EVERCEL, INC.
Shares of Preferred Stock
and Common Stock Purchase Warrants
SALES AGENCY AGREEMENT
December 16, 1999
Xxxxxxx Securities Inc.
1325 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Evercel, Inc., a Delaware corporation (the "Company"), proposes to
offer for sale in a private offering (the "Offering") pursuant to Rule 506 of
Regulation D ("Regulation D") under the Securities Act of 1933, as amended (the
"Act"), up to (i) 264,000 shares (each a "Primary Share") of Series A Cumulative
Convertible Preferred Stock, par value $0.01 per share (the "Series A Preferred
Stock") and (ii) up to 132,000 shares (each an "Overcall Share" and together
with a Primary Share, a "Share") of the Company's Series B Cumulative
Convertible Preferred Stock, par value $0.01 per share (the "Series B Preferred
Stock" and, together with the Series A Preferred Stock, the "Preferred Stock")
pursuant to Section 2(b) hereof, together with warrants (the "Warrants,"
together with the Preferred Stock are hereinafter sometimes referred to as the
"Securities") to purchase shares of the Company's common stock, $.01 par value
per share (the "Common Stock"). The Preferred Stock is convertible into shares
of Common Stock (the "Conversion Shares.") The Offering will be made solely to
"accredited investors" as defined in Regulation D. This is to confirm our
agreement concerning your acting as our exclusive placement agent (the
"Placement Agent") in connection with the Offering.
1. Appointment of Placement Agent.
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On the basis of the representations and warranties contained
herein, and subject to the terms and conditions set forth herein, the Company
hereby appoints you as its Placement Agent and grants to you the exclusive right
to offer, as its agent, the Securities pursuant to the terms of this Agreement.
On the basis of such representations and warranties, and subject to such
conditions, you hereby accept such appointment and agree to use your best
efforts to secure subscriptions to purchase up to 264,000 Shares pursuant to the
terms of this Agreement. The agency created hereby is not terminable by the
Company except upon termination of the Offering contemplated hereby or upon
expiration of the Offering Period (as defined below) in accordance with the
terms of this Agreement.
2. Terms of the Offering.
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(a) The Primary Shares shall be offered for sale to
prospective investors in this Offering (the "Prospective Investors") at a
purchase price of $25.00 per share (the "Offering Price"). The minimum
investment by a Prospective Investor shall be $12,5000 (500 Shares), unless
otherwise agreed to by the Company and the Placement Agent. Officers, directors
and employees of the Company, and the Placement Agent and its officers,
directors and employees may purchase Shares on the same terms and conditions as
other investors. All references herein to subscriptions from Prospective
Investors shall be deemed to include such Shares.
(b) In addition, upon the basis of the warranties and
representations and other terms and conditions herein set forth, at the purchase
price per share set forth in paragraph (a) of this Section 2, the Company has an
option to sell the Overcall Shares to the Prospective Investors who purchased
securities at the Closing or at any Additional Closing. The option hereby
granted will expire on August 31, 2000 and may be exercised once, in whole or in
part, upon notice by the Company to the Placement Agent setting forth the number
of Overcall Shares as to which the Company is then calling and the time and date
of payment and delivery for such Overcall Shares.
(c) The Offering with respect to the Primary Shares shall
commence on the date hereof (the "Commencement Date") and shall expire at 5:00
P.M., New York time, on December 20, 1999, unless extended from time to time for
up to an aggregate of 90 days by mutual agreement of the Company and the
Placement Agent. Such period, as the same may be so extended, shall hereinafter
be referred to as the "Offering Period."
(d) Each Prospective Investor who desires to purchase
Securities shall be required to deliver to the Placement Agent one copy of a
subscription agreement, including the investor questionnaire and the other
written materials required by the subscription instructions attached to such
subscription agreement (collectively, a "Subscription Agreement"), and payment
in the amount necessary to purchase the number of Shares such Prospective
Investor desires to purchase. The Placement Agent shall not have any obligation
to independently verify the accuracy or completeness of any information
contained in any Subscription Agreement or the authenticity, sufficiency or
validity of any check or other form of payment delivered by any Prospective
Investor in payment for the Securities.
(e) The Company has established a Special Account entitled
"Evercel, Inc. - Escrow Account" (the "Special Account"). The Placement Agent
shall deliver each check received from a Prospective Investor for deposit in the
Special Account and shall deliver the executed copy of the Subscription
Agreement received from such Prospective Investor to the Company. The Company
shall notify the Placement Agent promptly of the acceptance or rejection of any
subscription. The Company shall have the right, in its sole discretion, to
reject any subscription; provided, however, that in the event the Company shall
reject a subscription by a Prospective Investor meeting the investor suitability
requirements specified in the Subscription Agreement and who has delivered
payment and completed and executed a Subscription Agreement and whose ownership
interest in the Company will not be detrimental to the Company's business
interest in the reasonable judgment of the Company (a "Qualified Subscription"),
the Company shall pay you a fee and issue you warrants in respect thereof in an
amount equal to the sales commissions and Placement Agent's Warrants (as
hereinafter defined) you would have otherwise received pursuant to Sections 4(a)
and 4(b) from the sale of such Shares to such Prospective Investor.
(f) If Subscriptions to purchase a minimum of 200,000 Primary
Shares are not received from Prospective Investors prior to the expiration of
the Offering Period and accepted by the Company, unless otherwise mutually
agreed by the Placement Agent and the Company, the Offering shall be canceled,
all funds received by the Company shall be refunded in full, without interest
and this Agreement and the agency created hereby shall be terminated without any
further obligation on the part of either party, except as provided in Sections 7
and 10 hereof.
(g) You may engage other persons that are members of the
National Association of Securities Dealers, Inc. ("NASD") or registered
representatives of such members to assist you in the Offering (each such person
being hereinafter referred to as a "Selected Dealer") and you may allow such
persons such part of the compensation and payment of expenses payable to you
hereunder as you shall determine. Each Selected Dealer shall be required to
agree in writing to comply with the provisions of, and to make the
representations, warranties and covenants contained in, Sections 5(b) and 6(b)
by executing the form of Selected Dealer Agreement attached hereto as Exhibit
III. On or prior to the Closing (as defined below), the Placement Agent shall
deliver a copy of each executed Selected Dealer Agreement to the Company. By
executing this Agreement, the Company hereby agrees to make, and is deemed to
make, the representations and warranties to, and covenants and agreements with,
each Selected Dealer (including an agreement to indemnify under Section 9
hereof) who has executed the Selected Dealer Agreement as is contained in this
Agreement.
3. Closing.
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(a) Subject to the conditions set forth in Section 8 hereof,
if Qualified Subscriptions to purchase a minimum of 200,000 Primary Shares have
been received and cleared prior to the expiration of the Offering Period and
accepted by the Company, the closing under this Agreement (the "Closing") shall
be held at the offices of Fulbright & Xxxxxxxx L.L.P., 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, at 10:00 A.M., New York time, on the third business day
following the date upon which the Placement Agent receives notice from the
Company that subscriptions to purchase a minimum 200,000 Primary Shares have
been so accepted or at such other place, time, and/or date as the Company and
the Placement Agent shall agree upon (the "Closing Time"). The Company shall
provide the notice required by the preceding sentence as promptly as
practicable. The date upon which the initial Closing is held shall hereinafter
be referred to as the "Initial Closing Date."
(b) Subject to the conditions set forth in Section 8 hereof
and with the consent of both the Company and the Placement Agent, if, subsequent
to the Initial Closing Date and prior to the expiration of the Offering Period,
additional subscriptions to purchase Primary Shares are received from
Prospective Investors, which subscriptions are accepted by the Company, one or
more additional closings under this Agreement (each, an "Additional Closing")
shall be held at the offices of Fulbright & Xxxxxxxx L.L.P., 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, at 10:00 A.M., New York time, on the fifth business day
following the date upon which the Placement Agent receives notice from the
Company that additional subscriptions have been so accepted, or at such other
place, time or date as the Company and the Placement Agent shall agree upon. The
Company shall notify the Placement Agent as promptly as practicable whether any
additional subscriptions so received have been accepted. The date upon which any
Additional Closing is held shall hereinafter be referred to as an "Additional
Closing Date."
(c) If the Company elects to exercise its option pursuant to
Section 2(b) hereof, the closing (the "Overcall Closing") of all or part of the
Overcall Shares shall be held at the offices of Fulbright & Xxxxxxxx L.L.P., 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 A.M., New York time, on the fifteenth
business day following the date upon which the Placement Agent receives notice
from the Company of such exercise, or at such other place, time or date as the
Company and the Placement Agent shall agree upon. The date upon which the
Overcall Closing is held shall hereinafter be referred to as the "Overcall
Closing Date." The latest Closing Date is sometimes referred to herein as the
"Final Closing Date."
(d) At the Closing, Additional Closing or Overcall Closing, as
the case may be, the Company shall pay to the Placement Agent from the funds
deposited in the Special Account in payment for Securities, the amount payable
to the Placement Agent pursuant to Section 4(a) of this Agreement.
Notwithstanding the foregoing, if any portion of the proceeds raised in the
Offering are not paid to the Company at the Closing, Additional Closing or
Overcall Closing, as the case may be, then the placement fee relating to such
deferred proceeds shall only be paid by the Company upon receipt of such
deferred proceeds. Promptly after the Initial Closing Date, Additional Closing
Date or Overcall Closing Date, as the case may be, the Company shall deliver to
the purchasers of Securities certificates representing the Shares and Warrants
to which they are entitled, in the forms attached hereto as Exhibit I and
Exhibit II, respectively.
4. Compensation.
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(a) You shall be entitled, as compensation for your services
as Placement Agent under this Agreement, to an amount equal to 7% of the
aggregate gross proceeds received by the Company from the sale of Securities to
Prospective Investors, payable by the Company on the Initial Closing Date,
Additional Closing Date or Overcall Closing Date, as the case may be, with
respect to the Securities sold on such date to investors; provided, however,
that any subscription meeting the requirements set forth in Section 2(d) shall
be deemed to have been accepted for purposes of determining whether the
Placement Agent is entitled to its compensation pursuant to this Section 4(a).
In addition, the Company shall pay the Placement Agent an amount equal to 4% of
the aggregate gross proceeds to the Company upon the exercise of any of the
Warrants.
(b) As additional compensation for your services as Placement
Agent under this Agreement, you and/or your designees shall become entitled to
receive, on each of the Initial Closing Date, and each Additional Closing Date
and Overcall Closing Date, if any, warrants (collectively, the "Placement Agent
Warrants") to purchase shares of the Company's Common Stock, in an amount equal
to 7% of the number of shares of Common Stock issuable upon the conversion of
the Shares sold by the Company in the Offering on such Closing Date. Each
Placement Agent Warrant will entitle the holder thereof, until the date which is
five (5) years after the Initial Closing Date, Additional Closing Date or
Overcall Closing Date, as the case may be, to purchase one share of Common Stock
(such shares of Common Stock issuable upon the exercise of the Placement Agent
Warrants are hereinafter referred to as the "Placement Agent Warrant Shares")
and shall contain the same terms and conditions as the Warrants. The Company
shall be obligated, under certain circumstances set forth in the Registration
Rights Agreement made by the Company for the benefit of the purchasers of the
Securities and the Placement Agent and its designees (the "Registration Rights
Agreement"), to file a registration statement under the Act to permit the sale
in the public trading market of the Placement Agent Warrant Shares and the
shares of Common Stock issuable upon exercise of the Warrants (the "Warrant
Shares") by the holders thereof. The Placement Agent Warrants and the Warrants
shall be substantially in the form attached hereto as Exhibit II.
5. Representations and Warranties.
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(a) Representations and Warranties of the Company.
The Company represents and warrants to, and agrees with,
the Placement Agent that:
(i) Organization, Etc. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has full corporate power and authority to conduct
its business as it is now being conducted and to own, operate or lease the
properties and assets it currently owns, operates or holds under lease. The
Company is duly qualified or licensed to do business and is in good standing as
a foreign corporation in each jurisdiction where the character of its business
or the nature of its properties makes such qualification or licensing necessary,
except where the failure to so qualify or be licensed would not have a material
adverse effect
(ii) Capitalization. The SEC Reports (as defined
below) set forth the capitalization of the Company. There are no shares of
Common Stock held as treasury shares. The designations, powers, preferences,
rights, qualifications, limitations and restrictions in respect of each class
and series of authorized capital stock of the Company are as set forth in the
Company's Certificate of Incorporation, and all such designations, powers,
preferences, rights, qualifications, limitations and restrictions are valid,
binding and enforceable and in accordance with all applicable laws. All
outstanding shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable. All of the outstanding
securities of the Company were issued in compliance with all applicable Federal
and state securities laws. None of such outstanding securities has been issued
in violation of any preemptive rights, rights of first refusal or similar
rights. Except as set forth in the SEC Reports, there are no outstanding
options, warrants, convertible securities, calls, rights, commitments,
preemptive rights or agreements or instruments or understandings of any
character to which the Company is a party or by which the Company is bound,
obligating the Company to issue, deliver or sell, or cause to be issued,
delivered or sold, contingently or otherwise, additional shares of its capital
stock or any securities or obligations convertible into or exchangeable for such
shares or to grant, extend or enter into any such option, warrant, convertible
security, call, right, commitment, preemptive right or agreement. There are no
outstanding obligations, contingent or other, of the Company to purchase, redeem
or otherwise acquire any shares of its capital stock. There are no voting trust
agreements or other contracts, agreements, arrangements, commitments, plans or
understandings restricting or otherwise relating to voting, dividend or other
rights with respect to the capital stock of the Company.
(iii) No Prior Sales. The Company has not,
directly or indirectly, solicited any offer to buy or offered to sell any shares
of Series A Preferred Stock or any other securities of the Company during the
six-month period ending on the date hereof except for the securities as may be
described in the SEC Reports, and has no present intention to solicit any offer
to buy or to offer to sell any Series A Preferred Stock or any other securities
of the Company other than pursuant to this Agreement or as described in the SEC
Reports.
(iv) Authorization. The Company has all requisite
corporate power and authority to enter into this Agreement, the Subscription
Agreement and the Registration Rights Agreement (collectively, the "Transaction
Documents"), to carry out its obligations under each of the Transaction
Documents and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, the performance by the Company of its
obligations hereunder and thereunder (other than its obligations to register
shares of Common Stock under the Securities Act pursuant to the Registration
Rights Agreement) and the authorization, designation, reservation, sale,
issuance and delivery of the Shares, the Conversion Shares, the Warrants, the
Placement Agent Warrants, the Warrant Shares and the Placement Agent Warrant
Shares have been duly authorized by all necessary corporate action on the part
of the Company. This Agreement has been, and each of the other agreements
contemplated hereby, when executed and delivered by the Company, will have been,
duly executed and delivered by the Company and constitute the legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms (except as the enforceability thereof may be limited by any
applicable bankruptcy, insolvency or other laws affecting creditors' rights
generally or by general principles of equity, regardless of whether such
enforceability is considered in equity or at law). The Shares, the Conversion
Shares, the Warrants, the Placement Agent Warrants, the Warrant Shares and the
Placement Agent Warrant Shares have been duly authorized and, when issued in
accordance with this Agreement, the Shares, the Warrants and the Placement Agent
Warrants will be validly issued, fully paid and nonassessable, with no personal
liability attaching to the ownership thereof. The Conversion Shares, the Warrant
Shares and the Placement Agent Warrant Shares have been duly reserved for
issuance. Neither the issuance, sale nor delivery of the Shares, the Conversion
Shares, the Warrants, the Placement Agent Warrants, the Warrant Shares or the
Placement Agent Warrant Shares is subject to any preemptive right of
stockholders of the Company or to any right of first refusal or other right in
favor of any person which has not been waived in writing.
(v) No Violation. The execution and delivery of
this Agreement and each other Transaction Document by the Company do not, and
the consummation by the Company of the transactions contemplated hereby and
thereby and compliance with the terms hereof and thereof will not, (a) conflict
with, or result in any violation of or default or loss of any benefit under, any
provision of the Company's Certificate of Incorporation or By-laws; (b) conflict
with, or result in any violation of or default or loss of any benefit under, any
permit, concession, grant, franchise, law, rule or regulation, or any judgment,
decree or order of any court or other governmental agency or instrumentality to
which the Company is a party or to which any of its property is subject; (c)
conflict with, or result in a breach or violation of or default or loss of any
benefit under, or accelerate the performance required by, the terms of any
agreement, contract, indenture or other instrument to which the Company is a
party or to which any of its property is subject, or constitute a default or
loss of any right thereunder or an event which, with the lapse of time or notice
or both, might result in a default or loss of any right thereunder or the
creation of any Security Interest upon any of the assets or properties of the
Company; or (d) result in any suspension, revocation, impairment, forfeiture or
nonrenewal of any license.
(vi) Financial Statements and Other Information.
(a) The Company has previously furnished to the Placement Agent the Company's
Quarterly Reports on Form 10-QSB for the quarters ended January 31, 1999, April
30, 1999 and July 31, 1999, which contain the audited and unaudited financial
statements of the Company (the "Financial Statements"). These statements fairly
present the financial condition of the Company as of the respective dates
thereof and the results of the operations of the Company for such periods and
have been prepared in accordance with generally accepted accounting principles
consistently applied, except that any such unaudited statements may omit notes
and may be subject to year-end adjustment.
(b) Since July 31, 1999, (i) the business of the Company has
been conducted in the ordinary course of business and (ii) there has been no
material adverse change. As of the date hereof, there are no material
liabilities of the Company which would be required to be provided for in a
balance sheet of the Company as of July 31, 1999 prepared in accordance with
generally accepted accounting principles consistently applied, other than
liabilities provided for in the financial statements referred to in subparagraph
(a) above and liabilities incurred after July 31, 1999 in the ordinary course of
business.
(c) There are no material liabilities, contingent or
otherwise, of the Company that have not been disclosed in the financial
statements referred to in subparagraph (a) above or otherwise disclosed in the
Company's public filings with the Securities and Exchange Commission.
(vii) SEC Reports. The Company has filed all proxy
statements, reports and other documents required to be filed by it under the
Securities Exchange Act. The Company has furnished the Placement Agent with
copies of its (i) Quarterly Reports on Form 10-QSB for the quarters ended
January 31, 1999, April 30, 1999 and July 31, 1999, (ii) Form 8-K filed on
October 13, 1999 and (iii) press releases dated August 10, August 12, September
9 and November 1, 1999 (collectively, the "SEC Reports"). Each SEC Report was in
substantial compliance with the requirements of its respective form and none of
the SEC Reports, nor the financial statements (and the notes thereto) included
in the SEC Reports, as of their respective dates, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(viii) Litigation. There is no action, suit,
investigation, arbitration or proceeding pending or, to the best knowledge of
the Company, threatened against or affecting the Company, or any of its
properties or rights (including without limitation no charge of patent and/or
trademark infringement), by or before any governmental entity, or any basis in
fact therefor known to the Company, against or involving the Company or any of
its officers, directors or employees (in their capacity as such), assets,
business or products, whether at law or in equity. The Company is not subject to
any outstanding injunction, judgment, order, decree, ruling or charge which
could reasonably be expected to have a material adverse effect.
(ix) Compliance with Laws. The Company has
complied in all material respects with all applicable laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings and
charges thereunder) of any governmental entity relating to or affecting the
operation, conduct or ownership of its property or business, and no action,
suit, proceeding, hearing, investigation, charge, complaint, claim, demand or
notice has been filed or commenced or, to the best knowledge of the Company,
threatened against it alleging any failure so to comply. Neither the Company
nor, to the best knowledge of the Company, any of its directors, officers,
consultants or employees (in their capacity as such), is in default in any
material respect with respect to any order, writ, injunction or decree known to
or served upon the Company of any governmental entity.
(x) Environmental Compliance. The Company has not
generated, used, transported, treated, stored, released or disposed of, and has
not suffered or permitted anyone else to generate, use, transport, treat, store,
release or dispose of any hazardous substance in violation of any environmental
laws; (ii) there has not been any generation, use, transportation, treatment,
storage, release or disposal of any hazardous substance resulting from the
conduct of the Company or the use of any property or facility by the Company or,
to the best of the Company's knowledge, any nearby or adjacent properties or
facilities, which has created or could reasonably be expected to create any
material liability on the part of the Company under the environmental laws or
that would require reporting to or notification by the Company to any
governmental entity; and (iii) any hazardous substance handled or dealt with in
any way in connection with the business of the Company, whether before or during
the ownership of the Company, has been and is being handled or dealt with in all
respects in compliance with the environmental laws in effect at the time such
activities were being conducted, except where such violation, liability, failure
to report or failure to comply would not have a material adverse effect.
(xi) Registration Rights. Except as provided
for in the Registration Rights Agreement or the SEC Reports, upon consummation
of the transactions contemplated hereby the Company is not under any obligation
to register under the Securities Act any of its currently outstanding securities
or any of its securities which may hereafter be issued.
(xii) Private Offering. No form of general
solicitation or general advertising was used by the Company or its
representatives in connection with the offer or sale of the Securities. Based in
part on the representations of the Placement Agent contained herein, no
registration of the Securities pursuant to the provisions of the Securities Act
or any state securities or "blue sky" laws will be required by the offer, sale
or issuance of the Securities pursuant to this Agreement. The transactions
contemplated hereunder, including the issuance and sale of the Securities, are
exempt from registration under the provisions of the Securities Act and any
state "blue sky" laws.
(b) Representations and Warranties of the Placement Agent.
The Placement Agent hereby represents and warrants to, and agrees with, the
Company as follows:
(i) This Agreement have been duly authorized,
executed and delivered by the Placement Agent, are the legal, valid and binding
obligations of the Placement Agent and are enforceable as to the Placement Agent
in accordance with their respective terms (subject to applicable bankruptcy,
insolvency and other laws affecting the enforceability of creditors' rights
generally and to general equitable principles).
(ii) The Placement Agent will not offer or sell
the Securities to any investor which the Placement Agent did not have reasonable
grounds to believe and did not believe, was an "accredited investor."
(iii) The Placement Agent will not offer or
sell the Securities by means of any form of general solicitation or general
advertising, including, without limitation, the following:
(1) any advertisement, article, notice
or other communication published in any newspaper, magazine or similar medium
or broadcast over television or radio; and
(2) any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising.
(iv) The Placement Agent is a member in good
standing of the NASD or is a registered representative thereof, is licensed
under the Exchange Act, and, if required, under the laws of all jurisdictions in
which it will offer the Securities.
(v) Neither the Placement Agent nor any partner,
officer or director of the Placement Agent:
(1) Is currently subject to any
administrative order or judgment in any state which prohibits the use of any
exemption from registration in connection with the purchase or sale of
securities;
(2) Is subject to any order, judgment
or decree of any court or regulatory authority of competent jurisdiction
temporarily or preliminarily restraining or enjoining, or is subject to any
order, judgment or decree of any court or regulatory authority of competent
jurisdiction, entered within the last five years permanently restraining or
enjoining, such person from engaging in or continuing any conduct or practice
(including making use of any exemption) in connection with the purchase or sale
of any security or commodity or involving the making of any false filing with
any state relating to any security or offering or arising out of the conduct of
the business of an underwriter, broker, dealer, municipal securities dealer, or
investment adviser; or which restrains or enjoins such person from activities
subject to federal or state statutes designed to protect consumers against
unlawful or deceptive practices involving insurance, commodities or commodity
futures, real estate, franchise, business opportunities, consumer goods, or
other goods and services;
(3) Has been convicted of, or has pleaded
nolo contendere to, within the past ten years, any felony or misdemeanor in
connection with the purchase or sale of any security or commodity, involving the
making of a false filing relating to any security or offering; arising out of
the conduct of the business of an underwriter, broker, dealer, municipal
securities dealer, or investment adviser; or involving fraud, deceit,
racketeering, or intentional wrongdoing, including, without limitation, forgery,
embezzlement, obtaining money under false pretenses, larceny, or conspiracy to
defraud;
(4) Is currently subject to any state
administrative enforcement order or judgment entered by that state's securities
administrator within the past five years or is subject to any state's
administrative enforcement order or judgment, entered within the past five
years, in which fraud or deceit, including, without limitation, making untrue
statements of material facts and omitting to state material facts, was found;
or, if such an order or judgment was entered, the person subject to such order
or judgment is licensed or registered to conduct securities-related business in
the state in which the administrative order or judgment was entered against such
person;
(5) Is suspended or expelled from
membership in, or suspended or barred from association with a member of an
exchange registered as a national securities exchange pursuant to Section 6 of
the Exchange Act, an association registered as a national securities association
under Section 15A of the Exchange Act, or a Canadian securities exchange or
association for any act or omission to act constituting conduct inconsistent
with just and equitable principles of trade;
(6) Is subject to a United States
Postal Service false representation order entered under section 3005 of title
39, United States Code, within the past five years; or is subject to a
restraining order or preliminary injunction entered under section 3007 of title
39, United States Code, with respect to conduct alleged to have violated section
3005 of title 39, United States Code; or
(7) Has been the underwriter or named
as the underwriter of any securities covered by any registration statement or
offering circular which is the subject of any pending proceeding or examination
under the Act or is the subject of any refusal order or stop order entered
thereunder or under any state's laws within the past five years.
6. Covenants.
(a) Covenants of the Company. The Company covenants to
the Placement Agent that it will:
(i) Notify you immediately, and confirm such
notice promptly in writing, (A) when any event shall have occurred during the
period commencing on the date hereof and ending on the later of the expiration
of the Offering Period and the Final Closing Date, as a result of which the SEC
Reports would include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not misleading, all
in light of the circumstances under which they were made and (B) of the receipt
of any notification with respect to the modification, rescission, withdrawal or
suspension of an exemption from the registration or qualification of the
Securities in any jurisdiction. The Company will use commercially reasonable
efforts to prevent the issuance of any such modification, rescission, withdrawal
or suspension and, if any such modification, rescission, withdrawal or
suspension is issued and you so request, will use commercially reasonable
efforts to obtain the lifting thereof as promptly as possible.
(ii) Not, directly or indirectly, solicit
any offer to buy from, or offer to sell to any person any Securities except
through the Placement Agent.
(iii) Not solicit any offer to buy or offer to
sell the Securities by any form of general solicitation or advertising,
including, without limitation, any advertisement, article, notice or other
communication published in any newspaper, magazine or similar medium or
broadcast over television or radio or any seminar or meeting whose attendees
have been invited by any general solicitation or advertising.
(iv) Use commercially reasonable efforts to
qualify or register the Securities for offering and sale under, or establish an
exemption from such qualification or registration under, the securities or "blue
sky" laws of such jurisdictions as you may reasonably request. The Company will
not consummate any sale of Securities in any jurisdiction or in any manner in
which such sale may not be lawfully made.
(v) At all times during the period commencing
on the date hereof and ending on the later of the expiration of the Offering
Period and the Final Closing Date, provide to each Prospective Investor or his
or her purchaser representative, if any, on request, such reasonable information
(in addition to that contained in the SEC Reports) concerning the Offering, the
Company and any other relevant matters as it possesses or can acquire without
unreasonable effort or expense and extend to each Prospective Investor or his or
her purchaser representative, if any, the opportunity to ask questions of, and
receive answers from, the Company concerning the terms and conditions of the
Offering and the business of the Company and to obtain any other additional
information, to the extent it possesses the same or can acquire it without
unreasonable effort or expense, as such Prospective Investor or purchaser
representative may consider reasonably necessary in making an informed
investment decision or in order to verify the accuracy of the information
furnished to such Prospective Investor or purchaser representative, as the case
may be, subject to receipt of a confidentiality agreement if the Company deems
it appropriate; provided, however, that the Company shall not accept any
subscription to purchase Securities from a Prospective Investor who has not been
provided with all information requested by such Prospective Investor or who has
not received answers to all questions asked by such Prospective Investor. Any
additional written information provided to a Prospective Investor by the Company
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein not misleading. Copies of
any such written information will promptly be given to the Placement Agent.
(vi) Before accepting any subscription to
purchase Securities from, or making any sale to, any Prospective Investor, have
reasonable grounds to believe and does believe that (A) such Prospective
Investor is an "accredited investor" and meets all other suitability
requirements for investing in the Securities set forth in the Subscription
Agreement, and (B) all representations made and furnished by such Prospective
Investor in the Subscription Agreement and related documents are true and
correct in all material respects.
(vii) Notify you promptly of the acceptance or
rejection of any subscription.
(viii) File five copies of a Notice of Sales of
Securities on Form D with the Securities and Exchange Commission (the
"Commission") within the time required by such Rule and file a final notice on
Form D with the Commission within the time required by such Rule. The Company
shall file promptly such amendments to such Notices on Form D as shall become
necessary and shall also comply with any filing requirement imposed by the laws
of any state or jurisdiction in which offers and sales are made. The Company
shall furnish you and your counsel with copies of all such filings promptly
after any such filing is made.
(ix) Place the following legend on all
certificates representing the Shares sold pursuant to this Offering, as well as,
to the extent applicable, the Conversion Shares, Warrants, the Placement Agent
Warrants, the Warrant Shares and the Placement Agent Warrant Shares:
"The securities represented hereby have not
been registered under the Securities Act of 1933, as
amended, or any state securities laws and neither the
securities nor any interest therein may be offered,
sold, transferred, pledged or otherwise disposed of
except pursuant to an effective registration
statement under such act or such laws or an exemption
from registration under said act and such laws,
which, in the opinion of counsel for the holder,
which counsel and opinion are reasonably satisfactory
to counsel for the company, is available";
(x) Not, directly or indirectly, engage in any
act or activity which may jeopardize the status of the Offering and sale of the
Securities as exempt transactions under the Act or under the securities or "blue
sky" laws of any jurisdiction in which the Offering may be made. Without
limiting the generality of the foregoing, and notwithstanding anything contained
herein to the contrary, the Company shall not, during the six months following
completion of the Offering, (A) directly or indirectly, engage in any offering
of securities which would result in integration with the Offering in the manner
prescribed by Rule 502(a) of Regulation D and applicable releases of the
Commission and thereby jeopardize the status of the Offering and sale of the
Securities as exempt transactions under Regulation D or (B) engage in any
offering of securities, without the opinion of counsel reasonably satisfactory
to the Placement Agent, to the effect that such offering would not result in
integration with this Offering, or if integration would so result, that such
integration would not jeopardize the status of this Offering as an exempt
transaction under Regulation D. The Company agrees to indemnify the Placement
Agent and/or any controlling person, director, officer, employee, affiliate or
agent of the Placement Agent and hold them harmless against any losses, claims,
damages, expenses or liabilities to which the Placement Agent and/or such other
indemnified parties may become subject, which are related to or arise out of the
breach of the covenant contained in this Section 6(a)(x).
(xi) Apply, in all material respects, the net
proceeds from the sale of the Securities for the purposes of automating the
Danbury, CT manufacturing facility, working capital and general corporate
purposes.
(xii) Not, during the period commencing on the
date hereof and ending on the later of the expiration of the Offering Period and
the Final Closing Date, unless otherwise legally obligated, issue any press
release or other communication or hold any press conference with respect to the
Company, its financial condition, results of operations, business, properties,
assets or liabilities, or the Offering, without your prior written consent,
which consent shall not be unreasonably withheld.
(xiii) Comply in all respects with its obligations
under the Transaction Documents.
(b) Covenants of the Placement Agent. The Placement Agent
hereby covenants and agrees as follows:
(i) The Placement Agent will not accept the
subscription of any person unless immediately before accepting such subscription
the Placement Agent has reasonable grounds to believe and does believe that (A)
such person is an "accredited investor" and (B) all representations made and
information furnished by such person in the Subscription Agreement and related
documents are true and correct in all material respects. The Placement Agent
agrees to notify the Company promptly if the Placement Agent shall, at any time
during the period after delivery of the documents furnished by such person to
the Company in connection with a subscription for Securities and immediately
before the sale of Securities to such person, no longer reasonably believes one
or more of the foregoing matters with respect to such person.
(ii) The Placement Agent will solicit purchasers
of Securities in the United States only in the jurisdictions in which such
solicitation may, upon the advice of counsel, be made under applicable
securities or "blue sky" laws and in which the Placement Agent is qualified so
to act.
(iii) The Placement Agent will render its services
in connection with the Offering in accordance with Regulation D and all
applicable state and federal manner of sale and anti-fraud securities laws.
7 Payment of Expenses.
(a) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay
all fees, charges and expenses incident to the performance by the Company of its
obligations hereunder, including, without limitation, all fees, charges, and
expenses in connection with (i) the preparation, printing, reproduction, filing,
distribution and mailing of the Subscription Agreement, Transaction Documents
and all other documents relating to the offering, purchase, sale and delivery of
the Securities, and any supplements or amendments thereto, including the fees
and expenses of counsel to the Company, and the cost of all copies thereof, (ii)
the issuance, sale, transfer and delivery of the Shares, the Conversion Shares,
the Warrants, the Placement Agent Warrants, the Warrant Shares and the Placement
Agent Warrant Shares, including any transfer or other taxes payable thereon (not
including income related taxes of the recipient of such securities) and the fees
of any Transfer Agent or Registrar, (iii) the registration or qualification of
the Securities or the securing of an exemption therefrom under state or "blue
sky" or securities laws, including, without limitation, filing fees payable in
the jurisdictions in which such registration or qualification or exemption
therefrom is sought and the costs of preparing preliminary, supplemental and
final "Blue Sky Surveys" relating to the offer and sale of the Securities; and
(iv) the filing fees, if any, payable to the Commission; (v) travel and roadshow
expenses, all of which shall be paid at each Closing of the Offering, as
applicable.
(b) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will from
time to time promptly upon request therefor reimburse the Placement Agent for
the cost of printing and mailing the offering materials, travel and roadshow
expenses and all other out-of-pocket expenses incurred by the Placement Agent in
connection with this Offering (including, without limitation and disbursements
as set forth below). Such expenses in excess of $25,000 shall be billed monthly,
as incurred.
(c) The Company shall pay to or as directed by the Placement
Agent on the Initial Closing Date (and, to the extent of any additional legal
fees and expenses, on each Additional Closing Date or the Overcall Closing Date)
the fees and disbursements of counsel to the Placement Agent of up to an
aggregate of $25,000.
8 Conditions of Placement Agent's Obligations. The obligations of the
Placement Agent pursuant to this Agreement (other than pursuant to Section 1
hereof) and the right of the Company to obtain on the Initial Closing Date and,
if applicable, each Additional Closing Date and the Overcall Closing Date, the
funds representing Securities purchased at such Closing, as the case may be,
shall be subject to the performance by the Company of its obligations hereunder,
and to the satisfaction of the following additional conditions:
(a) On or prior to the Initial Closing Date, each Additional
Closing Date and the Overcall Closing Date, as the case may be, the Placement
Agent shall have been furnished such information, documents and certificates as
it may reasonably require for the purpose of enabling it to review the matters
referred to in this Section 8 and in order to evidence the accuracy,
completeness or satisfaction of any of the representations, warranties,
covenants, agreements or conditions herein contained, or as it may otherwise
reasonably request.
(b) The representations and warranties of the Company
contained in this Agreement that are qualified with respect to materiality shall
be true and correct in all material respects, and such representations and
warranties that are not so qualified shall be true and correct in all respects
on each Closing Date, as the case may be, with the same effect as if made on
such Closing Date, and all covenants and agreements contained in this Agreement
to be performed on the part of the Company and all conditions contained in this
Agreement to be fulfilled or complied with by the Company at or prior to the
Initial Closing Date, Additional Closing Date or Overcall Closing Date, as the
case may be, shall have been duly performed, fulfilled or complied with and the
Placement Agent shall have received a certificate to such effect, dated the such
Closing Date, as the case may be, from the chief executive officer and chief
financial officer of the Company.
(c) At the Initial Closing Date, the Company shall accept
subscriptions representing no less than 200,000 Primary Shares. At the Closing,
Additional Closing and Overcall Closing, if any, the Company shall have
satisfied its obligations under Sections 4(a) and 7.
(d) At the Closing and each Additional Closing and Overcall
Closing, if any, the Placement Agent shall have received the favorable opinions
of Xxxxxxxx & Xxxx, LLP, counsel for the Company, dated the date of delivery,
addressed to the Placement Agent, in form satisfactory to the Placement Agent
and its counsel.
(e) On the Initial Closing Date and each Additional Closing
Date and Overcall Closing Date, if any, all corporate and other proceedings
taken or to be taken by the Company in connection with the issuance, sale and
delivery of the Securities and the transactions contemplated hereby and all
documents incident thereto shall be satisfactory in form and substance to you
and your counsel.
(f) On the Initial Closing Date and each Additional Closing
Date and Overcall Closing Date, if any, the Registration Rights Agreement shall
have been duly executed and delivered by the Company, by the purchasers of
Securities, and by the other parties thereto and shall be in full force and
effect.
(g) There shall not have occurred, at any time prior to the
Initial Closing or, if applicable, an Additional Closing or Overcall Closing, as
the case may be, (i) any domestic or international event, act or occurrence
which has materially disrupted, or in your opinion will in the immediate future
materially disrupt, the securities markets; (ii) a general suspension of, or a
general limitation on prices for, trading in securities on a national securities
exchange or stock market, or in the over-the-counter market; (iii) any outbreak
of major hostilities or other national or international calamity; (iv) any
banking moratorium declared by a state or federal authority; (v) any moratorium
declared in foreign exchange trading by major international banks or other
persons; (vi) any material interruption in the mail service or other means of
communication within the United States; (vii) any material adverse change in the
business, properties, assets, results of operations or financial condition of
the Company; or (viii) any material change in the market for securities in
general or in political, financial or economic conditions which, in your
reasonable business judgment, makes it inadvisable to proceed with the offering,
sale and delivery of the Securities.
(h) On the Initial Closing Date and each Additional Closing
Date and Overcall Closing Date, if any, the Placement Agent shall have received
certificates, each dated the such Closing Date, as the case may be, signed by
the chief executive officer and the chief financial officer of the Company, in
form and substance satisfactory to the Placement Agent, to the effect that each
signer (solely in his capacity as an officer of, and on behalf of, the Company)
of such certificate has carefully examined the SEC Reports and since the date of
the latest SEC Report, no event has occurred as a result of which it is
necessary to amend or supplement such documents in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading in any material respect.
(i) On the Initial Closing Date and each Additional Closing
Date and Overcall Closing Date, if any, the Placement Agent shall have received
a certificate, dated such Closing Date, as the case may be, signed by the
Secretary of the Company, in form and substance satisfactory to the Placement
Agent, certifying as to (i) the incumbency and the signatures of those officers
of the Company executing the Transaction Documents and certificates or other
documents to be executed pursuant to the terms of such agreements, (ii) the
certificate of incorporation and by-laws of the Company and (iii) the
resolutions of the Board of Directors of the Company (or duly appointed
committee thereof) authorizing the execution and delivery of the Transaction
Documents and the transactions contemplated hereby and thereby.
Any certificate or other document signed by any officer of the
Company and delivered to you or to your counsel shall be deemed a representation
and warranty by the Company hereunder as to the statements made therein. If any
condition to your obligations hereunder has not been fulfilled as and when
required to be so fulfilled, you may terminate this Agreement or, if you so
elect, in writing waive any such conditions which have not been fulfilled or
extend the time for their fulfillment. In the event that you elect to terminate
this Agreement, you shall notify the Company of such election in writing. Upon
such termination, neither party shall have any further liability or obligation
to the other except as provided in Section 10 hereof.
9 Indemnification and Contribution.
(a) The Company agrees to indemnify the Placement Agent and/or
any controlling person, director, officer, employee, affiliate or agent of the
Placement Agent and hold them harmless against any losses, claims, damages,
expenses or liabilities to which the Placement Agent and/or such other
indemnified parties may become subject, which are related to or arise out of (i)
actions taken or omitted to be taken (including any untrue written statements of
a material fact made or alleged to have been made or any statements of material
fact omitted or alleged to have been omitted in connection with any written
statement by the Company) by the Company, its affiliates, directors, employees
or agent, or (ii) actions taken or omitted to be taken by the Placement Agent
and/or any controlling person, director, officer, employee, affiliate or agent
of the Placement Agent with the Company's written consent or in conformity with
its written instructions except to the extent that such losses, claims, damages,
expenses (including reasonable fees and expenses of counsel), liabilities,
actions, proceedings, investigations (formal and informal) or inquiries are
caused by gross negligence or willful misconduct or bad faith of the Placement
Agent and/or any controlling person, director, officer, employee, affiliate or
agent of the Placement Agent; and in case any action shall be brought against
the Placement Agent and/or any other party indemnified hereunder with respect to
which indemnity is available against the Company, the Placement Agent shall
promptly notify the Company in writing and the Company shall assume the defense
thereof, including the employment of counsel selected by the Company reasonably
satisfactory to the Placement Agent and payment of all fees and expenses. The
Placement Agent and/or any party indemnified hereunder shall have the right to
retain separate counsel, but the fees and expenses of such counsel shall be at
the expense of the Placement Agent or such other indemnified party, as the case
may be, unless (i) the expenses of such counsel have been expressly assumed in
writing by the Company, (ii) the Company has failed to assume the defense or the
employ of counsel satisfactory to the Placement Agent, or (iii) the named
parties to any such action (including any impleaded parties) include both (a)
the Placement Agent or any such other indemnified party and (b) the Company or
any controlling person, director, officer, employee, affiliate or agent of the
Company, and the Placement Agent or such other indemnified party shall have been
advised by legal counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the Company
or the Company's agents (in which case the Company shall not have the right to
assume the defense of such action on behalf of the Placement Agent and/or such
other indemnified party); it being understood that if the Placement Agent elects
not to have the Company defend any claim pursuant to this clause (iii), the
Placement Agent shall give the Company the opportunity to be defended by the
legal counsel selected by the Placement Agent; and, it being understood,
further, that the Company shall not, in connection with any one such action or
separate, substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys for the
Placement Agent and all such other indemnified parties, which firm shall be
designated in writing by the Placement Agent. For actions brought against the
Placement Agent or such other indemnified party for which the Company has
assumed the defense, the Company agrees that it will not, without the prior
consent of the Placement Agent, settle or compromise or consent to the entry of
any judgment in any pending or threatened claim, action or proceeding relating
to the matters contemplated by the Placement Agent's engagement unless such
settlement, compromise or consent includes an unconditional release of the
Placement Agent and such indemnified parties from all liability arising or that
may arise out of such claim. In addition, the Company agrees to reimburse such
indemnified person for all expenses (including fees and expenses of counsel) as
they are incurred by such indemnified person (upon receipt by the Company from
such indemnified person of an undertaking by such indemnified person promptly to
repay to the Company and such reimbursement upon a final judicial determination
that such indemnified person is not entitled to indemnification pursuant to the
preceding paragraphs) in connection with investigating, preparing or defending
any such action or claim, whether or not in connection with litigation in which
any indemnified person is a named party. The Company will reimburse the
Placement Agent for all out-of-pocket expenses incurred by the Placement Agent
by reason of any of its personnel being involved in any such action against the
Placement Agent, the Company or the Company's directors.
(b) The Placement Agent agrees to indemnify and hold harmless
the Company and/or any controlling person, director, officer, employee,
affiliate or agent of the Company to the same extent as the indemnity from the
Company to the Placement Agent set forth in paragraph (a) hereof, but only with
respect to statements or omissions made in reliance upon and in conformity with
written information furnished to the Company by the Placement Agent expressly
for use in the Subscription Agreement; provided, however, that any
indemnification or contribution by the Placement Agent hereunder shall not
exceed the amount of compensation received by the Placement Agent pursuant to
Section 4 hereof. If any action shall be brought against the Company and/or any
other party indemnified hereunder with respect to which indemnity is available
against the Placement Agent pursuant to this paragraph (b), the Placement Agent
shall have the rights and duties given to the Company by paragraph (a) above,
and the Company and/or any other indemnified party shall have the rights and
duties given to the Placement Agent by paragraph (a) above.
(c) The Company and the Placement Agent agree that if any
indemnification or reimbursement sought pursuant to the preceding paragraph is
finally judicially determined to be unavailable (except by reason of the gross
negligence or willful misconduct or bad faith of the party seeking
indemnification or its controlling persons, directors, officers, employees,
affiliates or agents, as the case may be), then the Company and the Placement
Agent shall contribute to the liabilities for which such indemnification or
reimbursement is held unavailable in such proportion as is appropriate to
reflect (a) the relative benefits to the Company on the one hand, and the
Placement Agent on the other hand, in connection with the transaction to which
such indemnification or reimbursement relates, (b) the relative fault of the
parties, and (c) other equitable considerations (provided, however, that in no
event shall the amount to be contributed by the Placement Agent exceed the
amount of the fees actually received by the Placement Agent hereunder).
(d) The reimbursement, indemnity and contribution obligations
of the Company and the Placement Agent under the preceding paragraphs shall be
in lieu of any right that the Placement Agent or the Company and/or any of their
respective controlling persons, directors, officers, employees, affiliates or
agents may otherwise have, and shall be binding upon and inure to the benefit of
any successors, assigns, heirs, and personal representatives of the Company, the
Placement Agent or such other persons.
10 Representations and Agreements to Survive Delivery. All
representations, warranties, covenants and agreements contained in this
Agreement shall be deemed to be representations, warranties, covenants and
agreements at the Initial Closing Date and, if applicable, each Additional
Closing Date and Overcall Closing Date, and such representations, warranties,
covenants and agreements, including the indemnity and contribution agreements
contained in Section 9, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Placement Agent or
any indemnified person, or by or on behalf of the Company or any person or
entity which is entitled to be indemnified under Section 9, and shall survive
termination of this Agreement or the issuance, sale and delivery of the
Securities. In addition, notwithstanding any election hereunder or any
termination of this Agreement, and whether or not the terms of this Agreement
are otherwise carried out, the provisions of Sections 7, 9, 10 and 12 shall
survive termination of this Agreement and shall not be affected in any way by
such election or termination or failure to carry out the terms of this Agreement
or any part thereof.
11 Notices. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and, if sent to the
Placement Agent, shall be mailed, or faxed and confirmed by letter, to its
address set forth above, with a copy to Xxxxxxx X. Xxxxxxx, Esq., Fulbright &
Xxxxxxxx L.L.P., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or if sent to the
Company, shall be mailed, or faxed and confirmed by letter, to Evercel, Inc., 0
Xxx Xxx Xxxxxx, Xxxxxxx, XX 00000, Attention: President, with a copy to Xxxxxxx
X. Xxxxxx, Esq., Xxxxxxxx & Xxxx, LLP, 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000. All notices hereunder shall be effective upon receipt by the
party to which it is addressed.
12 Assignment. This Agreement shall not be assigned by any party
hereto without the prior written consent of the other parties hereto.
13 Parties. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Placement Agent and the Company and the persons
and entities referred to in Section 9 who are entitled to indemnification or
contribution, and their respective successors, legal representatives and assigns
(which shall not include any purchaser, as such, of Securities), and no other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provision
herein contained.
14 Construction. This Agreement shall be construed in accordance with
the laws of the State of New York, without giving effect to its principles of
conflict of laws.
15 Entire Agreement. This Agreement and the letter agreement dated
October 20, 1999 between the Company and the Placement Agent (the "Engagement
Letter") constitute and contain the entire agreement between the parties hereto
and supersede any and all prior agreements, arrangements and understandings
between such parties relating to the subject matter hereof. To the extent any
provision of this Agreement directly conflicts with a provision of the
Engagement Letter, the provisions of this Agreement shall control.
16 Counterparts. This Agreement may be executed in counterparts, each
of which shall constitute an original and all of which, when taken together,
shall constitute one agreement.
If the foregoing correctly sets forth the understanding between us,
please so indicate in the space provided below for that purpose, whereupon this
letter shall constitute a binding agreement between us.
Very truly yours,
EVERCEL, INC.
By:__________________________________
Name:
Title:
Accepted as of the date first above written.
New York, New York
XXXXXXX SECURITIES INC.
By:____________________________________
Name:
Title:
EXHIBITS
I. - Form of Certificate of Designations
II. - Form of Warrant
III. - Form of Selected Dealer Agreement
