INVESTMENT BANKING ADVISOR AGREEMENT
Agreement dated as of March 28, 1996 by and between LMI ACQUISITION CORP.,
a Delaware corporation (the "Company") and AMERICAN MAPLE LEAF FINANCIAL
CORPORATION ("AMLF").
BACKGROUND
The Company is a privately held company whose primary business is the
origination and servicing of insurance premium finance contracts. The Company
seeks to become a publicly held reporting company with the Securities and
Exchange Commission at some time within the intermediate term. AMLF is a
financial services firm in the business of advising its clients relative to
public finance issues, going public transactions, and providing its private and
publicly-traded corporate clients with investor/broker relations and investment
banking advice. The Company desires to engage AMLF to perform financial
consulting and investment banking services and AMLF desires to perform such
services pursuant to the terms hereof.
AGREEMENT
1. Services.
(a) Investment Banking Services. AMLF shall provide investment
counseling services with respect to the material aspects of becoming a publicly
held company. These services shall also include using its best efforts to
introduce the Company to institutions, brokers, and other investment bankers
that may be interested in either participating in a public offering for the
Company, or assisting or facilitating in a public or private placement of
securities on behalf of the Company.
(b) Organizational Efforts. AMLF has been instrumental in organizing
and structuring the various acquisitions and business combinations pursuant to
which the Company has recently acquired Gold Coast Finance, Inc., National-Wide
Premium Finance Corp. and Traffic Violations Legal Services Protection
Corporation (in the aggregate, the "Target Companies"). AMLF is also being
engaged to use its best efforts to introduce the Company to entities,
individuals and/or institutions which may from time to time be engaged to
provide financing in connection with a private
placement transaction to be undertaken in connection with the acquisition of the
Target Companies.
(c) Financial Relation Services. AMLF shall, on a non-exclusive
basis, perform financial and public relations services including but not limited
to the preparation and distribution of information concerning the Company to its
stockholders and the general introduction of the Company to the financial
brokerage community.
2. Authorization. The Company authorizes AMLF on a non-exclusive basis to
act as an agent of the Company for the purpose of performing the services
provided for hereunder.
3. Consideration. In consideration for the services rendered and to be
rendered hereunder, AMLF shall receive the following securities and other
payments from the Company:
(i) Upon the closing of the acquisition by the Company of the
outstanding capital stock in the "Target Companies", 300,000 shares of the
common stock of the Company;
(ii) that number of shares of the common stock of the Company as
shall equal the difference between 1,000,000 and that number of shares of common
stock to be issued by the Company upon conversion of the convertible preferred
stock that is to be issued in accordance with Section 8.2 (up to a maximum of
$2,300,000 of net proceeds as set forth in Section 8.2) of the Plan of
Reorganization between the Company and Gold Coast Finance, Inc. ("Plan of
Reorganization"). By way of further explanation, the Company is undertaking the
concurrent acquisition of the Target Companies pursuant to which the Company has
agreed to undertake a private placement offering of up to $2.3 million of
convertible preferred stock (the "Private Placement"). Included within the $2.3
million of convertible preferred stock to be offered will be shares of
convertible preferred stock offered to accredited and other third party
investors (that bear a sales price and conversion rate of approximately $4.00
per share). Also included within the Private Placement will be shares of
convertible preferred stock that may be exchanged by the Company with existing
non-affiliated creditors. These shares of preferred stock are anticipated to
bear a sales price and conversion rate of approximately $3.00 per share. It is
intended by the parties hereto that AMLF shall in consideration for its efforts
in connection with such private placement, be entitled upon completion of the
Private Placement to
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that number of shares of the Company's common stock as are equal to the
difference between 1,000,000 and that number of shares of common stock into
which the convertible preferred stock sold in the Private Placement and offered
to non-affiliated creditors will be convertible;
(iii) once a registration statement has been filed with the
Securities and Exchange Commission the purpose of which is to register shares of
the Company, AMLF shall receive an investment banking fee of $3,000 per month
for the balance of the term of this Agreement.
In the event that the Historic Acquiror Stockholders surrender a
pro-rata amount of shares under paragraph 8.3 of the Plan of Reorganization, the
number of shares to be received under each of subsections 3(i) and 3(ii) above
shall similarly be reduced on a pro-rata basis.
Inasmuch as AMLF is an independent contractor and not an employee of
the Company, it shall pay all federal, state and local taxes with respect to the
compensation received hereunder.
4. Rights of First Refusal on Financings During Term. During the term
hereof, AMLF shall have a preferential right of refusal to secure any future
debt or equity financings on behalf of the Company. Should the Company seek to
undertake any debt or equity financings during the term hereof, then the Company
must first provide AMLF with written notification to that effect (the
"Notification"), which Notification must specify the proposed terms of the debt
or equity financings desired and the compensation anticipated to be paid to the
third party providing such financing. AMLF shall then have sixty (60) days in
which to secure such debt or equity financings on terms acceptable to the
Company. If AMLF is unable to do so, then the Company shall have the right to
secure the debt or equity financings from any third party. In the event,
however, that the debt or equity financings to be secured from a third party are
on terms materially different than those proposed in the Notification, then, and
in that event, the Company shall, prior to securing any such debt or equity
financings from such third party, provide a written explanation of the terms
thereof to AMLF and provide AMLF with an additional period of sixty (60) days in
which to secure debt or equity financings on those terms. If AMLF is unable to
do so within said sixty day period, then the Company is free of any restrictions
of this subparagraph to pursue the debt or equity financings proposed
accordingly. To the extent
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that AMLF is able to secure for the Company any such debt or equity financings,
AMLF shall receive the compensation in substantially the same amount and
character as was identified within the Notification.
5. Registration Right. The Company will grant AMLF "piggyback registration
rights" for shares issuable pursuant to Section 3 of this Agreement in the
manner set forth below. If the Company at any time proposes for any reason to
register any of its securities under the Securities Act of 1933 (the "Securities
Act") (other than pursuant to a registration statement on Form X-0, X-0 or
similar or successor form), it shall each such time promptly give written notice
to AMLF of its intention to do so, and, upon written request, given within
thirty (30) days after receipt of any such notice, use its best efforts to cause
all shares of common stock of the Company currently held by AMLF, (the
"Shares"), to be registered under the Securities Act promptly upon receipt of
the written request of AMLF for such registration, all to the extent requisite
to permit the sale or other disposition by AMLF of the Shares so registered. In
the event that the proposed registration by the Company is, in whole or in part,
an underwritten public offering of such securities of the Company, any request
pursuant to this Section to register the Shares may specify that such Shares are
to be included in the underwriting on the same terms and conditions as the
shares of common stock held by Stockholders other than AMLF (the "Other
Shares"), if any, otherwise being sold through underwriters under such
registration or provided, however, that if the managing underwriter determines
and advises in writing that the inclusion of all Shares proposed to be included
in the underwritten public offering the Other Shares would interfere with the
successful marketing (including pricing) of such securities, then the number of
Shares and Other Shares to be included in such underwritten public offering
shall be reduced first, pro rata among the holders of other Shares, and second,
if necessary, pro rata by the Shares, based upon the number of Shares requested
by AMLF thereof to be registered in such underwritten public offering.
6. Standard of Conduct. AMLF shall at all times conduct itself, both
respect to its activities under this Agreement and with respect to its business
activities generally, in compliance with all applicable federal and state
securities laws.
7. Term. The term of this Agreement shall be for three year from the date
of this Agreement.
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8. Expenses. The Company shall reimburse AMLF for all reasonable
out-of-pocket expenses, including but not limited to printing, travel, long
distance telephone charges, postage and press release costs; any expense
exceeding $1,000 shall require the prior approval of the Company. The Company
agrees to reimburse AMLF within 30 days from the date that AMLF presents the
Company with any expense invoice and supporting documentation.
9. Confidential Information. During the course of providing its services
to the Company, AMLF will have access to information concerning the Company and
its prospects that the Company considers to be of a confidential nature. AMLF
agrees to keep such information confidential and further agrees not to engage
either directly or indirectly in any buying or selling of the Company's
securities while in possession of such confidential information. Without the
prior consent of the Company, neither AMLF nor any of its representatives will
disclose to any person any confidential information except to the extent that
disclosure of this information may be made in a filing required by the
Securities Exchange Act of 1934 or, in the written opinion of counsel to the
Company, it is required to make such disclosure pursuant to the Exchange Act and
the rules and regulations promulgated thereunder, provided that prior to any
such disclosure, AMLF shall first give the Company a reasonable opportunity to
review the proposed disclosure and to comment thereon.
10. Independent Contractor. AMLF acts hereunder as an independent
contractor to the Company and shall not be considered an agent of the Company
for any purposes other than those expressly set forth in this Agreement. Neither
party to this Agreement is granted any right or authority to assume or create
any obligation or liability, expressed or implied, on behalf of the other or to
bind the other in any manner whatsoever.
11. Indemnification. AMLF agrees to indemnify and hold harmless the
Company from and against any and all lawsuits, claims, cost, damages,
liabilities, expenses, judgements and settlements in connection with or arising
from any of its acts which are in violation of any of the provisions contained
within this Agreement.
The Company shall conversely indemnify AMLF and its agents and
employees from and against any and all losses, claims, cost, damages,
liabilities, expenses, judgments and settlements in connection with or arising
from any information provided by the Company to AMLF upon which AMLF relied in
the performance of its
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duties under this Agreement, and such information is not accurate at the time it
was provided, or subject to subsequent modification without notification being
provided to AMLF to that effect.
12. Assignment. Neither party may assign its rights or obligations
hereunder without the written consent of the other party.
13. Entire Agreement. This Agreement contains the entire agreement of the
parties as to the subject matter hereof. This Agreement may be amended only in
writing signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
14. Notices. All notices, requests, demands, consents or other
communications under this Agreement shall be in writing and sent by registered
or certified mail, return receipt requested, or by personal delivery (including
delivery by a nationally recognized courier service) as follows:
To the Company prior to the acquisition of the Target Companies:
LMI ACQUISITION CORP.
000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxxx
To the Company after the acquisition of the Target Companies:
LMI ACQUISITION CORP.
00000 X.X. Xxxxxx Xxx.
X. Xxxxx Xxxxx, XX 00000
Attention: Mr. Xxxx Xxxxxxxx
With copies to:
Xxxx Xxxxxxx, Esquire
XXXXX, GILDAN, XXXXXX,
XXXXXX & WHITE, P.A.
United National Bank Tower
0000 Xxxx Xxxxx Xxxxx Xxxx.
Xxxxx 0000
0
Xxxx Xxxx Xxxxx, XX 00000
To AMLF:
AMERICAN MAPLE LEAF FINANCIAL
CORPORATION
000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxx, XX 00000
Attention: Xx. Xxxxxx Xxxxx
With copies to:
Nina X.X. Xxxxxxxxx, Esquire
XXXXXXXX INGERSOLL, P.C.
Two Xxxxx Square
00xx & Xxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
or to such other addresses as may be specified by notice given in accordance
with this Section.
15. Governing Law. This Agreement shall be interpreted, governed by and
construed in accordance with the laws of the State of Delaware without
application of the principles of conflicts of law thereunder.
IN WITNESS WHEREOF, the parties, intending to be legally bound
hereunder, have executed this Agreement as of the date first above written.
AMERICAN MAPLE LEAF FINANCIAL
CORPORATION
By: /s/ Xxxxxx Xxxxx
------------------------------------
Xxxxxx Xxxxx
(An Authorized Officer)
LMI ACQUISITION CORP.
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Xxxxx Xxxxxxx,
Secretary, Treasurer
(An Authorized Officer)
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