SUBSCRIPTION AGREEMENT
SUBSCRIPTION
AGREEMENT (this “Agreement”) made as of the last date set forth on the signature
page hereof between Lender to Lender Franchise, Inc., a Florida corporation (the
“Company”) and the undersigned (the “Subscriber”).
WITNESSETH:
WHEREAS,
the Company is conducting a private offering (the “Offering”) consisting of up
to 50 Units (the “Units”), each Unit consisting of 2,500 shares of common stock
of the Company (the “Common Stock”); and
WHEREAS,
the Subscriber desires to purchase that number of Units set forth on the
signature page hereof on the terms and conditions hereinafter set
forth.
NOW,
THEREFORE, in consideration of the premises and the mutual representations and
covenants hereinafter set forth, the parties hereto do hereby agree as
follows:
1. SUBSCRIPTION
FOR UNITS AND REPRESENTATIONS BY SUBSCRIBER. Subject to the terms and conditions
hereinafter set forth and in the Confidential Private Offering Memorandum dated
September 20, 2010 (such memorandum, together with all amendments thereof
and supplements and exhibits thereto, the “Memorandum”), the Subscriber hereby
irrevocably subscribes for and agrees to purchase from the Company such number
of Units, and the Company agrees to sell to the Subscriber as is set forth on
the signature page hereof, at a price equal to $500 per Unit. The purchase price
is payable by wire transfer or check payable to “Lender to Lender Franchise,
Inc.” contemporaneously with the execution and delivery of this Agreement by the
Subscriber to the Company, 00000 Xxxxxx Xxxxx Xxxx Xxxx, Xxxxx #0, Xxxxxxxxxxxx,
Xxxxxxxx 00000, Attention: Xxxxxxx
Xxxxxxxxxx.
1.1. The
Subscriber recognizes that the purchase of the Units involves a high degree of
risk including, but not limited to, the following: (a) the Company requires
funds in addition to the proceeds of the Offering; (b) an investment in the
Company is highly speculative, and only investors who can afford the loss of
their entire investment should consider investing in the Company and the Units;
(c) the Subscriber may not be able to liquidate its investment; (d)
transferability of the Common Stock is extremely limited; (e) in the event of a
disposition, the Subscriber could sustain the loss of its entire investment; and
(f) the Company may issue additional securities in the future which have rights
and preferences that are senior to those of the Common Stock. Without limiting
the generality of the representations set forth in Section 1.5 below, the
Subscriber represents that the Subscriber has carefully reviewed the section of
the Memorandum captioned “Risk Factors.”
1.2. The
Subscriber represents (a) that the Subscriber is an “accredited investor” as
such term is defined in Rule 501 of Regulation D (“Regulation D”) promulgated
under the Securities Act of 1933, as amended (the “Securities Act”), and that
the Subscriber is able to bear the economic risk of an investment in the Units
and/or (b) that (i) the Subscriber has knowledge and experience in business and
financial matters, prior investment experience, or the Subscriber has employed
the services of a “purchaser representative” (as defined in Rule 501 of
Regulation D), attorney and/or accountant to read all of the documents furnished
or made available by the Company both to the Subscriber and to all other
prospective investors in the Units to evaluate the merits and risks of such an
investment on the Subscriber's behalf and (ii) the Subscriber recognizes the
highly speculative nature of this investment.
1.3. The
Subscriber is able to bear the economic risk that the Subscriber hereby
assumes.
1.4. The
Subscriber hereby acknowledges receipt and careful review of this Agreement, the
Memorandum (which includes the Risk Factors), including all exhibits thereto,
and any documents which may have been made available upon request as reflected
therein (collectively referred to as the “Offering Materials”) and hereby
represents that the Subscriber has been furnished by the Company during the
course of the Offering with all information regarding the Company, the terms and
conditions of the Offering and any additional information that the Subscriber
has requested or desired to know, and has been afforded the opportunity to ask
questions of and receive answers from duly authorized officers or other
representatives of the Company concerning the Company and the terms and
conditions of the Offering.
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1.5. (a) In
making the decision to invest in the Units the Subscriber has relied solely upon
the information provided by the Company in the Offering Materials. To the extent
necessary, the Subscriber has retained, at its own expense, and relied upon
appropriate professional advice regarding the investment, tax and legal merits
and consequences of this Agreement and the purchase of the Units hereunder. The
Subscriber disclaims reliance on any statements made or information provided by
any person or entity in the course of Subscriber's consideration of an
investment in the Units other than the Offering Materials.
(b)
The Subscriber represents that (i) the Subscriber was contacted regarding
the sale of the Units by the Company (or an authorized agent or representative
thereof) and (ii) no Units were offered or sold to it by means of any form of
general solicitation or general advertising, and in connection therewith, the
Subscriber did not (A) receive or review any advertisement, article, notice or
other communication published in a newspaper or magazine or similar media or
broadcast over television or radio, whether closed circuit, or generally
available; or (B) attend any seminar meeting or industry investor conference
whose attendees were invited by any general solicitation or general
advertising.
1.6. The
Subscriber hereby represents that the Subscriber, either by reason of the
Subscriber's business or financial experience or the business or financial
experience of the Subscriber's professional advisors (who are unaffiliated with
and not compensated by the Company or any affiliate or selling agent of the
Company, directly or indirectly), has the capacity to protect the Subscriber's
own interests in connection with the transaction contemplated
hereby.
1.7. The
Subscriber hereby acknowledges that the Offering has not been reviewed by the
U.S. Securities and Exchange Commission (the “SEC”) nor any state regulatory
authority since the Offering is intended to be exempt from the registration
requirements of Section 5 of the Securities Act pursuant to Regulation D
promulgated thereunder. The Subscriber understands that the Common Stock has not
been registered under the Securities Act or under any state securities or “blue
sky” laws and agrees not to sell, pledge, assign or otherwise transfer or
dispose of the Common Stock unless they are registered under the Securities Act
and under any applicable state securities or “blue sky” laws or unless an
exemption from such registration is available.
1.8. The
Subscriber understands that the Common Stock has not been registered under the
Securities Act by reason of a claimed exemption under the provisions of the
Securities Act that depends, in part, upon the Subscriber's investment
intention. In this connection, the Subscriber hereby represents that the
Subscriber is purchasing the Units for the Subscriber's own account for
investment and not with a view toward the resale or distribution to others. The
Subscriber, if an entity, further represents that it was not formed for the
purpose of purchasing the Units.
1.9. The
Subscriber understands that there is no trading market for the Common Stock and
that an active market may not develop for the Common Stock.
1.10. The
Subscriber consents to the placement of a legend on any certificate or other
document evidencing the Common Stock that such securities have not been
registered under the Securities Act or any state securities or “blue sky” laws
and setting forth or referring to the restrictions on transferability and sale
thereof contained in this Agreement. The Subscriber is aware that the Company
will make a notation in its appropriate records with respect to the restrictions
on the transferability of such securities. The legend to be placed on each
certificate shall be in form substantially similar to the
following:
“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED. UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES OR “BLUE
SKY LAWS,” AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR
COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”
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1.11. The
Subscriber understands that the Company will review this Agreement and is hereby
given authority by the Subscriber to call Subscriber's bank or place of
employment or otherwise review the financial standing of the Subscriber; and it
is further agreed that the Company, in its sole discretion, reserves the
unrestricted right, without further documentation or agreement on the part of
the Subscriber, to reject or limit any subscription, to accept subscriptions for
fractional Units and to close the Offering to the Subscriber at any time and
that the Company will issue stop transfer instructions to its transfer agent
with respect to the Common Stock.
1.12. The
Subscriber hereby represents that the address of the Subscriber furnished by
Subscriber on the signature page hereof is the Subscriber's principal residence
if Subscriber is an individual or its principal business address if it is a
corporation or other entity.
1.13. The
Subscriber represents that the Subscriber has full power and authority
(corporate, statutory and otherwise) to execute and deliver this Agreement and
to purchase the Units. This Agreement constitutes the legal, valid and binding
obligation of the Subscriber, enforceable against the Subscriber in accordance
with its terms.
1.14. If
the Subscriber is a corporation, partnership, limited liability company, trust,
employee benefit plan, individual retirement account, Xxxxx Plan, or other
tax-exempt entity, it is authorized and qualified to invest in the Company and
the person signing this Agreement on behalf of such entity has been duly
authorized by such entity to do so.
1.15. The
Subscriber acknowledges that at such time, if ever, as the Common Stock is
registered (as such term is defined in Article 5 hereof), sales of the Common
Stock will be subject to state securities laws.
1.16. The
Subscriber agrees not to issue any public statement with respect to the
Subscriber's investment or proposed investment in the Company or the terms of
any agreement or covenant between them and the Company without the Company's
prior written consent, except such disclosures as may be required under
applicable law or under any applicable order, rule or regulation.
1.17. The
Subscriber understands that the Units are being offered and sold in reliance on
specific exemptions from the registration requirements of federal and state
securities laws and that the Company and the principals and controlling persons
thereof are relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments, and understandings set forth herein in
order to determine the applicability of such exemptions and the undersigned's
suitability to acquire Units.
1.18. The
Subscriber agrees to hold the Company and its directors, officers, employees,
affiliates, controlling persons and agents and their respective heirs,
representatives, successors and assigns harmless and to indemnify them against
all liabilities, costs and expenses incurred by them as a result of (a) any sale
or distribution of the Common Stock by the Subscriber in violation of the.
Securities Act or any applicable state securities or “blue sky” laws; or (b) any
false representation or warranty or any breach or failure by the Subscriber to
comply with any covenant made by the Subscriber in this Agreement or any other
document furnished by the Subscriber to any of the foregoing in connection with
this transaction. To the best of the Subscriber’s knowledge, neither the
Subscriber nor any person providing funds to the Subscriber: (i) is
under investigation by any governmental authority for, or has been charged with,
or convicted of, money laundering, drug trafficking, terrorist related
activities, any crimes which in the United States would be predicate crimes to
money laundering, or any violation of any Anti-Money Laundering Laws (as
hereinafter defined); (ii) has been assessed civil or criminal penalties under
any Anti-Money Laundering Laws; or (iii) has had any of its funds seized or
forfeited in any action under any Anti-Money Laundering Laws. For purposes of
this paragraph, the term “Anti-Money Laundering Laws” shall mean laws,
regulations and sanctions, state and federal, criminal and civil, that: (i)
limit the use of and/or seek the forfeiture of proceeds from illegal
transactions; (ii) limit commercial transactions with designated countries or
individuals believed to be terrorists, narcotics dealers or otherwise engaged in
activities contrary to the interests of the United States; (iii) require
identification and documentation of the parties with whom a financial
institution conducts business; or (iv) are designed to disrupt the flow of funds
to terrorist organizations. Such laws, regulations and sanctions shall be deemed
to include the USA Patriot Act of 2001, Pub. L. No. 107-56 (the “Patriot Act”),
the Bank Secrecy Act, 31 U.S.C. Section 5311 et. seq. (the “Bank Secrecy Act”),
the Trading with the Enemy Act, 50 U.S.C. Appendix, the International Emergency
Economic Powers Act, 50 U.S.C. Section 1701 et. seq., and the sanction
regulations promulgated pursuant thereto by the OFAC, as well as laws relating
to prevention and detection of money laundering in 18 U.S.C. Sections 1956 and
1957.
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2. REPRESENTATIONS
BY AND COVENANTS OF THE COMPANY. The Company hereby represents and
warrants to the Subscriber that:
2.1. Organization, Good Standing
And Qualification. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida and has
full corporate power and authority to conduct its business.
2.2. Authorization;
Enforceability. The Company has all corporate right, power and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby. All corporate action on the part of the Company, its directors and
stockholders necessary for the (i) authorization execution, delivery and
performance of this Agreement by the Company; and (ii) authorization, sale,
issuance and delivery of the Common Stock contemplated hereby and the
performance of the Company's obligations hereunder has been taken. This
Agreement has been duly executed and delivered by the Company and constitutes a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors and rules of law
governing specific performance, injunctive relief or other equitable remedies,
and to limitations of public policy. The Common Stock, when issued and fully
paid for in accordance with the terms of this Agreement, will be validly issued,
fully paid and nonassessable. The issuance and sale of the Common Stock
contemplated hereby will not give rise to any preemptive rights or rights of
first refusal on behalf of any person which have not been waived in connection
with this Offering.
3. TERMS
OF SUBSCRIPTION. The Company is offering on a “best efforts” basis
until all of the Units are sold (the “Maximum Offering”) or the Offering period
terminates, whichever occurs first. There is no minimum
offering.
3.1. Unless
terminated earlier in the Company’s discretion, the Offering Period will expire
on October 31, 2010, provided, however, the termination date may be extended by
up to an additional 30 day period in the Company’s discretion, without notice to
the investors (the “Termination Date”). Subscriptions for Units may not be
revoked once tendered, except in accordance with certain state
laws.
3.2. This
Offering can be withdrawn at any time before closing and is specifically made
subject to the terms described in this Memorandum. The Company
reserves the right to reject any subscription, in whole or in part, or to
allocate to any prospective investor less than the number of securities
subscribed for. The minimum investment is $500 (1 Unit), although the
Company may, in its discretion, accept subscriptions for a lesser
amount.
3.3. The
Company may conduct one or more closings covering Units up to the Maximum
Offering, but not later than Termination Date.
4. CONDITIONS
TO OBLIGATIONS OF THE SUBSCRIBERS. The Subscriber's obligation to purchase the
Units at the Closing is subject to the fulfillment on or prior to such Closing
of the following conditions, which conditions may be waived at the option of
each Subscriber to the extent permitted by law:
(a) Covenants. All
covenants, agreements and conditions contained in this Agreement to be performed
by the Company on or prior to the date of such Closing shall have been performed
or complied with in all material respects.
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(b) No Legal Order
Pending. There shall not then be in effect any legal or other order
enjoining or restraining the transactions contemplated by this
Agreement.
(c) No Law Prohibiting or
Restricting Such Sale. There shall not be in effect any law, rule or
regulation prohibiting or restricting such sale or requiring any consent or
approval of any person, which shall not have been obtained, to issue the Common
Stock (except as otherwise provided in this Agreement).
5. REGISTRATION
RIGHTS.
5.1. Definitions. As
used in this Agreement, the following terms shall have the following
meanings.
(a) The
term “Holder” shall mean any person owning or having the right to acquire
Registrable Securities or any permitted transferee of a Holder.
(b) The
terms “register,” “registered” and “registration” refer to a registration
effected by preparing and filing a registration statement or similar document in
compliance with the Securities Act, and the declaration or order of
effectiveness of such registration statement or document.
(c) The
term “Registrable Securities” shall mean the Common Stock; provided, however,
that securities shall only be treated as Registrable Securities if and only for
so long as they (A) have not been disposed of pursuant to a registration
statement declared effective by the SEC; (B) have not been sold in a transaction
exempt from the registration and prospectus delivery requirements of the
Securities Act so that all transfer restrictions and restrictive legends with
respect thereto are removed upon the consummation of such sale; (C) are held by
a Holder or a permitted transferee of a Holder pursuant to Section 5.8; and (D)
may not be disposed of under Rule 144 under the Securities Act without
restriction.
(d) The
term “SEC Guidance” means (i) any publicly-available written or oral guidance,
requirements or notice of the staff of the SEC, and (ii) the Securities Act and
the rules and regulations promulgated thereunder.
(e) The
term “Rule 415” means Rule 415 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the SEC having substantially the
same purpose and effect as such Rule.
5.2. Registration. The
Company will use its best reasonable efforts to file a registration statement,
within six (6) months of the Termination Date (the “Filing Date”), covering the
resale of all or such portion of the Registrable Securities as permitted by SEC
Guidance. The registration statement filed pursuant to this Section 5.2 shall be
on Form S-1, except if the Company is not then eligible to register for resale
the Registrable Securities on Form S-1, in which case such registration shall be
on another appropriate form. In the event that less than all of the Registrable
Securities are included in the registration statement as a result of SEC
Guidance, then the Company will use its best reasonable efforts to file
additional registration statements, registering the allowable balance pursuant
to Rule 415, in a manner permitted by the SEC, until all of the Registrable
Securities have been registered.
5.3. Registration
Procedures. Whenever required under this Article 5 to include Registrable
Securities in a Company registration statement, the Company shall:
(a) Use
its best reasonable efforts to (i) cause such registration statement to become
effective, and (ii) cause such registration statement to remain effective until
the earliest to occur of (A) such date as the sellers of Registrable Securities
(the “Selling Holders”) have completed the distribution described in the
registration statement and (B) such time that all of such Registrable Securities
are no longer, by reason of Rule 144 under the Securities Act, required to be
registered for the sale thereof by such Holders. The Company will also use its
best reasonable efforts to, during the period that such registration statement
is required to be maintained hereunder, file such post-effective amendments and
supplements thereto as may be required by the Securities Act and the rules and
regulations thereunder or otherwise to ensure that the registration statement
does not contain any untrue statement of material fact or omit to state a fact
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they are made, not
misleading; provided, however, that if applicable rules under the Securities Act
governing the obligation to file a post-effective amendment permits, in lieu of
filing a post-effective amendment that (i) includes any prospectus required by
Section 10(a)(3) of the Securities Act or (ii) reflects facts or events
representing a material or fundamental change in the information set forth in
the registration statement, the Company may incorporate by reference information
required to be included in (i) and (ii) above to the extent such information is
contained in periodic reports filed pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) in the
registration statement.
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(b) Prepare
and file with the SEC such amendments and supplements to such registration
statement, and the prospectus used in connection with such registration
statement, as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish
to the Selling Holders such numbers of copies of a prospectus, including a
preliminary prospectus as amended or supplemented from time to time, in
conformity with the requirements of the Securities Act, and such other documents
as they may reasonably request in order to facilitate the disposition of
Registrable Securities owned by them.
(d) Use
best reasonable efforts to register and qualify the securities covered by such
registration statement under such other federal or state securities laws of such
jurisdictions as shall be reasonably requested by the Selling Holders; provided,
however, that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions, unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act.
(e) Notify
each Holder of Registrable Securities covered by such registration statement, at
any time when a prospectus relating thereto is required to be delivered under
the Securities Act, (i) when the registration statement or any post-effective
amendment and supplement thereto has become effective; (ii) of the issuance by
the SEC of any stop order or the initiation of proceedings for that purpose (in
which event the Company shall make every effort to obtain the withdrawal of any
order suspending effectiveness of the registration statement at the earliest
possible time or prevent the entry thereof); (iii) of the receipt by the Company
of any notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose; and (iv) of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then
existing.
(f) Cause
all such Registrable Securities registered hereunder to be listed on each
securities exchange or quotation service on which similar securities issued by
the Company are then listed or quoted.
(g) Provide
a transfer agent for all Registrable Securities registered hereunder and a CUSIP
number for all such Registrable Securities, in each case not later than the
effective date of such registration.
(h) Comply
with all applicable rules and regulations of the SEC.
5.4. Furnish Information.
It shall be a condition precedent to the obligation of the Company to take any
action pursuant to this Article 5 with respect to the Registrable Securities of
any Selling Holder that such Holder shall furnish to the Company such
information regarding the Holder, the Registrable Securities held by the Holder,
and the intended method of disposition of such securities as shall be reasonably
required by the Company to effect the registration of such Holder's Registrable
Securities.
5.5. Registration
Expenses. The Company shall bear and pay all registration expenses
incurred in connection with any registration, filing or qualification of
Registrable Securities with respect to registration pursuant to Section 5.2 for
each Holder, but excluding (i) legal expenses of the Holders and (ii)
underwriting discounts and commissions, if any, relating to Registrable
Securities.
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5.6. Delay of
Registration. No Holder shall have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result
of any controversy that might arise with respect to the interpretation or
implementation of this Article.
5.7. Indemnification. In
the event that any Registrable Securities are included in a registration
statement under this Article 5:
(a) To
the extent permitted by law, the Company will indemnify and hold harmless each
Holder, any underwriter (as defined in the Securities Act) for such Holder and
each person, if any, who controls such Holder or underwriter within the meaning
of the Securities Act or the Exchange Act, against any losses, claims, damages,
or liabilities (joint or several) to which they may become subject under the
Securities Act, or the Exchange Act, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
“Violation”): (i) any untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation by the
Company of the Securities Act, the Exchange Act, or any rule or regulation
promulgated under the Securities Act, or the Exchange Act, and the Company will
pay to each such Holder, underwriter or controlling person, as incurred, any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this Section 5.7(a)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability,
or action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by any such Holder,
underwriter or controlling person.
(b) To
the extent permitted by law, each Selling Holder will indemnify and hold
harmless the Company, each of its directors, each of its officers, each person,
if any, who controls the Company within the meaning of the Securities Act, any
underwriter, any other Holder selling securities in such registration statement
and any controlling person of any such underwriter or other Holder, against any
losses, claims, damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Securities Act, or the Exchange
Act, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder expressly
for use in connection with such registration; and each such Holder will pay, as
incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this Section 5.7(b), in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this Section 5.7(b)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Holder, which consent shall not be unreasonably withheld; provided, further,
that, in no event shall any indemnity under this Section 5.7(b) exceed the
greater of the cash value of the (i) gross proceeds from the Offering received
by such Holder or (ii) such Holder's investment pursuant to this Agreement as
set forth on the signature page attached hereto.
(c) Promptly
after receipt by an indemnified party under this Section 5.7 of notice of the
commencement of any action (including any governmental action), such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 5.7, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly notified, to assume
the defense thereof with counsel selected by the indemnifying party and approved
by the indemnified party (whose approval shall not be unreasonably withheld);
provided, however, that an indemnified party (together with all other
indemnified parties which may be represented without conflict by one counsel)
shall have the right to retain one separate counsel, with the fees and expenses
to be paid by the indemnifying party, if representation of such indemnified
party by the counsel retained by the indemnifying party would be inappropriate
due to actual or potential differing interests between such indemnified party
and any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable time of
the commencement of any such action, if prejudicial to its ability to defend
such action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 5.7, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section
5.7.
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(d) If
the indemnification provided for in this Section 5.7 is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to
any loss, liability, claim, damage, or expense referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage, or expense in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
statements or omissions that resulted in such loss, liability, claim, damage, or
expense as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the alleged omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
(e) Notwithstanding
the foregoing, to the extent that the provisions on indemnification and
contribution contained in an underwriting agreement entered into in connection
with an underwritten public offering are in conflict with the foregoing
provisions, the provisions in such underwriting agreement shall
control.
(f) The
obligations of the Company and Holders under this Section 5.7 shall survive the
completion of the Offering.
5.8. Permitted
Transferees. The rights to cause the Company to register Registrable
Securities granted to the Holders by the Company under this Article 5 may be
assigned in full by a Holder in connection with a transfer by such Holder of its
Registrable Securities, to (a) any partner or retired partner of a Holder that
is a partnership, or (b) any family member or trust for the benefit of any
individual Holder, provided that (i) such Holder gives prior written notice to
the Company; (ii) such transferee agrees to comply with the terms and provisions
of this Agreement; (iii) such transfer is otherwise in compliance with this
Agreement; and (iv) such transfer is otherwise effected in accordance with
applicable securities laws. Except as specifically permitted by this Section
5.8, the rights of a Holder with respect to Registrable Securities as set out
herein shall not be transferable to any other person, and any attempted transfer
shall cause all rights of such Holder therein to be forfeited.
6. MISCELLANEOUS.
Any notice or other communication given hereunder shall be deemed sufficient if
in writing and sent by registered or certified mail, return receipt requested,
or delivered by hand against written receipt therefore, addressed as
follows:
If to the
Company, to it at:
00000
Xxxxxx Xxxxx Xxxx Xxxx, Xxxxx #0
Xxxxxxxxxxxx,
Xxxxxxxx 00000
Attention: Xxxxxxx
Xxxxxxxxxx
With a
copy to:
Quintairos,
Prieto, Wood & Xxxxx, P.A.
Xxx Xxxx
Xxxxxxx Xxxx., Xxxxx 0000
Xxxx
Xxxxxxxxxx, Xxxxxxx
Attention: Xxxxx
Xxxxxxxx, Esq.
8
If to the
Subscriber, to the Subscriber's address indicated on the signature page of this
Agreement.
Notices
shall be deemed to have been given or delivered on the date of mailing, except
notices of change of address, which shall be deemed to have been given or
delivered when received.
6.1. Except
as otherwise provided herein, this Agreement shall not be changed, modified or
amended except by a writing signed by the parties to be charged, and this
Agreement may not be discharged except by performance in accordance with its
terms or by a writing signed by the party to be charged.
6.2. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and to their respective heirs, legal representatives, successors and assigns.
This Agreement sets forth the entire agreement and understanding between the
parties as to the subject matter hereof and merges and supersedes all prior
discussions, agreements and understandings of any and every nature among
them.
6.3. Upon
the execution and delivery of this Agreement by the Subscriber, this Agreement
shall become a binding obligation of the Subscriber with respect to the purchase
of Units as herein provided, subject, however, to the right hereby reserved by
the Company to enter into the same agreements with other subscribers and to add
and/or delete other persons as subscribers.
6.4. This
Subscription Agreement shall be governed by and construed in accordance with the
domestic laws of the State of Florida without giving effect to any choice or
conflict of law provision or rule (whether of the State of Florida or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Florida. The parties further: (i) agree that
any legal suit, action or proceeding arising out of or relating to this
Subscription Agreement shall be instituted exclusively in any Federal or State
court of competent jurisdiction within Broward County, State of Florida, (ii)
waive any objection that they may have now or hereafter to the venue of any such
suit, action or proceeding, and (iii) irrevocably consent to the in
personam jurisdiction of any Federal or State court of competent jurisdiction
within Broward County, State of Florida in any such suit, action or
proceeding. The parties each further agree to accept and acknowledge
service of any and all process which may be served in any such suit, action or
proceeding in a Federal or State court of competent jurisdiction within Broward
County, State of Florida, and that service of process upon the parties mailed by
certified mail to their respective addresses shall be deemed in every respect
effective service of process upon the parties, in any action or
proceeding.
6.5. In
order to discourage frivolous claims the parties agree that unless a claimant in
any proceeding arising out of this Agreement succeeds in establishing his claim
and recovering a judgment against another party (regardless of whether such
claimant succeeds against one of the other parties to the action), then the
other party shall be entitled to recover from such claimant all of its/their
reasonable legal costs and expenses relating to such proceeding and/or incurred
in preparation therefore.
6.6. The
holding of any provision of this Agreement to be invalid or unenforceable by a
court of competent jurisdiction shall not affect any other provision of this
Agreement, which shall remain in full force and effect. If any provision of this
Agreement shall be declared by a court of competent jurisdiction to be invalid,
illegal or incapable of being enforced in whole or in part, such provision shall
be interpreted so as to remain enforceable to the maximum extent permissible
consistent with applicable law and the remaining conditions and provisions or
portions thereof shall nevertheless remain in full force and effect and
enforceable to the extent they are valid, legal and enforceable, and no
provisions shall be deemed dependent upon any other covenant or provision unless
so expressed herein.
6.7. It
is agreed that a waiver by either party of a breach of any provision of this
Agreement shall not operate, or be construed, as a waiver of any subsequent
breach by that same party.
6.8. All
of the representations and warranties contained in this Subscription Agreement
shall survive execution and delivery of this Subscription Agreement and the
undersigned's investment in the Company.
9
6.9. The
parties agree to execute and deliver all such further documents, agreements and
instruments and take such other and further action as may be necessary or
appropriate to carry out the purposes and intent of this Agreement.
6.10. This
Agreement may be executed in two or more counterparts each of which shall be
deemed an original, but all of which shall together constitute one and the same
instrument.
6.11. Nothing
in this Agreement shall create or be deemed to create any rights in any person
or entity not a party to this Agreement.
IN
WITNESS WHEREOF, the undersigned have executed this Subscription Agreement as of
___________________, 2010.
[REMAINDER
OF PAGE INTENTIONALY LEFT BLANK]
10
SUBSCRIPTION
AGREEMENT COUNTERPART SIGNATURE PAGE
[CORPORATION
OR TRUST]
If the
prospective investor is a CORPORATION OR TRUST, complete the
following.
The
undersigned hereby represents, warrants and covenants that the undersigned is
duly authorized by the prospective investor to take all requisite action on the
part of the prospective investor listed below to enter into this Agreement and,
further, that the prospective investor has all requisite authority to enter into
such Agreement.
The
undersigned represents and warrants that each of the above representations,
agreements or understandings set forth herein applies to the prospective
investor and that the undersigned has authority under the charter, by-laws,
corporate resolutions or trust agreement of such prospective investor to execute
this Agreement.
|
Name
of Company (Please type or print)
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
Number
of Units Subscribed for:
|
Amount
of check enclosed:
|
|||
|
$
|
||||
|
Address:
|
||||
11
SUBSCRIPTION
AGREEMENT COUNTERPART SIGNATURE PAGE
[PARTNERSHIP]
If the
prospective investor is a PARTNERSHIP, complete the following and enclose a true
copy of the Partnership Agreement of the prospective investor.
The
undersigned hereby represents, warrants and covenants that the undersigned is a
general partner of the prospective investor named below, is duly authorized by
the prospective investor to enter into this Agreement, and that the prospective
investor has all requisite authority to enter into this Agreement and set forth
below are the names of all Partners of the prospective investor.
The
undersigned represents and warrants that each of the above representations,
agreements or undertakings set forth herein applies to the prospective investor
and that the undersigned is authorized by such prospective investor to execute
this Agreement.
|
Name
of Company (Please type or print)
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
Names
of Partners:
|
Signature:
|
|
(Add
additional sheets if necessary)
|
Amount
of check enclosed:
|
|||
|
$
|
|||
|
Address:
|
|
12
SUBSCRIPTION
AGREEMENT COUNTERPART SIGNATURE PAGE
[INDIVIDUAL]
If the
prospective investor is an individual, please execute this Agreement
below.
|
Signature:*
|
|
|
Printed Name:
|
And (if
applicable)
|
Signature:*
|
|
|
Printed Name:
|
HOW UNITS
WILL BE HELD:
|
Individually
|
|
|
|
JTWROS
|
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|
TBTE
|
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|
Number
of Units Subscribed for:
|
Amount
of check enclosed:
|
||
|
$
|
|||
|
Address:
|
|
*If
investment is taken in joint names, both must sign.
13
[ACCEPTANCE
PAGE FOR SUBSCRIPTION AGREEMENT]
Agreed to
and accepted as of ________________, 2010.
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
14
EXHIBIT
1
Investor
Questionnaire
Confidential Investor
Questionnaire
INVESTOR
NAME:______________
00000
Xxxxxx Xxxxx Xxxx Xxxx, Xxxxx #0
Xxxxxxxxxxxx,
Xxxxxxxx 00000
Ladies
& Gentlemen:
Lender to
Lender Franchise, Inc., a Florida corporation (the “Company”),
has requested the information contained in this Questionnaire in order for the
Company to determine whether the Company may sell its Units to the undersigned
without registration under the Securities Act of 1933, as amended (the “Act”), or
any applicable state securities law. This Questionnaire is not an
offer to purchase or acceptance of any offer to sell any of the Company’s Units,
but is, in fact, a response to a solicitation of information to provide a basis
for determining the appropriateness of an investment in the Company. The
undersigned agrees and acknowledges as follows:
I. FOR
INDIVIDUAL INVESTORS:
Name: Telephone:
0;
Home
Address: &#
160;
_______________________________________________________________________________________________________
Date of
Birth: _______________________
U. S. Citizen Yes
______ No ______
Social
Security
Number:_________________________________________________________________________________
Occupation
or
Profession:_______________________________________________________________________________
Nature of
Business:_____________________________________________________________________________________
Name and
Address of
Employer:__________________________________________________________________________
Business
Telephone:____________________________________________________________________________________
Current
Position or Title: Period
Employed:
Nature of
Duties: 
60;
Prior
Employment (if current employment
is
less than five years):
Name of
Prior Employer:
Period
Employed:
Communications
should be sent to (check
one): ______
Residence ____
Business
|
II.
|
FOR
INVESTORS THAT ARE CORPORATIONS, PARTNERSHIPS, LIMITED LIABILITY
COMPANIES, TRUSTS OR OTHER
ENTITIES:
|
Special
Instructions: If the Investor is a
corporation, partnership, limited liability company, trust or other entity,
please follow the additional instructions below. The Company may, in
some circumstances, require additional information.
1
For each
entity, please provide a copy of its (i) articles or certificate of
incorporation and by-laws, (ii) partnership agreement, (iii) operating or
limited liability company agreement or (iv) trust agreement. In
addition, please provide appropriate evidence of authority to invest and execute
subscription documents (board resolution or consent of partners, members or
trustees).
For
corporations, an authorized officer of the corporation must date, sign and
complete this Questionnaire concerning the corporation. The officer
should print the name of the corporation above his or her signature and print
his or her name and office held with the corporation below his or her
signature.
For
partnerships, limited liability companies and trusts, each partner, member or
beneficiary of the trust must separately meet appropriate suitability
requirements as determined by the Company. Each such person must
date, sign and complete items I, II and III of this Questionnaire as if he or
she were investing in the Company individually and not as a partner, member or
beneficiary of a trust.
Name:
______________________________________________________________________________________________
Address
of Principal
Office:______________________________________________________________________________
____________________________________________________________________________________________________
Telephone:
________________________________________________________
Date and
State of Incorporation or
Organization: ___________________________
Taxpayer
Identification
Number: _______________________________________
Nature of
Business:________________________________________________________________________________
Individual
Authorized to Execute this Questionnaire:
________________________________________________________
(Name and Title)
Name of
record and beneficial owners of entity (attached additional pages, if
necessary):
_______________________________________________________
The
entity’s intended investment in the Company will constitute approximately ___%
of the assets of the entity.
III. FOR
ALL INVESTORS:
|
1.
|
Relationship
to the Company or its officers or directors, if any (for example, family
member, business associate, business contact, personal acquaintance, none,
etc.):
|
____________________________________________________
2. The
undersigned is an officer or director of a publicly held company.
Yes
____ No
___
If yes, specify.
______________________________________
|
3.
|
The
undersigned beneficially owns 10% or more of the voting securities of a
publicly held company.
|
Yes
____ No
___
2
|
4.
|
The
undersigned __ has ___ has not
invested in investments sold by means of private placements within the
past 5 years.
|
|
5.
|
I,
the undersigned individual or person authorized to execute this
Questionnaire, consider myself to have such knowledge of the Company and
such experience in financial and business matters to enable me to evaluate
the merits and risks of an investment in the
Company.
|
Yes
___ No
___
|
6.
|
The
undersigned understands the full nature and risk of an investment in the
Company and is able to bear the economic risk of an investment in the
Company for an infinite period of time and can afford the complete loss of
such investment.
|
Yes
___ No
___
|
7.
|
Listed
below are the categories of accredited investors, as defined in Regulation
D, promulgated under the Securities Act of 1933, as amended. I
have checked the box or boxes below which describe
me:
|
|
o
|
The
undersigned is presently an officer or director of the Company and is
completing this questionnaire in connection with my making an additional
investment.
|
|
o
|
The
undersigned is a natural person whose net worth as of the date hereof
(including the net worth of my spouse, if married but excluding the value
of my primary residence) exceeds
$1,000,000.
|
|
o
|
The
undersigned is a natural person who had an individual “income” exceeding
$200,000 during both of the two most recently completed calendar years (or
a joint income with my spouse, if married, in excess of $300,000 in each
of those years) and the undersigned has a reasonable expectation of
reaching the same income level in the current calendar
year. For purposes of this document, the term “income” shall
mean adjusted gross income reported or to be reported on a federal income
tax return.
|
|
o
|
The
undersigned is a (i) bank, (ii) savings and loan association, (iii)
insurance company, (iv) broker or dealer registered under the Securities
Exchange Act of 1934, as amended, or (v) investment company registered
under the Investment Company Act of 1940, as
amended.
|
|
o
|
The
undersigned is a “business development company” as defined in Section
2(a)(48) of the Investment Company Act of 1940, as
amended.
|
|
o
|
The
undersigned is a trust with total assets in excess of $5,000,000 which was
not formed for the specific purpose of acquiring the Common Stock, and for
which the investment decisions are made by a person capable of evaluating
the merits and risks of the proposed
investment.
|
|
o
|
The
undersigned is a Small Business Investment Company licensed by the United
States Small Business Administration under Section 301(c) or Section
301(d) of the Small Business Investment Act of 1958, as
amended.
|
|
o
|
The
undersigned is a “private business development company” as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940, as
amended.
|
|
o
|
The
undersigned is a non-profit organization of the type described in Section
501(c)(3) of the Internal Revenue Code, a corporation, a Massachusetts or
similar business trust, or partnership, not formed for the specific
purpose of acquiring the Common Stock offered, with total assets in excess
of $5,000,000.
|
3
|
o
|
The
undersigned is an “employee benefit plan” (within the meaning of Title I
of the Employee Retirement Income Security Act of 1974, as amended) and
either (i) the plan fiduciary is a bank, savings and loan association,
insurance company or registered investment advisor or (ii) the plan has
total assets exceeding $5,000,000 or (iii) if a self-directed plan, the
investment decisions are made solely by persons who, if executing this
document, would be able to check one or more of the boxes
above.
|
|
o
|
The
undersigned is a plan established and maintained by a State, its political
subdivisions, or agency or instrumentality of a State or its political
subdivisions, for the benefit of its employees and such plan has assets in
excess of $5,000,000.
|
|
o
|
The
undersigned is an entity. Each of the undersigned’s equity
investors, if executing this document, would be able to check one or more
of the boxes above.
|
The
undersigned understands that the Company will rely on the accuracy and
completeness of the undersigned’s responses to the foregoing questions and the
undersigned represents and warrants to the Company as follows:
(i) The
answers to the above questions are true, complete and correct and may be relied
upon by the Company in determining whether the offering in connection with which
the undersigned has executed this Questionnaire is exempt from registration
under the Securities Act of 1933, as amended;
(ii) The
undersigned is a “United States Person” for purposes of the United States
Internal Revenue Code; and
(iii)The
undersigned will notify the Company immediately of any material change in any
statement made herein that occurs prior to the closing of the sale of the Common
Stock.
DATED:
___________________, 2010.
|
IF
INDIVIDUAL INVESTOR:
|
||
|
|
||
|
(Signature)
|
||
|
|
||
|
(Printed
Name)
|
||
|
IF
CORPORATION, PARTNERSHIP. LIMITED
LIABILITY
COMPANY, TRUST, ESTATE OR
REPRESENTATIVE:
|
||
|
Name
of Investor
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
4
