EXHIBIT 10.1
SUBSCRIPTION AGENT AGREEMENT
___________ __, 2002
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In connection with your appointment as Subscription Agent in the
transaction described herein, Ladenburg Xxxxxxxx Financial Services Inc., a
Florida corporation (the "Company"), hereby confirms its arrangements with you
as follows:
1. Rights Offering. The Company has declared a dividend to the holders
of shares of its common stock, par value $0.0001 per share ("Common Stock"), and
offered to holders of its outstanding options, warrants and senior convertible
promissory notes (the "Rights Offering"), on _____ __, 2002 (the "Record Date"),
the right to subscribe for additional shares of Common Stock, at a subscription
price of $___ per share of Common Stock ("Rights"). The Common Stock along with
the Company's outstanding options, warrants and senior convertible promissory
notes shall hereafter be referred to as the "Securities." One Right is being
issued for every _____ shares of Common Stock held on the Record Date. Each
holder of the Company's options, warrants and senior convertible promissory
notes will be deemed to hold that number of shares of Common Stock that they
would hold if they exercised or converted their securities on the Record Date.
One Right is required to subscribe for one share of Common Stock. Except as set
forth herein, Rights shall cease to be exercisable at 5:00 p.m., New York City
time, on ________ __, 2002 (the "Expiration Date"). Rights are evidenced by
non-transferable subscription rights certificates in registered form
("Subscription Certificates"). Each holder of a Subscription Certificate who
exercises the right to subscribe for all shares that can be subscribed for with
the Rights evidenced by such Subscription Certificate (the "Basic Subscription
Right") may have the right to subscribe for additional shares, if any, available
as a result of any unexercised Rights (such additional subscription right being
referred to hereafter as the "Over-subscription Privilege"). The Rights Offering
will be conducted in the manner and upon the terms set forth in the Company's
Prospectus dated _______________, 2002 (the "Prospectus"), which is incorporated
herein by reference and made a part hereof as if set forth in full herein.
2. Appointment of Subscription Agent. You are hereby appointed as
Subscription Agent to effect the Rights Offering in accordance with the
Prospectus. Each reference to you in this letter is to you in your capacity as
Subscription Agent unless the context indicates otherwise.
3. Delivery of Documents. Enclosed herewith are the following, the
receipt of which you acknowledge by your execution hereof:
(a) a copy of the Prospectus;
(b) the form of Subscription Certificate;
(c) the form of Letter from the Company to its Shareholders;
(d) the Instructions for Use of the Company's Subscription
Certificates;
(e) the Form of Notice of Guaranteed Delivery; and
(f) a return envelope addressed to American Stock Transfer &
Trust, as Subscription Agent.
On or before ________ __, 2002, you shall mail or cause to be mailed to
each holder of Securities at the close of business on the Record Date a
Subscription Certificate evidencing the Rights to which such holder is entitled,
a Prospectus, a Notice of Guaranteed Delivery (as defined in paragraph 7 hereof)
and an envelope addressed to you. Prior to mailing, the Company will provide you
with blank Subscription Certificates which you will prepare and issue in the
names of holders of record of the Securities at the close of business on the
Record Date and for the number of Rights to which they are entitled. The Company
will also provide you with a sufficient number of copies of each of the
documents to be mailed with the Subscription Certificates.
4. Subscription Procedure. (a) Upon your receipt prior to 5:00 p.m.,
New York City time, on the Expiration Date (by mail, facsimile or delivery) as
Subscription Agent of (i) any Subscription Certificate completed and endorsed
for exercise, as provided in the Subscription Certificate (except as provided in
paragraph 6 hereof), and (ii) payment in full of the subscription price set
forth on the cover page of the Prospectus for the shares of Common Stock
subscribed for (the "Subscription Price") in U.S. funds (i) by personal check,
certified or cashier's check, bank draft or a postal, telegraphic or express
money order payable at par (without deduction for bank service charges or
otherwise) to you, "AS SUBSCRIPTION AGENT"; (ii) or wire transfer of immediately
available funds; or (iii) an alternative payment method arranged by you and
approved by the Company, you shall as soon as practicable after the Expiration
Date but after performing the procedures described in subparagraphs (b) and (c)
below (which is anticipated to be the twelfth business day thereafter) mail to
the subscriber's registered addresses on the books of the Company the shares of
Common Stock for the Rights duly exercised (pursuant to the Basic Subscription
Privilege and the Over-subscription Privilege) and furnish a list of all such
information to the Company.
(b) As soon as practicable after the Expiration Date you shall
calculate the number of shares to which each subscriber is entitled to receive
pursuant to the Over-subscription Privilege. The Over-subscription Privilege may
only be exercised by holders who subscribe to all the shares of Common Stock
that can be subscribed for by them under the Basic Subscription Right. The
shares of Common Stock available for additional subscriptions will be those that
have not been subscribed and paid for pursuant to the Basic Subscription Right
(the "Remaining Shares"). Where there are sufficient Remaining Shares to satisfy
all additional subscriptions by holders exercising their rights under the
Over-subscription Privilege, each holder shall be allotted the number of
additional shares subscribed for. If the aggregate number of shares subscribed
for under the Over-subscription Privilege exceeds the number of Remaining
Shares, the number of Remaining Shares initially allotted to each participant in
the Over-subscription Privilege shall be the lesser of (i) the number of shares
which that participant has subscribed for under the Over-subscription Privilege
and (ii) the product (disregarding fractions) obtained by multiplying the number
of Remaining Shares by a fraction of which the numerator is the number of shares
subscribed for by the participant under the Basic Subscription Right and the
denominator is the aggregate number of shares subscribed for under the Basic
Subscription Privilege. If after the initial allotment there are still Remaining
Shares and holders of Rights whose exercise of the Over-subscription Privilege
has not been fully satisfied, such Remaining Shares shall be allocated (one or
more time as necessary) in accordance with the foregoing principal until all
available Remaining Shares have been allocated. Any fractional share to which
persons exercising their Over-subscription Privilege would otherwise be entitled
pursuant to such allocation shall be rounded up to the next whole share.
(c) Upon calculating the number of shares to which each subscriber is
entitled pursuant to the Over-subscription Privilege and the amount overpaid, if
any, by each subscriber, you shall, as soon as practicable, (i) furnish a list
of all such information to the Company and (ii) inform holders of Subscription
Certificates who participated in the Over-subscription Privilege of the number
of additional shares, if any, allotted to them.
(d) Upon calculating the number of shares to which each subscriber is
entitled pursuant to the Over-subscription Privilege and assuming payment for
the additional shares subscribed for has been delivered, you shall mail to the
subscriber's registered address on the books of the Company the additional
shares the subscriber has been allotted as contemplated in subparagraph (a)
above. If a lesser number of shares is allotted to a subscriber under the
Over-subscription Privilege than the subscriber has tendered payment for, you
shall remit the difference to the subscriber without interest or deduction at
the same time as certificates representing the shares allotted pursuant to the
Over-subscription Privilege are mailed.
(e) You shall promptly remit, after expiration of the Rights Offering
and issuance of certificates for the shares subscribed for, all funds received
in payment of the Subscription Price under the Basic Subscription Right to the
Company. Funds received by you pursuant to the Over-subscription Privilege shall
be held by you in a segregated interest-bearing account pending allocation of
shares issued pursuant to the Over-subscription Privilege. Upon mailing
certificates representing the shares and refunding subscribers' funds for
additional shares subscribed for but not allotted, if any, you shall promptly
remit all funds received in payment of the Subscription Price under the
Over-subscription Privilege to the Company.
5. Defective Exercise of Rights; Lost Subscription Certificates. The
Company shall have the absolute right to reject any defective exercise of Rights
or to waive any defect in exercise. Unless requested to do so by the Company,
you shall not be under any duty to give notification to holders of Subscription
Certificates of any defects or irregularities in subscriptions. Such
subscriptions will not be deemed to have been made until any such defects or
irregularities have been cured or waived within such time as the Company shall
determine. You shall as soon as practicable return Subscription Certificates
with defects or irregularities which have not been cured or waived to the holder
of the Rights. If any Subscription Certificate is alleged to have been lost,
stolen or destroyed, you should follow the same procedures followed for lost
stock certificates representing shares of Common Stock you use in your capacity
as transfer agent for the Company's Common Stock.
6. Late Delivery. If prior to 5:00 p.m., New York City time, on the
Expiration Date, you receive (i) payment in full of the Subscription Price for
the shares of Common Stock being subscribed for and (ii) a guarantee notice (a
"Notice of Guaranteed Delivery") substantially in the form delivered with the
Subscription Certificate, from a member firm of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc., or
a commercial bank or trust company having an office or correspondent in the
United States or some other acceptable eligible guarantor institution qualified
under a guarantee program stating the certificate number of the Subscription
Certificate relating to the Rights, the name and address of the exercising
shareholder, the number of Rights represented by the Subscription Certificate
held by such exercising shareholder, the number of shares of Common Stock being
subscribed for pursuant to the Basic Subscription Right, the number of shares of
Common Stock, if any, being subscribed for pursuant to the Over-subscription
Privilege, and guaranteeing the delivery to you of the Subscription Certificate
evidencing such Rights within three trading days on the American Stock Exchange
("Amex") following the date of the Notice of Guaranteed Delivery, then the
Rights may be exercised even though the Subscription Certificate was not
delivered to you prior to 5:00 p.m., New York City time, on the Expiration Date,
provided that within three Amex trading days following the date of the Notice of
Guaranteed Delivery you receive the properly completed and duly executed
Subscription Certificate evidencing the Rights being exercised, with signature
guaranteed if required.
7. Delivery. You shall deliver to the Company the exercised
Subscription Certificates in accordance with written directions received from
the Company and shall deliver the shares of Common Stock to the subscribers who
have duly exercised Rights at their registered addresses as instructed in the
the Subscription Certificates.
8. Reports. You shall notify the Company by telephone on or before the
close of business on each business day during the period commencing with the
mailing of the Rights and ending at the Expiration Date (and in the case of
guaranteed deliveries ending three business days after the Expiration Date) (a
"daily notice"), which notice shall thereafter be confirmed in writing of (i)
the number of Rights exercised on the day covered by such daily notice, (ii) the
number of Rights subject to guaranteed delivery on the day covered by such daily
notice, (iii) the number of Rights for which defective exercises have been
received on the day covered by such daily notice, (iv) the number of shares
requested under the Over-subscription Privilege and (v) the cumulative total of
the information set forth in clauses (i) through (iv) above. At or before 5:00
p.m., New York City time on the first business day following the Expiration
Date, you shall certify in writing to the Company the cumulative total through
the Expiration Date of all the information set forth in clauses (i) through
(iii) above. You shall maintain and update a listing of holders who have fully
or partially exercised their Rights, and holders who have not exercised their
Rights. You shall provide the Company or its designee with such information
compiled by you pursuant to this paragraph 8 as any of them shall request.
9. Future Instructions. With respect to notices or instructions to be
provided by the Company hereunder, you may rely and act on any written
instruction signed by (a) any one or more of the following authorized officers
or employees of the Company: Xxxxxx X. Xxxxxx, Chairman of the Board of
Directors of the Company, Xxxxxx X. Xxxxx, President and Chief Executive Officer
of the Company, Xxxxxxx X. Xxxxxxxxxx, Vice Chairman of the Board of Directors
and Chief Operating Officer of the Company or X. Xxxxxx Xxxxxxxx III, Chief
Financial Officer of the Company; or (b) Xxxxx Xxxx Xxxxxx or Xxxxxxx X. Xxxxxxx
of Xxxxxxxx Xxxxxx, counsel for the Company.
10. Payment of Compensation and Expenses. The Company will pay you
compensation for acting in your capacity as Subscription Agent hereunder as set
forth on Schedule 1 attached hereto.
11. Counsel. You may consult with counsel satisfactory to you, which
may be counsel to the Company, and the written advice or opinion of such counsel
shall be full and complete authorization and protection in respect of any action
taken, suffered or omitted by you hereunder in good faith and in accordance with
such advice or opinion of such counsel.
12. Indemnification. The Company covenants and agrees to indemnify and
hold you harmless against any costs, expenses (including reasonable fees for
legal counsel), losses or damages, which may be paid, incurred or suffered by or
to which you may become subject, arising from or out of, directly or indirectly,
any claim or liability resulting from your actions as Subscription Agent
pursuant hereto; provided that such covenant and agreement does not extend to
such costs, expenses, losses and damages incurred or suffered by you as a result
of, or arising out of, your own negligence, misconduct or bad faith or that of
any employees, agents or independent contractors used by you in connection with
performance of your duties as Subscription Agent hereunder, or your breaching
any of your obligations under this Agreement.
13. Notices. Unless otherwise provided herein, all reports, notices and
other communications required or permitted to be given hereunder shall be in
writing and delivered by hand or confirmed telecopy or by first class mail,
postage prepaid, as follows:
(a) If to the Company, to:
Ladenburg Xxxxxxxx Financial Services Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxx Xxxx Xxxxxx, Esq.
Xxxxxxxx Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Telecopy: (000-000-0000
(b) If to you, to:
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
14. Assignment, Delegation. (a) Neither this Agreement nor any rights
or obligations hereunder may be assigned or delegated by either party without
the written consent of the other party.
(b) This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns. Nothing in
this Agreement is intended or shall be construed to confer upon any other person
any right, remedy or claim or to impose upon any other person any duty,
liability or obligation.
15. Governing Law. The validity, interpretation and performance of this
Agreement shall be governed by the law of the State of New York.
16. Severability. If any provision of this Agreement shall be held
invalid, unlawful, or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
18. Captions. The captions and descriptive headings herein are for
convenience of the parties only. They do not in any way modify, amplify, alter
or give full notice of the provisions hereof.
19. Confidentiality. The Subscription Agent and the Company agree that
all books, records, information and data pertaining to the business of the other
party which are exchanged or received pursuant to the negotiation or the
carrying out of this Agreement including the fees for services set forth in the
attached schedule shall remain confidential, and shall not be voluntarily
disclosed to any other person, except as may be required by law.
20. Term. This Agreement shall remain in effect until 30 days' written
notice has been provided by either party to the other. Upon termination of the
Agreement, the Subscription Agent shall retain all cancelled Subscription
Certificates and related documentation as required by applicable law.
21. Merger of Agreement. This Agreement constitutes the entire
agreement between the parties hereto and supercedes any prior agreement with
respect to the subject matter hereof whether oral or written.
If the foregoing is in accordance with your understanding of our
arrangements, please sign and return the enclosed duplicate of this letter.
Very truly yours,
LADENBURG XXXXXXXX FINANCIAL SERVICES INC.
By:_____________________________________________
Name: Xxxxxx X. Xxxxx
Title: President and Chief Executive Officer
The foregoing is in accordance with our understanding and is hereby
confirmed and accepted.
AMERICAN STOCK TRANSFER &
TRUST COMPANY
By:_____________________________________________
Name: Xxxxxxx Xxxxxx
Title: Vice President and General Counsel
Dated: _______________, 2002
SCHEDULE 1
Compensation and Expenses
The Subscription Agent shall submit an invoice to the Company upon
completion of the Rights Offering. The Company shall submit payment of such
invoice within 10 business days of receipt of the invoice.
Compensation and Expenses: $7,500 plus reasonable out-of-pocket
expenses incurred
