SELLING AGREEMENT
February
11,2008
Mr.
Xxxxxx Xxxxx
Chief
Executive Officer
Envision
Solar International, Inc.
0000
Xxxxxxxxx Xxxxxx, Xxxxx 000
XxXxxxx,
XX 00000
Re: Offering
of Shares $40.00 per Share
Gentlemen:
Envision Solar International,
Inc. ("ENVISION" or "the Company") is a California corporation formed in 2007 to
develop and commercialize carport and other structures with integrative
photovoltaic arrays in the United States and internationally. ENVISION desires
to raise up to $4,000,000 through the sale of up to 100,000 Shares ("Shares") to
Accredited Investors ("Investors") at a price of $40.00 per Share pursuant to
Regulation D of the Securities Act of 1933, as amended (the "Offering"). Each
Investor participating in this Offering is required to purchase a minimum of
1,000 Shares; however, ENVISION may choose to accept purchases below the minimum
at its discretion. ENVISION hereby confirms as follows its agreement with
Nexcore Capital, Inc. ("Nexcore"), a registered member in good standing of the
Financial Industry Regulatory Association ("FINRA"), formerly the National
Association of Securities Dealers, Inc. ("NASD"), under which Nexcore will act
as a nonexclusive agent for ENVISION in connection with the Offering.
1. Memorandum. ENVISION has caused the
preparation of a private placement memorandum ("Memorandum") relating to the
sale of the Shares.
2. Appointment
of Agent. On the
basis of the representations, warranties and covenants herein contained, and
subject to the terms and conditions herein set forth, Nexcore is hereby
appointed as a non-exclusive agent (except as provided in Section 3) of ENVISION
to offer and sell the Shares to Accredited Investors. Nexcore covenants to offer
and sell Shares on a "best efforts" basis on behalf of ENVISION in accordance
with the terms of this Agreement and the Memorandum, and not to misrepresent
orally or in writing any of the facts regarding ENVISION, its business, or the
Offering. Nexcore covenants to closely supervise all of its representatives in
the Offering of the Shares and to comply with all applicable federal and state
securities laws and NASD rules and regulations. Nexcore is not responsible for
the contents of the Memorandum. Nexcore covenants not to use any written
material or oral statements in offering or selling the Shares which are not
specifically authorized by ENVISION, provided, that Nexcore is specifically
authorized to use the Memorandum. Subject to the performance by ENVISION of its
obligations to be performed hereunder, and to the accuracy of all the
representations and warranties contained herein, Nexcore hereby accepts such
agency and agrees to perform its obligations hereunder.
3. Limited
Exclusivity.
Notwithstanding the non-exclusive nature of the appointment of Nexcore,
Nexcore shall have limited exclusivity as provided in this section. During the
term of this agreement as specified in Section 10(a), Nexcore shall have the
right to act as
exclusive agent with respect to $2,500,000 of the Offering. ENVISION shall
reserve for exclusive sale by Nexcore (or by other FINRA-licensed entity
referred by Nexcore) 62,500 of the Shares for sale by Nexcore during this
period.
4.Representations
and Warranties of ENVISION. ENVISION
represents, warrants
and agrees with Nexcore for Nexcore's benefit that:
(a) All
action required to be taken by ENVISION as a condition to sale of the Shares has
been taken.
(b) ENVISION
is duly and validly organized, existing and in good standing as a corporation
under the laws of the State of California, with full power and authority to
conduct its business and proposed business as described in the Memorandum.
ENVISION has all government licenses and permits necessary to conduct its
business, and is duly qualified to conduct its business in all jurisdictions in
which such qualification is necessary.
(c) From the
commencement of the Offering through the termination or expiration of the
Offering, the Memorandum will not contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(d) This
Agreement has been duly and validly authorized, executed and delivered by or on
behalf of ENVISION, and constitutes the valid, binding and enforceable agreement
of ENVISION.
(e) No
federal or state securities agency has issued an order preventing or suspending
the Offering or the use of the Memorandum with respect to the sale of the
Shares. ENVISION will promptly notify Nexcore upon the issuance of any such
order and furnish Nexcore with a copy thereof. The Memorandum and any amendment
or supplement thereto will comply and will continue to comply with all
applicable requirements of the Securities Act of 1933, as amended (the "Act"),
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and any
other applicable federal and state laws and regulations at all times during the
term of this Agreement.
(f) No
consent, approval, authorization or other order of any governmental authority is
required in connection with the execution, delivery or performance by ENVISION
of this Agreement.
(g) The
execution and delivery of this Agreement will not constitute a breach of, or
default under, any instrument by which ENVISION is bound or, to the best of
their knowledge, any order, rule or regulation of any court or any governmental
body or administrative agency having jurisdiction over ENVISION.
[Missing Graphic Reference]
5. Nexcore
Representations and Warranties. Nexcore represents and
warrants that it
is duly and fully licensed under the rules and regulations of the NASD and is
capable of performing
and satisfying its obligations under this Agreement. Nexcore further represents
and warrants
that Nexcore's execution and performance of this Agreement will not cause
Nexcore to be
in default under or to violate any agreement, law, rule, regulation, order or
judgment applicable to it.
6. Compensation
to Nexcore. In consideration for
Nexcore's services hereunder, ENVISION covenants to pay Nexcore a selling
commission equal to seven percent (7%) of the total purchase price of Shares
sold in the Offering by or through Nexcore or by or through other FINRA licensed
entities referred by Nexcore. The selling commission payable to Nexcore will be
paid periodically as ENVISION accepts subscriptions for the sales of Shares and
receives payments therefore. Nexcore shall not be entitled to a selling
commission for any Shares not sold by or through Nexcore or by or through other
FINRA entities referred by Nexcore, but which are instead sold by ENVISION
itself or by a third party not referred by Nexcore.
7. Due
Diligence Allowance. In consideration for due
diligence expenses incurred by Nexcore in connection with the Offering, ENVISION
covenants to pay Nexcore a due diligence fee equal to two (2%) percent of the
total purchase price of Shares sold in the Offering by or through Nexcore or by
or through other FINRA licensed entities referred by Nexcore, provided, however,
that should ENVISION refer prospective investors to Nexcore for potential
inclusion in the Offering, Nexcore will not be entitled to a due diligence fee
with respect to these referrals. In addition, should any single investor
purchase 12,500 or more Shares for a total purchase price of $500,000 or more,
Nexcore will not be entitled to a due diligence fee with respect to mat
investment.
8. Offering
Costs. In
consideration for other expenses incurred by Nexcore in connection with the
Offering, including but not limited to administrative and miscellaneous
expenses, Nexcore will also receive from ENVISION a non-accountable expense
reimbursement in cash equal to two (2%) percent of the total purchase price of
all Shares sold in the Offering by or through Nexcore or by or through other
FINRA licensed entities referred by Nexcore, provided, however, that should
ENVISION refer prospective investors to Nexcore for potential inclusion in the
offering, Nexcore will not be entitled to an expense reimbursement with respect
to those referrals. In addition, should any single investor purchase 12,500 or
more Shares for a total purchase price of $500,000 or more, Nexcore will not be
entitled to an expense reimbursement with respect to that
investment.
In
addition, as non-cash incentive compensation for Nexcore, ENVISION shall also
compensate Nexcore with non-assessable and assignable Warrants to purchase
common stock of the Company at $40.00 (Forty dollars) per share exercisable up
to five (5) years after the termination or expiration of the Offering. ENVISION
shall compensate Nexcore with the number of Warrants equal to seven percent (7%)
of the total number of Shares sold in this Offering by or through Nexcore or by
or through another FINRA licensed entity referred by Nexcore, subject to a
maximum of 7,000 Warrants. The Warrant shall not include any sales of Shares
made by ENVISION itself or by a third party not referred by
Nexcore.
Nexcore
acknowledges that, concurrently with the Offering, ENVISION is offering for sale
convertible promissory notes in an aggregate amount up to $1,000,000. As
referred to in mis agreement, the term "Offering" does not include the sale of
any such notes. Nexcore understands that ENVISION intends to reduce the amount
of the Offering by the aggregate principal amount of any convertible promissory
notes sold by ENVISION. Nexcore shall not be compensated
with respect to the sale of any such notes, and acknowledges that any reduction
of the amount of the Offering as a result of the sale of notes may reduce the
compensation otherwise payable to Nexcore pursuant to this
agreement.
9.Offering
Costs. ENVISION
will pay all legal, accounting, printing and other Offering
expenses incurred by the Company from its existing general working
capital.
10.Covenants
of the Company.
ENVISION covenants with Nexcore that:
(a) The term
of this Agreement will commence on the date first above written and will
terminate on the date ("Termination Date") which is 60 days after the date the
Memorandum is first provided by Nexcore to a third party, unless sooner
terminated or extended by the written agreement of both parties to this
Agreement.
(b) If any
event relating to the Company occurs which requires, in the opinion of
ENVISION's counsel, an amendment or supplement to the Memorandum in order that
the Memorandum will not contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a subscriber, ENVISION will forthwith prepare the amendment or
supplement to the Memorandum and deliver a copy thereof to Nexcore. Furthermore,
ENVISION will furnish such information to Nexcore as Nexcore may from time to
time reasonably request.
(c) ENVISION
will endeavor in good faith to qualify the Shares for offering and sale under,
or to establish the exemption of the Offering and sale of the Shares from
qualification or registration under, applicable state securities or "blue sky"
laws. ENVISION will pay all legal fees and related expenses in connection with
qualifying the Shares under said "blue sky" laws.
(d) ENVISION
will not offer to sell Shares in any state in which such offer would be
unlawful. ENVISION will bear all of the costs and liability incurred by it or
Nexcore as a result of the unlawful offer of Shares by the Company in any state,
unless Nexcore directly causes such unlawful offer without the participation of
ENVISION.
(e) ENVISION
covenants to issue financial statements and reports of the Company in accordance
with the Memorandum.
(f) Nexcore
will have reasonable review and approval rights with respect to the Memorandum
and its contents.
(g) ENVISION
covenants not to terminate the Offering before the Offering Termination Date, as
defined in the Memorandum, and Nexcore shall have at least the full Offering
period to sell all of the Shares.
(h) ENVISION
covenants that Nexcore shall have the right to obtain the equity or
financing for ENVISION from to an entity affiliated with Nexcore, such as, by
way of illustration
but not of limitation, The Greencore Capital Equity Fund, LLC.
11. Payment
of Expenses and Fees.
Except as provided in Sections 5, 6 and 7 of this Agreement, Nexcore and
ENVISION will each pay their own expenses incident to the transactions
contemplated by this Agreement. ENVISION will bear all of the fees and expenses
incurred in printing of the Memorandum.
12. Noncircumvention. ENVISION shall not directly
or indirectly circumvent Nexcore or any of its affiliates with respect to any
relationships introduced or made known to the Company by Nexcore as a direct or
indirect result of this Agreement, including but not limited to investors,
customers, suppliers, and professionals, without the prior written consent of
Nexcore. In the event of a breach of this section by ENVISION, Nexcore will have
all injunctive and equitable relief available, as well as all other remedies at
law or in equity.
13. Conditions
to Nexcore's Obligations. Nexcore's obligations
hereunder are subject to the accuracy of and compliance with the representations
and warranties of ENVISION in this Agreement, and to the performance by ENVISION
of its obligations hereunder.
14. Conditions
to the Obligations of ENVISION. The obligations of ENVISION
hereunder are subject to the accuracy of and the compliance with Nexcore's
representations and warranties in this Agreement, and to the performance by
Nexcore of its obligations hereunder.
15. Term of
Agreement. The
term of this Agreement will commence on the date first above written and will
terminate on the Termination Date.
16. Indemnification.
(a) ENVISION
hereby indemnifies and holds Nexcore, Nexcore's affiliates, officers, directors,
shareholders, agents, employees, accountants and attorneys, and each of them,
harmless from and against all liabilities, claims, damages, losses, costs,
attorneys fees and expenses arising directly or indirectly from (a) the conduct
of ENVISION's business, (b) the manner and conduct of any offer or sale of
securities by persons or entities other than Nexcore which conduct any business
with ENVISION, (c) any financial statements or other financial information
prepared, provided, published, or disseminated by ENVISION, or (d) the source or
manner of solicitation of any prospective Investors referred by ENVISION to
Nexcore. In addition, ENVISION hereby indemnifies and holds Nexcore, Nexcore's
affiliates, officers, directors, shareholders, agents, employees, consultants
and attorneys, and each of them, harmless from and against any loss, expense,
claim, damage or liability to which Nexcore or said other parties may become
subject under any securities act, common law concept, or otherwise, insofar as
such loss, expense, claim, damage or liability or action in respect thereof,
arises out of or is based in whole or in part on any untrue statement or alleged
untrue statement of any material fact made by ENVISION, any employee of the
Company, or in the Memorandum, or the omission thereby of any material fact
required to be stated or necessary to make the statement made to a prospective
investor not misleading. ENVISION shall promptly reimburse the indemnified
parties for any reasonable legal or other expenses incurred by them in
connection with any such indemnified action or claim.
(b) ENVISION
will not be liable under this indemnity agreement with respect to any claim made
against Nexcore or any of said other persons related to Nexcore
unless
ENVISION
is notified in writing of the nature of the claim. ENVISION shall be entitled to
participate at its own expense in the defense or, if it so elects within a
reasonable time after receipt of such notice, to assume the defense of any such
claims, which defense shall be conducted by counsel chosen by it and reasonably
satisfactory to Nexcore and the other said person or persons related to Nexcore
who are defendants in any suit so brought. In the event that the ENVISION elects
to assume the defense of any such suit and retain such counsel, Nexcore or the
person or persons who are defendants in the suit shall bear the fees and
expenses of any additional counsel thereafter retained by Nexcore or them.
ENVISION agrees to promptly notify Nexcore of the assertion of any claim against
it or against any person who is a control person of ENVISION in connection with
the sale of the Shares.
(c)
Nexcore agrees to indemnify and hold harmless ENVISION and its affiliates,
officers, directors, shareholders, agents, employees, attorneys and accountants
against any and all loss, liability, claim, damage and expense whatsoever
directly or indirectly resulting from material violations by Nexcore or its
representatives of any of Nexcore's representations, warranties or covenants in
this Agreement, or of any applicable law, rule or regulation. In case any action
is brought against ENVISION or any of its affiliates under such laws,
regulations or rules on account of such material violation of such
representations, warranties or covenants, Nexcore shall have the rights and
duties given to ENVISION, and ENVISION shall have the rights and duties given to
Nexcore, by the provisions of Section 15(b).
17.Representations,
Warranties and Agreements to Survive Delivery. All
representations,
warranties and agreements shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of Nexcore or any person
who controls Nexcore, or by or on behalf of ENVISION or any person who controls
ENVISION, for a period of four years after the Termination Date.
18.Notices. All notices, requests,
demands and other communications hereunder shall be
deemed to have been duly given if delivered, faxed, or mailed by first class
mail:
| If to ENVISION: |
Envision
Solar International, Inc.
0000
Xxxxxxxxx Xxxxxx, Xxxxx 000
Xx
Xxxxx,XX 00000
Facsimile:(000)
000-0000
Attn:
Xxxxxx X. Xxxxx
|
||
| With a copy (which shall | |||
| not constitute notice) to: |
Xxxx X.
X'Xxxxx, Esq.
Xxxxxxxx,
Xxxx, Xxxxxxxxxx & Xxxxxxx LLP
000
X Xxxxxx, Xxxxx 0000
Xxx
Xxxxx, XX 00000-0000
Facsimile:
(000) 000-0000
|
| If to Nexcore: |
00000
Xxxxx Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxx
Xxxxx, XX 00000
|
||
| Facsimile: | |||
| Attn: Xxx X. Xxxxxx, President |
19. Parties. This Agreement shall inure
to the benefit of and be binding upon Nexcore, ENVISION, and their respective
successors and assigns.
20. Entire
Agreement. This
Agreement represents the entire agreement among the parties hereto and may not
be amended except by a writing signed by the party against whom enforcement of
the provision is sought.
21. Injunctive
Relief. Each
party acknowledges that it would be impossible to measure in money the damages
to the other party if there is a failure to comply with any covenants or
provisions of this Agreement, and agrees that in the event of any breach of any
covenant or provision, the other party to this Agreement will not have an
adequate remedy at law. It is therefore agreed that the other party to this
Agreement who is entitled to the benefit of the covenants or provisions of this
Agreement which have been breached, in addition to any other rights or remedies
which they may have, shall be entitled to immediate injunctive relief to enforce
such covenants and provisions, and that in the event that any such action or
proceeding is brought in equity to enforce them, the defaulting or breaching
party will not urge a defense that there is an adequate remedy at
law.
22. Waivers. If any party shall at any
time waive any rights hereunder resulting from any breach by the other party of
any of the provisions of this Agreement, such waiver is not to be construed as a
continuing waiver of other breaches of the same or other provisions of this
Agreement. Resort to any remedies referred to herein shall not be construed as a
waiver of any other rights and remedies to which such party is entitled under
this Agreement or otherwise.
23. Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of California, and the venue for any action hereunder shall be in the
appropriate forum in the County of San Diego, State of California.
24. Counterparts. This Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
25. Attorneys'
Fees and Costs.
In the event that either party must resort to legal action in order to
enforce the provisions of this Agreement or to defend such action, the
prevailing party shall be entitled to receive reimbursement from the
nonprevailing party for all reasonable attorneys' fees and all other costs
incurred in commencing or defending such action, or in enforcing this Agreement,
including but not limited to post-judgment costs.
26. Further
Acts. The parties
to this Agreement hereby agree to execute any other documents and take any
further actions which are reasonably necessary or appropriate in order to
implement the transactions contemplated by this Agreement.
27. Time of
Essence. Time is
of the essence in the performance of the obligations under this
Agreement.
28. Authorized
Signatures. Each
party to tins Agreement hereby represents that the persons signing below are
duly authorized to execute this Agreement on behalf of their respective
party.
29. Execution. If the foregoing is in
accordance with your understanding of our Agreement, kindly sign and return to
us a counterpart hereof, whereupon this Agreement along with all counterparts
will become a binding Agreement between Nexcore and ENVISION in accordance with
its terms.
|
Very truly yours,
Nexcore Capital Inc.
a Delaware corporation
By: /s/ Xxx
X.Xxxxxx
Xxx X. Xxxxxx
President
|
Confirmed
and Accepted:
| Envision Solar International, Inc, | |
| a California Corporation | |
| By: /s/ Xxxxxx X. Xxxxx | |
| Xxxxxx X. Xxxxx | |
| Chief Executive Officer |
