Exhibit 4.3
RIGHTS AGENT AGREEMENT
Between
EVERCEL, INC.
a Delaware corporation
and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
Dated February , 1999
TABLE OF CONTENTS
ARTICLE I - RIGHTS AGENT................................................2
1.1. Appointment as Rights Agent.....................................2
1.2. Form of Subscription Certificates...............................2
1.3. Issuance of Subscription Certificates...........................2
1.4. Exercise of Rights..............................................2
1.5. Oversubscription Procedures.....................................5
1.6. Rules Applicable to Exercise....................................6
1.7 Transfer of Rights...............................................7
1.8. Mutilated or Missing Subscription Certificates..................7
1.9. Information Provided to the Company.............................8
ARTICLE II - ESCROW.....................................................8
2.1. Appointment as Escrow Agent.....................................8
2.2. Establishment of Escrow Account.................................9
2.3. Escrow Period...................................................9
2.4. Collection Procedure............................................9
ARTICLE III- MISCELLANEOUS..............................................9
3.1. Definitions.....................................................9
3.2 Duties of Continental..........................................10
3.3 Merger or Consolidation or Change of Name of Continental.......12
3.4. Identity of Transfer Agent.....................................12
3.5. Compensation for Services......................................12
3.6. Notices........................................................12
3.7. Supplements and Amendments.....................................13
3.8. Governing Law..................................................13
3.9. Benefits of this Agreement.....................................13
3.10. Successors....................................................13
SIGNATURE...........................................................14
RIGHTS AGENT AGREEMENT
RIGHTS AGENT AGREEMENT ("Agreement") dated as of February , 1999, by
and between EVERCEL, INC., a Delaware corporation (the "Company"), and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New York corporation (referred to
herein, variously, as "Continental," or the "Rights Agent," as the circumstances
require). (Certain capitalized terms used herein are defined in Section 3.1.)
W I T N E S S E T H:
WHEREAS, the Company intends to issue approximately 1,389,000 rights
(the "Rights") to its shareholders of record (the "Shareholders") on the record
date fixed by the Board of Directors, notice of which shall be given to the
Rights Agent (the "Record Date"), entitling them to purchase one (1) share of
its Common Stock, par value $.01 per share (the "Common Stock"), for each share
of Common Stock held of record on the Record Date (the "Rights Offering"); and
WHEREAS, Shareholders will also be given the opportunity to purchase
excess shares of Common Stock not purchased through the exercise of the Rights
(the "Oversubscription Privilege"); and
WHEREAS, the Company may issue an additional approximately 208,350
shares of Common Stock to cover exercises of excess Oversubscription Privileges,
if any (the "Oversubscription Option"); and
WHEREAS, ▇▇▇▇▇▇▇ Securities Inc. and Loeb Partners Corporation (the
"Underwriters") have the option (the "Overallotment Option") to purchase up to
an additional approximately 208,350 shares of Common Stock, reduced by the
number of shares, if any, sold by the Company to holders of Rights under the
Oversubscription Option; and
WHEREAS, the Company has filed a Registration Statement on Form SB-2
(No. 333-64931) with the Securities and Exchange Commission (the "Rights
Offering Registration Statement") which is expected to be declared effective
within the next two days, registering the Rights and the shares of Common
Stock (the "Shares") being offered in the Rights Offering and under the
Oversubscription Option, as well as certain shares issuable pursuant to the
exercise of certain outstanding stock options or rights to acquire common
stock (collectively the "Offerings"); and
WHEREAS, the processing associated with the Offerings will involve
substantial administrative matters; and
WHEREAS, the Company desires that Continental act on behalf of the
Company, and Continental is willing to so act, in various capacities herein
described in connection with the Offerings;
NOW THEREFORE, for good and valuable consideration, receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
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ARTICLE I - RIGHTS AGENT
1.1. APPOINTMENT AS RIGHTS AGENT . The Company hereby appoints
Continental to act as its agent in connection with the Offerings, and
Continental hereby accepts such appointment.
1.2. FORM OF SUBSCRIPTION CERTIFICATES . The Subscription Certificates
shall be substantially in the form annexed hereto as EXHIBIT A (the provisions
of which are hereby incorporated herein). The Subscription Certificates shall be
dated the date of issuance thereof (whether upon initial issuance, permitted
transfer, or in lieu of mutilated, lost, stolen or destroyed Subscription
Certificates).
1.3. ISSUANCE OF SUBSCRIPTION CERTIFICATES .
(a) Upon written order of or on behalf of the Company, the
Rights Agent shall mail or deliver Subscription Certificates, Prospectuses,
Instructions and return envelopes to holders of Common Stock on the Record
Date and additional forwarding information to street name nominees. During
the Rights Exercise Period, the Rights Agent shall (i) issue Subscription
Certificates in whole number denominations to the person entitled thereto in
connection with any partial exercise or transfer permitted under this
Agreement to the extent there is sufficient time to do so prior to the
Expiration Date, and (ii) deliver a Prospectus to each person who is a
transferee of Rights in accordance with Section 1.7 (which Prospectus shall
accompany the transferee's Subscription Certificate). The Company shall at
all times supply the Rights Agent with a sufficient number of Subscription
Certificates and Prospectuses for the purposes contemplated by this Agreement.
(b) The Rights Agent shall keep records, including a register of
the registered holders, reflecting the ownership of all Subscription
Certificates and any permitted transfer thereof. Except as provided in this
Agreement, no Subscription Certificates shall be issued during the Rights
Exercise Period except (i) Subscription Certificates initially issued hereunder,
(ii) Subscription Certificates issued upon the exercise of any Rights to
evidence unexercised Rights held by the exercising registered holder, and (iii)
Subscription Certificates issued upon any permitted transfer of Rights, or in
lieu of mutilated, lost, stolen or destroyed Subscription Certificates. No
Subscription Certificates shall be issued prior to or after the Rights Exercise
Period.
(c) All Subscription Certificates surrendered to the Rights Agent
shall be promptly canceled by the Rights Agent and thereafter retained by it for
six months, and then shall be delivered to the Company.
1.4. EXERCISE OF RIGHTS .
(a) Rights represented by Subscription Certificates may be
exercised at any time during the Rights Exercise Period by delivery to the
Rights Agent of the properly completed and executed Subscription Certificate
evidencing such Rights with any required signatures guaranteed, together with
payment in full of the Subscription Price for each Underlying Share subscribed
for pursuant to the Basic Subscription Privilege, and, except as described
below in
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accordance with the Guaranteed Payment Procedures, the Oversubscription
Privilege upon the terms and conditions set forth herein, in the Prospectus, and
in the Subscription Certificates. Payment must be made by wire transfer, or by
check, bank draft or money order payable to the order of "Continental Stock
Transfer & Trust Company," in an amount of lawful money of the United States of
America equal to the Subscription Price times the number of Shares subscribed,
including subscriptions under both the Basic Subscription Privilege and the
Oversubscription Privilege. The Company shall pay all federal and state transfer
taxes required to be paid on the issuance or exercise of Rights.
(b) A Subscription Certificate shall be deemed to have been
properly exercised if all of the following conditions (the "Guaranteed Delivery
Procedures") are met:
(i) such holder has caused payment in full of the Subscription
Price for each Underlying Share being subscribed for pursuant to the Basic
Subscription privilege to be received (in the manner set forth above) by the
Rights Agent on or prior to the Expiration Date;
(ii) the Rights Agent receives, on or prior to the Expiration
Date, a guarantee notice (a "Notice of Guaranteed Delivery"), substantially in
the form provided and distributed with the Subscription Certificates, from a
member firm of a registered national securities exchange or a member of the
National Association of Securities Dealers, Inc. (the "NASD"), or from a
commercial bank or trust company having an office or correspondent in the United
States (each, an "Eligible Institution"), stating the name of the exercising
Rights holder, the number of Rights represented by the Subscription Certificate
or Subscription Certificates held by such exercising Rights holder, the number
of Underlying Shares being subscribed for pursuant to the Basic Subscription
Privilege and the number of Underlying Shares, if any, being subscribed for
pursuant to the Oversubscription Privilege, and guaranteeing the delivery to the
Rights Agent of any Subscription Certificate evidencing such Rights within five
Nasdaq trading days following the Expiration Date; and
(iii) the properly completed Subscription Certificate evidencing
the Rights being exercised, with any required signatures guaranteed, is received
by the Rights Agent within five Nasdaq trading days following the Expiration
Date. The Notice of Guaranteed Delivery may be delivered to the Rights Agent in
the same manner as Subscription Certificates, or may be transmitted to the
Rights Agent by telegram or facsimile transmission. The Rights Agent shall make
additional copies of the form of Notice of Guaranteed Delivery available to the
holders upon request.
(c) If a Rights holder wishes to delay payment of the
Subscription Price with respect to such holder's exercise of the
Oversubscription Privilege, the Oversubscription Privilege may nevertheless be
exercised if all of the following conditions (the "Guaranteed Payment
Procedures") are met:
(i) the Rights Agent receives, on or prior to the Expiration Date
either (a) a Notice of Guaranteed Delivery by facsimile or otherwise,
substantially in the form provided and distributed with the Subscription
Certificates, from a member firm of a registered national
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securities exchange or a member of NASD or from an Eligible Institution, stating
the information required thereon, as described above; or (b) the properly
completed and executed Subscription Certificate;
(ii) such holder has caused payment in full of the Subscription
Price for each Underlying Share subscribed for pursuant to the Basic
Subscription Privilege to be received (in the manner set forth above) by the
Rights Agent on or prior to the Expiration Date;
(iii) the Rights Agent receives, on or prior to the Expiration
Date a Notice of Guaranteed Delivery by facsimile or otherwise, substantially in
the form provided and distributed with the Subscription Certificates, from a
member firm of a registered national securities exchange or a NASD member firm
or from an Eligible Institution, stating the name of the exercising Rights
holder, the number of Rights represented by the Subscription Certificate or
Subscription Certificates held by such exercising Rights holder, the number of
Underlying Shares being subscribed for pursuant to the Basic Subscription
Privilege and the number of Underlying Shares being subscribed for pursuant to
the Oversubscription Privilege, and guaranteeing delivery of payment in full of
the Subscription Price (in immediately available funds) for each Underlying
Share being subscribed for pursuant to the Oversubscription Privilege by 5:00
p.m., Eastern time, on March ___, 1999; and
(iv) payment in full of the Subscription Price for each Underlying
Share being subscribed for pursuant to the Oversubscription Privilege has been
received (in immediately available funds) by the Rights Agent by 5:00 p.m.,
Eastern time, on March ___, 1999. The Notice of Guaranteed Payment may be
delivered to the Rights Agent in the same manner as Subscription Certificates,
or may be transmitted to the Rights Agent by telegram or facsimile transmission.
The Rights Agent shall make additional copies of the form of Notice of
Guaranteed Payment available to the holders upon request.
(d) Not less than two business days prior to March ___, 1999,
the Rights Agent will provide notice to a Rights holder who exercises the
Oversubscription Privilege pursuant to the Guaranteed Payment Procedures and
the member firm, commercial bank or trust company that guarantees payment for
such Rights holder under the Notice of Guaranteed Payment, which notice shall
state the number of shares subscribed for under the Oversubscription
Privilege which are available for such Rights holder to purchase and the
aggregate Subscription Price to be paid by such Rights holder for such Shares.
(e) The Rights Agent will issue to any holder of Rights who
purchases less than all of the shares of Company Common Stock represented by his
Subscription Certificate a new Subscription Certificate representing the balance
of the unsubscribed Rights, to the extent reasonably practicable prior to the
Expiration Date.
(f) The Rights Agent will date and time stamp, upon receipt, all
documents received by it as Rights Agent. The Rights Agent shall examine the
Subscription Certificates and other documents delivered or mailed to the Rights
Agent by or for shareholders of the Company to ascertain whether (i) the
Subscription Certificates are properly completed and duly executed in accordance
with the instructions set forth herein, (ii) the proper payment accompanies the
Subscription Certificates, and (iii) any other necessary documents are properly
completed and duly executed. The Rights Agent need not pass on the legal
sufficiency of any signature or verify any signature guarantee. The Rights Agent
is authorized, upon consultation with the Company or one or more of its
representatives, to request from any person exercising Rights such additional
undertakings as the Rights Agent may deem appropriate. The Rights Agent is not
authorized to accept any alternative, conditional or contingent purchase, or any
purchase of fractional shares of Common Stock.
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(g) Once a registered holder of Rights has delivered or mailed a
completed Subscription Certificate, the exercise of the Rights represented
thereby is not revocable by the holder for any reason.
(h) The Rights Agent, in its capacity as the Company's
transfer agent, shall direct the Company's transfer agent to issue
certificates for the Shares purchased in the Offerings not later than nine
Business Days after the Expiration Date, provided that the Rights Agent shall
have previously received good funds in the amount of the Subscription Price
therefor. No Rights holder, as such, shall be a shareholder with respect to
such Shares and no such Shares shall be deemed to be outstanding until such
Shares are issued in accordance herewith.
1.5. OVERSUBSCRIPTION PROCEDURES
(a) If less than all Shares are subscribed for through (i)
exercise of the Basic Subscription Privilege, those unsubscribed Shares (the
"Excess Shares") may be purchased by holders of record of Common Stock on the
Record Date who exercise the Oversubscription Privilege. Only a holder who has
exercised his or her Basic Subscription Privilege in full shall be eligible to
exercise Oversubscription Privileges.
(b) Oversubscription Privileges may be exercised during the
Rights Exercise Period and full payment made as provided in Section 1.4.
(c) If the aggregate number of Shares subscribed for through the
exercise of Oversubscription Privileges is more than the number of Excess Shares
available for purchase, the Excess Shares will be apportioned among the holders
who exercised the Oversubscription Privileges through repeated application of
the proration procedure described in the next paragraph.
(d) The Number of Available Shares shall be apportioned among all
those holders who have not yet been apportioned (through previous applications
of this procedure) the full number of Shares subscribed for by them in their
respective exercises of Oversubscription Privileges. Each time the procedure is
applied, the "Number of Available Shares" shall mean the number of Shares not
apportioned by prior applications of the procedures described therein.
Apportionment to each such holder them shall be based on the ratio of (i) the
number of Shares purchased through the Basic Subscription Privilege by that
holder, divided by (ii) the number of Shares purchased through the Basic
Subscription Privilege by all such holders; PROVIDED HOWEVER, that if the number
of Shares so apportioned to any holder exceeds the number of Shares subscribed
for by that holder's exercise of Oversubscription Privileges, then the excess
shall not be apportioned, and that holder shall thereafter not be apportioned
any additional Shares should there be further applications of this procedure.
This procedure shall be repeated until either (i) the Number of Available Shares
is zero, or (ii) a sufficient number of Shares has been apportioned to all
holders to satisfy all of their exercised Oversubscription Privileges, whichever
occurs first.
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1.6. RULES APPLICABLE TO EXERCISE
(a) The Rights Agent, in its capacity as the Company's
transfer agent, shall to issue certificates for the Shares purchased in the
Offerings in accordance with Section 1.4(g), provided that the Rights Agent
shall have previously received good funds in the amount of the Subscription
Price therefor. No Rights holder, as such, shall be a shareholder with
respect to such Shares and no such Shares shall be deemed to be outstanding
until such Shares are issued in accordance herewith.
(b) The Company shall not issue any fractional Rights nor any
fractional Shares upon exercise of a Subscription Certificate. In the event that
payment is submitted in an amount less than the Subscription Price for the
Rights intended to be exercised, only the number of whole Shares for which
payment was received will be issued. If a holder of Rights exercises for fewer
than all of the Shares to which his Subscription Certificate applies, the Rights
Agent shall issue a new Subscription Certificate representing the balance of the
unsubscribed Rights, to the extent that there is sufficient time to do so prior
to the expiration of the Rights Exercise Period.
(c) The Company shall pay all federal and state transfer taxes
required to be paid on the issuance or exercise of Rights.
(d) The Rights Agent shall promptly notify the Company of any
irregularities in any documents related to exercise of Rights received by the
Rights Agent. All questions as to the validity, form, eligibility (including
times of receipt and matters pertaining to the beneficial ownership) and the
acceptance of subscriptions and payment of the Subscription Price will be
determined by the Company, which determinations will be final and binding. No
alternative, conditional or contingent exercises of Rights will be accepted.
The Company reserves the absolute right to reject any or all exercises of
Rights not properly submitted or the acceptance of which would, in the
opinion of the Company's counsel, be unlawful. The Company also reserves the
right to waive any irregularities or conditions, and the Company's
interpretations of the terms and conditions of the Offerings shall be final
and binding. Any irregularities in connection with exercises of Rights must
be cured within such time as the Company shall determine, unless waived.
Rights will not be deemed to have been exercised until such irregularities
have been cured or waived. Subscription Certificates received by the Rights
Agent that are not properly submitted and as to which the irregularities have
not been cured or waived shall be returned by the Rights Agent to the
appropriate holder of the Rights, to the extent there is sufficient time to
do so prior to the expiration of the Rights Exercise Period, and funds
submitted with such Subscription Certificates shall be returned without
interest by the Rights Agent to such holder.
(e) The Rights Agent will follow and act upon any amendments,
modifications or supplements to these instructions, and upon any further
information in connection with the terms of the Offerings, any of which may be
given to the Rights Agent by the Company or by its legal counsel, including
instructions with respect to (i) any extension or other modifications of the
Offerings and (ii) the amount or manner of payment for any Shares purchased.
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1.7. TRANSFER OF RIGHTS.
(a) The Rights evidenced by a single Subscription Certificate may
be transferred in whole by endorsing the Subscription Certificate for transfer
in accordance with the accompanying instructions. A portion of the Rights
evidenced by a single Subscription Certificate (but not fractional Rights) may
be transferred by delivering to the Rights Agent a Subscription Certificate
properly endorsed for transfer, with instructions to register such portion of
the Rights evidenced thereby in the name of the transferee (and to issue a new
Subscription Certificate to the transferee evidencing such transferred Rights).
In such event, a new Subscription Certificate evidencing the balance of the
Rights will be issued to the Rights holder or, if the Rights holder so
instructs, to an additional transferee. However, notwithstanding the foregoing,
the Rights Agent will reissue Subscription Certificates for the transferred
Rights to the transferee, and will reissue Subscription Certificates for the
balance, if any, to the holder of the Rights, to the extent it is reasonably
practicable to do so before the Expiration Date. To transfer Rights to any
person other than a bank or broker, signatures on the Subscription Certificate
must be guaranteed by an Eligible Institution.
None of the Company, ERC, nor the Rights Agent will have any liability
to a transferee or transferor of Rights if Subscription Certificates are not
received in time for exercise or sale prior to the Expiration Date.
Except for the fees charged by the Rights Agent (which will be paid by
the Company), all commissions, fees and other expenses (including brokerage
commissions and transfer taxes) incurred in connection with the purchase, sale
or exercise of Rights will be for the account of the transferor of the Rights,
and none of such commissions, fees or expenses will be paid by the Company or
the Rights Agent.
(b) Rights may also be transferred by operation of law in the
event of the death or dissolution of the person who is the holder on the Record
Date. In that event, rights may be transferred by delivering to the Rights Agent
a Subscription Certificate with proper evidence of transfer by operation of law
executed by the appropriate legal representative, with instructions to reissue
the Rights in the name of the transferee. The Subscription Certificate must be
received by the Rights Agent by the close of business on the second Business Day
prior to the expiration of the applicable Rights Exercise Period for a
Subscription Certificate to be reissued upon such transfer.
(c) The Company and the Rights Agent may deem and treat the
registered holder of any Subscription Certificate as the absolute owner thereof
and of each Right represented thereby (notwithstanding any notation of ownership
or writing thereon made by anyone other than the Company or the Rights Agent)
for all purposes and shall not be affected by any notice to the contrary.
1.8. MUTILATED OR MISSING SUBSCRIPTION CERTIFICATES . In case any of
the Subscription Certificates shall be mutilated, lost, stolen or destroyed, the
Company may, in its discretion, issue, and the Rights Agent shall countersign
and deliver in exchange and substitution for and
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upon cancellation of the mutilated Subscription Certificate, or in lieu of and
in substitution for the Subscription Certificate lost, stolen or destroyed, a
new Subscription Certificate of like tenor and representing an equivalent right
or interest, but only upon receipt of evidence satisfactory to the Company and
the Rights Agent of such loss, theft or destruction and, in case of a lost,
stolen or destroyed Subscription Certificate, indemnity, if requested, also
satisfactory to them. Applicants for such substitute Subscription Certificates
shall also comply with such other reasonable regulations and pay such reasonable
charges as the Company or the Rights Agent may prescribe.
1.9. INFORMATION PROVIDED TO THE COMPANY AND THE UNDERWRITERS
(a) The Rights Agent shall notify both the Company and its
designated representative, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, daily in writing during the
period commencing with the mailing of Subscription Certificates and ending on
the Expiration Date (and in the case of guaranteed deliveries pursuant to
Section 1.4(b), the period ending five Nasdaq trading days after the
Expiration Date and in the case of guaranteed deliveries pursuant to the
Guaranteed Payment Procedures described at Section 1.4(c), on March ___,
1999), of (i) the number of rights exercised on such day, (ii) the number of
Underlying Shares subscribed for pursuant to the Basic Subscription Privilege
and the number of such rights for which payment has been received, (iii) the
number of Underlying Shares subscribed for pursuant to the Oversubscription
Privilege and the number of such Rights for which payment has been received,
(iv) the number of Rights subject to guaranteed delivery pursuant to Section
1.4(b) on such day, (v) the number of Underlying Shares subscribed for
pursuant to the Oversubscription Privilege and the number of such Rights for
which payment is pursuant to the Guaranteed Payment Procedures described at
Section 1.4(c), (vi) the number of Rights for which defective exercises have
been received on such day and (vii) cumulative totals derived from the
information set forth in clauses (i) through (vi) above. At or before 5:00
p.m., Eastern time, on each of the first and sixth Nasdaq trading days
following the Expiration Date, the Rights Agent shall certify in writing to
the Company and the Underwriters the cumulative totals through the Expiration
Date derived from the information set forth in clauses (i) through (vi)
above. At or before 5:00 p.m., Eastern time, on March __, 1999 (no later than
5:00 p.m. on the Business Day after the date on which funds paid pursuant to
the Guaranteed Payment Procedures are due), the Rights Agent shall certify in
writing to the Company and the Underwriters the number of shares of Common
Stock required to be purchased by the Underwriters (i.e. the number of shares
of Common Stock remaining unsubscribed in the Rights Offering). The Rights
Agent shall also maintain and update a listing of holders who have fully or
partially exercised their Rights, holders who have transferred their Rights
and their transferees and holders who have not exercised their Rights. The
Rights Agent shall provide the Company or its designated representative with
the information compiled pursuant to this Section 1.8(a) as any of them shall
request.
(b) In addition, the Rights Agent will also provide, and will
cooperate in making available to the Company and the Underwriters, upon oral
request made from time to time, such other information as the Company may
reasonably request.
ARTICLE II - ESCROW
2.1. APPOINTMENT AS ESCROW AGENT. The Company hereby appoints
Continental to act as Escrow Agent for the Company in accordance with the
provisions hereof, and Continental accepts such appointment.
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2.2. ESTABLISHMENT OF ESCROW ACCOUNT. On or prior to the Initial
Issuance Date, the Company shall establish a non-interest-bearing escrow
account with Continental, as Escrow Agent, which escrow account shall be
entitled "Evercel, Inc. Rights Offering Escrow Account" (the "Escrow
Account"). Subscribers in the Offerings shall be directed to make checks for
subscriptions payable to the order of the Rights Agent.
2.3. ESCROW PERIOD. The period during which funds shall remain in
escrow (the "Escrow Period") with respect to the Rights Exercise Period shall
begin on the Initial Issuance Date and shall terminate upon the earlier to
occur of the following dates:
(a) the date (which shall not be later than 9 Business Days
after the Expiration Date) on which the Rights Agent, in its capacity as
transfer agent for the Company, issues the certificates for Shares purchased
under Article I hereof and releases the purchase price for such certificates
to the Company ("Closing Date").
During the Escrow Period, the Company shall not be entitled to any
funds received into escrow, and no amounts deposited in the Escrow Account
shall become the property of the Company or any other entity, or be subject
to the debts of the Company or any other entity.
2.4. COLLECTION PROCEDURE . If the Rights Agent rejects any Rights
exercise (including any Oversubscription) for which the Escrow Agent has
already collected funds, the Escrow Agent shall promptly issue a refund check
to the rejected subscriber. If the Rights Agent rejects any Rights exercise
for which the Escrow Agent has not yet collected funds but has submitted the
subscriber's check for collection, the Escrow Agent shall promptly issue a
check in the amount of the subscriber's check to the rejected subscriber
after the Escrow Agent has cleared such funds. If the Escrow Agent has not
yet submitted a rejected subscriber's check for collection, the Escrow Agent
shall promptly remit the subscriber's check directly to the subscriber.
ARTICLE III - MISCELLANEOUS
3.1. DEFINITIONS. (a) As used herein, the following terms shall have
the following meanings, unless the context shall otherwise
require:
"Basic Subscription Privilege" means the entitlement of a Rights
holder to purchase for the Subscription Price one share of Common
Stock for each Right held.
"Business Day" means a day upon which commercial banks in New York
City are open for business.
"Common Stock" means the Company's Common Stock, $.01 par value
per share.
"Closing Date" has the meaning specified in Section 2.3.
"Expiration Date" means March __, 1999, unless extended by the
Company subject to the consent of the Underwriters.
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"Excess Shares" has the meaning specified in Section 1.5(a).
"Initial Issuance Date" means the date of initial issuance of the
Rights Certificates following the effective date of the Registration Statement.
"Overallotment Option" means the Underwriter's option to purchase up to
an additional approximately 208,350 shares of the Company Common Stock, reduced
by the number of shares, if any, sold by the Company to holders of Rights under
the Oversubscription Option.
"Oversubscription Option" means the Company's option to sell up to an
additional approximately 208,350 shares of Company Common Stock solely to cover
exercises of excess Oversubscription Privileges, if any.
"Oversubscription Privileges" means the right to elect to purchase
additional Shares beyond the number represented by the Subscription Certificate
from among all of the Excess Shares, as provided in Section 1.5.
"Prospectus" means the prospectus contained in the Registration
Statement at the time it is declared effective by the Securities and Exchange
Commission, as it may thereafter be amended or supplemented from time to time.
"Rights" means the rights to purchase Shares.
"Rights Exercise Period" means the period commencing on the Initial
Issuance Date and ending at 5:00 p.m. Eastern Standard Time on the Expiration
Date.
"Shares" means the approximately 1,597,350 Shares of Common Stock
purchasable in the Rights Offering and under the Oversubscription Option.
"Subscription Certificate" means a certificate evidencing Rights.
"Subscription Price" means $6.00 per share.
(b) Any capitalized term used in this Agreement and not defined
herein shall have the meaning specified in the Prospectus.
3.2. DUTIES OF CONTINENTAL . Continental, as Rights Agent, undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Rights, by their
acceptance thereof, shall be bound:
(a) The statements of fact and recitals contained herein and in
the Rights shall be taken as statements of the Company, and Continental assumes
no responsibility for the correctness of any of the same except such as describe
Continental or action taken or to be taken by it. Continental assumes no
responsibility with respect to the distribution of the Rights except as herein
expressly provided.
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(b) Continental shall not be responsible for any failure of the
Company to comply with any of the covenants in this Agreement or in the Rights
to be complied with by the Company.
(c) Continental may consult at any time with counsel satisfactory
to it (who may be counsel for the Company) and shall incur no liability or
responsibility to the Company or to any holder of any Right in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with the reasonable opinion or advice of such counsel.
(d) Continental shall incur no liability or responsibility to the
Company or to any holder of any Right for any action taken in reliance on any
notice, resolution, waiver, consent, order, certificate or other instrument
believed by it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(e) The Company agrees to reimburse Continental for all expenses,
taxes and governmental charges and other charges incurred by Continental in the
execution of this Agreement and to indemnify Continental and save it harmless
against any and all liabilities, including judgments, costs and reasonable
counsel fees, for anything done or omitted by Continental in the execution of
this Agreement except as a result of Continental's negligence, willful
misconduct or bad faith.
(f) Continental, in its capacity as Rights Agent, shall be under
no obligation to institute any action, suit or legal proceeding or to take any
other action likely to involve expenses unless the Company or one or more
registered holders of Rights shall furnish it with reasonable security and
indemnity for any costs and expenses which may be incurred, but this provision
shall not affect the power of Continental to take such action as it may consider
proper, whether with or without any such security or indemnity. All rights of
action under this Agreement or under any of the Rights may be enforced by
Continental without the possession of any of the Rights or the production
thereof at any trial or other proceeding. Any such action, suit or proceeding
instituted by Continental in its capacity as Rights Agent, and any recovery of
judgment thereon, shall be for the ratable benefit of the registered holders of
the Rights, as their respective rights and interests may appear.
(g) Continental and any stockholder, director, officer, partner
or employee of Continental may buy, sell or deal in any securities of the
Company or become pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to or otherwise act as fully
and freely as though it were not the Rights Agent under this Agreement. Nothing
herein shall preclude Continental from acting in any other capacity for the
Company or for any othe legal entity.
(h) Continental shall act hereunder solely as agent and its
duties shall be determined solely by the provisions hereof.
(i) Continental may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and it shall not be answerable or accountable
for any such attorneys or agents or for any loss to
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the Company resulting from such neglect or misconduct, provided reasonable care
had been exercised in the selection and continued retention thereof.
(j) Any request, direction, election, order or demand of the
Company shall be sufficiently evidenced by an instrument signed in the name of
the Company by its President or a Vice President or its Secretary or an
Assistant Secretary or its Treasurer or an Assistant Treasurer (unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to Continental by a copy
thereof certified by the Secretary or Assistant Secretary of the Company.
3.3. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF CONTINENTAL .
(a) Any corporation or company which may succeed to the corporate
trust business of Continental by any merger or consolidation or otherwise shall
be the successor to it as Rights Agent hereunder without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of this Agreement. In case at the time such
successor shall succeed to the agency created by this Agreement, any of the
Rights shall have been countersigned but not delivered, any such successor to
Continental may adopt the countersignature of the original Rights Agent and
deliver such Rights so countersigned.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights so countersigned. In all such cases such Rights shall have
the full force provided in the Rights.
3.4. IDENTITY OF TRANSFER AGENT. Forthwith upon the appointment of any
transfer agent for the Common Stock, the Company will file with the Rights Agent
a statement setting forth the name and address of such transfer agent, unless it
is the Rights Agent who serves as the transfer agent.
3.5. COMPENSATION FOR SERVICES. The Company agrees to pay Continental
for its services hereunder and reimburse it for its reasonable expenses
hereunder, all in accordance with the fee agreements attached as EXHIBIT B
hereto and made a part hereof by this reference.
3.6. NOTICES. Any notice pursuant to this Agreement to be given by
Continental, or by the registered holder of any Right to the Company, shall be
sufficiently given if sent by first-class mail, postage prepaid, as follows:
Evercel, Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Chairman
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and a copy thereof to:
Brown, Rudnick, Freed & Gesmer
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Any notice pursuant to this Agreement to be given by the Company or by
the registered holder of any Right or Warrant to the Rights Agent or Warrant
Agent shall be sufficiently given if sent by first-class mail, postage prepaid,
as follows:
Continental Stock Transfer & Trust Company
▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Compliance Department
or, in each case, to such other address as is specified in writing by one party
to the other.
3.7. SUPPLEMENTS AND AMENDMENTS. The Company and Continental may from
time to time supplement or amend this Agreement in order to cure any ambiguity
or to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provision herein, or to make any other
provisions in regard to matters or questions arising hereunder which the Company
and Continental may deem necessary or desirable and which shall not be
inconsistent wit the provisions of the Rights and which shall not adversely
affect the interest of the holders of Rights.
3.8. GOVERNING LAW. This Agreement shall be deemed to be a contract
made under the laws of the State of New York and shall be construed in
accordance with the laws of New York applicable to agreements to be performed
wholly within New York.
3.9. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Rights any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent, and the registered
holders of the Rights.
3.10. SUCCESSORS. All the covenants and provisions of this Agreement
by or for the benefit of the Company or Continental shall bind and inure to the
benefit of their respective successors and assigns hereunder.
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IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
EVERCEL, INC.
By:
----------------------------------
Name:
Title:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
as Rights Agent
By:
----------------------------------
Name:
Title:
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EXHIBITS
EXHIBIT A - FORM OF SUBSCRIPTION CERTIFICATE
(SEE ATTACHED)
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EXHIBIT B - FEE AGREEMENT
The fee for acting as Rights Agent shall be $ .
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