January 26, 2006
January
26, 2006
Xx.
Xxxxx
Xxxxxxxx (Sent
via
Electronic Mail)
President
and Chief Executive Officer
New
Century Companies, Inc.
0000
Xxxxx Xx Xxxxxxx Xxxx
SantaFe
Springs, CA 90670 Dear Xxxxx,
Thank
you
for the opportunity to work with you and your company, New Century Companies,
Inc.
This
letter agreement (the “Agreement”) confirms that New Century Companies, Inc.
(“Client”) has engaged Ascendiant Securities, LLC (“Ascendiant”) to act on a
best efforts basis as financial advisor and non-exclusive placement agent for
the Client in connection with the stmcturing, issuance, and sale (the
“Transaction(s)”) of debt and/or equity securities (the “Securities”) for
financing purposes. Ascendiant Securities, LLC is an investment banking
firm
registered
as a broker-dealer with the U.S. Securities and Exchange Commission (SEC),
and
member of the NASD and SIPC.
Accordingly,
we mutually agree as follows:
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1.
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Transactions.
Ascendiant anticipates one or more Transactions, involving the sale
of the
Client’s Securities to institutional and/or accredited investors
(“Investor” or “Investors”). The actual terms and stmcture of each
Transaction will depend on market conditions and will be subject
to
negotiation between the Client and Ascendiant and prospective
Investors.
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2.
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Engagement.
In connection herewith, Ascendiant shall provide the following financial
advisory and placement agent services on a best efforts basis to
the
Client:
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a.
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advise
the Client with respect to the form and stmcture of each
Transaction;
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b.
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assist
the Client in developing any necessary
materials;
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c.
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identify
and make contact with prospective
Investors;
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d.
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assist
the Client in conducting presentations and due diligence meetings
with
prospective Investors;
and
|
| ASCENDIANT INITIALS |
CLIENT
INITIALS
|
ASCENDIANT
SECURITIES, LLC
00000
Xxx
Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000
Tel:
(000) 000-0000 I
Fax:
(000) 000-0000 I
xxx.xxxxxxxxxx.xxx
Member
NASD/SIPC
|
e.
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provide
such other financial advisory and investment banking services as
are
reasonably necessary to consummate each
Transaction.
|
Ascendiant
shall devote such time and efforts to the affairs of the Client as is reasonably
necessary to render the services contemplated by this Agreement. Any work or
task of Ascendiant provided for herein which requires Client to provide certain
information to assist Ascendiant in completion of the work shall be excused
(without effect upon any obligation of Client) until such time as Client has
fully provided all information and cooperation necessary for Ascendiant to
complete the work. The services of Ascendiant shall not include the rendering
of
any legal opinions or the performance of any work that is in the ordinary
purview of a certified public accountant.
It
is
expressly understood and agreed that Ascendiant shall have no power to bind
Client to any Transaction or contract obligation. Client shall have the right
to
refuse any Transaction proposal presented to it without incurring any
obligations to Ascendiant. However, if and when an Ascendiant term sheet is
signed by the Client, Client pledges to work in good faith toward a closed
Transaction and pledges not to use the Ascendiant term sheet to “shop” offers
from other financing sources.
It
is
understood and agreed that the execution of this Agreement shall not be deemed
or constmed as obligating Ascendiant to purchase any of the Securities and
there
is no obligation on the part of Ascendiant to place the Securities. Although
Ascendiant cannot guarantee results on behalf of the Client, it shall use its
best efforts to provide the services listed above.
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3.
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Success
Fee.
Client agrees that should Client accept and complete any Transaction(s),
which includes without limitation proceeds from any common stock
offerings, convertible debt or equity securities, additional investment
rights, block trade transactions, or exercise of associated warrants
or
options (“Securities”) from any Investors introduced by Ascendiant during
the term of this Agreement, which is defined in Section 6 below,
or if
Client should for a period of thirty-six (36) months following the
termination of this Agreement (including extensions) accept financing
from
any Investors introduced, or contacted on Client’s behalf, by Ascendiant,
there shall become due and payable via wire transfer to Ascendiant
immediately upon consummation of each Transaction, a cash fee equal
to
eight percent (8%) of the gross proceeds from the sale of Securities.
Should Ascendiant not be paid within five (5)
business
days after the completion of a Transaction, a service charge shall
accme
from the date of the Transaction at the rate of 1.5% per
month.
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4.
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Warrants.
Client agrees that should Client accept and complete any Transaction(s)
which includes proceeds from any common stock offerings and/or
convertible
debt or equity securities, or completion of a Securities transaction
as
provided in Section 3 above, from any Investors introduced by
Ascendiant
during the term of this Agreement, which is defined in Section
6 below, or
if Client should for a period of thirty-six (36) months following
the
termination of this Agreement (including extensions) accept financing
from
any Investors introduced, or previously contacted on Client’s behalf, by
Ascendiant, there shall become due and payable to Ascendiant
warrants for
the purchase of an amount equal to eight percent (8%) of the
Securities
issuable in connection with the Transaction. The warrants shall
be
exercisable into common stock, and will have a term consistent
with the
warrants issued to the Investors with an exercise price equal
to
the
|
| ASCENDIANT INITIALS |
CLIENT
INITIALS
|
ASCENDIANT
SECURITIES, LLC
00000
Xxx
Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000
Tel:
(000) 000-0000 I
Fax:
(000) 000-0000 I
xxx.xxxxxxxxxx.xxx
Member
NASD/SIPC
| closing bid price on the date of the Transaction. The warrants shall contain piggyback registration rights and a net exercise provision. |
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5.
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Expenses.
If the Client requests that Ascendiant travel outside of Southern
California to perform the services described herein, whether or not
a
Transaction is consummated, Client shall reimburse Ascendiant for
travel-related expenses and payment shall be made within seven (7)
days of
invoice. The Client agrees that it will engage its legal counsel
at its
own expense to assist in the preparation of any legal documents or
definitive agreements deemed necessary to facilitate the Transaction(s)
contemplated herein.
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6.
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Term.
The term of this Agreement shall be six (6) months from the date
of
Client’s execution of this Agreement. Additional extensions may be
negotiated as necessary at the mutual written consent of the Client
and
Ascendiant. Should Ascendiant successfully complete a Transaction
generating gross proceeds to Client of $3,000,000 or more, Client
agrees
to extend this Agreement for twelve (12) months from the date of
the
Transaction, with Ascendiant serving as Client’s exclusive placement agent
with respect to institutional equity funds managed by groups domiciled
in
the United States. Upon the completion of the Transaction referenced
herein generating gross proceeds to Client of $3,000,000 or more,
Client
shall, within three business days of the Transaction, issue to Ascendiant
250,000 shares of Client’s restricted common stock Said shares shall be
included in the registration statement to be filed in connection
with the
Transaction referenced herein.
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7.
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Representations,
Warranties, and Indemnification.
Each of Ascendiant and Client represents and warrants to each other
that
this Agreement has been duly authorized, executed and delivered by
it;
and, assuming the due execution by the other party, constitutes a
legal,
valid and binding agreement of it, enforceable against it in accordance
with its terms. Each of Ascendiant and Client agrees to comply with
all
applicable securities laws, and the Client will disclose to Ascendiant
all
information necessary for Ascendiant to act upon Client’s request and to
notify Ascendiant promptly of any material changes to such information.
Client hereby represents that it shall notify Ascendiant within three
(3)
business days of the completion of any Securities Transaction(s)
occurring
during the term of this Agreement and/or involving Investors introduced
by
Ascendiant. Additionally, each of the Client and Ascendiant agrees
to
indemnif~y the other and the other’s affiliates in accordance with the
terms and conditions contained in Exhibit A to this
Agreement.
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8.
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Confidentiality.
Ascendiant and Client each agree to keep confidential and provide
reasonable security measures to keep confidential information
where
release may be detrimental to their respective business interests.
Ascendiant and Client shall each require their employees, agents,
affiliates, other licensees, and others who will have access
to the
information through Ascendiant and Client respectively, to abide
by the
confidentiality provisions contemplated by this Agreement in
perpetuity.
Ascendiant will not, either during its engagement by the Client
pursuant
to this Agreement or at any time thereafter, disclose, use or
make known
for its or another’s benefit any confidential information, knowledge, or
data of the Client or any of its affiliates in any way acquired
or used by
Ascendiant during its engagement by the Client. Confidential
information,
knowledge or data of the Client and its affiliates shall not
include any
information that is, or becomes generally available to the public
other
than as a result of a disclosure by Ascendiant or its representatives.
Notwithstanding the foregoing, Client hereby authorizes Ascendiant
to
transmit to prospective Investors, information and materials
provided
by
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| ASCENDIANT INITIALS |
CLIENT
INITIALS
|
ASCENDIANT
SECURITIES, LLC
00000
Xxx
Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000
Tel:
(000) 000-0000 I
Fax:
(000) 000-0000 I
xxx.xxxxxxxxxx.xxx
Member
NASD/SIPC
| Client and/or developed by Ascendiant on behalf of Client upon approval by Client of such materials. Additionally, at any time after the consummation or other public announcement of the Transaction, Ascendiant may, at its own expense, place an announcement in such newspapers and publications as it may choose, stating that Ascendiant has acted as financial advisor and placement agent to the Client in connection with the Transaction, and may use, from time to time, the Client’s name and logo and a brief description of the Transaction in publications and/or marketing materials prepared and/or distributed by Ascendiant. |
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9.
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Non-Circumvention.
In and for valuable consideration, Client hereby agrees that Ascendiant
may introduce (whether by written, oral, data, or other form of
communication) Client to one or more Investors, including, without
limitation, natural persons, corporations, limited liability companies,
partnerships, unincorporated businesses, sole proprietorships and
similar
entities (hereinafter an “Investor” or “Investors”). Client further
acknowledges and agrees that the identity of the subject Investors,
and
all other information concerning Investors (including without limitation,
all mailing information, phone and fax numbers, email addresses and
other
contact information) introduced hereunder are the property of Ascendiant,
and shall be treated as confidential and proprietary information
by
Client, its affiliates, officers, directors, shareholders, employees,
agents, representatives, successors and assigns. Client shall not
use such
information, except in the context of any arrangement with Ascendiant
in
which Ascendiant is directly and actively involved, and never without
Ascendiant’s prior written approval. Client further agrees that neither it
nor its employees, affiliates or assigns, shall enter into, or otherwise
arrange (either for it/him/herself, or any other person or entity),
any
Transaction, business relationship, meeting, phone call, or other
correspondence with such Investors, either directly or indirectly,
or
accept any Transaction, compensation or advantage in relation to
such
Investors, except as directly though Ascendiant, without the prior
written
approval of Ascendiant. Ascendiant is relying on Client’s assent to these
terms and their intent to be bound by the terms by evidence of their
signature. Without Client’s signed assent to these terms, Ascendiant would
not introduce any Investors or disclose any confidential information
to
Client as herein described.
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10.
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Governing
Law.
This Agreement shall be governed by and construed in accordance with
the
laws of the State of California applicable to contracts executed
and to be
wholly performed therein without regard to its conflict of law doctrine.
The Client and Ascendiant hereby agree that any dispute concerning
this
Agreement shall be resolved through binding arbitration before the
NASD in
Los Angeles County pursuant to its arbitration mles. The prevailing
party
shall be entitled, in addition to such other relief that may be granted,
to a reasonable sum of attorney’s fees and any other costs and expenses
relating thereto.
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11.
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Entire
Agreement.
This Agreement represents the entire agreement by and between
the Client
and Ascendiant and supersedes any and all other agreements, either
oral or
written, with respect to the Agreement. Each party to this Agreement
acknowledges that no representation, inducements, promises or
agreement,
orally or otherwise, have been made by any party, or anyone acting
on
behalf of any party, which are not embodied herein, and that
no other
agreement, statement, or promise not contained in this Agreement
shall be
valid or binding. The Client and Ascendiant hereby agree that
the opening
and closing statements of this Agreement are incorporated herein
by this
reference and made a material part of this Agreement. If any
part of this
Agreement is found, or deemed by a court of competent jurisdiction,
to be
invalid or unenforceable, that part shall be severable from the
remainder
of the Agreement. This Agreement may be executed simultaneously
in
two
or
more counterparts, each of which shall be deemed
an
|
| ASCENDIANT INITIALS |
CLIENT
INITIALS
|
ASCENDIANT
SECURITIES, LLC
00000
Xxx
Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000
Tel:
(000) 000-0000 I
Fax:
(000) 000-0000 I
xxx.xxxxxxxxxx.xxx
Member
NASD/SIPC
| original, but all of which shall constitute one and the same instrument. Any modification of this Agreement will be effective only if it is in writing and signed by the Client and Ascendiant. |
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12.
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Survival
of Certain
Provisions.
Sections 3, 4, 5,
6,
7, 8, 9, 10, 12 and Exhibit A of this Agreement shall survive this
Agreement, and remain operative and in full force and effect, regardless
of, (i) the completion of any Transaction, (ii) the resignation of
Ascendiant or any termination of Ascendiant’s services, or (iii) any
amendment, expiration or termination of this Agreement, and shall
be
binding upon, and shall inure to the benefit or, any successors,
assigns,
heirs and personal representatives of the Client, Ascendiant, and
the
Indemnified Persons.
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Please
initial each page, sign below, and return an original and one copy of this
letter to the undersigned to indicate your acceptance of the terms set forth
herein, whereupon this letter and your acceptance shall constitute a binding
agreement by and between New Century Companies, Inc. and Ascendiant Securities,
LLC as of the date first above written. We appreciate the opportunity to be
of
service and look forward to a cooperative working relationship with you and
your
staff
| Sincerely, | Accepted and Agreed: |
| Ascendiant Securities, LLC | New Century Companies, Inc. |
| By:
Xxxxxxx X. Xxxxxxx
Its:
Managing Director
Date:
January
27, 2006
|
By:
Xxxxx Xxxxxxxx
Its:
President
Date:
January 27,
2006
|
| ASCENDIANT INITIALS |
CLIENT
INITIALS
|
ASCENDIANT
SECURITIES, LLC
00000
Xxx
Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000
Tel:
(000) 000-0000 I
Fax:
(000) 000-0000 I
xxx.xxxxxxxxxx.xxx
Member
NASD/SIPC
EXHIBIT
A
This
Exhibit A is a part of
and
is
incorporated into that certain letter agreement between New Century Companies,
Inc. (the “Client”) and
Ascendiant
Securities, LLC (“Ascendiant”). The letter agreement and
this
Exhibit A are referred
to herein as the “Agreement”. Capitalized terms used herein without definition
shall have the meanings ascribed to them in the letter agreement.
Each
of
the Client and Ascendiant (each an “Indemnifying Party”) agrees to indemnify and
hold harmless the other, any affiliates and
the
respective officers, directors, partners, employees, representatives
and
agents
and
any
other
persons controlling the other or any
affiliates
within the meaning of the Securities Act of 1933 or the Securities Exchange
Act
of 1934 (each such person or entity being referred to as an “Indemiiified
Person”), to the fullest extent lawful, from and against, and the Indemiiified
Persons shall have no liability to the Indemnifying Party or its owners,
affiliates, controlling persons, security holders or creditors for, all claims,
liabilities, losses, damages and expenses, including without limitation and
as
incurred, reimbursement of all costs of investigating, preparing, pursuing,
or
defending any such claim or action, including fees and expenses of counsel
to,
and the per diem costs and expenses of personnel of, the Indemiiified Person
(collectively, “Losses”), whether or not arising out of pending or threatened
litigation, governmental investigation, arbitration or other alternative dispute
resolution, or other action or proceeding (individually a “Proceeding” and
collectively “Proceedings”), directly or indirectly related to or arising out
of, or in connection with (i) actions taken or omitted to be taken by the
Indemnifying Party, its affiliates, employees, directors, officers, partners,
representatives or agents in connection with any transaction or activities
contemplated by this Agreement; (ii) actions taken or omitted to be taken by
any
Indemiiified Person pursuant to the terms of, or in connection with services
rendered pursuant to, this
Agreement,
provided that in the case of this
subsection
(ii) the Indemnifying Party shall not be responsible for any Losses arising
out
of or based upon the willful misconduct or negligence (as determined by the
judgment of a court of competent jurisdiction, no longer subject to appeal
or
further review) of or by such Indemnified Person; and (iii) any untrue statement
or alleged untrue statement of material fact contained in any Information
approved by the Client or any omission or alleged omission to state a material
fact necessary to make the statements therein not misleading (other than untrue
statements or alleged untrue statements in, or omissions or alleged omissions
from, information relating to an Indemiiified Person furnished in writing by
or
on behalf of such Indemnified Person expressly for use in such Information).
If
the indenmification provided for under this
Agreement
is unavailable to an Indemiiified Person in respect of any Losses, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Person, shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such Losses in such proportion as is appropriate to reflect the relative
fault of the Client on the one hand and the Indemiiified Person on the other,
as
well as any other relevant equitable considerations. If any Proceeding is
commenced as to which an Indemnified Person demands indemiiification, the
Indenmified Person shall have the right to retain counsel of its own choice
to
represent it, the Indemnifying Party
shall
pay
the reasonable fees and expenses of such counsel, and such counsel shall to
the
extent consistent with its professional responsibilities cooperate with the
Indemnifying Party and any counsel designated by the Indemnifying Party
,
provided,
that in no event shall the Indemnifying Party
be
required to pay fees and expenses under this
indemnity
for more than one firm of attorneys for the Indemnified Person in any
jurisdiction in any one legal action or group of related legal actions. The
Indemnifying Party shall be liable as provided herein for any settlement of
any
claim against Ascendiant or any Indemniified Person made with the Indemnifying
Party’s
written
consent, which consent shall not be unwasonably withheld. The Indemnifying
Party
agrees
that it will not, without the prior written consent of Ascendiant, settle or
compromise or consent to the entry of any judgment in any Proceeding (whether
or
not any Indemiiified Person is a party
thereto)
unless such settlement, compromise or consent includes an unconditional release
of Ascendiant and each other Indemiiified Person from all liability arising
or
that may arise out of such Proceeding. The indemniity and contribution
obligations of the Indemniifying Party
set
forth
herein shall be in addition to any liability or obligation the Indemniifying
Party may have to any Indemniified Person at common law or otherwise. The
Indemnifying Party
hereby
consents to personal jurisdiction, service and venue in any court in which
any
claim, which is subject to this
Agreement,
is brought against Ascendiant or any other Indenmified Person.
| ASCENDIANT INITIALS |
CLIENT
INITIALS
|
ASCENDIANT
SECURITIES, LLC
00000
Xxx
Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000
Tel:
(000) 000-0000 I
Fax:
(000) 000-0000 I
xxx.xxxxxxxxxx.xxx
Member
NASD/SIPC
