOCK FINANCIAL SERVICES, INC.
By: ______________________________________
Xxxxxxx X. Xxxxxxxxxx/Vice President
Agreed to:
Citrus Financial Services, Inc.
By: __________________________________ Date: _______________
Xxxx Xxx
Its: President and Chief Executive Officer
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