1
EXHIBIT 1.3
SERVICES AGREEMENT
PARTIES
This Services Agreement ("Agreement") is made by and among SOUTHWALL CAPITAL
CORP., a New York corporation ("SouthWall"), C2i SOLUTIONS, INC., a Delaware
corporation ("C2i") and the following individuals who are officers, directors
and principal shareholders of C2i: Xxxx Xxxxxxx Xxxxxx, Xx. ("Xxxxxx"), Xxxxx X.
Vukmanik ("Vukmanik"), Xxxxx Xxxxxx ("Xxxxxx"), Xxxxxx Xxxx ("Xxxx"), Xxxxx X.
Xxxxxxx ("Xxxxxxx"), Xxx X. Xxxxxx ("Xxxxxx"), Xxx X. Xxx ("Goh") and Xxxxx
Xxxxxxx ("Xxxxxxx"). Xxxxxx, Vukmanik, Xxxxxx and Xxxx are sometimes
collectively referred to below as "Principals," and the Principals together with
Hessler, Beretz, Goh and Xxxxxxx collectively as "Shareholders."
RECITAL
SouthWall and C2i have entered into an Underwriting Agreement relating to the
offering ("OFFERING") by C2i of 1,000,000 shares of its Common Stock and
1,000,000 redeemable warrants to purchase shares of Common Stock. C2i wishes to
avail itself of certain services that SouthWall is able to provide, and
SouthWall wishes to obtain preferential rights with respect to certain future
securities offerings by C2i and the Shareholders.
AGREEMENTS
A. CONSULTING SERVICES.
1. NATURE OF SERVICES. SouthWall shall render investment banking and
financial consulting services ("Services") to C2i during the term set
forth below. The Services shall include:
a. rendering strategic and financial advice in connection with any
future proposed financing transactions;
b. strategic and financial advice in connection with any future
proposed business combination transactions or joint ventures,
including, if required, identification and introduction of potential
counterparties;
c. initiation of strategic business initiatives; and
d. such other services as the Company may reasonably request.
1
2
2. TIME AND PERSONNEL. SouthWall shall devote such amounts of time as are
reasonably required to the performance of the Services, and shall make
available qualified personnel for their performance.
3. COMPENSATION. As compensation for the services described in the
preceding paragraph, SouthWall shall be entitled to a fee of $3,000 per
month payable on the first business day (meaning a day on which banks in
New York City are open for the regular transaction of business) of each
month included in the term in which the Services are to be provided. In
addition, should SouthWall introduce to C2i the counterparty to a
business combination or joint venture transaction consummated by the
Company, it shall be entitled to a finder's fee computed according to
$1,000,000 (or fraction) increments in the value of consideration
involved in the transaction as follows: 5% of the first increment, 4% of
the second, 3% of the third, 2% of the fourth, and 1% of the fifth and
any additional increments (or fractions). The finder's fee shall be
payable at the closing of the transaction..
B. UNDERWRITING SERVICES.
1. OBLIGATION. Should the Company, or any one or more of the Principals,
determine to offer securities issued by the Company to the public in a
transaction requiring registration of the offering under the Securities
Act of 1933, as amended ("ACT"), such determination being made at any
time on or prior to the third anniversary of the effective date of the
registration statement under the Act relating to the Offering, The
Company or Principal(s) (as the case may be) shall offer SouthWall the
opportunity to serve as underwriter with respect to each offering thus
proposed to be made, subject in all respects to the provisions of
paragraph 2 of this section B.
2. TERMS.
a. INITIAL NOTICE. The Company, and/or each Principal proposing to make
the offering, shall notify SouthWall in writing (an "Initial
Notice"), stating the type and quantity of securities proposed to be
offered.
b. NOTICE OF ACCEPTANCE. If SouthWall wishes to act as underwriter with
respect to the proposed offering, it shall deliver a written notice
of acceptance to each person from whom it received an Initial Notice
within 30 days after its receipt thereof. The notice of acceptance
shall be accompanied by SouthWall's proposed underwriting letter of
intent in customary form, setting forth the terms and conditions it
proposes for the offering.
c. TERMINATION PAYMENT. Should SouthWall comply in all respects with
the provisions of clauses a. and b. of this paragraph ERROR!
REFERENCE SOURCE NOT FOUND., and should the person(s) giving the
Initial Notice nonetheless determine to use the services of an
underwriter other than SouthWall in
2
3
connection with the proposed offering, those person(s) shall, prior
to signing a letter of intent or similar document looking toward
such a transaction, pay SouthWall the sum of $35,000 ("Termination
Payment") as consideration for the termination of the obligation
under paragraph 1 of this section B.. If the initial notice was
given by more than one person, each shall be responsible for the
payment of a portion of the Termination Payment pro rata according
to the percentage of the total number of Company-issued securities
specified in the Initial Notice given by each.
d. EFFECT OF PAYMENT, Upon receipt of the full amount of the
Termination Payment, the provisions of this section B shall become
null and void and without further effect, as to both the offering
that was the subject of the Initial Notice and any subsequent
offerings by the Company and the Principals of Company-issued
securities.
e. EFFECT OF LATE ACCEPTANCE. A notice of acceptance given after the
time limited in clause b. of this paragraph 2 shall be deemed a
rejection of the offer contained in the Initial Notice.
C. BROKER/DEALER SERVICES.
1. OBLIGATION. Should any of the Shareholders determine to offer securities
issued by the Company to the public in a transaction not requiring
registration under the Act (each such individual making such
determination a "Selling Shareholder"), including a transaction ("Rule
144 Sale") exempt from such registration by reason of Rule 144
promulgated under the Act ("Rule 144"), such determination being made at
any time on or prior to the fourth anniversary of the effective date of
the registration statement under the Act relating to the Offering, that
Selling Shareholder shall offer SouthWall the opportunity to act, at its
election, as broker with respect to the proposed transaction, or as
dealer purchasing the offered securities for its own account, subject in
all respects to the provisions of paragraph 2 of this section C.
2. TERMS.
a. SALE NOTICE. Each Shareholder shall notify SouthWall in writing
("Sale Notice") promptly after making the determination to sell any
Company-issued securities. Each Sale Notice shall state the type and
quantity of securities proposed to be sold, the price at which the
Selling Shareholder proposes to sell them if not at market price,
and the exemption from registration under the Act upon which the
Selling Shareholder proposes to rely, if any. If the Selling
Shareholder has received a bona fide proposal from a broker or
dealer other than SouthWall relating to the securities proposed to
be sold, the Sale Notice shall specify the securities pricing and
other relevant terms of that proposal.
3
4
b. EXCEPTION. If (i) the provisions of this section C would require two
or more Selling Shareholders to give a Sale Notice relating to a
Rule 144 Sale, and (ii) in the opinion of legal counsel to any such
Selling Shareholder, those Selling Shareholders would (solely by
reason of complying with the obligation imposed by paragraph 1 of
this section C) be deemed "acting in concert" within the meaning of
that phrase as used in paragraph (e)(3)(vi) of Rule 144, and (iii)
the quantity limit applicable to the proposed sale under paragraph
(e) of Rule 144 would be lower than the aggregate number of
securities proposed to be sold by all such Selling Shareholders,
none of those Selling Shareholders shall be obligated to give a Sale
Notice or otherwise to comply with the provisions of this section C
in respect of the proposed sale.
c. NOTICE OF ACCEPTANCE. If SouthWall wishes to act as broker or dealer
with respect to the proposed offering, it shall deliver by verified
facsimile transmission or electronic mail a notice of acceptance to
each person from whom it received a Sale Notice within one business
day (that is, a day on which banks in New York City are open for the
regular transaction of business) after its receipt thereof. The text
of the notice of acceptance shall contain SouthWall's proposal for
the securities pricing and other relevant terms on which it proposes
to act as broker or dealer. If the terms proposed in the notice of
acceptance are at least as favorable to the Selling Shareholder as
the alternative terms of the bona fide proposal from another broker
or dealer specified in the Sale Notice, or if the Sale Notice
specified no such alternative terms, the Selling Shareholder shall
sell the securities that were the subject of the Sale Notice to or
through SouthWall as proposed in the Sale Notice.
d. EFFECT OF LATE ACCEPTANCE. A notice of acceptance given after the
time limited in clause c. of this paragraph 3 shall be deemed a
rejection of the offer contained in the Sale Notice.
D. MISCELLANEOUS.
1. NOTICES. All notices and other communications given under this Agreement
shall be in writing unless otherwise specified, and shall be effective
only upon receipt. The address used for any notice shall be as specified
below each signature, or to another address of which the person
addressed has given notice to the Company or of which the Company has
given notice to all the Principals, as the case may be.
2. ENTIRE AGREEMENT. This Agreement is the parties' entire agreement
relating to its subject matter. It supersedes all prior agreements,
written or oral, relating to that subject matter.
3. MODIFICATION AND WAIVER. This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions
of this
4
5
Agreement may be waived, only by a written instrument signed by all
parties or, in the case of a waiver, the party waiving compliance.
4. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within that State.
5. NO ASSIGNMENT. This Agreement is not assignable except by operation of
law.
6. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of each of
the undersigned on and as of January __, 1998.
SIGNATURES
SOUTHWALL CAPITAL CORP. C2i SOLUTIONS, INC
By By
-------------------------- --------------------------
Its Its
------------------------- -------------------------
Address: 000 Xxxx Xxxxxx Address: 0000 Xxxxxx Xxxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
e-mail: xxxxxxx@xxxxxxx.xxx e-mail:
---------------------------- ----------------------------
Xxxx Xxxxxxx Xxxxxx, Xx. Xxxxx X. Xxxxxxx
Address: Address:
Telephone: Telephone:
Facsimile: Facsimile:
e-mail: e-mail:
---------------------------- ----------------------------
Xxxxx X. Vukmanik Xxxxx Xxxxxxx
Address: Address:
Telephone: Telephone:
Facsimile: Facsimile:
e-mail: e-mail:
5
6
---------------------------- ----------------------------
Xxx X. Xxx Xxx X. Xxxxxx
Address: Address:
Telephone: Telephone:
Facsimile: Facsimile:
e-mail: e-mail:
----------------------------
Xxxxx Xxxxxx
Address:
Telephone:
Facsimile:
e-mail:
6
