Exhibit 10.11
PRIVATE PLACEMENT AGENCY AGREEMENT
This AGREEMENT, made effective as of the 30th day of December 1997, by and
between NATIONAL ENVIRONMENTAL SERVICE CO., an Oklahoma corporation (the
"Company"), and PEACOCK, HISLOP, XXXXXX & GIVEN, INC., an Arizona corporation
(the "Agent"), as selling agent.
1. Description of the Offering. The Company proposes to offer and sell to
Accredited "accredited Investors investors" within the meaning as such term is
defined in Rule 501(a) of Regulation D of the Securities Act of 1933, as
amended, through the Agent hereby appointed as exclusive selling agent, on a
"best efforts" basis (the "Offering"), up to 300,000 shares of the Company's
Common Stock (the "Shares"), at a price of $2.00 per share. The Offering shall
terminate the earlier of (i) the sale of 300,000 Shares totaling $600,000, (ii)
January 15, 1998 (or if extended March 16, 1998), or (iii) an earlier
termination date as described herein. (the "Offering Period"). The Offering
Period may be extended for up to 60 days (through March 16, 1998) with the
agreement of the Company and the Agent.
All terms used herein, unless specifically defined herein, shall have the
meanings as defined in the Confidential Private Placement Memorandum, dated
December 1930, 1997 and any supplements thereto (collectively, as supplemented,
the "Memorandum") and various documents to be executed on closing of the
purchase of the Shares (the "Purchase Documents").
2. Representations, Warranties and Covenants of the Company. The Company
represents, warrants and covenants to the Agent that:
(a) The offer, offer for sale, and sale of the Shares have not been and
will not be registered with the Securities and Exchange Commission (the "SEC").
The Shares shall be offered and sold pursuant to the exemption from the
registration requirements of Section 5 of the Securities Act of 1933, as
amended, and the rules and regulations of the SEC thereunder (collectively,
called the "Act"), provided by Sections 4(2) and 4(6) thereof. The Company will
conduct the Offering in compliance with the requirements of Rule 506 of
Regulation D ("Rule 506"), promulgated under the Act and with all other
securities laws and rules and regulations (the "Rules and Regulations")
applicable to the Company and to the Offering. The Company will, in a timely
manner, file on Form D appropriate notices of the Offering with the SEC and will
make any required filings with any applicable state securities regulatory
authorities. The issuance, offer, sale and delivery of the Shares, in the
manner and circumstances contemplated by the Memorandum and this Agreement, is
an exempt transaction under the Act and does not require the registration of the
Shares under the Act, as amended.
(b) The Memorandum, with respect to the Shares, has been prepared by the
Company in conformity with the applicable requirements of the Act.
(c) Neither the SEC nor any state securities commission has issued any
order
preventing or suspending the Offering contemplated herein or use of the
Memorandum, as amended or supplemented, relating to the proposed Offering of the
Shares nor instituted, or to the best knowledge of the Company contemplated
instituting, proceedings for that purpose. Neither the Memorandum (including the
exhibits, financial statements and schedules thereto), nor any amendment or
supplement thereto, to be utilized in connection with the sale of the Shares,
contains or will contain, as the case may be, any untrue statement of any
material fact or omits or will omit to state any material fact necessary to be
stated therein in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Notwithstanding the
foregoing, the Company makes no representations or warranties as to the
information provided in writing to the Company by the Agent expressly for use in
the Memorandum.
(d) Neither the Company nor any of its subsidiaries is in violation of or
default under any provision of its articles of incorporation or bylaws or any of
its agreements, leases, licenses, contracts, franchises, mortgages, permits,
deeds of trust, indentures or other instruments or obligations to which it is a
party or by which it or any of its properties is bound or may be affected
(collectively, "Contracts"), which failure or default would materially adversely
affect the business, properties, operations, financial condition or earnings of
the Company and its subsidiaries taken as a whole ("Material Adverse Effect").
The execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated herein, and in the Memorandum do not and will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute, either with or without notice or the passage of
time or both, a default under, any Contract to which the Company or any of its
subsidiaries is a party or by which the Company, any of its subsidiaries or any
of their respective properties, is bound, or violate any statute, rule or
regulation applicable to the Company or any of its subsidiaries or violate any
order, judgment or decree of any court or of any regulatory, administrative or
governmental body or agency or arbitral forum having jurisdiction over the
Company, any of its subsidiaries or any of their respective property, or result
in the creation or imposition of any lien, charge or encumbrance upon any of the
assets of the Company or any of its subsidiaries, or violate any of the
provisions of the articles of incorporation or bylaws of the Company or any of
its subsidiaries. No other consent, approval, authorization or action is
required for the consummation of the transactions herein contemplated other than
such as has been obtained.
(e) The Company shall provide to the Agent and to each purchaser, and his
representatives, if any, such information, documents and instruments as may be
reasonably requested and are required to be provided pursuant to Rule 506 and
the laws of any state in which the offer or sale of securities has been approved
by the Company and the Agent and to otherwise comply with such requirements.
(f) The Company:
(i) has not offered for sale or sold any Shares or other securities of
the Company, the offer for sale or sale of which would be "integrated" under the
standards of existing published rules and regulations under the Act with the
offers for sale or sales of the Shares proposed to be made by Agent pursuant
hereto in determining whether a public
offering of the Shares has been made so as to render the exemption provided by
Section 4(2) of the Act or Rule 506 unavailable with respect to the Offering of
the Shares hereunder by the Agent; and
(ii) Shall not offer for sale or sell any Shares or other securities
except and to the extent that any such offer for sale or sale shall not render
unavailable the exemptions from registration and qualification requirements of
applicable federal and state securities laws relied upon with respect to the
Offering and sale of the Shares contemplated by this Agreement.
(g) The Company and each of its subsidiaries is duly authorized to transact
the business in which it is engaged and in which it proposes to engage as
described in the Memorandum.
(h) Since the respective dates as of which information is given in the
Memorandum and other than as therein contemplated, neither the Company nor any
of its subsidiaries has incurred, nor during the period of the Offering will it
incur, any material liabilities or obligations contingent or otherwise, except
in the ordinary course of business, or as set forth in the Memorandum and there
has not been, and during the period of the Offering there will not be, any
material adverse change in the business, assets, operations or condition of the
Company, financial or otherwise.
(i) The Company will notify the Agent immediately and confirm the notice in
writing of the issuance by the SEC or by any state securities commission of any
stop order suspending the effectiveness of any qualification of the Shares for
sale, suspending the sale of the Shares or the use of the Memorandum, or of the
initiation of any proceedings for any such purpose. The Company will use its
best efforts to prevent the issuance of any such stop order and, if any such
stop order shall at any time be issued, to obtain the lifting thereof at the
earliest possible moment.
(j) The Company's Board of Directors consists of those persons listed in
the Memorandum. Except as disclosed in the Memorandum, none of such persons is
employed by the Company, nor is any of them affiliated with the Company, except
for service on such Board of Directors.
(k) Other than as disclosed in the Memorandum, neither the Company, nor to
its knowledge, after due and diligent inquiry, any person other than the Agent,
has made any representation, promise or warranty, whether verbal or in writing
to anyone, whether an existing creditor or shareholder or not, that any of the
Shares will be reserved for or directed to them during the proposed Offering.
(l) Each of the Company and its subsidiaries has been incorporated and is
validly existing and in good standing under the laws of its jurisdiction of
incorporation. Each of the Company and its subsidiaries is duly qualified to
transact business in all jurisdictions in which the conduct of its business
requires such qualification where the failure to do so would have a Material
Adverse Effect. The Company has fully disclosed to the Agent the existence of
each of its subsidiaries.
(m) Each of the Company and its subsidiaries possesses all requisite
licenses, permits and other authorities which may be required to conduct its
business, each of which remains in full force and effect in accordance with its
terms, where the failure to possess the same would have a Material Adverse
Effect. The government authority which issued each such license has not denied
or threatened to revoke or suspend any such license, no investigation or
proceeding is pending or threatened with respect to any such license and the
Company has disclosed to the Agent and in the Memorandum any current unresolved
dispute or disagreement between the Company or any subsidiary and any such
governmental authority regarding the business or financial condition of the
Company or any subsidiary or the Company's or any subsidiary's alleged lack of
compliance with applicable laws, rules or regulations, which dispute or
disagreement if resolved adversely to the Company would have a Material Adverse
Effect.
(n) The Company and each of its subsidiaries is conducting business in
compliance with all applicable federal, state and local laws, rules and
regulations, including, without limitation, ERISA, OSHA, environmental laws,
rules and regulations, and all federal laws, except where the failure to so
comply would not have a Material Adverse Effect on the business or financial
condition of the Company.
(o) All representations, warranties and covenants of the Company made to
investors in the Subscription Agreement relating to the Shares are hereby made
to the Agent and are incorporated herein by reference.
(p) The Company has the legal right, corporate power and authority to enter
into this Agreement on behalf of itself and to perform as contemplated thereby.
This Agreement has been duly authorized, executed and delivered by the Company,
and is legally binding upon and enforceable against the Company in accordance
with its terms. All necessary and proper corporate proceedings have been or will
be taken to validly authorize the Shares and no further approval or authority of
the stockholders of the Company is required for the making and sale of the
Shares as contemplated herein, and in the Memorandum.
(q) The Shares conform with the statements concerning them in the
Memorandum in all material respects, and there are no Contracts or other
documents required to be described in the Memorandum or to be included as
exhibits to the Memorandum in order to make the information therein not
misleading which have not been described or included as required.
(r) The consolidated financial statements of the Company, together with
related Shares and schedules as set forth in the Memorandum, present fairly in
all material respects the financial position and the results of operations of
the Company and its subsidiaries, as at the dates and for the periods indicated.
Such financial statements, schedules and related Shares have been prepared in
accordance with generally accepted accounting principles, consistently applied
throughout the periods involved, and all adjustments necessary for a fair
presentation of results for such periods have been made. The summary and
selected financial and statistical data and schedules included in the Memorandum
present fairly the information shown therein and have been compiled on a
basis consistent with the financial statements presented therein.
(s) There is no action, suit or proceeding pending or, to the best
knowledge of the Company after due inquiry, threatened against the Company
before any court or regulatory, governmental or administrative agency or body,
or arbitral forum, domestic or foreign, which might result in any Material
Adverse Effect upon the business or condition (financial or otherwise) or
results of operations or prospects for the future of the Company, except as set
forth in the Memorandum. Neither the Company nor any of its subsidiaries is
subject to the provisions of any injunction, judgment, decree or order of any
court, regulatory body, administrative agency or other governmental body or
arbitral forum that would have a Material Adverse Effect upon the business of
the Company. There are no labor disputes involving the Company that exist or are
imminent which could have a Material Adverse Effect upon the conduct of the
business, property, operations, financial condition or earnings of the Company.
(t) The Company has good and marketable title to all of the properties and
assets reflected as owned by it in either the financial statements or as
described in the Memorandum, and such properties and assets are subject to no
lien, mortgage, security interest, pledge or encumbrance (other than easements,
if any) of any kind, except those (i) reflected in such financial statements or
as described in the Memorandum; and (ii) that, individually or in the aggregate,
would not have a Material Adverse Effect on the Company;
(u) Each of the Company and its subsidiaries has filed all federal, state,
local and foreign income tax returns which have been required to be filed and
has paid all taxes indicated by said returns and has paid all tax assessments
against it where the failure to file or pay would have a Material Adverse
Effect. There is no income, sales, use, transfer or other tax deficiency or
assessment which has been or might reasonably be expected to be asserted or
threatened against the Company or its subsidiaries which could have a Material
Adverse Effect upon the business operations or property or business prospects of
the Company. Each of the Company and its subsidiaries has paid all sales, use,
transfer and other taxes applicable to it and its business and operations.
(v) Any material transactions among the Company and the officers,
directors, and affiliates of the Company have been accurately disclosed in the
Memorandum to the extent necessary to make the statements therein, in light of
the circumstances under which the Memorandum is to be used, not misleading.
(w) The Company maintains insurance of the types and in the amounts (with
deductibles and retentions) which it deems adequate for its business and which
is customary for companies in its industry, all of which insurance is in full
force and effect.
(x) Tullius Xxxxxx Xxxxxxx & Xxxxxxx, who have certified the financial
statements included in the Memorandum, are independent public accountants within
the meaning of the Act.
(y) The Company is in material compliance with all reporting requirements
under Section 12(b), Section 12(g) or Section 15(d), as applicable, of the
Securities and Exchange Act of 1934, as amended ("Exchange Act"). The Company's
Common Stock is traded on the NASDAQ SmallCap Market under the symbol "NESC."
The Company shall, for a period of at least three years following the closing of
this Offering continue to remain in material compliance with all of its
reporting requirements under the Exchange Act and shall continue to cause its
Common Stock to be traded on the NASDAQ SmallCap or National Markets or listed
on a nationally recognized exchange.
3. Representations, Warranties and Covenants of the Agent. Agent represents,
warrants and covenants to the Company that:
(a) The Agent is a corporation duly organized, validly existing and in
good standing under the laws of the State of Arizona, with all requisite power
and authority to enter into this Agreement and to carry out its obligations
hereunder.
(b) This Agreement has been duly authorized, executed and delivered by the
Agent and is a valid and binding agreement on the part of the Agent, except as
its enforceability may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws from time to time in effect
affecting creditors' rights generally or by principles governing the
availability of equitable remedies.
(c) The consummation of the transaction contemplated herein and those
contemplated by the Memorandum will not result in a material breach of any of
the terms or conditions of or constitute a default under any indenture,
agreement or other instrument to which the Agent is a party which default would
have a Material Adverse Effect upon the Agent or its business, or, assuming the
accuracy of the representations and warranties of the Company made herein,
violate any law or any order directed to the Agent of any court or any federal
or state regulatory body or administrative agency having jurisdiction over the
Agent or its property.
(d) The Agent is duly registered pursuant to the provisions of the
Securities Exchange Act of 1934, as amended, as a broker-dealer and is a member
in good standing of the National Association of Securities Dealers, Inc.
("NASD") and is duly registered as a broker dealer in those states in which it
is required to be so registered in order to carry out the Offering contemplated
by the Memorandum.
(e) The Agent will conduct the Offering in compliance with the requirements
of Rule 506 and in this regard it will:
(i) During the course of the Offering, make every reasonable effort to
avoid making representations other than those set forth in the Memorandum, and
to the extent any representations other than those set forth in the Memorandum
are made, not to make any untrue statements of a material fact or omit to state
a material fact required to be stated or necessary to make any statement made
not misleading concerning the Offering or any matters set forth in or
contemplated by the Memorandum;
(ii) Not offer, offer for sale or sell the Shares by any means
prohibited
by Rule 506;
(iii) Limit its offer and sale of the Shares to persons who it has
reasonable grounds to believe and, in fact, believes are "Accredited accredited
Investorsinvestors," and maintain for the Agent's benefit and for the benefit of
the Company, memoranda and other appropriate records substantiating the
foregoing;
(iv) Prior to the sale of any of the Shares, have reasonable grounds
to believe and, in fact, believe that each subscriber alone or together with his
duly appointed purchaser representative, if any, meets the suitability standards
set forth in the Memorandum and it will prepare and maintain for its benefit and
for the benefit of the Company, file memoranda and other appropriate records
substantiating the foregoing, copies of which shall be delivered to the Company
promptly upon receipt by the Agent;
(v) Distribute no sales materials to prospective investors, other than
the Memorandum, without the express written permission of the Company and
refrain from providing any such permitted sales materials to any purchaser of
the Shares unless such materials are accompanied or preceded by the Memorandum
and are permitted for use in connection with the Offering under applicable state
blue sky or securities laws and the Act;
(vi) Provide each investor with a copy of the Memorandum during the
course of the Offering and within a reasonable time prior to. such investor
executing a Subscription Agreement; and
(vii) Until the Closing Date (as defined below), if any event
affecting the Company should occur which the Company, or its counsel, or the
Agent or its counsel believe should be set forth in a supplement or amendment to
the Memorandum, promptly distribute such supplement or amendment to the
Memorandum to persons who have previously received a copy of the Memorandum from
the Agent and who continue to be interested in the Company, and include such
supplement or amendment in all further deliveries of the Memorandum. The Company
shall, at its own expense, promptly prepare and furnish to the Agent a
reasonable number of copies of each such supplement or amendment to the
Memorandum for such distribution.
4. Further Undertakings of the Company. The Company represents, covenants and
warrants that:
(a) Except as set forth or otherwise contemplated in the Memorandum, the
Company hereby covenants to the Agent that offers for sale or sales of Shares
shall not be made by the Company, by any subsidiary or by any employee or agent
of the Company or any subsidiary during the Offering without the prior approval
of the Agent.
(b) Until the Closing Date (as defined below), if any event affecting the
Company, shall occur which, in the Company's or the Agent's opinion should be
set forth in a supplement or an amendment to the Memorandum, the Company will
forthwith, at its own expense, prepare and furnish to the Agent a reasonable
number of copies of a
supplement or amendment to the Memorandum so that it, as so supplemented or
amended, will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they are made, not misleading. The
Company shall not prepare or file any such amendment or supplement of which the
Agent shall not previously have been advised and furnished with a copy or to
which the Agent shall have reasonably objected in writing or which is not in
compliance with the Act.
(c) The Company will cause to be prepared, executed and timely filed with
respect to the Offering, appropriate notices on Form D with the SEC, will
promptly furnish the Agent and its counsel with a true and correct copy of each
such notice and will take all action necessary or appropriate to comply with the
laws, rules or regulations of each state in which the Company has authorized the
Shares to be offered or sold.
(d) The Company will apply the net proceeds from the sale of the Shares
substantially in accordance with the use of proceeds section of the Memorandum.
(e) Piggyback Registration of Common Stock.
(i) If the Company proposes to register any of its securities under
the Securities Act, on any registration statement, whether or not for its own
account (other than by a registration statement on Form S-8 or other form which
does not include substantially the same information as would be required in a
form for the general registration of securities, would not otherwise be
available for the Shares or relates to any employee benefit plan or
reorganization of the Company), it shall as expeditiously as possible give
written notice to all persons purchasing Shares in the Offering ("Holders") of
such Holders' "piggyback registration rights" as set forth in this Section 4(e).
Upon the written request of any Holder made within 20 days after receipt of any
such notice, the Company shall (subject to the additional terms hereof) include
in the registration statement the Shares which the Company has been so requested
to register by the Holder thereof and the Company shall keep such registration
statement in effect and maintain compliance with each federal and state law or
regulation for the period necessary for such Holder to effect the proposed sale
or other disposition (but in no event for a period greater than 120 days).
(ii) If, at any time after giving written notice of its intention to
register Shares in a "piggyback registration" but prior to the effective date of
the related registration statement, the Company shall determine for any reason
not to register any of its securities, the Company shall give notice of such
determination to each Holder and, thereupon, shall be relieved of its obligation
to register any Shares in connection with such piggyback registration. All best
efforts obligations of the Company shall cease if the Company determines to
terminate prior to such effective date any registration pursuant to this Section
4(e).
(iii) If a piggyback registration involves an offering by or through
underwriters, all Holders requesting to have their Shares included in the
Company's registration statement must sell their Shares to the underwriters
selected by the Company on the same terms and conditions as apply to other
selling shareholders, and any Holder
requesting to have its Shares included in such registration statement may elect
in writing, not later than three business days prior to the effectiveness of the
registration statement filed in connection with such registration, not to have
its Shares so included in connection with such registration.
(iv) If a piggyback registration involves an offering by or through
underwriters, the Company, except as otherwise provided herein, shall not be
required to include Shares therein if and to the extent the underwriter managing
the offering reasonably believes in good faith and advises each Holder
requesting to have Shares included in the Company's registration statement that
such inclusion would materially adversely affect such offering, provided that if
other selling shareholders who are employees, officers, directors or other
affiliates of the Company have requested registration of securities in the
proposed offering, the Company will reduce or eliminate such other selling
shareholders' securities before any reduction or elimination of Shares held by
Holders, and any such reduction or elimination (after taking into account the
effect of the preceding clause) shall be pro rata to all other holders of the
securities of the Company exercising registration rights similar to those set
forth herein in proportion to the respective number of Shares such holders have
requested to be registered.
(v) The Company shall pay all expenses in connection with the
registration of Shares other than underwriters' fees, discounts, concessions or
expenses, but including the fees of one attorney (as mutually agreed upon by the
Company and the Holders holding a majority of the Shares) to represent the
selling Holders. All fees and expenses (other than registration expenses
otherwise required to be paid) of any managing underwriter, any co-manager or
any independent underwriter or other independent price required under the rules
of NASD shall be paid for by such underwriters.
(vi) The Company's obligation to provide "piggyback registration" to
Holders of Shares under this Section 4(e) shall cease upon the Shares being
generally tradable by non-affiliates of the Company under Rule 144 as
promulgated under the Securities Act or any successor thereto.
(vii) (1) In connection with any registration statement relating to
disposition of Shares, the Company shall indemnify and hold harmless each Holder
and each underwriter of Shares and each person, if any, who controls such Holder
or underwriter (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable investigation, legal and
other expenses incurred in connection with, and any amount paid in settlement of
any action, suit or proceeding or any claim asserted), to which they, or any of
them, may become subject under the Securities Act, the Exchange Act or other
federal or state law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto, or arise out of or are based upon any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided, however,
that such indemnity shall not inure
to the benefit of any Holder or underwriter (or any person controlling such
Holder or underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) on account of any losses, claims, damages or
liabilities arising from the sale of the Shares if such untrue statement or
omission or alleged untrue statement or omission was made in such registration
statement, prospectus or preliminary prospectus, or such amendment or
supplement, in reliance upon and in conformity with information furnished in
writing to the Company by the Holder or underwriter specifically for use
therein. The Company shall also indemnify selling brokers, dealer managers and
similar securities industry professionals participating in the distribution,
their officers and directors and each person who controls such persons (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) to the same extent as provided above with respect to the indemnification of
the Holders if requested. This indemnity agreement shall be in addition to any
liability which the Company may otherwise have.
(2) In connection with each registration statement, each Holder
shall indemnify, to the same extent as the indemnification provided by the
Company in Section [need reference here]____(g)(i)4(e) (vii) (1), the Company,
its directors and each officer who signs the registration statement and each
person who controls the Company (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) but only insofar as such
losses, claims, damages and liabilities arise out of or are based upon any
untrue statement or omission or alleged untrue statement or omission which was
made in the registration statement, the prospectus or preliminary prospectus or
any amendment thereof or supplement thereto, in reliance upon and in conformity
with information furnished in writing by such Holder to the Company specifically
for use therein. The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, to the same extent as provided
above, with respect to information so furnished in writing by such persons
specifically for inclusion in any prospectus, registration statement or
preliminary prospectus or any amendment thereof or supplement thereto.
(3) In connection with each registration statement relating to
the disposition of Shares if the indemnification provided for in subsection (a)
hereof is unavailable to an indemnified party thereunder in respect to any
losses, claims, damages or liabilities referred to therein, then the Company
shall in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities. The amount to be contributed by the Company hereunder
shall be an amount which is in the same proportionate relationship to the total
amount of such losses, claims, damages or liabilities as the total net proceeds
from the offering (before deducting expenses) of the Shares bears to the total
price to the public (including underwriters' discounts) for the offering of the
Shares covered by such registration.
5. State Securities Filings. The Company further represents, warrants and
covenants that:
(a) It shall take all necessary action and file all necessary forms and
documents
to be filed in connection with an offering exempt from registration pursuant to
the National Securities Markets Improvements Act of 1996 in the State of
Arizona, in each of the other states listed on Exhibit A hereto and in such
other states as the Agent and the Company mutually agree upon.
(b) In each jurisdiction where the Shares have been offered in an exempt
transaction as provided above, the Company will make and file such statements,
documents, materials and reports in each year and take all other actions as are
or may be required to be made or filed by the Company by the laws of each
jurisdiction.
(c) The Company will promptly provide to the Agent for delivery to all
purchasers and their representatives any additional information, documents and
instruments which the Agent or the Company deem necessary to comply with the
rules, regulations and judicial and administrative interpretations with respect
to compliance with such exemption from registration requirements in those states
where the Shares are to be offered or sold.
6. Appointment of the Agent and Nature of the Offering.
(a) On the basis of the representations, warranties and covenants herein
contained, and subject to the conditions herein set forth, the Company hereby
appoints the Agent as its exclusive agent to effect sales of the Shares during
the period prescribed in Section 6(b) and upon the terms and conditions set
forth in the Memorandum. The Agent hereby accepts such appointment and agrees,
as agent for the Company, to use its best efforts to find purchasers for the
Shares.
(b) The Offering shall commence on the date designated by the Agent and
shall continue until the earlier of (i) the sale of 300,000 Shares totaling
$600,000, (ii) January 15, 1998 (or if extended March 16, 1998), or (iii) an
earlier termination date as described herein (the "Offering Period"). The
Offering Period may be extended for up to 60 days with the agreement of the
Company and the Agent.
(c) Payment for Shares sold is to be made by the investors by certified or
bank cashier's check(s) drawn to the order of the Company, or by wire transfer
of funds as the investors shall elect, against delivery of Shares. Such payment
and delivery is to be made at the offices of the Agent set forth in Section 14
hereof at 10:00 A.M., Phoenix time, on the fifth business day after the sale of
such Shares or at such other time, date and place not later than seven business
days thereafter as the Agent and the Company shall agree upon. The time and date
after the termination of the Offering pursuant to Section 6(cb) on which the
final transfer of funds due the Company hereunder is being herein referred to as
the "Closing Date." The Shares shall be represented by certificates in
definitive form, and shall be made to the order of such holders as the Agent
requests in writing not later than the third full business day prior to the
Closing Date, and shall be made available for inspection by the Agent prior to
the Closing Date at the offices of the Agent Shared stated in Section 14. As
used herein, "business day" means a day other than (i) a Saturday or a Sunday or
(ii) a day on which banks in Arizona are authorized or obligated by law or
executive order to be closed.
(d) Upon the successful consummation of the Offering, the Agent shall be
entitled to (i) a commission equal to five percent (5 %) of the gross amount
raised through the sale of the Shares and, in addition thereto, (ii)
reimbursement for all expenses incurred by the Agent in connection with the sale
of the Shares, including the fees and expenses of Agent's legal counsel incurred
in connection with this Agreement, the Purchase Documents and the Offering
(which shall be in addition to the commission set forth in the foregoing clause
(i)) and (iii) a warrant to purchase 50,000 shares of the Company's Common
Stock exercisable at a price of $2.00 per share for a period of five years. On
the Closing Date, the Agent shall deduct the commission and the expense
reimbursement from the proceeds received from the sale of the Shares prior to
transmitting payment to the Company. The Company shall remit any unpaid
commission or reimbursement due the Placement Agent no later than five days from
the Closing Date.
(e) The Agent has not assumed, will not assume nor will it be permitted to
assume any duties, responsibilities or obligations regarding the management,
operations or any of the business affairs of the Company after the Closing Date.
The Agent shall be held harmless by the Company from and against any claim,
suit, loss, damage, liability or action by or against the Company based upon or
arising out of the assertion that the Agent has any continuing duty or
obligations after the Closing Date to the Company, except the indemnification
obligations as set forth in Paragraph 11 of this Agreement.
7. Expenses of Sale. Subject to Section 6(ed) of this Agreement, the Company
will pay all reasonable costs, expenses and fees in connection with the Offering
or incident to the performance of the obligations of the Company hereunder
including, but not limited to, the fees and expenses of the Company, the fees
and expenses of the Company's counsel and accounting firm, the fees and expenses
of the Agent's counsel, the cost of qualifying the offer and sale of the Shares
in various states for an exemption from state registration requirements, the
cost of printing and delivering to, or as requested by, the Agent the Shares and
copies of the Memorandum and other documents related to the Offering, and any
transfer taxes imposed on the sale of the Shares. If the transactions
contemplated by this Agreement shall not be consummated because this Agreement
is terminated by the Agent pursuant to Section 8 or 12 hereof, because this
Agreement is terminated automatically pursuant to Section 6(b), hereof because
the Agent, despite its best efforts, was unable to sell the Shares, or because
of a decision by the Company to terminate or delay the Offering for any reason
or a failure, refusal or inability on the part of the Company to perform any
undertaking or satisfy any condition of this Agreement or to comply with any of
the terms hereof on its part to be performed, then in lieu of the foregoing
provisions in this Section 7 (and without prejudice to all other rights and
remedies which the Agent may have against the Company at law and in equity, and
which are in accordance with the NASD's Rules of Fair Practice) the Company
shall reimburse the Agent upon demand and on an accountable basis for all
reasonable out-of-pocket costs and expenses, including all fees and
disbursements of the Agent's counsel, actually incurred by the Agent in
connection with investigating, marketing and proposing to market the Shares or
in contemplation of performing its obligations hereunder.
8. Conditions to the Agent's Obligations. The Company's right to receive
payments and the obligations of the Agent hereunder shall be subject to the
accuracy of and
compliance with, as of the date hereof and on the Closing Date, the
representations, covenants and warranties contained herein, to the performance
by the Company of its obligations hereunder required to be performed on or
before the Closing Date and to the following additional conditions:
(a) No stop order suspending the Offering contemplated herein or use of the
Memorandum, as amended or supplemented, shall have been issued and no
proceedings for that purpose shall have been taken or, to the best knowledge of
the Company, after due inquiry, shall be contemplated by the SEC or any state
securities commission.
(b) The Agent shall have received on the Closing Date the opinion of Xxxxxx
& Xxxxxxx, counsel for the Company, in a form reasonably satisfactory to the
Agent. Such opinion shall be dated as of the Closing Date and addressed to the
Agent.
(c) The Agent shall have received on the Closing Date a certificate or
certificates of the Chief Executive Officer and the Chief Financial Officer of
the Company to the effect that, as of the Closing Date, each of them jointly and
severally represents as follows:
(i) No stop order suspending the Offering contemplated herein or use
of the Memorandum has been issued, and no proceedings for such purpose have been
taken or are, to the best of their knowledge, after due inquiry, contemplated or
threatened by the SEC or any state securities commission;
(ii) They do not know of any material investigation, litigation, or
proceeding instituted, threatened or contemplated against the Company which is
not disclosed in the Memorandum. The representations and warranties of the
Company contained in Section 2 hereof are true and correct in all material
respects as of the Closing Date as if such representations and warranties were
made as of such date;
(iii) They have carefully examined the Memorandum and, in their
opinion, at the time the Memorandum was distributed or used or at the Closing
Date and through the date the Offering is terminated, the statements contained
in the Memorandum were and are correct, in all material respects, and such
Memorandum does not omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading and, in
their opinion, no event has occurred which should be set forth in a supplement
to or an amendment of the Memorandum which has not been so set forth in such
supplement or amendment; and
(iv) The Company has performed all of its obligations pursuant to this
Agreement and the Purchase Agreement.
(d) The Company shall have furnished to the Agent such further certificates
and documents confirming the representations, warranties and covenants contained
herein and related matters as the Agent may reasonably have requested.
The opinions and letters described in this Agreement shall be addressed to
the
Agent. The opinions, letters and certificates described in this Agreement shall
be deemed to be in compliance with the provisions hereof only if they are in all
respects satisfactory in form and substance to the Agent and to counsel for the
Agent.
If any of the conditions herein above provided for in this Section 8 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Agent hereunder may be terminated by the Agent by
notifying the Company of such termination in writing or by telegram at or prior
to the Closing Date. In such event, the Company and the Agent shall not be
under any obligation to each other (except to the extent provided in Sections 7
and 11 hereof).
9. Conditions of Company's Obligations. The obligations of the Company (other
than its obligations under Sections 7 and 11 hereof) shall be subject to (i) the
accuracy as of the date hereof and on the Closing Date of the representations
and warranties contained in Section 3 hereof, (ii) the performance by the Agent
of all its obligations pursuant to this Agreement required to be performed prior
to the Closing Date, and (iii) the successful completion of the Offering by the
Agent in the manner described in Section 6.
If any of the conditions herein above provided for in this Section 9 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Company hereunder may be terminated by the Company by
notifying the Agent of such termination in writing or by telegram at or prior to
the Closing Date. In such event, the Company and the Agent shall not be under
any obligation to each other (except to the extent provided in Sections 7 and 11
hereof).
10. Agent's Authority. It is understood and agreed that neither the Agent nor
any of its representatives is authorized to make any representations on behalf
of the Company other than those contained in the Memorandum or to act as the
agent of the Company in any other capacity except as expressly set forth herein.
11. Indemnification and Contribution.
(a) The Company will indemnify and hold the Agent harmless against any
losses, claims, damages or liabilities, joint or several, to which the Agent may
become subject under the Act, the various state securities acts or otherwise,
insofar as such losses, claims, damages or liabilities (or actions with respect
thereto) arise out of or are based upon (1) any untrue statement or alleged
untrue statement of any material fact contained in the Memorandum, any other
documentation prepared by the Company or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except, however, any misstatements or
omissions provided to the Company for inclusion in the Memorandum under the
section captioned "Terms of the Offering" by the Agent, and/or (2) a breach by
the Company of the representations, covenants or warranties contained in this
Agreement; and will reimburse the Agent for any legal or other expense
reasonably incurred in connection with investigating or defending any such loss,
claim, damage, liability or action. Notwithstanding the preceding sentence, the
Company shall in no event be liable for any
lost profits or loss of bargain damages of the Agent.
The foregoing indemnity agreement shall extend upon the same terms and
conditions to, and shall inure to the benefit of the Agent's officers, directors
and counsel, and each person, if any, who "controls" the Agent.
(b) The Agent will indemnify and hold the Company harmless against any
losses, claims, damages or liabilities, joint or several, to which the Company
may become subject under the Act, the various state securities acts or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
with respect thereto) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the Memorandum under
the section captioned "Terms of the Offering," which arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading
insofar as and only insofar as any such misstatement or omission was contained
in any material provided the Company in writing by the Agent for inclusion in
the Memorandum, and/or (ii) a breach by the Agent of the representations,
covenants and warranties contained in Paragraph 3 of this Agreement; and will
reimburse the Company for any legal or other expenses reasonably incurred in
connection with investigating or defending any such loss, claim, damage,
liability or action. Notwithstanding the preceding sentence, the Agent shall in
no event be liable for any lost profits or loss of bargain damages of the
Company.
The foregoing indemnity agreement shall extend upon the same terms and
conditions to, and shall inure to the benefit of the Company's officers,
directors and counsel, and each person, if any, who "controls" the Company.
(c) Promptly after receipt by an indemnified person of notice of the
commencement of any action, such indemnified person shall, if a claim in respect
thereof is to be made against the indemnifying party pursuant to this Section
11, notify the indemnifying party in writing of the commencement thereof; but
the omission to so notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under such
subparagraph. In case any such action shall be brought against such indemnified
party, and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in, and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel approved by the
indemnified party. The indemnified party shall not be responsible for any legal
or other expenses incurred by such indemnified party in connection with the
defense thereof, other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 11 is unavailable
to or insufficient to hold harmless an indemnified party under Section 11 (a) or
(b) above in respect of any losses, claims, damages or liabilities referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and
the Agent on the other from the Offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Agent on the other in connection with the
statements, omissions or breaches which resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Agent on the
other shall be deemed to be in the same proportion as the total net proceeds
from the Offering (before deducting expenses) received by the Company bear to
the total commissions received by the Agent, in each case as set forth in the
Memorandum. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Agent on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Agent agree that it would not be just and equitable if
contributions pursuant to this Section 11 (d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 11(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities referred to above in this Section 11 (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 11 (d), (i) the Agent
shall not be required to contribute any amount in excess of the commission
received by it, and (ii) no person guilty of fraudulent misrepresentations
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
In any proceeding relating to the Memorandum or any supplement or amendment
thereto, each party against whom contribution may be sought under this Section
11(d) hereby consents to the jurisdiction of any court having jurisdiction over
any other contributing party, agrees that process issuing from such court may be
served upon him or it by any other contributing party and consents to the
service of such process and agrees that any other contributing party may join
him as an additional defendant in any such proceeding in which such other
contributing party is a party.
12. Termination. This Agreement may be terminated by the Agent by notice to
the Company as follows:
(a) at any time prior to the Closing itself if any of the following has
occurred:
(i) since the respective dates as of which information is given in the
Memorandum, any material adverse change or any development involving a
prospective material adverse change in or affecting the condition, financial or
otherwise, of the Company, or the earnings, business affairs, management or
business prospects of the
Company, whether or not arising in the ordinary course of business;
(ii) any outbreak of hostilities or other national or international
calamity or crisis or change in economic or political conditions if the effect
of such outbreak, calamity, crisis or change on the financial markets or
economic conditions would, in the Agent's reasonable judgment, make the offering
or delivery of the Shares impracticable;
(iii) suspension of trading in securities on the New York Stock
Exchange, Inc. or the American Stock Exchange or limitation on prices (other
than limitations on hours or numbers of days of trading) for securities on
either such Exchangee;
(iv) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of any code or other
governmental authority which in the Agent's reasonable opinion materially and
adversely affects or will materially or adversely affect the business or
operations of the Company;
(v) declaration of a banking moratorium by either federal, Oklahoma or
Arizona authorities;
(vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in the
Agent's reasonable opinion has a Material Adverse Effect on the securities
markets in the United States or the prospects of the Company; or
(vii) if the Agent's "due diligence" review discloses information
which (a) is in any material respect inconsistent with the information
previously provided to the Agent; (b) discloses materially adverse matters
concerning the business (past, current or prospective) of the Company or any its
subsidiaries not previously fully disclosed to the Agent; or (c) would require
any material amendment or modification to the drafts of the Memorandum
previously circulated to reflect additional risk factors or significant adverse
changes; and
(b) as provided in Section 6(b) or 8 of this Agreement
13. Representations and Agreements to Survive Delivery. All representations,
warranties and agreements of the Company and Agent, herein or in certificates
delivered pursuant hereto, and the indemnity agreement contained in Paragraph 11
hereof, shall survive the delivery, execution and closing hereof and shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of the Agent or any controlling person, the Company, and
shall survive delivery of the Shares hereunder. The indemnification provisions
of Paragraph 11 hereof are in addition to any and all other remedies for any
breach of any representation, warranty or covenant made or given by one or more
parties to any other party.
14. Notices. All notices requires or permitted hereunder shall be in writing
and shall be mailed, delivered or telegraphed to the following addresses:
If to the Agent: Peacock, Hislop, Xxxxxx & Given, Inc.
0000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Senior Vice President
with a copy to: Xxxxxxxxx & Xxxxxxx
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
If to the Company: National Environmental Service Co.
00000 Xxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx, President
with a copy to: Xxxxxx & Xxxxxxx A Professional Corporation
0000 0xx Xxxxx Tower
00 Xxxx Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Lynnwood More, Jr., Esq.
Any such notices shall be either (a) sent by certified mail, return receipt
requested, in such case notice shall be deemed delivered three (3) business days
after deposit, postage prepaid in the U.S. mail, or (b) sent by personal
delivery or by a nationally recognized overnight courier, in which case it shall
be deemed delivered upon receipt if personally delivered or one (1) business day
after deposit with an overnight courier. The above addresses may be changed by
written notice to the other party; provided, however, that no notice of a change
of address shall be effective until actual receipt of such notice.
15. Parties. This Agreement shall inure to the benefit of and be binding upon
the Agent and the Company and each of their respective successors and assigns
and, if expressly applicable, their affiliates. Nothing expressed or mentioned
in this Agreement is intended or shall be construed to give any person or
corporation, other than the parties hereto and their respective successors and
assigns, affiliates, and the controlling persons, officers, directors and
counsel referred to in Paragraph 11, any legal or equitable right, remedy or
claim under or with respect to this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of the
parties hereto. No purchaser of any of the Shares shall be construed a
successor assign by reason merely of such purchase.
16. Severability. Every provision in this Agreement is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegally or invalidity shall not affect the validity of the
remainder hereof.
17. Captions. The captions or headings in this Agreement are inserted for
convenience and identification only and are in no way intended to describe,
interpret, define, or limit the scope, extent, or intent of this Agreement or
any provision hereof.
18. Applicable Law. This Agreement and all disputes and controversies relating
hereto or in connection with the transactions contemplated hereby shall be
governed and construed in accordance with the internal laws of the State of
Arizona without regard to choice or conflict of law principles. Personal
jurisdiction and venue in any action arising hereunder shall be in a court of
competent subject matter jurisdiction in Maricopa County, Arizona.
19. Prior Agreements. This Agreement supersedes all prior agreements, oral or
written, covered in the same subject matter.
20. Counterparts. This Agreement and any notices delivered hereunder 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. This
Agreement and any and all notices may be delivered by telecopy and shall be
effective upon receipt, with the original of such document to be deposited
promptly in the U.S. Mail.
IN WITNESS HEREOF, the parties hereto have executed this Agreement this 15th
day of January 1998, to be effective as of the date first written above.
NATIONAL ENVIRONMENTAL PEACOCK, HISLOP, XXXXXX
SERVICE CO. & GIVEN, INC.
By: /s/ Xxxx Xxxxxxxxx By: /s/ Xxx X. Xxxxxx
Name: Xxxx Xxxxxxxxx Name: Xxx X. Xxxxxx
Title: President Title: Managing Director
EXHIBIT A
States
Arizona
California
Idaho
Michigan
Minnesota
Montana
Oklahoma
(C) Peacock, Hislop, Xxxxxx & Given, Inc. 1998
PAGE 15 of 15
Exhibit 10.11
January 14, 1998
Xx. Xxxx Xxxxxxxxx
President
National Environmental Service Co.
00000 Xxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Dear Xx. Xxxxxxxxx:
This letter shall serve as the formal agreement between National Environmental
Service Co. and Peacock, Hislop, Xxxxxx & Given, Inc. that the Private Placement
Agency agreement made effective as of December 30, 1997 shall be amended to
reflect such terms as set forth in the First Supplement the Confidential Private
Placement Memorandum dated January 12, 1998 a copy of which is attached hereto.
Agreed to this 15th day of January, 1998
PEACOCK, HISLOP, XXXXXX NATIONAL ENVIRONMENTAL
& GIVEN, INC. SERVICE CO.
By: Xx. Xxxxxx X. Xxxxxx By: Xx. Xxxx Xxxxxxxxx
Managing Director President
Capital Markets Group
Exhibit 10.11
National Environmental Service Co.
First Supplement to the Confidential Private Placement Memorandum
Supplement dated January 12, 1998
This First Supplement dated January 12, 1998 supplements the Confidential
Private Placement Memorandum dated December 30, 1997 (the "Memorandum") and must
be read together with the Memorandum. All section references herein correspond
to the Memorandum and all capitalized terms used herein, unless otherwise
indicated, shall have the meaning set forth in the Memorandum. All terms and
conditions of the Offering, unless amended herein, shall be as set forth in the
Memorandum.
Changes in the Offering Terms
The purpose of this Fist Supplement is to:
disclose the increase to the Offering amount up to 400,000 shares of Common
Stock;
disclose the Company's agreement to provide "piggyback" registration rights
relating to the Shares; and,
correct a misstatement in the Risk Factors section of the Memorandum.
Effects of the Changes
The increase of the Offering amount up to 400,000 shares from 300,000 will,
assuming the Offering is fully subscribed and sold, have the effect of:
increasing the total proceeds received from the Offering to up to $800,000 from
$600,000;
increasing the maximum placement fee to up to $40,000 from $30,000; and,
increasing the net proceeds to the Company to up to $760,000 from $570,000.
The Company has agreed to grant certain registration rights to the holders of
Shares purchased in the Offering. In the event that the Company files a
registration statement with the Securities and Exchange Commission, except for
registrations related to employee benefit plans or corporate reorganizations,
the holders of the Shares purchased in the Offering will be notified and,
subject to the following, be allowed to include ("piggyback") Shares in such
registration. With respect to any registration related to an underwritten
offering of the Company's securities, the number of Shares included in such
registration may be reduced or eliminated as determined by the underwriter in
such offering. The Company will bear the cost and expenses associated with any
such registration of Shares except for selling commissions or underwriter
discounts associated with the Shares sold in any such registered offering.
These registration rights will lapse upon the Shares being generally tradable
under Rule 144 of the Securities Act (currently
one year from the closing of the Offering).
Correction to Private Placement Memorandum
In the risk factor titled "Environmental Liability" on page 7 of the Memorandum,
it is misstated that the Company has general liability insurance which provides
for $2 million of coverage per occurrence. Instead, the Company's insurance
policy provides for $1 million of coverage per occurrence with a $2 million
aggregate limit.
Status of the Offering
The Company and the Placement Agent have agreed to increase the offering amount
of the Offering to 400,000 Shares from 300,000 Shares of Common Stock and to
provide "piggyback" registration rights to holders of the Shares. As of the
date of this supplement, the Placement Agent has received subscriptions for the
purchase of approximately 325,000 shares.
