Further Covenants. The Company hereby covenants and agrees that: (a) The Company will not at any time, whether before or after Termination Date, prepare or use any amendment or supplement to the Memorandum of which the Placement Agent will not previously have been advised and furnished with a copy, or to which the Placement Agent or its counsel will have objected in writing or orally (confirmed in writing within 24 hours), or which is not in compliance with the Act and the Regulations. As soon as the Company is advised thereof, the Company will advise the Placement Agent and its counsel, and confirm the advice in writing, of any order preventing or suspending the use of the Memorandum, or the suspension of or the qualification or registration of the Shares for offering or of any exemption for such qualification or registration of the Shares for offering in any jurisdiction, or of the institution or threatened institution of any proceedings for any of such purposes, and the Company will use its best efforts to prevent the issuance of any such order and, if issued, to obtain as soon as possible the lifting thereof. (b) The Company has caused to be delivered to the Placement Agent copies of the Memorandum, has consented, and hereby consents, to the use of such copies for the purposes contemplated hereby permitted by the Act and applicable state securities laws, and has authorized, and hereby authorizes, the Placement Agent to use the Memorandum in connection with the sale of the Shares until the Termination Date, in each case subject to the limitations contained therein and herein, and no person is or will be authorized to give any information or make any representations other than those contained in the Memorandum or to use any offering materials other than those contained in the Memorandum in connection with the sale of the Shares. In the event of the happening, at any time within such period, of any event to which the Company has knowledge and which materially adversely affects, or may affect, the Company, and which should in the opinion of the Placement Agent's counsel be set forth in an amendment or supplement to the Memorandum in order to make the statement therein not misleading, in light of the circumstances existing at the time the Memorandum is required to be delivered to a purchaser of the Shares, or in case it shall, in the opinion of counsel to the Placement Agent, be necessary to amend or supplement the Memorandum to comply with any Federal or state securities laws or with the Regulations or the rules and regulations of any state in which the Memorandum is made available to a prospective subscriber, the Company will forthwith prepare and furnish to the Placement Agent copies of such amended Memorandum or of such supplement to be attached to the Memorandum in such quantities as the Placement Agent may reasonably request, in order that the Memorandum, as so amended or supplemented, will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements in the Memorandum, in light of the circumstances under which they were made, not misleading. The preparation, distribution and furnishing of any such amendment to the Memorandum or any such supplement to be attached to the Memorandum will be without expense to the Placement Agent. (c) The Company will comply with the Act, the Regulations (including, without limitation, Rule 506) so as to permit the continuance of the sales of the Shares, and will file with the SEC, and will promptly thereafter forward to the Placement Agent any and all reports on Form D as are required. (d) During the Offering Period, the Company will make available for review by prospective purchasers of the Shares, upon their request, all material contracts or other documents described or listed in the Memorandum. (e) The Company will use its best efforts to qualify the Shares for sale under the securities laws of the States of [INSERT STATE NAMES], and the Company will make such applications and furnish information as may be reasonably required for such purposes, provided that the Company will not be required to qualify as a foreign corporation in any jurisdiction. The Company will, from time to time, prepare and file such statements and reports as are or may be required to continue such qualifications, in effect for so long a period as the Placement Agent may reasonably request. (f) The Company will deliver to the Placement Agent from time to time and without charge, until the Termination Date, as many copies of the Memorandum as the Placement Agent may reasonably request. (g) The Company will apply the net proceeds from the sale of the Shares substantially for the purposes set forth under "Use of Proceeds" in the Memorandum. (h) For a period of three years from the Termination Date, the Company will deliver to the Placement Agent (i) within 45 days from the end of the applicable fiscal quarter, a copy of each unaudited quarterly financial statement which shall have been prepared in accordance with generally accepted accounting principles consistently applied, and, if applicable, any other documents or reports which may be issued by the Company to the public, including, without limitation, reports on Forms 8-K, 10-K and 10-Q and exhibits thereto, (ii) reports or communications (financial or other) of the Company mailed to its security holders, and (iii) every press release and every material news item and article in respect of the Company or its affairs which was released by the Company. Further, for a period of three years from the Termination Date, the Company will (i) within 90 days of the end of the fiscal year furnish to the Placement Agent and distribute the Company's stockholders annual financial statements prepared by an independent auditor in conformity with generally accepted accounting principles, consistently applied, which clearly set forth the financial position of the Company and (ii) furnish to the Placement Agent a duplicate list of stockholders of the Company at such time as reasonably requested by the Placement Agent together with monthly DTC transfer sheets, if applicable. (i) The Company will pay all expenses incurred in connection with the preparation and printing of all necessary offering documents and instruments related to the Offering and the issuance of the Shares, and the underlying shares of Common Stock and will also pay its own expenses for accounting fees, legal fees, transfer agent fees and other costs involved with the Offering. The Company will furnish at its expense such quantities of the offering documents and instruments as the Placement Agent may reasonably request. (j) The Company will provide to the Placement Agent, for delivery to all offerees and subscribers and their representatives, any additional information, documents and instruments which the Placement Agent or its counsel reasonably deems necessary to comply with the Act and the Regulations and the securities laws and the rules and regulations thereunder of those states in which the Shares are to be offered and sold. (k) The Company will comply with all registration, filing and reporting requirements of the Act or the Securities Exchange Act of 1934 (the "Exchange Act") which may from time to time be applicable to the Company. (l) For a period of three years from the Termination Date, the Placement Agent shall have the right of first refusal (the "Right of First Refusal") to act as underwriter or agent for any and all public or private offerings of securities (excluding all lease financing, bank financing or institutionally placed property debt), of the Company, or any successor to or subsidiary of the Company or other entity in which the Company either has a controlling equity interest or is generally authorized to enter into contracts or otherwise act on behalf of, (collectively referred to herein as the "Company") by the Company (the "Subsequent Company Offering"). In addition, the Company will use its best efforts to cause all officers, directors and holders of five percent or more of the Company's equity securities (the "Principal Stockholders") to agree in writing that the Placement Agent shall have such Right of First Refusal with respect to any secondary offering of the Company's securities by the Principal Stockholders made during the three year period following the Termination Date. Accordingly, if during such period the Company intends to make a Subsequent Company Offering, the Company shall notify the Placement Agent in writing of such intention and of the proposed terms of the offering. The Company shall thereafter promptly furnish the Placement Agent with such information concerning the business, condition and prospects of the Company as the Placement Agent may reasonably request. If within 15 business days of the receipt of such notice of intention and statement of terms, the Placement Agent does not accept in writing such offer to act as underwriter or agent with respect to such offering upon the terms proposed, the Company and each of the Principal Stockholders shall be free to negotiate terms with other underwriters with respect to such offering and to effect such offering on such proposed terms within six months after the end of such 15 business days. Before the Company and each of the Principal Stockholders and/or shall accept any modified proposal from such underwriter, the Placement Agent's preferential right shall be reinstated and the same procedure with respect to such modified proposal as provided above shall be adopted. The failure of the Placement Agent to exercise its Right of First Refusal in any particular instance shall not affect in any way such right with respect to any other Subsequent Company Offering or Secondary Offering. [OPTIONAL - SEE LOI] Notwithstanding the foregoing, (i) should an investment banking firm which is generally recognized to be of a higher tier than the Placement Agent agree to the Subsequent Company Offering resulting in aggregate gross proceeds of $15,000,000 or more, and (ii) the Placement Agent is permitted by such investment banking firm to participate in the Subsequent Company Offering to the extent of at least 10%, then the Right of First Refusal granted herein shall not apply to the Subsequent Company Offering or any related offering. (m) Within 90 days after the Termination Date, the Company shall elect a minimum of two "outside" persons (excluding affiliates of the Company and family members of the Company's existing directors, officers and principal shareholders) to the Company's Board of Directors, which such individuals shall be reasonably acceptable to the Placement Agent. Within 90 days of the Termination Date, the Board of Directors of the Company shall create an audit committee consisting of a majority of outside directors, which such audit committee will generally supervise the financial affairs of the Company. (n) For a period of five years from the Termination Date, unless waived by the Placement Agent, the Placement Agent shall have a right to designate an individual to attend all meetings of the Company's Board of Directors or committees thereof. The Company shall provide the Placement Agent with notice of all Board or committee meetings contemporaneously with notification to the members of the Board of Directors, as well as copies of any draft written consents of the Board of Directors or other documents or materials which may be provided to the Board of Directors. All information received by such representative at such meetings shall be kept confidential, shall not be disclosed by the representative to any third party, and shall be dealt with in full compliance with federal and state securities laws. (o) [IF APPLICABLE] For a period of five years from the Termination Date, the Company shall use its best efforts to maintain its current listing on the OTC Bulletin Board, including taking such actions as are necessary to comply with any newly enacted listing standards. (p) For a period of one year from the Termination Date, the Company will not, without the Placement Agent's prior written consent, redeem any securities outstanding at the Termination Date nor declare or pay any dividends or make any other cash distribution in respect of its securities in excess of the amount of the Company's then current retained earnings as reflected on its most recent balance sheet. sell any securities, grant warrants or options to acquire any securities except pursuant to its existing Stock Option Plans or conversions of convertible securities or the exercise of outstanding options or Warrants. The Company shall advise the Placement Agent in writing at least five business days in advance of its intent to either redeem any outstanding securities or declare and pay dividends.

Appears in 1 contract

Samples: Placement Agency Agreement (Circle Group Internet Inc)

Further Covenants. The Company hereby covenants and agrees that: (a) Except with the prior written consent of the Placement Agent (which consent shall not be unreasonably withheld), the Company shall not, at any time prior to the Final Closing, take any action that would cause any of the representations and warranties made by it in this Agreement not to be complete and correct on and as of each Closing Date with the same force and effect as if such representations and warranties had been made on and as of each such date. (b) If, at any time prior to the Final Closing, any event shall occur that does or may materially affect the Company or as a result of which it might become necessary to amend or supplement the Memorandum so that the representations and warranties herein remain true, or in case it shall, in the reasonable opinion of counsel to the Placement Agent, be necessary to amend or supplement the Memorandum to comply with Regulation D or any other applicable securities laws or regulations, the Company will promptly notify the Placement Agent and shall, at its sole cost, prepare and furnish to the Placement Agent copies of appropriate amendments and/or supplements in such quantities as the Placement Agent may reasonably request. The Company will not at any time, whether before or after ~~Termination Date~~the Final Closing, prepare or use any amendment or supplement to the Memorandum of which the Placement Agent will not previously have been advised and furnished with a copy, or to which the Placement Agent or its counsel will have reasonably objected in writing or orally (confirmed in writing within 24 hours), or which is not in compliance in all material respects with the ~~Act~~ Act, the Regulations and ~~the Regulations~~other applicable securities laws. As soon as the Company is advised thereof, the Company will advise the Placement Agent and its counsel, and confirm the advice in writing, of any order preventing or suspending the use of the Memorandum, or the suspension of or the qualification or registration of the ~~Shares~~ Notes and/or Warrants for offering or the suspension of any exemption for such qualification or registration of the ~~Shares~~ Notes and/or Warrants for offering in any jurisdiction, or of the institution or threatened institution of any proceedings for any of such purposes, and the Company will use its best efforts to prevent the issuance of any such ~~order~~ order, judgment or decree, and, if issued, to obtain as soon as reasonably possible the lifting thereof. (b) The Company has caused to be delivered to the Placement Agent copies of the Memorandum, has consented, and hereby consents, to the use of such copies for the purposes contemplated hereby permitted by the Act and applicable state securities laws, and has authorized, and hereby authorizes, the Placement Agent to use the Memorandum in connection with the sale of the Shares until the Termination Date, in each case subject to the limitations contained therein and herein, and no person is or will be authorized to give any information or make any representations other than those contained in the Memorandum or to use any offering materials other than those contained in the Memorandum in connection with the sale of the Shares. In the event of the happening, at any time within such period, of any event to which the Company has knowledge and which materially adversely affects, or may affect, the Company, and which should in the opinion of the Placement Agent's counsel be set forth in an amendment or supplement to the Memorandum in order to make the statement therein not misleading, in light of the circumstances existing at the time the Memorandum is required to be delivered to a purchaser of the Shares, or in case it shall, in the opinion of counsel to the Placement Agent, be necessary to amend or supplement the Memorandum to comply with any Federal or state securities laws or with the Regulations or the rules and regulations of any state in which the Memorandum is made available to a prospective subscriber, the Company will forthwith prepare and furnish to the Placement Agent copies of such amended Memorandum or of such supplement to be attached to the Memorandum in such quantities as the Placement Agent may reasonably request, in order that the Memorandum, as so amended or supplemented, will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements in the Memorandum, in light of the circumstances under which they were made, not misleading. The preparation, distribution and furnishing of any such amendment to the Memorandum or any such supplement to be attached to the Memorandum will be without expense to the Placement Agent. (c) The Company will comply with the Act, the Regulations (including, without limitation, Rule 506) so as to permit the continuance of the sales of the Shares, and will file with the SEC, and will promptly thereafter forward to the Placement Agent any and all reports on Form D as are required. (d) During the Offering Period, the Company will make available for review by prospective purchasers of the Shares, upon their request, all material contracts or other documents described or listed in the Memorandum. (e) The Company will use its best efforts to qualify the Shares for sale under the securities laws of the States of [INSERT STATE NAMES], and the Company will make such applications and furnish information as may be reasonably required for such purposes, provided that the Company will not be required to qualify as a foreign corporation in any jurisdiction. The Company will, from time to time, prepare and file such statements and reports as are or may be required to continue such qualifications, in effect for so long a period as the Placement Agent may reasonably request. (f) The Company will deliver to the Placement Agent from time to time and without charge, until the Termination Date, as many copies of the Memorandum as the Placement Agent may reasonably request. (g) The Company will apply the net proceeds from the sale of the Shares substantially for the purposes set forth under "Use of Proceeds" in the Memorandum. (h) For a period of three years from the Termination Date, the Company will deliver to the Placement Agent (i) within 45 days from the end of the applicable fiscal quarter, a copy of each unaudited quarterly financial statement which shall have been prepared in accordance with generally accepted accounting principles consistently applied, and, if applicable, any other documents or reports which may be issued by the Company to the public, including, without limitation, reports on Forms 8-K, 10-K and 10-Q and exhibits thereto, (ii) reports or communications (financial or other) of the Company mailed to its security holders, and (iii) every press release and every material news item and article in respect of the Company or its affairs which was released by the Company. Further, for a period of three years from the Termination Date, the Company will (i) within 90 days of the end of the fiscal year furnish to the Placement Agent and distribute the Company's stockholders annual financial statements prepared by an independent auditor in conformity with generally accepted accounting principles, consistently applied, which clearly set forth the financial position of the Company and (ii) furnish to the Placement Agent a duplicate list of stockholders of the Company at such time as reasonably requested by the Placement Agent together with monthly DTC transfer sheets, if applicable. (i) The Company will pay all expenses incurred in connection with the preparation and printing of all necessary offering documents and instruments related to the Offering and the issuance of the Shares, and the underlying shares of Common Stock and will also pay its own expenses for accounting fees, legal fees, transfer agent fees and other costs involved with the Offering. The Company will furnish at its expense such quantities of the offering documents and instruments as the Placement Agent may reasonably request. (j) The Company will provide to the Placement Agent, for delivery to all offerees and subscribers and their representatives, any additional information, documents and instruments which the Placement Agent or its counsel reasonably deems necessary to comply with the Act and the Regulations and the securities laws and the rules and regulations thereunder of those states in which the Shares are to be offered and sold. (k) The Company will comply with all registration, filing and reporting requirements of the Act or the Securities Exchange Act of 1934 (the "Exchange Act") which may from time to time be applicable to the Company. (l) For a period of three years from the Termination Date, the Placement Agent shall have the right of first refusal (the "Right of First Refusal") to act as underwriter or agent for any and all public or private offerings of securities (excluding all lease financing, bank financing or institutionally placed property debt), of the Company, or any successor to or subsidiary of the Company or other entity in which the Company either has a controlling equity interest or is generally authorized to enter into contracts or otherwise act on behalf of, (collectively referred to herein as the "Company") by the Company (the "Subsequent Company Offering"). In addition, the Company will use its best efforts to cause all officers, directors and holders of five percent or more of the Company's equity securities (the "Principal Stockholders") to agree in writing that the Placement Agent shall have such Right of First Refusal with respect to any secondary offering of the Company's securities by the Principal Stockholders made during the three year period following the Termination Date. Accordingly, if during such period the Company intends to make a Subsequent Company Offering, the Company shall notify the Placement Agent in writing of such intention and of the proposed terms of the offering. The Company shall thereafter promptly furnish the Placement Agent with such information concerning the business, condition and prospects of the Company as the Placement Agent may reasonably request. If within 15 business days of the receipt of such notice of intention and statement of terms, the Placement Agent does not accept in writing such offer to act as underwriter or agent with respect to such offering upon the terms proposed, the Company and each of the Principal Stockholders shall be free to negotiate terms with other underwriters with respect to such offering and to effect such offering on such proposed terms within six months after the end of such 15 business days. Before the Company and each of the Principal Stockholders and/or shall accept any modified proposal from such underwriter, the Placement Agent's preferential right shall be reinstated and the same procedure with respect to such modified proposal as provided above shall be adopted. The failure of the Placement Agent to exercise its Right of First Refusal in any particular instance shall not affect in any way such right with respect to any other Subsequent Company Offering or Secondary Offering. [OPTIONAL - SEE LOI] Notwithstanding the foregoing, (i) should an investment banking firm which is generally recognized to be of a higher tier than the Placement Agent agree to the Subsequent Company Offering resulting in aggregate gross proceeds of $15,000,000 or more, and (ii) the Placement Agent is permitted by such investment banking firm to participate in the Subsequent Company Offering to the extent of at least 10%, then the Right of First Refusal granted herein shall not apply to the Subsequent Company Offering or any related offering. (m) Within 90 days after the Termination Date, the Company shall elect a minimum of two "outside" persons (excluding affiliates of the Company and family members of the Company's existing directors, officers and principal shareholders) to the Company's Board of Directors, which such individuals shall be reasonably acceptable to the Placement Agent. Within 90 days of the Termination Date, the Board of Directors of the Company shall create an audit committee consisting of a majority of outside directors, which such audit committee will generally supervise the financial affairs of the Company. (n) For a period of five years from the Termination Date, unless waived by the Placement Agent, the Placement Agent shall have a right to designate an individual to attend all meetings of the Company's Board of Directors or committees thereof. The Company shall provide the Placement Agent with notice of all Board or committee meetings contemporaneously with notification to the members of the Board of Directors, as well as copies of any draft written consents of the Board of Directors or other documents or materials which may be provided to the Board of Directors. All information received by such representative at such meetings shall be kept confidential, shall not be disclosed by the representative to any third party, and shall be dealt with in full compliance with federal and state securities laws. (o) [IF APPLICABLE] For a period of five years from the Termination Date, the Company shall use its best efforts to maintain its current listing on the OTC Bulletin Board, including taking such actions as are necessary to comply with any newly enacted listing standards. (p) For a period of one year from the Termination Date, the Company will not, without the Placement Agent's prior written consent, redeem any securities outstanding at the Termination Date nor declare or pay any dividends or make any other cash distribution in respect of its securities in excess of the amount of the Company's then current retained earnings as reflected on its most recent balance sheet. sell any securities, grant warrants or options to acquire any securities except pursuant to its existing Stock Option Plans or conversions of convertible securities or the exercise of outstanding options or Warrants. The Company shall advise the Placement Agent in writing at least five business days in advance of its intent to either redeem any outstanding securities or declare and pay dividends.

Appears in 1 contract

Samples: Placement Agency Agreement (Vyteris Holdings, Inc.)

Further Covenants. The Company hereby covenants and agrees that: (a) Except upon prior written notice to the Placement Agent, the Company shall not, at any time prior to the Final Closing, knowingly take any action which would cause any of the representations and warranties made by it in this Agreement not to be complete and correct in all material respects on and as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of each such date (except to the extent any representation or warranty relates to an earlier date). (b) If, at any time prior to the Final Closing, any event shall occur that causes a Company Xxxxx Xxxxxxxx Adverse Effect or otherwise which as a result it becomes necessary to amend or supplement any of the Offering Materials so that the representations and warranties herein remain true and correct in all material respects, or in case it shall be necessary to amend or supplement any of the Offering Materials to comply with Regulation D or any other applicable securities laws or regulations, the Company will promptly notify the Placement Agent and shall, at its sole cost, prepare and furnish to the Placement Agent copies of appropriate amendments and/or supplements in such quantities as the Placement Agent may reasonably request for delivery by the Placement Agent to potential subscribers. The Company will not at any ~~time, whether~~ time before ~~or after Termination Date,~~ the Final Closing prepare or use any amendment or supplement to the ~~Memorandum~~ Offering Materials of which the Placement Agent will not previously have been advised and furnished with a copy, or ~~to which the Placement Agent or its counsel will have objected in writing or orally (confirmed in writing within 24 hours), or~~ which is not in compliance in all material respects with the Act and ~~the Regulations~~other applicable securities laws. As soon as the Company is advised thereof, the Company will advise the Placement Agent and its counsel, and confirm the advice in writing, of any order preventing or suspending the use of the ~~Memorandum~~Offering Materials, or the suspension ~~of or the qualification or registration of the Shares for offering or~~ of any exemption for such qualification or registration ~~of the Shares~~ thereof for offering in any jurisdiction, or of the institution or threatened institution of any proceedings for any of such purposes, and the Company will use its reasonable best efforts to prevent the issuance of any such order and, if issued, to obtain as soon as reasonably possible the lifting thereof. (b) The Company has caused to be delivered to the Placement Agent copies of the Memorandum, has consented, and hereby consents, to the use of such copies for the purposes contemplated hereby permitted by the Act and applicable state securities laws, and has authorized, and hereby authorizes, the Placement Agent to use the Memorandum in connection with the sale of the Shares until the Termination Date, in each case subject to the limitations contained therein and herein, and no person is or will be authorized to give any information or make any representations other than those contained in the Memorandum or to use any offering materials other than those contained in the Memorandum in connection with the sale of the Shares. In the event of the happening, at any time within such period, of any event to which the Company has knowledge and which materially adversely affects, or may affect, the Company, and which should in the opinion of the Placement Agent's counsel be set forth in an amendment or supplement to the Memorandum in order to make the statement therein not misleading, in light of the circumstances existing at the time the Memorandum is required to be delivered to a purchaser of the Shares, or in case it shall, in the opinion of counsel to the Placement Agent, be necessary to amend or supplement the Memorandum to comply with any Federal or state securities laws or with the Regulations or the rules and regulations of any state in which the Memorandum is made available to a prospective subscriber, the Company will forthwith prepare and furnish to the Placement Agent copies of such amended Memorandum or of such supplement to be attached to the Memorandum in such quantities as the Placement Agent may reasonably request, in order that the Memorandum, as so amended or supplemented, will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements in the Memorandum, in light of the circumstances under which they were made, not misleading. The preparation, distribution and furnishing of any such amendment to the Memorandum or any such supplement to be attached to the Memorandum will be without expense to the Placement Agent. (c) The Company ~~will~~ shall comply with the Act, the ~~Regulations (including~~Exchange Act and the rules and regulations thereunder, ~~without limitation~~all applicable state securities laws and the rules and regulations thereunder in the states in which the Company’s blue sky counsel has advised the Placement Agent that the Shares are qualified or registered for sale or exempt from such qualification or registration, ~~Rule 506)~~ so as to permit the continuance of the sales of the Shares, and will file or cause to be filed with the SEC, and ~~will~~ shall promptly thereafter forward or cause to be forwarded to the Placement ~~Agent~~ Agent, any and all reports on Form D as are required. (d) During the Offering Period, the Company will make available for review by prospective purchasers of the Shares, upon their request, all material contracts or other documents described or listed in the Memorandum. (e) The Company ~~will~~ shall use its best efforts to qualify the Shares for sale under the securities laws of such jurisdictions in the United States ~~of [INSERT STATE NAMES]~~as may be mutually agreed to by the Company and the Placement Agent, and ~~the~~ Company will make or cause to be made such applications and furnish information as may be ~~reasonably~~ required for such purposes, provided that ~~the~~ Company will not be required to qualify as a foreign corporation in any ~~jurisdiction~~jurisdiction or execute a general consent to service of process. The Company will, from time to time, prepare and file such statements and reports as are or may be required to continue such ~~qualifications,~~ qualifications in effect for so long a period as the Placement Agent may reasonably ~~request~~request with respect to the Offering. (e) The Company shall place a legend on the certificates representing the Shares and the Agent Warrants that the securities evidenced thereby have not been registered under the Act or applicable state securities laws, setting forth or referring to the applicable restrictions on transferability and sale of such securities under the Act and applicable state laws. (f) The Company will deliver to the Placement Agent from time to time and without charge, until the Termination Date, as many copies of the Memorandum as the Placement Agent may reasonably request. (g) The Company will shall apply the net proceeds from the sale of the Shares ~~substantially~~ for the purposes ~~set forth under "Use of Proceeds"~~ substantially as described in the ~~Memorandum~~Offering Materials. The Company shall not use any of the net proceeds of the Offering to repay indebtedness to officers (other than accrued salaries incurred in the ordinary course of business), directors or shareholders of the Company without the prior written consent of the Placement Agent. (g) During the Offering Period, the Company shall afford each prospective purchaser of Shares the opportunity to ask questions of and receive answers from an officer of the Company concerning the terms and conditions of the Offering and the opportunity to obtain such other additional information necessary to verify the accuracy of the Offering Materials to the extent the Company possesses such information or can acquire it without unreasonable expense. In addition, to the extent that any purchaser of Shares has inquiries concerning any of the business or operations of any member of the Company Group, the Company shall use reasonable best efforts to ensure that officers of such members are made available to respond to such inquiries. (h) ~~For a period~~ Except upon obtaining the prior written consent of ~~three years from~~ Aegis, which consent shall not be unreasonably withheld, the Company shall not, at any time prior to the earlier of the Final Closing or the Termination Date, except as contemplated by the ~~Company will deliver to the Placement Agent~~ Offering Materials (i) ~~within 45 days from~~ engage in or commit to engage in any transaction outside the ~~end~~ ordinary course of the applicable fiscal quarter, a copy of each unaudited quarterly financial statement which shall have been prepared in accordance with generally accepted accounting principles consistently applied, and, if applicable, any other documents or reports which may be issued by the Company to the public, including, without limitation, reports on Forms 8-K, 10-K and 10-Q and exhibits theretobusiness, (ii) ~~reports~~ issue, agree to issue or ~~communications~~ set aside for issuance any securities (~~financial~~ debt or ~~other~~equity) or any rights to acquire any such securities; provided, however, that the Company shall be permitted to issue stock options and/or restricted stock to officers, advisors, directors and employees of the Company ~~mailed~~ pursuant to its ~~security holders~~existing equity incentive plan as described in the SEC Reports, ~~and~~ (ii) incur, outside of the ordinary course of business, any material indebtedness, (iii) ~~every press release and every~~ dispose of any material ~~news item and article in respect of the Company or its affairs which was released by the Company. Further~~assets, ~~for a period of three years from the Termination Date, the Company will~~ (iiv) ~~within 90 days of the end of the fiscal year furnish~~ make any acquisition (except to the ~~Placement Agent and distribute~~ extent specifically referenced in the Company's stockholders annual financial statements prepared by an independent auditor in conformity with generally accepted accounting principles, consistently applied, which clearly set forth the financial position of the Company and Offering Materials) or (iiv) ~~furnish to the Placement Agent a duplicate list of stockholders of the Company at such time as reasonably requested by the Placement Agent together with monthly DTC transfer sheets, if applicable~~change its business or operations. (i) The Company ~~will~~ shall pay all reasonable expenses incurred in connection with the preparation and printing of all necessary offering documents and instruments related to the Offering and the issuance of the ~~Shares,~~ Shares and the ~~underlying shares of Common Stock~~ Agent Warrants and will also pay its own expenses for accounting fees, legal ~~fees, transfer agent~~ fees and other costs involved with the Offering. ~~The~~ All blue sky filings related to this Offering shall be prepared by the Company’s counsel, at the Company’s expense, with copies of all filings to be promptly forwarded to the Placement Agent. Further, as promptly as practicable after the Final Closing, the Company ~~will furnish~~ shall prepare, at its ~~expense~~ own expense, an electronic “closing binder” relating to the Offering and will distribute one such ~~quantities~~ binder to each of ~~the offering documents and instruments as~~ the Placement Agent ~~may reasonably request~~and its counsel. (j) ~~The~~ Until the earlier of the Termination Date or the Final Closing, the Company will ~~provide~~ not, nor will any person or entity acting on Company’s behalf, (i) negotiate with or enter into any letter of intent or definitive agreement with any other placement agent or underwriter with respect to a private or public offering of such entity’s debt or equity securities or (ii) enter into any definitive agreement regarding any merger, combination divestiture, joint venture, sale or acquisition agreement in whatever form. Neither the Company nor anyone acting on the Company’s behalf will, until the earlier of the Termination Date or the Final Closing, without the prior written consent of the Placement Agent, offer for ~~delivery~~ sale to, or solicit offers to ~~all offerees and subscribers and their representatives~~subscribe for any securities of the Company from, or otherwise approach or negotiate in respect thereof with, any additional information, documents and instruments which the Placement Agent or its counsel reasonably deems necessary to comply with the Act and the Regulations and the securities laws and the rules and regulations thereunder of those states in which the Shares are to be offered and soldother person. (k) The Company will comply with all registration, filing and reporting requirements of the Act or the Securities Exchange Act of 1934 (the "Exchange Act") which may from time to time be applicable to the Company. (l) For a period of three years from the Termination Date, the Placement Agent shall have the right of first refusal (the "Right of First Refusal") to act as underwriter or agent for any and all public or private offerings of securities (excluding all lease financing, bank financing or institutionally placed property debt), of the Company, or any successor Immediately prior to or ~~subsidiary of~~ promptly following the Company or other entity in which the Company either has a controlling equity interest or is generally authorized to enter into contracts or otherwise act on behalf of, (collectively referred to herein as the "Company") by the Company (the "Subsequent Company Offering"). In additionClosing, the Company will use its best efforts to ~~cause~~ take all ~~officers~~reasonable actions necessary to obtain the Preferred Approval (as defined in the Term Sheet) and the Stockholder Approvals (as described in the Term Sheet) including with respect to the Stockholder Approvals, ~~directors and holders of five percent or more~~ adding same as a matter to be voted on at the next annual meeting of the Company's equity securities (the "Principal Stockholders") to agree in writing that the Placement Agent shall have such Right of First Refusal with respect to any secondary offering of the Company's securities by the Principal ’s Stockholders made during the three year period following the Termination Date. Accordingly, if during such period the Company intends to make a Subsequent Company Offering, the Company shall notify the Placement Agent in writing of such intention and of the proposed terms of the offering. The Company shall thereafter promptly furnish the Placement Agent with such information concerning the business, condition and prospects of the Company as the Placement Agent may reasonably request. If within 15 business days of the receipt of such notice of intention and statement of terms, the Placement Agent does not accept in writing such offer to act as underwriter or agent with respect to such offering upon the terms proposed, the Company and each of the Principal Stockholders shall be free to negotiate terms with other underwriters with respect to such offering and to effect such offering on such proposed terms within six months after the end of such 15 business days. Before the Company and each of the Principal Stockholders and/or shall accept any modified proposal from such underwriter, the Placement Agent's preferential right shall be reinstated and the same procedure with respect to such modified proposal as provided above shall be adopted. The failure of the Placement Agent to exercise its Right of First Refusal in any particular instance shall not affect in any way such right with respect to any other Subsequent Company Offering or Secondary Offering. [OPTIONAL - SEE LOI] Notwithstanding the foregoing, (i) should an investment banking firm which is generally recognized to be ~~of a higher tier than the Placement Agent agree to the Subsequent Company Offering resulting~~ held in aggregate gross proceeds of $15,000,000 or more, and (ii) the Placement Agent is permitted by such investment banking firm to participate in the Subsequent Company Offering to the extent of at least 10%, then the Right of First Refusal granted herein shall not apply to the Subsequent Company Offering or any related offeringAugust 2024. (m) Within 90 days after the Termination Date, the Company shall elect a minimum of two "outside" persons (excluding affiliates of the Company and family members of the Company's existing directors, officers and principal shareholders) to the Company's Board of Directors, which such individuals shall be reasonably acceptable to the Placement Agent. Within 90 days of the Termination Date, the Board of Directors of the Company shall create an audit committee consisting of a majority of outside directors, which such audit committee will generally supervise the financial affairs of the Company. (n) For a period of five years from the Termination Date, unless waived by the Placement Agent, the Placement Agent shall have a right to designate an individual to attend all meetings of the Company's Board of Directors or committees thereof. The Company shall provide the Placement Agent with notice of all Board or committee meetings contemporaneously with notification to the members of the Board of Directors, as well as copies of any draft written consents of the Board of Directors or other documents or materials which may be provided to the Board of Directors. All information received by such representative at such meetings shall be kept confidential, shall not be disclosed by the representative to any third party, and shall be dealt with in full compliance with federal and state securities laws. (o) [IF APPLICABLE] For a period of five years from the Termination Date, the Company shall use its best efforts to maintain its current listing on the OTC Bulletin Board, including taking such actions as are necessary to comply with any newly enacted listing standards. (p) For a period of one year from the Termination Date, the Company will not, without the Placement Agent's prior written consent, redeem any securities outstanding at the Termination Date nor declare or pay any dividends or make any other cash distribution in respect of its securities in excess of the amount of the Company's then current retained earnings as reflected on its most recent balance sheet. sell any securities, grant warrants or options to acquire any securities except pursuant to its existing Stock Option Plans or conversions of convertible securities or the exercise of outstanding options or Warrants. The Company shall advise the Placement Agent in writing at least five business days in advance of its intent to either redeem any outstanding securities or declare and pay dividends.

Appears in 1 contract

Samples: Placement Agency Agreement (Super League Enterprise, Inc.)

Further Covenants. The Company hereby covenants and agrees that: (a) The Company agrees that it shall modify or supplement the Memorandum during the course of the Offering to ensure that the Memorandum does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, and shall, at its sole cost, prepare and furnish to the Placement Agent copies of appropriate amendments and/or supplements in such quantities as the Placement Agent may reasonably request. The Company will not at any time, whether before or after ~~Termination Date~~the Final Closing, prepare or use any amendment or supplement to the Memorandum of which the Placement Agent will not previously have been advised and furnished with a copy, or to which the Placement Agent or its counsel will have reasonably objected in writing or orally (confirmed in writing within 24 hours), or which is not in compliance with the ~~Act~~ Act, the Regulations and other applicable securities laws. (b) Except with the ~~Regulations.~~ prior written consent of the Placement Agent, which consent shall not be unreasonably withheld, the Company shall not, at any time prior to the Final Closing, take any action that would cause any of the representations and warranties made by it in this Agreement not to be complete and correct in all material respects on and as of each Closing Date with the same force and effect as if such representations and warranties had been made on and as of each such date. (c) As soon as ~~the Company is advised~~ practicable following notification thereof, the Company will advise the Placement Agent and its counsel, and confirm the advice in writing, of any order preventing or suspending the use of the Memorandum, or the suspension of or the qualification or registration of the ~~Shares~~ Units for offering or the suspension of any exemption for such qualification or registration of the ~~Shares~~ Units for offering in any jurisdiction, or of the institution or threatened institution of any proceedings for any of such purposes, and the Company will use its reasonable best efforts to prevent the issuance of any such ~~order~~ order, judgment or decree, and, if issued, to obtain as soon as ~~possible~~ reasonably practicable the lifting thereof. (bd) The Company has caused to be delivered to the Placement Agent copies of the Memorandum, has consented, and hereby consents, to the use of such copies for the purposes contemplated hereby permitted by the Act and applicable state securities laws, and has authorized, and hereby authorizes, the Placement Agent to use the Memorandum shall comply in ~~connection~~ all material respects with the ~~sale of the Shares until the Termination Date~~Act, in each case subject to the limitations contained therein and herein, and no person is or will be authorized to give any information or make any representations other than those contained in the Memorandum or to use any offering materials other than those contained in the Memorandum in connection with the sale of the Shares. In the event of the happening, at any time within such period, of any event to which the Company has knowledge and which materially adversely affects, or may affect, the Company, and which should in the opinion of the Placement Agent's counsel be set forth in an amendment or supplement to the Memorandum in order to make the statement therein not misleading, in light of the circumstances existing at the time the Memorandum is required to be delivered to a purchaser of the Shares, or in case it shall, in the opinion of counsel to the Placement Agent, be necessary to amend or supplement the Memorandum to comply with any Federal or state securities laws or with the Regulations or the rules and regulations of ~~any~~ the Securities and Exchange Commission (the "SEC"), the 1934 Act, and the rules and regulations thereunder in each case applicable to the offer and sale of the Units, and all applicable state securities laws and the rules and regulations thereunder in the states in which the ~~Memorandum is made available to a prospective subscriber, the Company will forthwith prepare and furnish to~~ Placement Agent's Blue Sky counsel has advised the Placement Agent ~~copies of~~ that the Units are qualified or registered for sale or exempt from such ~~amended Memorandum~~ qualification or of registration (except to the extent that such ~~supplement~~ qualification or registration would require the Company to be ~~attached~~ qualified to ~~the Memorandum~~ do business in such ~~quantities as the Placement Agent may reasonably request~~state or states), in order that the Memorandum, as so amended or supplemented, will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements in the Memorandum, in light of the circumstances under which they were made, not misleading. The preparation, distribution and furnishing of any such amendment to the Memorandum or any such supplement to be attached to the Memorandum will be without expense to the Placement Agent. (c) The Company will comply with the Act, the Regulations (including, without limitation, Rule 506) so as to permit the continuance of the sales of the ~~Shares~~Units, and will file with the SEC, and ~~will~~ shall promptly thereafter forward to the Placement ~~Agent~~ Agent, any and all reports on Form D as are required. (d) During the Offering Period, the Company will make available for review by prospective purchasers of the Shares, upon their request, all material contracts or other documents described or listed in the Memorandum. (e) The Company ~~will~~ shall use its reasonable best efforts to qualify the ~~Shares~~ Units for sale (or seek exemption therefrom) under the securities laws of such jurisdictions in the United States ~~of [INSERT STATE NAMES]~~as the Placement Agent shall designate, and the Company will (through Blue Sky counsel) make such applications and furnish information as may be ~~reasonably~~ required for such purposes~~, provided that the Company will not be required to qualify as a foreign corporation in any jurisdiction~~. The Company will, from time to time, prepare and file such statements and reports as are or may be required to continue such ~~qualifications,~~ qualifications in effect for so long a period as the Placement Agent may reasonably request. (f) The Company ~~will deliver~~ shall place a legend on the certificates representing the Securities issued to subscribers stating that the securities evidenced thereby have not been registered under the Act or applicable state securities laws, setting forth or referring to the applicable restrictions on transferability and sale of such securities under the Act and applicable state laws. (g) During the Offering Period, the Company shall make available for review by prospective purchasers of the Units during normal business hours at the Company's offices, upon their request, copies of the Company Agreements to the extent that such disclosure shall not violate any obligation on the part of the Company to maintain the confidentiality thereof and shall afford each prospective purchaser of Units the opportunity to ask questions of and receive answers from an officer of the Company concerning the terms and conditions of the Offering and the opportunity to obtain such other additional information necessary to verify the accuracy of the Memorandum to the extent it possesses such information or can acquire it without unreasonable expense. (h) Except with the prior written consent of the Placement Agent, which consent shall not be unreasonably withheld, or as set forth in the Memorandum with respect to the issuance of Units, the Company shall not, at any time prior to the earlier of the Final Closing or the Termination Date, engage in or commit to engage in any transaction outside the ordinary course of business, including, without limitation, the incurrence of material indebtedness; materially change its business or operations as shall be described in the Memorandum; dispose of any material assets or make any material acquisition; or issue, agree to issue or set aside for issuance any securities (debt or equity) or any right to acquire such securities, except as shall be contemplated by the Memorandum. Notwithstanding the preceding sentence, the Company may issue (i) compensatory option grants to employees and consultants in the ordinary course of business pursuant to option plans presently in effect, (ii) shares of its Common Stock upon exercise of outstanding options or warrants or conversion of outstanding convertible securities and (iii) securities included in the Units sold in the Offering and the Agent's Warrants. (i) Whether or not the Offering is consummated, or this Agreement is terminated, the Company hereby agrees to pay all of its fees, costs and expenses incident hereto and to the Offering, including, without limitation, those in connection with (i) preparing, distributing and binding the Memorandum and any and all amendments and/or supplements thereto, fees for bound volumes and any and all agreements, contracts and other documents related hereto and thereto; (ii) the authorization, issuance, transfer and delivery of the Securities, Conversion Shares, and the Agent's Securities, including, without limitation, fees and expenses of any transfer agent or registrar; (iii) the fees and expenses of the Escrow Agent (subject to Section 4(b) hereof); (iv) all fees and expenses of legal, accounting and other advisers to the Company; (v) all filing fees, costs and legal fees and expenses for Blue Sky services and related filings with respect to Blue Sky exemptions and qualifications, including legal fees of $3,000 for the first ten states and $450 per state thereafter, $3,000 of which shall be paid to the Placement Agent's counsel upon execution of this Agreement for legal fees in connection with obtaining Blue Sky exemptions (the "Blue Sky Fees"); and (vi) subject to Section 9 hereof, a nonaccountable expense allowance ("Placement Agent Expenses") relating to expenses incurred by the Placement Agent in connection with the Offering (including, without limitation, travel and related expenses and fees and expenses of legal, accounting and other advisers to the Placement Agent) equal to 3% of the gross proceeds from ~~time~~ the sale of Units. A good faith advance of $25,000 to ~~time and without charge~~cover up front expenses to be incurred by the Placement Agent has been paid by the Company on March 16, 2004. Such amount shall be credited at the First Closing against the 3% nonaccountable expense allowance. (j) Until the Termination Date, neither the Company nor any person or entity acting on its behalf will negotiate or enter into any agreement with any other placement agent or underwriter with respect to a private or public offering of the Company's or any subsidiary's debt or equity securities. Neither the Company nor anyone acting on its behalf will, until the Termination Date, ~~as many copies~~ without the prior written consent of the Memorandum as the Placement Agent may reasonably request. (g) The Company will apply the net proceeds from the sale of the Shares substantially for the purposes set forth under "Use of Proceeds" in the Memorandum. (h) For a period of three years from the Termination Date, the Company will deliver to the Placement Agent (i) within 45 days from the end of the applicable fiscal quarter, a copy of each unaudited quarterly financial statement which shall have been prepared in accordance with generally accepted accounting principles consistently applied, and, if applicable, any other documents or reports which may be issued by the Company to the public, including, without limitation, reports on Forms 8-K, 10-K and 10-Q and exhibits thereto, (ii) reports or communications (financial or other) of the Company mailed to its security holders, and (iii) every press release and every material news item and article in respect of the Company or its affairs which was released by the Company. Further, for a period of three years from the Termination Date, the Company will (i) within 90 days of the end of the fiscal year furnish to the Placement Agent and distribute the Company's stockholders annual financial statements prepared by an independent auditor in conformity with generally accepted accounting principles, consistently applied, which clearly set forth the financial position of the Company and (ii) furnish to the Placement Agent a duplicate list of stockholders of the Company at such time as reasonably requested by the Placement Agent together with monthly DTC transfer sheets, if applicable. (i) The Company will pay all expenses incurred in connection with the preparation and printing of all necessary offering documents and instruments related to the Offering and the issuance of the Shares, and the underlying shares of Common Stock and will also pay its own expenses for accounting fees, legal fees, transfer agent fees and other costs involved with the Offering. The Company will furnish at its expense such quantities of the offering documents and instruments as the Placement Agent may reasonably request. (j) The Company will provide to the Placement Agent, offer for ~~delivery~~ sale to, or solicit offers to ~~all offerees and subscribers and their representatives~~subscribe for Units or other securities of the Company from, or otherwise approach or negotiate in respect thereof with, any additional information, documents and instruments which the Placement Agent or its counsel reasonably deems necessary to comply with the Act and the Regulations and the securities laws and the rules and regulations thereunder of those states in which the Shares are to be offered and soldother person. (k) The Company will comply with all registration, filing and reporting requirements of the Act or the Securities Exchange Act of 1934 (the "Exchange Act") which may from time to time be applicable to the Company. (l) For a period of three years from the Termination At each Closing Date, the Placement Agent shall have the right of first refusal (the "Right of First Refusal") to act as underwriter or agent for any and all public or private offerings of securities (excluding all lease financing, bank financing or institutionally placed property debt), of the Company, or any successor to or subsidiary of the Company or other entity in which the Company either has a controlling equity interest or is generally authorized to enter into contracts or otherwise act on behalf of, (collectively referred to herein as the "Company") by the Company (the "Subsequent Company Offering"). In addition, the Company will use its best efforts to cause all officers, directors and holders of five percent or more of the Company's equity securities (the "Principal Stockholders") to agree in writing that the Placement Agent shall have such Right of First Refusal with respect to any secondary offering of the Company's securities by the Principal Stockholders made during the three year period following the Termination Date. Accordingly, if during such period the Company intends to make a Subsequent Company Offering, the Company shall notify the Placement Agent in writing of such intention and of the proposed terms of the offering. The Company shall thereafter promptly furnish the Placement Agent with such information concerning the business, condition and prospects of the Company as the Placement Agent may reasonably request. If within 15 business days of the receipt of such notice of intention and statement of terms, the Placement Agent does not accept in writing such offer to act as underwriter or agent with respect to such offering upon the terms proposed, the Company and each of the Principal Stockholders shall be free to negotiate terms with other underwriters with respect to such offering and to effect such offering on such proposed terms within six months after the end of such 15 business days. Before the Company and each of the Principal Stockholders and/or shall accept any modified proposal from such underwriter, the Placement Agent's preferential right shall be reinstated and the same procedure with respect to such modified proposal as provided above shall be adopted. The failure of the Placement Agent to exercise its Right of First Refusal in any particular instance shall not affect in any way such right with respect to any other Subsequent Company Offering or Secondary Offering. [OPTIONAL - SEE LOI] Notwithstanding the foregoing, (i) ~~should an investment banking firm which is generally recognized to be of~~ the independent auditors for the Company shall have provided a ~~higher tier than~~ "comfort letter" concerning the ~~Placement Agent agree to~~ Company's financial statements in the ~~Subsequent Company Offering resulting~~ form customarily provided by Terance Kelley, CPA in ~~aggregate gross proceeds of $15,000,000 or more,~~ connxxxxxx xxxx xxcurities offerings by its audit clients and (ii) the ~~Placement Agent~~ chief executive officer and chief financial officer of the Company shall have provided representations and warranties relating to the Company's most recent quarterly and year-to-date unaudited financial statements and internal financial controls, similar to those to be included in the Company's 2003 annual report on Form 10-KSB under the 1934 Act, and as required by the Sarbanes-Oxley Act of 2002. (x) Xxx Xxxxany hereby agrees to file a registration statement on Form SB-2 or other appropriate registration document under the Act for resale of the Shares, the Conversion Shares and the Agent's Shares, as soon as possible, but not later than 30 days following the Final Closing. The Company shall cause such registration statement to become effective within the earlier of (i) the fifth trading day following the date on which the Company is notified by the SEC that such registration statement will not be reviewed or is no longer subject to further review and comments, (ii) one hundred twenty (120) days after the Final Closing or (iii) ninety (90) days from the date of the filing of such registration statement. If the registration statement has not been filed, or does not become effective within the respective periods set forth in the preceeding sentence, the Company shall pay to each investor in the Offering as liquidated damages and not as a penalty, an amount in cash equal to 2% of the aggregate purchase price paid by such investor in the Offering per month, until such registration statement has been filed or has been declared effective, as applicable. If the Company fails to pay any liquidated damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest thereon at a rate of 10% per annum (or such lesser maximum amount that is permitted to be paid by ~~such investment banking firm to participate in the Subsequent Company Offering~~ applicable law) to the ~~extent of at least 10%~~holder, ~~then~~ accruing daily from the ~~Right of First Refusal granted herein shall not apply~~ date such liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The liquidated damages pursuant to the ~~Subsequent Company Offering~~ terms hereof shall apply on a pro-rate basis for any portion of a month prior to the filing or ~~any related offering~~effectiveness of the registration statement required hereunder, as applicable. (m) ~~Within 90 days after~~ Effective immediately following the ~~Termination Date~~First Closing, the Company ~~shall elect~~ hereby grants the Placement Agent the right to designate a ~~minimum of two "outside" persons (excluding affiliates of the Company and family members of the Company's existing directors, officers and principal shareholders)~~ nonvoting observer to the Company's Board of ~~Directors, which such individuals~~ Directors (the "Observer"). Such status as an observer shall ~~be reasonably acceptable~~ include advance written notice of and the right to ~~the Placement Agent. Within 90 days~~ attend all meetings of ~~the Termination Date,~~ the Board of Directors of the Company shall create an audit committee consisting of a majority of outside directors, which such audit committee will generally supervise the financial affairs of the Company. (n) For a period of five years from the Termination Date, unless waived by the Placement Agent, the Placement Agent shall have a right and to ~~designate an individual to attend all meetings of the Company's Board of Directors or committees thereof. The Company shall provide the Placement Agent with notice~~ obtain copies of all ~~Board or committee meetings contemporaneously with notification~~ minutes from, and notices regarding, such meetings, as well as copies of all correspondence to ~~the~~ members of the Board of Directors. If reasonably requested by the Company, the Observer will execute a non-disclosure agreement in a customary form. (n) The Company hereby agrees to use its best efforts to (A) no later than November 30, 2004, (x) add an additional member to the Board of Directors such that the Board of Directors shall be composed of a total of seven (7) members and (y) appoint two (2) "independent directors" (as ~~well as copies~~ defined in New Nasdaq Rule 4200(a)(15)) to fill the vacancy created by such addition to the Board of Directors and other vacancies; and (B) at any ~~draft written consents~~ time after November 30, 2004, but not later than February 28, 2005, designate an audit committee of the Board of Directors ~~or other documents or materials which may be provided~~ and appoint two (2) new members to the Board of ~~Directors. All information received by such representative at such meetings~~ Directors to replace two (2) existing directors, which audit committee shall be ~~kept confidential, shall not be disclosed by the representative to any third party, and shall be dealt with~~ in ~~full~~ compliance with ~~federal and state securities laws~~the requirements of Nasdaq (as if the Company were subject to those requirements) or, if the Company's Common Stock is then traded on the American Stock Exchange ("Amex"), in compliance with the requirements of Amex. The Company shall use its reasonable best efforts to maintain compliance with the provisions of this Section 5(n) until the end of the Effectiveness Period (as defined in the Registration Rights Agreement). (o) ~~[IF APPLICABLE] For a period~~ Within three (3) days following the date of ~~five years from~~ the ~~Termination Date~~First Closing, the Company shall ~~use~~ instruct its ~~best efforts~~ transfer agent that in no event shall such transfer agent be permitted to ~~maintain its current listing on~~ issue any certificates evidencing newly-issued shares of Common Stock, unless the ~~OTC Bulletin Board~~issuances of shares of Common Stock evidenced by such certificates shall have been first approved by the Board of Directors of the Company, ~~including taking~~ and the transfer agent shall have obtained a written certification from both the Chief Executive Officer and the Chief Financial Officer of the Company to such ~~actions as are necessary to comply with any newly enacted listing standards~~effect. (p) ~~For a period of one year from~~ As soon as reasonably practicable following the ~~Termination Date~~Final Closing, the Company ~~will not~~hereby agrees, ~~without~~ in consultation with the Placement Agent~~'s prior written consent~~, ~~redeem any securities outstanding at~~ to use its reasonable best efforts to cause its stockholders to approve and effect either a reverse stock split or increase in the ~~Termination Date nor declare or pay any dividends or make any other cash distribution in respect~~ number of ~~its securities in excess~~ authorized shares of the amount of the Company's then current retained earnings as reflected on its most recent balance sheet. sell any securities, grant warrants or options to acquire any securities except pursuant to its existing Stock Option Plans or conversions of convertible securities or the exercise of outstanding options or Warrants. The Company shall advise the Placement Agent in writing at least five business days in advance of its intent to either redeem any outstanding securities or declare and pay dividendsCommon Stock.

Appears in 1 contract

Samples: Placement Agency Agreement (Wireless Frontier Internet Inc)

Further Covenants. The Company hereby covenants and agrees that: (a) Except with the prior written consent of each Placement Agent (which consent shall not be unreasonably withheld), the Company shall not, at any time prior to the Closing Date, take any action that would cause any of the representations and warranties made by it in this Agreement not to be complete and correct on and as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of each such date. (b) If, at any time prior to the Closing, any event shall occur that does or may materially affect the Company or as a result of which it might become necessary to amend or supplement the Memorandum so that the representations and warranties herein remain true, or in case it shall, in the reasonable opinion of counsel to either Placement Agent, be necessary to amend or supplement the Memorandum to comply with Regulation D or any other applicable securities laws or regulations, the Company will promptly notify each Placement Agent and shall, at its sole cost, prepare and furnish to each Placement Agent copies of appropriate amendments and/or supplements in such quantities as each Placement Agent may reasonably request. The Company will not at any time, whether before or after ~~Termination Date~~the Closing, prepare or use any amendment or supplement to the Memorandum of which ~~the~~ each Placement Agent will not previously have been advised and furnished with a copy, or to which ~~the~~ either Placement Agent or its counsel will have reasonably objected in writing or orally (confirmed in writing within 24 hours), or which is not in compliance in all material respects with the ~~Act~~ Act, the Regulations and ~~the Regulations~~other applicable securities laws. As soon as the Company is advised thereof, the Company will advise ~~the~~ each Placement Agent and its counsel, and confirm the advice in writing, of any order preventing or suspending the use of the Memorandum, or the suspension of or the qualification or registration of the ~~Shares~~ Common Stock and/or Warrants for offering or the suspension of any exemption for such qualification or registration of the ~~Shares~~ Common Stock and/or Warrants for offering in any jurisdiction, or of the institution or threatened institution of any proceedings for any of such purposes, and the Company will use its best efforts to prevent the issuance of any such ~~order~~ order, judgment or decree, and, if issued, to obtain as soon as reasonably possible the lifting thereof. (b) The Company has caused to be delivered to the Placement Agent copies of the Memorandum, has consented, and hereby consents, to the use of such copies for the purposes contemplated hereby permitted by the Act and applicable state securities laws, and has authorized, and hereby authorizes, the Placement Agent to use the Memorandum in connection with the sale of the Shares until the Termination Date, in each case subject to the limitations contained therein and herein, and no person is or will be authorized to give any information or make any representations other than those contained in the Memorandum or to use any offering materials other than those contained in the Memorandum in connection with the sale of the Shares. In the event of the happening, at any time within such period, of any event to which the Company has knowledge and which materially adversely affects, or may affect, the Company, and which should in the opinion of the Placement Agent's counsel be set forth in an amendment or supplement to the Memorandum in order to make the statement therein not misleading, in light of the circumstances existing at the time the Memorandum is required to be delivered to a purchaser of the Shares, or in case it shall, in the opinion of counsel to the Placement Agent, be necessary to amend or supplement the Memorandum to comply with any Federal or state securities laws or with the Regulations or the rules and regulations of any state in which the Memorandum is made available to a prospective subscriber, the Company will forthwith prepare and furnish to the Placement Agent copies of such amended Memorandum or of such supplement to be attached to the Memorandum in such quantities as the Placement Agent may reasonably request, in order that the Memorandum, as so amended or supplemented, will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements in the Memorandum, in light of the circumstances under which they were made, not misleading. The preparation, distribution and furnishing of any such amendment to the Memorandum or any such supplement to be attached to the Memorandum will be without expense to the Placement Agent. (c) The Company ~~will~~ shall comply with the Act, the ~~Regulations~~ Regulations, the Securities and Exchange Act of 1934, as amended (~~including~~the "1934 ACT"), ~~without limitation~~and the rules and regulations thereunder, ~~Rule 506)~~ all applicable state securities laws and the rules and regulations thereunder in the states in which the Units are to be offered and in which the Blue Sky counsel has advised the Placement Agents that the Units are qualified or registered for sale or exempt from such qualification or registration, so as to permit the continuance of the sales of the ~~Shares~~Units, and will file with the SEC, and ~~will~~ shall promptly thereafter forward to ~~the~~ each Placement ~~Agent~~ Agent, any and all reports on Form D as are required. (d) During the Offering Period, the Company will make available for review by prospective purchasers of the Shares, upon their request, all material contracts or other documents described or listed in the Memorandum. (e) The Company ~~will~~ shall use its reasonable best efforts to qualify the ~~Shares~~ Units for sale (or seek exemption therefrom) under the securities laws of such jurisdictions in the United States ~~of [INSERT STATE NAMES]~~as may be mutually agreed to by the Company and the Placement Agents, and the Company will (through Blue Sky counsel) make such applications and furnish information as may be ~~reasonably~~ required for such purposes~~, provided that the Company will not be required to qualify as a foreign corporation in any jurisdiction~~. The Company will, from time to time, prepare and file such statements and reports as are or may be required to continue such ~~qualifications,~~ qualifications in effect for so long a period as the Placement ~~Agent~~ Agents may reasonably request. (e) The Company shall place a legend on the certificates representing the Common Stock, Warrants and the Conversion Shares issued to subscribers stating that the securities evidenced thereby have not been registered under the Act or applicable state securities laws and setting forth or referring to the applicable restrictions on transferability and sale of such securities under the Act and applicable state laws. (f) The Company will deliver to the Placement Agent from time to time and without charge, until the Termination Date, as many copies of the Memorandum as the Placement Agent may reasonably request. (g) The Company will shall apply the net proceeds from the sale of the ~~Shares substantially~~ Units to fund its working capital requirements and/or for ~~the~~ such other purposes ~~set forth~~ as shall be described under "Use of Proceeds" in the Memorandum. The net proceeds of the Offering shall not be used to repay indebtedness to officers, directors or stockholders of the Company without the prior written consent of the Placement Agents: PROVIDED, HOWEVER, a portion of the net proceeds of the Offering will be used for the repayment of indebtedness in the amount of $500,000 plus accrued interest owed to a related party of Xxxxxxx Xxxxx. (g) During the Offering Period, the Company shall make available for review by prospective purchasers of the Units during normal business hours at the Company's offices, upon their request, copies of the Company Agreements to the extent that such disclosure shall not violate any obligation on the part of the Company to maintain the confidentiality thereof and shall afford each prospective purchaser of Units the opportunity to ask questions of and receive answers from an officer of the Company concerning the terms and conditions of the Offering and the opportunity to obtain such other additional information necessary to verify the accuracy of the Memorandum to the extent it possesses such information or can acquire it without unreasonable expense. (h) ~~For a period~~ Except with the prior written consent of ~~three years from~~ each Placement Agent (which shall not be unreasonably withheld) or as set forth in the Memorandum, the Company shall not, at any time prior to the earlier of the Closing Date or the Termination Date, engage in or commit to engage in any transaction outside the ~~Company will deliver~~ ordinary course of business, including without limitation the incurrence of material indebtedness, materially change its business or operations as described in the Memorandum, or issue, agree to issue or set aside for issuance any securities (debt or equity) or any rights to acquire any such securities except as shall be contemplated by the ~~Placement Agent~~ Memorandum. (i) ~~within 45 days from~~ Whether or not the ~~end of the applicable fiscal quarter~~transactions contemplated hereby are consummated, ~~a copy of each unaudited quarterly financial statement which shall have been prepared in accordance with generally accepted accounting principles consistently applied~~or this Agreement is terminated, ~~and, if applicable, any other documents or reports which may be issued by~~ the Company hereby agrees to pay all fees, costs and expenses incident hereto and to the ~~public~~Offering, including, without limitation, ~~reports on Forms 8-K~~those in connection with (i) preparing, ~~10-K~~ printing, duplicating, filing, distributing and ~~10-Q~~ binding the Memorandum and ~~exhibits~~ any and all amendments and/or supplements thereto and any and all agreements, contracts and other documents related hereto and thereto, ; (ii) ~~reports~~ the creation, authorization, issuance, transfer and delivery of the Common Stock, Warrants, the Conversion Shares and the Agents' Securities, including, without limitation, fees and expenses of any transfer agent or ~~communications~~ registrar; (~~financial~~ iii) the fees and expenses of the Escrow Agent; (iv) the formation, organization and qualification of one or ~~other~~more investment vehicles for the purchasers of the Units; (v) all fees and expenses of legal, accounting and other advisers to the Company; (vi) all reasonable filing fees, costs and legal fees and expenses for Blue Sky services and related filings with respect to Blue Sky exemptions and qualifications, $6,500 of which shall be paid to Xxxxxxx Xxxxx'x counsel upon execution of this Agreement for legal fees in connection with obtaining Blue Sky exemptions (the "BLUE SKY FEES"); and (vii) subject to Section 9 hereof, a non-accountable expense allowance equal to three percent (3%) of the ~~Company mailed to its security holders, and (iii) every press release and every material news item and article in respect~~ aggregate purchase price of the ~~Company or its affairs~~ Units placed by each Placement Agent ("PLACEMENT AGENTS' EXPENSES"), which ~~was released by the Company. Further, for a period of three years~~ shall be deducted from the ~~Termination Date~~gross proceeds of the Units sold at the Closing, to cover, without limitation, the Company will (i) within 90 days of the end of the fiscal year furnish to the Placement Agent and distribute the Company's stockholders annual financial statements prepared by an independent auditor in conformity with generally accepted accounting principles, consistently applied, which clearly set forth the financial position of the Company and (ii) furnish to the Placement Agent a duplicate list of stockholders of the Company at such time as reasonably requested by the Placement Agent together with monthly DTC transfer sheets, if applicable. (i) The Company will pay all expenses incurred in connection with the preparation and printing of all necessary offering documents and instruments related to the Offering and the issuance of the Shares, and the underlying shares of Common Stock and will also pay its own expenses for accounting fees, legal fees, ~~transfer agent fees~~ mailing, telephone, travel, due diligence and ~~other costs involved with the Offering. The Company will furnish at its expense such quantities~~ similar expenses of ~~the offering documents and instruments as the~~ each Placement ~~Agent may reasonably request~~Agent. (j) ~~The~~ Until the earlier of the Closing Date or the Termination Date, neither the Company nor any person or entity acting on its behalf will ~~provide~~ negotiate or enter into any agreement with any other placement agent or underwriter with respect to a private or public offering of the Company's or any subsidiary's debt or equity securities. Neither the Company nor anyone acting on its behalf will, until the earlier of the Closing Date or the Termination Date, without the prior written consent of each Placement Agent, offer for ~~delivery~~ sale to, or solicit offers to ~~all offerees and subscribers and their representatives~~subscribe for Units or other securities of the Company from, or otherwise approach or negotiate in respect thereof with, any additional information, documents and instruments which the Placement Agent or its counsel reasonably deems necessary to comply with the Act and the Regulations and the securities laws and the rules and regulations thereunder of those states in which the Shares are to be offered and soldother person. (k) ~~The Company will comply with all registration, filing and reporting requirements~~ Until the earlier of (x) the Expiration Date (if applicable) or (y) the fifth anniversary of the ~~Act~~ Closing, in the event that no employee of Xxxxxxx Xxxxx, or ~~the Securities Exchange Act~~ one of ~~1934 (the "Exchange Act") which may from time to time be applicable to~~ its related parties, is a member of the Company's Board of Directors, Xxxxxxx Xxxxx or one of its related parties shall be entitled to appoint one observer to attend meetings of the Company's Board of Directors (subject to exclusion with respect to any matter in which it would present, in the reasonable opinion of the Company's Board of Directors, a conflict of interest for such observer to participate in a Company's Board of Directors discussion with respect to such matter). (l) ~~For a period of three years from~~ On or prior to the ~~Termination Date~~Closing, the Company and the Placement Agents shall enter into a Right of First Refusal Agreement (the "ROFR AGREEMENT") in a form acceptable to the Company and each Placement Agent ~~shall have the~~ and their respective counsel: PROVIDED, HOWEVER, that R&R's right of first refusal under the ROFR Agreement shall take effect if, and only if, R&R places at least $15,000,000 of the Minimum Offering. The ROFR Agreement shall provide that (i) for a period of two years from the ~~"Right~~ Closing, the Company shall give each Placement Agent who is a party to the ROFR Agreement the irrevocable preferential right of ~~First Refusal")~~ first refusal to purchase for such Placement Agent's account, or to act as ~~underwriter or~~ agent for any ~~and all public or~~ proposed private offerings of securities (excluding all lease financing, bank financing or institutionally placed property debt), of the Company, or any successor to or subsidiary of the Company or other entity in which the Company either has a controlling equity interest or is generally authorized to enter into contracts or otherwise act on behalf of, (collectively referred to herein as the "Company") by the Company (the "Subsequent Company Offering"). In addition, the Company will use its best efforts to cause all officers, directors and holders of five percent or more of the Company's equity securities (the "Principal Stockholders") to agree in writing that the Placement Agent shall have such Right of First Refusal with respect to any secondary offering of the Company's securities by the ~~Principal Stockholders made during the three year period following the Termination Date. Accordingly, if during such period the~~ Company ~~intends to make a Subsequent Company Offering, the Company shall notify~~ and (ii) should the Placement ~~Agent~~ Agents each decide to exercise their Right of First Refusal on or about the same time, they shall do so in ~~writing~~ accordance with the terms set forth in the Right of ~~such intention and of the proposed terms of the offering~~First Refusal Agreement. The Company ~~shall thereafter promptly furnish the~~ agrees to offer each Placement Agent ~~with~~ the opportunity to purchase or sell such ~~information concerning the business, condition and prospects of the Company as the Placement Agent may reasonably request~~securities on terms no less favorable than it can obtain elsewhere. If within 15 20 business days of the receipt of such notice of intention and statement of ~~terms,~~ terms the Placement Agent does not accept in writing such offer to purchase such securities or to act as ~~underwriter or~~ agent with respect to such offering upon the terms proposed, the Company ~~and each of the Principal Stockholders~~ shall be free to negotiate terms with ~~other underwriters~~ third parties with respect to such offering and to effect such offering on such proposed ~~terms within six months after the end of such 15 business days~~terms. Before the Company ~~and each of the Principal Stockholders and/or~~ shall accept any ~~modified~~ proposal ~~from such underwriter~~materially less favorable to it than as originally proposed to each Placement Agent, ~~the~~ each Placement Agent's preferential ~~right~~ rights shall be ~~reinstated~~ applied, and the ~~same~~ procedure set forth above with respect to such modified proposal ~~as provided above shall be~~ adopted. ~~The~~ Each Placement Agent's failure ~~of the Placement Agent~~ to exercise ~~its Right of First Refusal~~ these preferential rights in any ~~particular instance~~ situation shall not affect ~~in any way~~ such ~~right with respect~~ Placement Agent's preferential rights to any subsequent offering during the term of the right of first refusal agreement. The Company represents and warrants that no other Subsequent Company Offering or Secondary Offering. [OPTIONAL - SEE LOI] Notwithstanding the foregoing, (i) should an investment banking firm which is generally recognized to be of a higher tier than the Placement Agent agree to the Subsequent Company Offering resulting in aggregate gross proceeds of $15,000,000 or more, and (ii) the Placement Agent is permitted by such investment banking firm person has any right to participate in ~~the Subsequent Company Offering to the extent of at least 10%~~any offer, ~~then the Right of First Refusal granted herein shall not apply to the Subsequent Company Offering~~ sale or ~~any related offering. (m) Within 90 days after the Termination Date, the Company shall elect a minimum of two "outside" persons (excluding affiliates of the Company and family members~~ distribution of the Company's ~~existing directors, officers and principal shareholders)~~ securities to ~~the Company's Board of Directors,~~ which such individuals shall be reasonably acceptable to the Placement Agent. Within 90 days of the Termination Date, the Board of Directors of the Company shall create an audit committee consisting of a majority of outside directors, which such audit committee will generally supervise the financial affairs of the Company. (n) For a period of five years from the Termination Date, unless waived by the Placement Agent, the Placement Agent shall have a right to designate an individual to attend all meetings of the Company's Board of Directors or committees thereof. The Company shall provide the Placement Agent with notice of all Board or committee meetings contemporaneously with notification to the members of the Board of Directors, as well as copies of any draft written consents of the Board of Directors or other documents or materials which may be provided to the Board of Directors. All information received by such representative at such meetings shall be kept confidential, shall not be disclosed by the representative to any third party, and shall be dealt with in full compliance with federal and state securities laws. (o) [IF APPLICABLE] For a period of five years from the Termination Date, the Company shall use its best efforts to maintain its current listing on the OTC Bulletin Board, including taking such actions as are necessary to comply with any newly enacted listing standards. (p) For a period of one year from the Termination Date, the Company will not, without the each Placement Agent's prior written consent, redeem any securities outstanding at the Termination Date nor declare or pay any dividends or make any other cash distribution in respect of its securities in excess of the amount of the Company's then current retained earnings as reflected on its most recent balance sheet. sell any securities, grant warrants or options to acquire any securities except pursuant to its existing Stock Option Plans or conversions of convertible securities or the exercise of outstanding options or Warrants. The Company preferential rights shall ~~advise the Placement Agent in writing at least five business days in advance of its intent to either redeem any outstanding securities or declare and pay dividends~~apply.

Appears in 1 contract

Samples: Placement Agency Agreement (Vyteris Holdings, Inc.)

Further Covenants. The Company hereby covenants and agrees that: (a) Except upon prior written notice to the Placement Agent, the Company shall not, at any time prior to the Final Closing, knowingly take any action which would cause any of the representations and warranties made by it in this Agreement not to be complete and correct in all material respects on and as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of each such date (except to the extent any representation or warranty relates to an earlier date). (b) If, at any time prior to the Final Closing, any event shall occur that causes a Company Xxxxx Xxxxxxxx Adverse Effect or otherwise which as a result it becomes necessary to amend or supplement any of the Offering Materials so that the representations and warranties herein remain true and correct in all material respects, or in case it shall be necessary to amend or supplement any of the Offering Materials to comply with Regulation D or any other applicable securities laws or regulations, the Company will promptly notify the Placement Agent and shall, at its sole cost, prepare and furnish to the Placement Agent copies of appropriate amendments and/or supplements in such quantities as the Placement Agent may reasonably request for delivery by the Placement Agent to potential subscribers. The Company will not at any ~~time, whether~~ time before ~~or after Termination Date,~~ the Final Closing prepare or use any amendment or supplement to the ~~Memorandum~~ Offering Materials of which the Placement Agent will not previously have been advised and furnished with a copy, or ~~to which the Placement Agent or its counsel will have objected in writing or orally (confirmed in writing within 24 hours), or~~ which is not in compliance in all material respects with the Act and ~~the Regulations~~other applicable securities laws. As soon as the Company is advised thereof, the Company will advise the Placement Agent and its counsel, and confirm the advice in writing, of any order preventing or suspending the use of the ~~Memorandum~~Offering Materials, or the suspension ~~of or the qualification or registration of the Shares for offering or~~ of any exemption for such qualification or registration ~~of the Shares~~ thereof for offering in any jurisdiction, or of the institution or threatened institution of any proceedings for any of such purposes, and the Company will use its reasonable best efforts to prevent the issuance of any such order and, if issued, to obtain as soon as reasonably possible the lifting thereof. (b) The Company has caused to be delivered to the Placement Agent copies of the Memorandum, has consented, and hereby consents, to the use of such copies for the purposes contemplated hereby permitted by the Act and applicable state securities laws, and has authorized, and hereby authorizes, the Placement Agent to use the Memorandum in connection with the sale of the Shares until the Termination Date, in each case subject to the limitations contained therein and herein, and no person is or will be authorized to give any information or make any representations other than those contained in the Memorandum or to use any offering materials other than those contained in the Memorandum in connection with the sale of the Shares. In the event of the happening, at any time within such period, of any event to which the Company has knowledge and which materially adversely affects, or may affect, the Company, and which should in the opinion of the Placement Agent's counsel be set forth in an amendment or supplement to the Memorandum in order to make the statement therein not misleading, in light of the circumstances existing at the time the Memorandum is required to be delivered to a purchaser of the Shares, or in case it shall, in the opinion of counsel to the Placement Agent, be necessary to amend or supplement the Memorandum to comply with any Federal or state securities laws or with the Regulations or the rules and regulations of any state in which the Memorandum is made available to a prospective subscriber, the Company will forthwith prepare and furnish to the Placement Agent copies of such amended Memorandum or of such supplement to be attached to the Memorandum in such quantities as the Placement Agent may reasonably request, in order that the Memorandum, as so amended or supplemented, will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements in the Memorandum, in light of the circumstances under which they were made, not misleading. The preparation, distribution and furnishing of any such amendment to the Memorandum or any such supplement to be attached to the Memorandum will be without expense to the Placement Agent. (c) The Company ~~will~~ shall comply with the Act, the ~~Regulations (including~~Exchange Act and the rules and regulations thereunder, ~~without limitation~~all applicable state securities laws and the rules and regulations thereunder in the states in which the Company’s blue sky counsel has advised the Placement Agent that the Shares are qualified or registered for sale or exempt from such qualification or registration, ~~Rule 506)~~ so as to permit the continuance of the sales of the Shares, and will file or cause to be filed with the SEC, and ~~will~~ shall promptly thereafter forward or cause to be forwarded to the Placement ~~Agent~~ Agent, any and all reports on Form D as are required. (d) During the Offering Period, the Company will make available for review by prospective purchasers of the Shares, upon their request, all material contracts or other documents described or listed in the Memorandum. (e) The Company ~~will~~ shall use its best efforts to qualify the Shares for sale under the securities laws of such jurisdictions in the United States ~~of [INSERT STATE NAMES]~~as may be mutually agreed to by the Company and the Placement Agent, and ~~the~~ Company will make or cause to be made such applications and furnish information as may be ~~reasonably~~ required for such purposes, provided that ~~the~~ Company will not be required to qualify as a foreign corporation in any ~~jurisdiction~~jurisdiction or execute a general consent to service of process. The Company will, from time to time, prepare and file such statements and reports as are or may be required to continue such ~~qualifications,~~ qualifications in effect for so long a period as the Placement Agent may reasonably ~~request~~request with respect to the Offering. (e) The Company shall place a legend on the certificates representing the Shares and the Agent Warrants that the securities evidenced thereby have not been registered under the Act or applicable state securities laws, setting forth or referring to the applicable restrictions on transferability and sale of such securities under the Act and applicable state laws. (f) The Company will deliver to the Placement Agent from time to time and without charge, until the Termination Date, as many copies of the Memorandum as the Placement Agent may reasonably request. (g) The Company will shall apply the net proceeds from the sale of the Shares ~~substantially~~ for the purposes ~~set forth under "Use of Proceeds"~~ substantially as described in the ~~Memorandum~~Offering Materials. The Company shall not use any of the net proceeds of the Offering to repay indebtedness to officers (other than accrued salaries incurred in the ordinary course of business), directors or shareholders of the Company without the prior written consent of the Placement Agent. (g) During the Offering Period, the Company shall afford each prospective purchaser of Shares the opportunity to ask questions of and receive answers from an officer of the Company concerning the terms and conditions of the Offering and the opportunity to obtain such other additional information necessary to verify the accuracy of the Offering Materials to the extent the Company possesses such information or can acquire it without unreasonable expense. In addition, to the extent that any purchaser of Shares has inquiries concerning any of the business or operations of any member of the Company Group, the Company shall use reasonable best efforts to ensure that officers of such members are made available to respond to such inquiries. (h) ~~For a period~~ Except upon obtaining the prior written consent of ~~three years from~~ Aegis, which consent shall not be unreasonably withheld, the Company shall not, at any time prior to the earlier of the Final Closing or the Termination Date, except as contemplated by the ~~Company will deliver to the Placement Agent~~ Offering Materials (i) ~~within 45 days from~~ engage in or commit to engage in any transaction outside the ~~end~~ ordinary course of the applicable fiscal quarter, a copy of each unaudited quarterly financial statement which shall have been prepared in accordance with generally accepted accounting principles consistently applied, and, if applicable, any other documents or reports which may be issued by the Company to the public, including, without limitation, reports on Forms 8-K, 10-K and 10-Q and exhibits theretobusiness, (ii) ~~reports~~ issue, agree to issue or ~~communications~~ set aside for issuance any securities (~~financial~~ debt or ~~other~~equity) or any rights to acquire any such securities; provided, however, that the Company shall be permitted to issue stock options and/or restricted stock to officers, advisors, directors and employees of the Company ~~mailed~~ pursuant to its ~~security holders~~existing equity incentive plan as described in the SEC Reports, ~~and~~ (ii) incur, outside of the ordinary course of business, any material indebtedness, (iii) ~~every press release and every~~ dispose of any material ~~news item and article in respect of the Company or its affairs which was released by the Company. Further~~assets, ~~for a period of three years from the Termination Date, the Company will~~ (iiv) ~~within 90 days of the end of the fiscal year furnish~~ make any acquisition (except to the ~~Placement Agent and distribute~~ extent specifically referenced in the Company's stockholders annual financial statements prepared by an independent auditor in conformity with generally accepted accounting principles, consistently applied, which clearly set forth the financial position of the Company and Offering Materials) or (iiv) ~~furnish to the Placement Agent a duplicate list of stockholders of the Company at such time as reasonably requested by the Placement Agent together with monthly DTC transfer sheets, if applicable~~change its business or operations. (i) The Company ~~will~~ shall pay all reasonable expenses incurred in connection with the preparation and printing of all necessary offering documents and instruments related to the Offering and the issuance of the ~~Shares,~~ Shares and the ~~underlying shares of Common Stock~~ Agent Warrants and will also pay its own expenses for accounting fees, legal ~~fees, transfer agent~~ fees and other costs involved with the Offering. ~~The~~ All blue sky filings related to this Offering shall be prepared by the Company’s counsel, at the Company’s expense, with copies of all filings to be promptly forwarded to the Placement Agent. Further, as promptly as practicable after the Final Closing, the Company ~~will furnish~~ shall prepare, at its ~~expense~~ own expense, an electronic “closing binder” relating to the Offering and will distribute one such ~~quantities~~ binder to each of ~~the offering documents and instruments as~~ the Placement Agent ~~may reasonably request~~and its counsel. (j) During the Offering Period, the Company will not, nor shall it authorize any person or entity acting on its behalf to (i) enter into any letter of intent or definitive agreement with any other placement agent or underwriter with respect to a private or public offering of the Company’s debt or equity securities, or (ii) enter into any definitive agreement regarding any merger, combination divestiture, joint venture, sale or acquisition agreement in whatever form. The Company will ~~provide to the Placement Agent, for delivery to all offerees and subscribers and their representatives, any additional information, documents and instruments which the~~ keep Placement Agent promptly advised with respect to any negotiations regarding any (i) a private or ~~its counsel reasonably deems necessary to comply with~~ public offering of the ~~Act and the Regulations and the~~ Company’s debt or equity securities ~~laws and the rules and regulations thereunder of those states~~ or (ii) merger, combination divestiture, joint venture, sale or acquisition agreement in ~~which the Shares are to be offered and sold~~whatever form. (k) The Company will comply with all registration, filing and reporting requirements of the Act or the Securities Exchange Act of 1934 (the "Exchange Act") which may from time to time be applicable to the Company. (l) For a period of three years from the Termination Date, the Placement Agent shall have the right of first refusal (the "Right of First Refusal") to act as underwriter or agent for any and all public or private offerings of securities (excluding all lease financing, bank financing or institutionally placed property debt), of the Company, or any successor Immediately prior to or ~~subsidiary of~~ promptly following the Company or other entity in which the Company either has a controlling equity interest or is generally authorized to enter into contracts or otherwise act on behalf of, (collectively referred to herein as the "Company") by the Company (the "Subsequent Company Offering"). In additionClosing, the Company will use its best efforts to ~~cause~~ take all ~~officers, directors~~ reasonable actions necessary to obtain the Stockholder Approval (as described above and ~~holders of five percent or more~~ in the Term Sheet) including adding same as matters to be voted on at the next annual meeting of the Company~~'s equity securities~~ ’s Stockholders to be held in October 2024 or promptly thereafter. (l) Prior to the ~~"Principal Stockholders") to agree in writing that the Placement Agent shall have such Right of~~ First Refusal with respect to any secondary offering of the Company's securities by the Principal Stockholders made during the three year period following the Termination Date. Accordingly, if during such period the Company intends to make a Subsequent Company OfferingClosing, the Company shall ~~notify~~ provide notices to certain holders of those rights issued pursuant to Section 6 of those certain subscription agreements (the ~~Placement Agent~~ “Additional Investment Rights”), (a) dated between April 19, 2023 and May 26, 2023 (the “Prior Subscription Agreements”), executed in ~~writing of such intention~~ connection with the offer and ~~of the proposed terms of the offering. The Company shall thereafter promptly furnish the Placement Agent with such information concerning the business, condition and prospects of~~ sale by the Company as of its Series AA Convertible Preferred Stock (inclusive of all subseries thereof) (the ~~Placement Agent may reasonably request. If within 15 business days of the receipt of such notice of intention and statement of terms~~“Series AA Financing”), the Placement Agent does not accept in writing such offer to act as underwriter or agent with respect to such offering upon the terms proposed, the Company and each of the Principal Stockholders shall be free to negotiate terms with other underwriters with respect to such offering and to effect such offering on such proposed terms within six months after the end of such 15 business days. Before the Company and each of the Principal Stockholders and/or shall accept any modified proposal from such underwriter, the Placement Agent's preferential right shall be reinstated and the same procedure with respect to such modified proposal as provided above shall be adopted. The failure of the Placement Agent to exercise its Right of First Refusal in any particular instance shall not affect in any way such right with respect to any other Subsequent Company Offering or Secondary Offering. [OPTIONAL - SEE LOI] Notwithstanding the foregoing, confirming: (i) ~~should an investment banking firm~~ the extension of the period for which ~~is generally recognized~~ such Additional Investment Rights can be exercised from November 26, 2024, to ~~be of a higher tier than the Placement Agent agree to the Subsequent Company Offering resulting in aggregate gross proceeds of $15,000,000 or more~~May 26, 2025: and (ii) adjusting the ~~Placement Agent is permitted by~~ conversion prices of such ~~investment banking firm~~ Additional Investment Rights to ~~participate~~ the respective Conversion Price Floor (as defined in the ~~Subsequent Company Offering to~~ Prior Subscription Agreements) and (b) dated between November 30, 2023 and December 22, 2023 (the ~~extent of at least 10%~~“Prior AAA Subscription Agreements”), ~~then~~ executed in connection with the ~~Right of First Refusal granted herein shall not apply to the Subsequent Company Offering or any related offering. (m) Within 90 days after the Termination Date,~~ offer and sale by the Company ~~shall elect a minimum~~ of ~~two "outside" persons~~ its Series AAA Convertible Preferred Stock (~~excluding affiliates~~ inclusive of all subseries thereof) (the “Series AAA Financing”), confirming: (i) the extension of the ~~Company and family members of the Company's existing directors, officers and principal shareholders) to the Company's Board of Directors,~~ period for which such ~~individuals shall~~ Additional Investment Rights can be ~~reasonably acceptable~~ exercised from June 22, 2025 to ~~the Placement Agent. Within 90 days of the Termination Date~~September 22, the Board of Directors of the Company shall create an audit committee consisting of a majority of outside directors, which such audit committee will generally supervise the financial affairs of the Company2025. (n) For a period of five years from the Termination Date, unless waived by the Placement Agent, the Placement Agent shall have a right to designate an individual to attend all meetings of the Company's Board of Directors or committees thereof. The Company shall provide the Placement Agent with notice of all Board or committee meetings contemporaneously with notification to the members of the Board of Directors, as well as copies of any draft written consents of the Board of Directors or other documents or materials which may be provided to the Board of Directors. All information received by such representative at such meetings shall be kept confidential, shall not be disclosed by the representative to any third party, and shall be dealt with in full compliance with federal and state securities laws. (o) [IF APPLICABLE] For a period of five years from the Termination Date, the Company shall use its best efforts to maintain its current listing on the OTC Bulletin Board, including taking such actions as are necessary to comply with any newly enacted listing standards. (p) For a period of one year from the Termination Date, the Company will not, without the Placement Agent's prior written consent, redeem any securities outstanding at the Termination Date nor declare or pay any dividends or make any other cash distribution in respect of its securities in excess of the amount of the Company's then current retained earnings as reflected on its most recent balance sheet. sell any securities, grant warrants or options to acquire any securities except pursuant to its existing Stock Option Plans or conversions of convertible securities or the exercise of outstanding options or Warrants. The Company shall advise the Placement Agent in writing at least five business days in advance of its intent to either redeem any outstanding securities or declare and pay dividends.

Appears in 1 contract

Samples: Placement Agency Agreement (Super League Enterprise, Inc.)

Further Covenants. The Company hereby covenants and agrees that: (a) Except with the prior written consent of the Placement Agent, the Company shall not, at any time prior to the Final Closing, take any action which would cause any of the representations and warranties made by it in this Agreement not to be complete and correct on and as of each Closing Date with the same force and effect as if such representations and warranties had been made on and as of each such date. (b) If, at any time prior to the Final Closing, any event shall occur which does or may materially affect the Company or as a result of which it might become necessary to amend or supplement the Memorandum so that the representations and warranties herein remain true in all material respects, or in case it shall, in the opinion of counsel to the Placement Agent, be necessary to amend or supplement the Memorandum to comply with Regulation D or any other applicable securities laws or regulations, the Company will promptly notify the Placement Agent and shall, at its sole cost, prepare and furnish to the Placement Agent copies of appropriate amendments and/or supplements in such quantities as the Placement Agent may reasonably request. The Company will not at any time, whether before or after ~~Termination Date~~the Final Closing, prepare or use any amendment or supplement to the Memorandum of which the Placement Agent will not previously have been advised and furnished with a copy, or to which the Placement Agent or its counsel will have reasonably objected in writing or orally (confirmed in writing within 24 hours), or which is not in compliance in all material respects with the ~~Act~~ Act, the regulations and ~~the Regulations~~other applicable securities laws. As soon as the Company is advised thereof, the Company will advise the Placement Agent and its counsel, and confirm the advice in writing, of any order preventing or suspending the use of the Memorandum, or the suspension of or the qualification or registration of the Shares for offering or the suspension of any exemption for such qualification or registration of the Shares for offering in any jurisdiction, or of the institution or threatened institution of any proceedings for any of such purposes, and the Company will use its reasonable best efforts to prevent the issuance of any such order and, if issued, to obtain as soon as reasonably possible the lifting thereof. (b) The Company has caused to be delivered to the Placement Agent copies of the Memorandum, has consented, and hereby consents, to the use of such copies for the purposes contemplated hereby permitted by the Act and applicable state securities laws, and has authorized, and hereby authorizes, the Placement Agent to use the Memorandum in connection with the sale of the Shares until the Termination Date, in each case subject to the limitations contained therein and herein, and no person is or will be authorized to give any information or make any representations other than those contained in the Memorandum or to use any offering materials other than those contained in the Memorandum in connection with the sale of the Shares. In the event of the happening, at any time within such period, of any event to which the Company has knowledge and which materially adversely affects, or may affect, the Company, and which should in the opinion of the Placement Agent's counsel be set forth in an amendment or supplement to the Memorandum in order to make the statement therein not misleading, in light of the circumstances existing at the time the Memorandum is required to be delivered to a purchaser of the Shares, or in case it shall, in the opinion of counsel to the Placement Agent, be necessary to amend or supplement the Memorandum to comply with any Federal or state securities laws or with the Regulations or the rules and regulations of any state in which the Memorandum is made available to a prospective subscriber, the Company will forthwith prepare and furnish to the Placement Agent copies of such amended Memorandum or of such supplement to be attached to the Memorandum in such quantities as the Placement Agent may reasonably request, in order that the Memorandum, as so amended or supplemented, will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements in the Memorandum, in light of the circumstances under which they were made, not misleading. The preparation, distribution and furnishing of any such amendment to the Memorandum or any such supplement to be attached to the Memorandum will be without expense to the Placement Agent. (c) The Company ~~will~~ shall comply in all material respects with the Act, the ~~Regulations (including~~regulations, ~~without limitation~~the 1934 Act and the rules and regulations thereunder, ~~Rule 506)~~ all applicable state securities laws and the rules and regulations thereunder in the states in which the Placement Agent's Blue Sky counsel has advised the Placement Agent that the Units are qualified or registered for sale or exempt from such qualification or registration, so as to permit the continuance of the sales of the ~~Shares~~Units, and will file with the SEC, and ~~will~~ shall promptly thereafter forward to the Placement ~~Agent~~ Agent, any and all reports on Form D as are required. (d) During the Offering Period, the Company will make available for review by prospective purchasers of the Shares, upon their request, all material contracts or other documents described or listed in the Memorandum. (e) The Company ~~will~~ shall use its reasonable best efforts to qualify the ~~Shares~~ Units for sale under the securities laws of such jurisdictions as may be mutually agreed to by the ~~States of [INSERT STATE NAMES]~~Company and the Placement Agent, and the Company will make such applications and furnish information as may be ~~reasonably~~ required for such purposes, provided that the Company will not be required to qualify as a foreign corporation in any ~~jurisdiction~~jurisdiction or to subject itself to general service of process in any jurisdiction (with the exception of the State of New York and United States Federal courts sitting in the City of New York). The Company will, from time to time, prepare and file such statements and reports as are or may be required to continue such ~~qualifications,~~ qualifications in effect for so long a period as the Placement Agent may reasonably request. (e) The Company shall place a legend on the certificates representing the Shares, and the Agent's Warrants and the Agent's Shares stating that the securities evidenced thereby have not been registered under the Act or applicable state securities laws, setting forth or referring to the applicable restrictions on transferability and sale of such securities under the Act and applicable state laws. (f) The Company will deliver to the Placement Agent from time to time and without charge, until the Termination Date, as many copies of the Memorandum as the Placement Agent may reasonably request. (g) The Company will shall apply the net proceeds from the sale of the ~~Shares substantially for~~ Units in the ~~purposes set forth~~ manner described under "Risk Factors - Discretionary Use of Proceeds" and "Use of Proceeds" headings in the Memorandum. Except as specifically set forth in the Memorandum, the net proceeds of the Offering shall not be used to repay indebtedness to officers, directors or stockholders of the Company without the prior written consent of the Placement Agent, except for the reimbursement for reasonable and necessary expenses which are related to Company business or which are incurred in connection with attendance at board, committee or shareholder meetings. (g) During the Offering Period, the Company shall make available for review by prospective purchasers of the Units during normal business hours at the Company's offices, upon their request, copies of the Company Agreements to the extent that such disclosure shall not violate any obligation on the part of the Company to maintain the confidentiality thereof and shall afford each prospective purchaser of Units the opportunity to ask questions of and receive answers from, an officer of the Company concerning the terms and conditions of, the Offering and the opportunity to obtain such other additional information necessary to verify the accuracy of the Memorandum and the Current Reports to the extent it possesses such information or can acquire it without unreasonable expense. (h) ~~For a period of three years from~~ In connection with the ~~Termination Date~~Placement Agent's due diligence investigation, the Company ~~will deliver to the Placement Agent (i) within 45 days from the end of the applicable fiscal quarter, a copy of each unaudited quarterly financial statement which~~ shall ~~have been prepared in accordance~~ cooperate with generally accepted accounting principles consistently applied, and, if applicable, any other documents or reports which may be issued by the Company to the public, including, without limitation, reports on Forms 8-K, 10-K and 10-Q and exhibits thereto, (ii) reports or communications (financial or other) of the Company mailed to its security holders, and (iii) every press release and every material news item and article in respect of the Company or its affairs which was released by the Company. Further, for a period of three years from the Termination Date, the Company will (i) within 90 days of the end of the fiscal year furnish to the Placement Agent and ~~distribute~~ the ~~Company~~Placement Agent's ~~stockholders annual financial statements prepared~~ counsel by ~~an independent auditor~~ making available to the Placement Agent's representatives such information as may be appropriate in ~~conformity with generally accepted accounting principles, consistently applied, which clearly set forth the financial position~~ making a reasonable investigation of the Company and ~~(ii) furnish to~~ its affairs. The Company shall provide, at its expense, background checks, credit or similar reports on such key management persons as the Placement Agent ~~a duplicate list of stockholders of~~ shall reasonably request. These expenses will not exceed $5,000. Prior to the First Closing, the Company at shall make available to such ~~time~~ credit reporting firm such materials relating to the Company, and shall provide such firm with access to such employees, as shall be reasonably requested by the Placement ~~Agent together with monthly DTC transfer sheets, if applicable~~Agent. (i) [Intentionally Omitted]. (j) The Company ~~will~~ shall pay all reasonable expenses incurred in connection with the preparation and printing of all necessary offering documents and instruments related to the Offering and the issuance of the ~~Shares~~Units, the Agent's Warrants, the Agent's Shares and any warrants issued by the ~~underlying shares of Common Stock~~ Company to the Placement Agent pursuant to the consulting agreement referred to in Section 3(h) and will also pay ~~its~~ the Company's own expenses for accounting fees, legal fees, ~~transfer agent fees~~ and other costs involved with the Offering. The Company will ~~furnish~~ provide at its own expense such quantities of the ~~offering~~ Memorandum and other documents and instruments ~~as the Placement Agent may reasonably request. (j) The Company will provide~~ relating to the Placement Agent, for delivery to all offerees and subscribers and their representatives, any additional information, documents and instruments which the Placement Agent or its counsel reasonably deems necessary to comply with the Act and the Regulations and the securities laws and the rules and regulations thereunder of those states in which the Shares are to be offered and sold. (k) The Company will comply with all registration, filing and reporting requirements of the Act or the Securities Exchange Act of 1934 (the "Exchange Act") which may from time to time be applicable to the Company. (l) For a period of three years from the Termination Date, the Placement Agent shall have the right of first refusal (the "Right of First Refusal") to act as underwriter or agent for any and all public or private offerings of securities (excluding all lease financing, bank financing or institutionally placed property debt), of the Company, or any successor to or subsidiary of the Company or other entity in which the Company either has a controlling equity interest or is generally authorized to enter into contracts or otherwise act on behalf of, (collectively referred to herein as the "Company") by the Company (the "Subsequent Company Offering"). In addition, the Company will use its best efforts to cause all officers, directors and holders of five percent or more of the Company's equity securities (the "Principal Stockholders") to agree in writing that the Placement Agent shall have such Right of First Refusal with respect to any secondary offering of the Company's securities by the Principal Stockholders made during the three year period following the Termination Date. Accordingly, if during such period the Company intends to make a Subsequent Company Offering, the Company shall notify the Placement Agent in writing of such intention and of the proposed terms of the offering. The Company shall thereafter promptly furnish the Placement Agent with such information concerning the business, condition and prospects of the Company Offering as the Placement Agent may reasonably request. ~~If within 15 business days of the receipt of such notice of intention and statement of terms~~In addition, the ~~Placement Agent does not accept in writing such offer to act as underwriter or agent~~ Company will pay all reasonable filing fees, costs and reasonable legal fees for Blue Sky services and related filings and expenses of counsel with respect to ~~such offering upon the terms proposed, the Company and each of the Principal Stockholders~~ Blue Sky qualifications. The Blue Sky filings shall be free to negotiate terms with other underwriters with respect to such offering and to effect such offering on such proposed terms within six months after the end of such 15 business days. Before the Company and each of the Principal Stockholders and/or shall accept any modified proposal from such underwriter, prepared by the Placement Agent's ~~preferential right~~ Blue Sky counsel and all Blue Sky filing fees shall be ~~reinstated~~ paid by the Company prior to any filing. All other fees and expenses of Blue Sky counsel shall be payable at each Closing. (k) Until the earlier of the Termination Date and the ~~same procedure~~ Final Closing, neither the Company nor any person or entity acting on its behalf will negotiate with any other placement agent or underwriter with respect to ~~such modified proposal as provided above shall be adopted~~a private or public offering of the Company's or any subsidiary's debt or equity securities. ~~The failure~~ Neither the Company nor anyone acting on its behalf will, until the earlier of the Termination Date and the Final Closing, without the prior written consent of the Placement ~~Agent to exercise its Right~~ Agent, offer for sale to, or solicit offers to, subscribe for Units or other securities of ~~First Refusal~~ the Company from, or otherwise approach or negotiate in ~~any particular instance shall not affect in any way such right with~~ respect to thereof with, any other ~~Subsequent~~ person. (l) Current Company ~~Offering or Secondary Offering. [OPTIONAL - SEE LOI] Notwithstanding the foregoing~~management, (i) should an investment banking firm which is generally recognized to be of a higher tier than the Placement Agent agree to the Subsequent Company Offering resulting in aggregate gross proceeds of $15,000,000 or more, and (ii) the Placement Agent is permitted by such investment banking firm to participate as described in the ~~Subsequent~~ Memorandum, will retain their positions through the Final Closing and the Company ~~Offering to~~ will not modify the ~~extent~~ employment agreements between each member of ~~at least 10%, then~~ management and the ~~Right~~ Company prior the earlier of ~~First Refusal granted herein shall not apply to~~ the ~~Subsequent Company Offering or any related offering~~Termination Date and the Final Closing. (m) ~~Within 90 days~~ At all times from and after the date of the Memorandum and until the earlier of the Termination ~~Date~~Date and the Final Closing, the Company shall ~~elect a minimum of two "outside" persons (excluding affiliates~~ own all right, title and interest in all Intangibles, as described in the Memorandum or Current Reports. Prior to earlier of the ~~Company~~ Termination Date and ~~family members~~ the Final Closing and except as otherwise described in the Memorandum of the ~~Company's existing directors~~Current Reports, ~~officers and principal shareholders) to~~ the ~~Company's Board~~ Company will not incur any material indebtedness or dispose of ~~Directors~~any material assets or make any material acquisition or change in its business or operations, ~~which such individuals shall be reasonably acceptable to~~ except with the Placement Agent. Within 90 days of the Termination Date, the Board of Directors of the Company shall create an audit committee consisting of a majority of outside directors, which such audit committee will generally supervise the financial affairs of the Company's knowledge or consent. (n) For a period of three (3) years after the Final Closing, the Company shall file with the SEC in a timely manner all reports and other documents required of the Company under the Act and the 1934 Act, and reports on Form 6-K for each of the first three quarters of its fiscal year, and promptly shall furnish copies of the same to the Placement Agent within five ~~years from~~ (5) days of the filing thereof. (o) The Company shall file five (5) copies of a Notice of Sales of Securities on Form D with the SEC no later than 15 days after the first sale of the Units. The Company shall file promptly such amendments to such Notices on Form D as shall become necessary and shall also comply with any filing requirement imposed by the laws of any state of jurisdiction in which offers and sales are made. The Company shall furnish the Placement Agent with copies of all filings. (p) The Company shall not, during the period commencing on the date hereof and ending on the earlier of the Termination ~~Date~~Date and the Final Closing, ~~unless waived by~~ issue any press release or other public communication, or hold any press conference with respect to the Company, its financial condition, results of operations, business, properties, assets or liabilities, or the Offering, without the prior consent of the Placement Agent, ~~the Placement Agent~~ which consent shall ~~have a right~~ not be unreasonably withheld or delayed, subject to ~~designate an individual to attend all meetings of~~ the Company's ~~Board of Directors or committees thereof. The Company shall provide the Placement Agent~~ obligation to comply with notice of all Board or committee meetings contemporaneously with notification to the members of the Board of Directors, as well as copies of any draft written consents of the Board of Directors or other documents or materials which may be provided to the Board of Directors. All information received by such representative at such meetings shall be kept confidential, shall not be disclosed by the representative to any third party, and shall be dealt with in full compliance with federal and state applicable securities laws. (oq) ~~[IF APPLICABLE] For a period of five years from the Termination Date, the~~ The Company shall ~~use its best efforts~~ continue to maintain ~~its current listing~~ "key man" life insurance on Xxxxxx X.X. Xxxxxxxxx in an amount of $2,000,000 and on Xxxx Xxxxxx in an amount of $1,000,000 as set forth under the ~~OTC Bulletin Board, including taking such actions as are necessary to comply with any newly enacted listing standards~~caption "Risk Factors" in the Memorandum. (pr) ~~For~~ The Placement Agent shall have the right to have one board observer for a two-year period ~~of one year from~~ following the ~~Termination Date, the Company will not, without the~~ Final Closing. The Placement Agent's prior written consent, redeem any securities outstanding at the Termination Date nor declare or pay any dividends or make any other cash distribution in respect of its securities in excess of the amount of the Company's then current retained earnings as reflected on its most recent balance sheet. sell any securities, grant warrants or options to acquire any securities except pursuant to its existing Stock Option Plans or conversions of convertible securities or the exercise of outstanding options or Warrantsboard observer shall initially be Xxxxxxx Xxxxxxx. The Company ~~shall advise~~ will reimburse the Placement Agent ~~in writing~~ for the reasonable expenses related to the attendance of that observer at ~~least five business days in advance of its intent to either redeem any outstanding securities or declare and pay dividends~~board meetings.

Appears in 1 contract

Samples: Placement Agency Agreement (Acln LTD)

Further Covenants. The Company hereby covenants and agrees that: (a) The Company will not at any time, whether before or after ~~Termination~~ Closing Date, prepare or use any amendment or supplement to the Memorandum of which the Placement Agent will not previously have been advised and furnished with a copy, or to which the Placement Agent or its counsel will have objected in writing or orally (confirmed in writing within 24 hours), or which is not in compliance with the Act and the Regulations. As soon as the Company is advised thereof, the Company will advise the Placement Agent and its counsel, and confirm the advice in writing, of any order preventing or suspending the use of the Memorandum, or the suspension of or the qualification or registration of the Shares for offering or of any exemption for such qualification or registration of the Shares for offering in any jurisdiction, or of the institution or threatened institution of any proceedings for any of such purposes, and the Company will use its best efforts to prevent the issuance of any such order and, if issued, to obtain as soon as possible the lifting thereof. (b) The Company has caused to be delivered to the Placement Agent copies of the Memorandum, has consented, and hereby consents, to the use of such copies for the purposes contemplated hereby permitted by the Act and applicable state securities laws, and has authorized, and hereby authorizes, the Placement Agent to use the Memorandum in connection with the sale of the Shares until the ~~Termination Date~~expiration of the Offering Period, in each case subject to the limitations contained therein and herein, and no person is or will be authorized to give any information or make any representations other than those contained in the Memorandum or to use any offering materials other than those contained in the Memorandum in connection with the sale of the Shares. In the event of the happening, at any time within such period, of any event to which the Company has knowledge and which materially adversely affects, or may affect, the Company, and which should in the opinion of the Placement Agent's counsel be set forth in an amendment or supplement to the Memorandum in order to make the statement therein not misleading, in light of the circumstances existing at the time the Memorandum is required to be delivered to a purchaser of the Shares, or in case it shall, in the opinion of counsel to the Placement Agent, be necessary to amend or supplement the Memorandum to comply with any Federal or state securities laws or with the Regulations or the rules and regulations of any state in which the Memorandum is made available to a prospective subscriber, the Company will forthwith prepare and furnish to the Placement Agent copies of such amended Memorandum or of such supplement to be attached to the Memorandum in such quantities as the Placement Agent may reasonably request, in order that the Memorandum, as so amended or supplemented, will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements in the Memorandum, in light of the circumstances under which they were made, not misleading. The preparation, distribution and furnishing of any such amendment to the Memorandum or any such supplement to be attached to the Memorandum will be without expense to the Placement Agent. (c) The Company will comply with the Act, the Regulations (including, without limitation, Rule ~~506~~504) so as to permit the continuance of the sales of the Shares, and will file with the SEC, and will promptly thereafter forward to the Placement Agent any and all reports on Form D as are required. (d) During the Offering Period, the Company will make available for review by prospective purchasers of the Shares, upon their request, all material contracts or other documents described or listed in the Memorandum. (e) The Company will use its best efforts to qualify the Shares for sale under the securities laws of the States of ~~[INSERT STATE NAMES]~~Florida and New York, and the Company will make such applications and furnish information as may be reasonably required for such purposes, provided that the Company will not be required to qualify as a foreign corporation in any jurisdiction. The Company will, from time to time, prepare and file such statements and reports as are or may be required to continue such qualifications, in effect for so long a period as the Placement Agent may reasonably request. (f) The Company will deliver to the Placement Agent from time to time and without charge, until the ~~Termination~~ Closing Date, as many copies of the Memorandum as the Placement Agent may reasonably request. (g) The Company will apply the net proceeds from the sale of the Shares substantially for the purposes set forth under "Use of Proceeds" in the Memorandum. (h) For a period of ~~three~~ five years from the ~~Termination~~ Closing Date, the Company will deliver to the Placement Agent (i) ~~within 45 days from the end of the applicable fiscal quarter,~~ a copy of each unaudited quarterly financial statement ~~which shall have been prepared in accordance~~ and together with ~~generally accepted accounting principles consistently applied, and, if applicable,~~ any other documents or reports which may be issued by the Company to the public, including, without limitation, reports on Forms 8-K, 10-K and 10-Q and exhibits thereto, (ii) reports or communications (financial or other) of the Company mailed to its security holders, and (iii) every press release and every material news item and article in respect of the Company or its affairs which was released by the Company. Further, for a period of three years from the ~~Termination~~ Closing Date, the Company will (i) ~~within 90 days of the end of the fiscal year~~ furnish to the Placement Agent and distribute the Company's ~~stockholders~~ shareholders annual financial statements prepared by an independent auditor in conformity with generally accepted accounting principles, consistently applied, which clearly set forth the financial position of the Company and (ii) furnish to the Placement Agent a duplicate list of ~~stockholders~~ shareholders of the Company at such time as reasonably requested by the Placement Agent together with monthly DTC transfer sheets~~, if applicable~~. (i) The Company will pay all expenses incurred in connection with the preparation and printing of all necessary offering documents and instruments related to the Offering and the issuance of the Shares, ~~and the underlying shares of Common Stock~~ and will also pay its own expenses for accounting fees, legal fees, transfer agent fees and other costs involved with the Offering. The Company will furnish at its expense such quantities of the offering documents and instruments as the Placement Agent may reasonably request. (j) The Company will provide to the Placement Agent, for delivery to all offerees and subscribers and their representatives, any additional information, documents and instruments which the Placement Agent or its counsel reasonably deems necessary to comply with the Act and the Regulations and the securities laws and the rules and regulations thereunder of those states in which the Shares are to be offered and sold. (k) The Company will comply with all registration, filing and reporting requirements of the Act or the ~~Securities~~ Exchange Act ~~of 1934 (the "Exchange Act")~~ which may from time to time be applicable to the Company. (l) For a period of three years from the ~~Termination~~ Closing Date, the Placement Agent shall have the right of first refusal (the "Right of First Refusal") to act as underwriter or agent for any and all public or private offerings of securities (excluding all lease financing, bank financing or institutionally placed property debt), of the Company, or any successor to or subsidiary of the Company or other entity in which the Company either has a controlling equity interest or is generally authorized to enter into contracts or otherwise act on behalf of, (collectively referred to herein as the "Company") by the Company (the "Subsequent Company Offering"). In addition, the Company will use its best efforts to cause all officers, directors and holders of five percent (5%) or more of the Company's equity securities (the "Principal Stockholders") to agree in writing that the Placement Agent shall have such Right of First Refusal with respect to any ~~secondary offering~~ sale of the Company's securities by the Principal Stockholders made during the three year period following the ~~Termination~~ Closing Date. Accordingly, if during such period the Company intends to make a Subsequent Company Offering, the Company shall notify the Placement Agent in writing of such intention and of the proposed terms of the offering. The Company shall thereafter promptly furnish the Placement Agent with such information concerning the business, condition and prospects of the Company as the Placement Agent may reasonably request. If within 15 business days of the receipt of such notice of intention and statement of terms, the Placement Agent does not accept in writing such offer to act as underwriter or agent with respect to such offering upon the terms proposed, the Company and each of the Principal Stockholders shall be free to negotiate terms with other underwriters with respect to such offering and to effect such offering on such proposed terms within six months after the end of such 15 business days. Before the Company and each of the Principal Stockholders and/or shall accept any modified proposal from such underwriter, the Placement Agent's preferential right shall be reinstated and the same procedure with respect to such modified proposal as provided above shall be adopted. The failure of the Placement Agent to exercise its Right of First Refusal in any particular instance shall not affect in any way such right with respect to any other Subsequent Company Offering or Secondary Offering. ~~[OPTIONAL - SEE LOI]~~ Notwithstanding the foregoing, (i) should an investment banking firm which is generally recognized to be of a higher tier than the Placement Agent agree to the Subsequent Company Offering resulting in aggregate gross proceeds of $15,000,000 or ~~more,~~ more and (ii) the Placement Agent is permitted by such investment banking firm to participate in the Subsequent Company Offering to the extent of at least ten percent (10%), then the Right of First Refusal granted herein shall not apply to the Subsequent Company Offering or any related offering. (m) Within 90 days ~~after~~ of the ~~Termination~~ Closing Date, the Company shall elect a minimum of two "outside" persons ~~(excluding affiliates of the Company and family members of the Company's existing directors, officers and principal shareholders)~~ to the Company's Board of Directors, which such individuals shall not be ~~reasonably acceptable to the Placement Agent. Within 90 days~~ affiliates of the ~~Termination Date~~Company or family members of the Company's existing directors, officers or shareholders, and the Board of Directors of the Company shall create an audit committee consisting of a majority of outside directors, which such audit committee will generally supervise the financial affairs of the Company. (n) For a period of five years from the ~~Termination~~ Closing Date~~, unless waived by the Placement Agent~~, the Placement Agent shall have a the right to designate an a member to the Company's Board of Director, which such individual shall be reasonably acceptable to the Company. The Company shall, prior to the Closing Date, obtain from the officers, directors and holders of five percent (5%) or more of the outstanding shares of Common Stock of the Company, agreements in writing to vote the shares of Common Stock respectively owned by them, whether directly or indirectly, during such five-year period in favor of the election of such nominee. Following the election of such nominee as director, such person shall receive the same compensation paid to other non-officer directors of the Company for attendance at meetings of the Board of Directors of the Company and shall be entitled to receive reimbursement for all reasonable costs incurred in attending such meetings to the extent permitted under applicable law, and on the same basis as all other directors of the Company. The Company agrees to indemnify and hold such director harmless, to the maximum extent permitted under applicable law, against any and all claims, actions, awards and judgments arising out of his or her service as a director and, in the event the Company maintains a liability insurance policy affording coverage for the acts of its officers and directors, indemnification and the benefits of such insurance shall, to the extend possible, extend to the Placement Agent insofar as it may be or may be alleged to be responsible for such director, provided that the extension of such rights and benefits to the Placement Agent may be done without additional cost to the Company. In the event that the Placement Agent does not elect to designate one member to the Company's Board of Directors, the Placement Agent shall have the right during such five-year period to have one representative attend all meetings of the ~~Company's~~ Board of Directors ~~or committees thereof. The Company shall provide the Placement Agent with notice of all Board or committee meetings contemporaneously with notification to the members~~ of the ~~Board of Directors~~Company, ~~as well as copies~~ including any meetings of any ~~draft written consents~~ committees of ~~the Board of Directors or other documents or materials which may be provided to~~ the Board of Directors. All information received by such representative at such meetings shall be kept confidential, shall not be disclosed by the representative to any third party, and shall be dealt with in full compliance with federal and state securities laws. (o) ~~[IF APPLICABLE]~~ For a period of five years from the ~~Termination~~ Closing Date, the Company shall use its best efforts to obtain and maintain ~~its current~~ a listing on the OTC Bulletin Board, including taking such actions as are necessary to comply with any newly enacted listing standards. (p) For a period of one year from the ~~Termination~~ Closing Date, and except as contemplated in the Memorandum, the Company will not, without the Placement Agent's prior written consent, redeem any securities outstanding at the ~~Termination~~ Closing Date nor declare or pay any dividends or make any other cash distribution in respect of its securities in excess of the amount of the Company's then current retained earnings as reflected on its most recent balance sheet. sell any securities, grant warrants or options to acquire any securities except pursuant to its existing Stock Option Plans or conversions of convertible securities or the exercise of outstanding options or Warrants. The Company shall advise the Placement Agent in writing at least five business days in advance of its intent to either redeem any outstanding securities or declare and pay dividends.

Appears in 1 contract

Samples: Placement Agency Agreement (Peregrine Industries Inc)

Further Covenants. ~~The~~ Company hereby covenants and agrees that: (a) ~~The~~ If, at any time prior to the Closing, any event shall occur as a result of which, in the reasonable judgment of Company or the Placement Agent (or counsel thereto), (i) the Offering Documents would include any untrue statement of material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (ii) it would be necessary to amend or supplement the Offering Documents so that the representations and warranties herein remain true in all material respects or to comply with Regulation D or any other applicable securities laws or regulations, Company or the Placement Agent, as applicable, will promptly notify the other party and Company shall, at its sole cost, prepare and furnish to the Placement Agent copies of appropriate amendments and/or supplements in such quantities as the Placement Agent may reasonably request. Company will not at any time, whether before or after ~~Termination Date~~the Closing, prepare or use any amendment or supplement to the ~~Memorandum~~ Offering Documents of which the Placement Agent will not previously have been advised and furnished with a copy, or to which the Placement Agent or its counsel will have reasonably objected in writing or orally (confirmed in writing within 24 hours), or which is not in compliance in all material respects with the ~~Act~~ Act, the Regulations and ~~the Regulations~~other applicable securities laws, rules and regulations. As soon as ~~the~~ Company is advised thereof, ~~the~~ Company will advise the Placement Agent and its counsel, and confirm the advice in writing, of any order preventing or suspending the use of the ~~Memorandum~~Offering Documents, or the suspension of or the qualification or registration of the ~~Shares~~ Securities or shares of common stock of Company underlying the Securities for offering or the suspension of any exemption for such qualification or registration of the ~~Shares~~ Securities underlying the Securities for offering in any jurisdiction, or of the institution or threatened institution of any proceedings for any of such purposes, and ~~the~~ Company will use its ~~best~~ commercially reasonable efforts to prevent the issuance of any such ~~order~~ order, judgment or decree and, if issued, to endeavor to obtain as soon as reasonably possible the lifting thereof. (b) ~~The~~ Company has caused to be delivered to the Placement Agent copies of the Memorandum, has consented, and hereby consents, to the use of such copies for the purposes contemplated hereby permitted by the Act and applicable state securities laws, and has authorized, and hereby authorizes, the Placement Agent to use the Memorandum in connection with the sale of the Shares until the Termination Date, in each case subject to the limitations contained therein and herein, and no person is or will be authorized to give any information or make any representations other than those contained in the Memorandum or to use any offering materials other than those contained in the Memorandum in connection with the sale of the Shares. In the event of the happening, at any time within such period, of any event to which the Company has knowledge and which materially adversely affects, or may affect, the Company, and which should in the opinion of the Placement Agent's counsel be set forth in an amendment or supplement to the Memorandum in order to make the statement therein not misleading, in light of the circumstances existing at the time the Memorandum is required to be delivered to a purchaser of the Shares, or in case it shall, in the opinion of counsel to the Placement Agent, be necessary to amend or supplement the Memorandum to comply with any Federal or state securities laws or with the Regulations or the rules and regulations of any state in which the Memorandum is made available to a prospective subscriber, the Company will forthwith prepare and furnish to the Placement Agent copies of such amended Memorandum or of such supplement to be attached to the Memorandum in such quantities as the Placement Agent may reasonably request, in order that the Memorandum, as so amended or supplemented, will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements in the Memorandum, in light of the circumstances under which they were made, not misleading. The preparation, distribution and furnishing of any such amendment to the Memorandum or any such supplement to be attached to the Memorandum will be without expense to the Placement Agent. (c) The Company will shall comply with the Act, the ~~Regulations (including~~Regulations, ~~without limitation~~the 1934 Act, ~~Rule 506)~~ and the rules and regulations thereunder, all applicable federal, state and foreign securities laws and the rules and regulations thereunder in the states in which the Securities are to be offered and in which Company’s counsel has advised the Placement Agent that the Securities are qualified or registered for sale or exempt from such qualification or registration, so as to permit the continuance of the sales of the ~~Shares~~Securities, and will file with the SEC, and ~~will~~ shall promptly thereafter forward to the Placement ~~Agent~~ Agent, any and all reports on Form D and other securities filings as are required. Company shall take all reasonable steps to assist the Placement Agent in complying with FINRA Rule 5123 and Regulation M, provided that compliance with FINRA Rule 5123 and Regulation M shall be the Placement Agent’s responsibility. (dc) ~~During the Offering Period, the~~ Company ~~will make available for review by prospective purchasers of the Shares, upon their request, all material contracts or other documents described or listed in the Memorandum. (e) The Company will~~ shall use its reasonable best efforts to qualify the ~~Shares~~ Securities for sale (or seek exemption therefrom) under the state securities or Blue Sky laws of such jurisdictions in the United States ~~of [INSERT STATE NAMES]~~as may be mutually agreed to by Company and the Placement Agent, and ~~the~~ Company will (through its counsel) make such applications and furnish information as may be ~~reasonably~~ required for such purposes, provided that ~~the~~ in no event shall Company ~~will~~ be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action which would subject it to general service of process in any jurisdiction where it is not now subject, and provided further that Company shall not be required to ~~qualify as a foreign corporation in~~ produce any ~~jurisdiction~~new disclosure document other than the Memorandum. ~~The~~ Company will, from time to time, prepare and file such statements and reports as are or may be required to continue such ~~qualifications,~~ qualifications in effect for so long a period as the Placement Agent may reasonably request. (fd) ~~The~~ To the extent required by applicable law or its governing documents, Company ~~will deliver~~ shall place a legend on the certificates representing the Securities issued to investors stating that the securities evidenced thereby have not been registered under the Act or applicable state securities laws and setting forth or referring to the ~~Placement Agent from time to time~~ applicable restrictions on transferability and ~~without charge, until~~ sale of such securities under the ~~Termination Date, as many copies of the Memorandum as the Placement Agent may reasonably request~~Act and applicable state laws. (ge) ~~The~~ Company ~~will~~ shall apply the net proceeds from the sale of the ~~Shares substantially~~ Securities for the purposes ~~set forth under "Use of Proceeds"~~ described in the Memorandum. (hf) ~~For a period of three years from~~ Whether or not the ~~Termination Date~~transactions contemplated hereby are consummated, ~~the Company will deliver~~ or this Agreement is terminated, as partial consideration to the Placement Agent ~~(i) within 45 days from~~ for the ~~end~~ performance of ~~the applicable fiscal quarter~~its services hereunder, ~~a copy of each unaudited quarterly financial statement which shall have been prepared in accordance with generally accepted accounting principles consistently applied~~Company hereby agrees to pay all reasonable fees, ~~and, if applicable, any other documents or reports which may be issued by the Company~~ costs and expenses incident hereto and to the ~~public~~Offering, including, without limitation, ~~reports on Forms 8-K~~those in connection with: (i) preparing, ~~10-K~~ printing, duplicating, filing, distributing and ~~10-Q~~ binding the Memorandum and ~~exhibits~~ any and all amendments and/or supplements thereto and any and all agreements, contracts and other documents related hereto and thereto, ; (ii) ~~reports or communications (financial or other)~~ the creation, authorization, issuance, transfer and delivery of the ~~Company mailed to its security holders~~Securities, including, without limitation, fees and expenses of any transfer agent or registrar; (iii) ~~every press release~~ all fees and ~~every material news item~~ expenses of legal, accounting and ~~article in respect~~ other advisers to Company; (iv) the registration, qualification or exemption of the ~~Company~~ Securities for offer and sale under the securities or ~~its affairs which was released~~ Blue Sky laws of such jurisdictions pursuant to Section 6(c); (v) the fees and expenses of the Escrow Agent; (vi) all reasonable travel, long-distance telephone call, photocopying, courier and related other out-of-pocket expenses incurred by the ~~Company. Further~~Placement Agent in connection with this Agreement, ~~for a period of three years from~~ including the ~~Termination Date, the Company will (i) within 90 days~~ reasonable fees and expenses of the ~~end~~ Placement Agent’s counsel, all of which fees, costs and expenses shall be reasonably documented by the ~~fiscal year furnish~~ Placement Agent in an invoice submitted by the Placement Agent to Company; provided, however, that in no event shall Company be obligated to pay any fees and expenses described in this clause (vi) in excess of $20,000 in the aggregate without Company written consent; provided, further, that the foregoing limitation on fees and expenses shall in no way affect the obligations of Company with respect to the indemnification provisions set forth in Section 9 hereof and, provided further, that fees and expenses for the Placement Agent’s counsel shall not exceed $3,500. All fees and expenses described in this clause (vi) shall be payable to the Placement Agent ~~and distribute the~~ by Company within 30 days after Company~~'s stockholders annual financial statements prepared by~~ ’s receipt of an ~~independent auditor in conformity with generally accepted accounting principles, consistently applied, which clearly set forth the financial position of the Company and (ii) furnish to~~ invoice from the Placement Agent ~~a duplicate list of stockholders of the Company at~~ for such time as reasonably requested by the Placement Agent together with monthly DTC transfer sheets, if applicable. (i) The Company will pay all expenses incurred in connection with the preparation and printing of all necessary offering documents and instruments related to the Offering and the issuance of the Shares, and the underlying shares of Common Stock and will also pay its own expenses for ~~accounting fees, legal fees, transfer agent~~ such fees and ~~other costs involved with the Offering. The Company will furnish at its expense such quantities of the offering documents and instruments as the Placement Agent may reasonably request~~expenses. (j) The Company will provide to the Placement Agent, for delivery to all offerees and subscribers and their representatives, any additional information, documents and instruments which the Placement Agent or its counsel reasonably deems necessary to comply with the Act and the Regulations and the securities laws and the rules and regulations thereunder of those states in which the Shares are to be offered and sold. (k) The Company will comply with all registration, filing and reporting requirements of the Act or the Securities Exchange Act of 1934 (the "Exchange Act") which may from time to time be applicable to the Company. (l) For a period of three years from the Termination Date, the Placement Agent shall have the right of first refusal (the "Right of First Refusal") to act as underwriter or agent for any and all public or private offerings of securities (excluding all lease financing, bank financing or institutionally placed property debt), of the Company, or any successor to or subsidiary of the Company or other entity in which the Company either has a controlling equity interest or is generally authorized to enter into contracts or otherwise act on behalf of, (collectively referred to herein as the "Company") by the Company (the "Subsequent Company Offering"). In addition, the Company will use its best efforts to cause all officers, directors and holders of five percent or more of the Company's equity securities (the "Principal Stockholders") to agree in writing that the Placement Agent shall have such Right of First Refusal with respect to any secondary offering of the Company's securities by the Principal Stockholders made during the three year period following the Termination Date. Accordingly, if during such period the Company intends to make a Subsequent Company Offering, the Company shall notify the Placement Agent in writing of such intention and of the proposed terms of the offering. The Company shall thereafter promptly furnish the Placement Agent with such information concerning the business, condition and prospects of the Company as the Placement Agent may reasonably request. If within 15 business days of the receipt of such notice of intention and statement of terms, the Placement Agent does not accept in writing such offer to act as underwriter or agent with respect to such offering upon the terms proposed, the Company and each of the Principal Stockholders shall be free to negotiate terms with other underwriters with respect to such offering and to effect such offering on such proposed terms within six months after the end of such 15 business days. Before the Company and each of the Principal Stockholders and/or shall accept any modified proposal from such underwriter, the Placement Agent's preferential right shall be reinstated and the same procedure with respect to such modified proposal as provided above shall be adopted. The failure of the Placement Agent to exercise its Right of First Refusal in any particular instance shall not affect in any way such right with respect to any other Subsequent Company Offering or Secondary Offering. [OPTIONAL - SEE LOI] Notwithstanding the foregoing, (i) should an investment banking firm which is generally recognized to be of a higher tier than the Placement Agent agree to the Subsequent Company Offering resulting in aggregate gross proceeds of $15,000,000 or more, and (ii) the Placement Agent is permitted by such investment banking firm to participate in the Subsequent Company Offering to the extent of at least 10%, then the Right of First Refusal granted herein shall not apply to the Subsequent Company Offering or any related offering. (m) Within 90 days after the Termination Date, the Company shall elect a minimum of two "outside" persons (excluding affiliates of the Company and family members of the Company's existing directors, officers and principal shareholders) to the Company's Board of Directors, which such individuals shall be reasonably acceptable to the Placement Agent. Within 90 days of the Termination Date, the Board of Directors of the Company shall create an audit committee consisting of a majority of outside directors, which such audit committee will generally supervise the financial affairs of the Company. (n) For a period of five years from the Termination Date, unless waived by the Placement Agent, the Placement Agent shall have a right to designate an individual to attend all meetings of the Company's Board of Directors or committees thereof. The Company shall provide the Placement Agent with notice of all Board or committee meetings contemporaneously with notification to the members of the Board of Directors, as well as copies of any draft written consents of the Board of Directors or other documents or materials which may be provided to the Board of Directors. All information received by such representative at such meetings shall be kept confidential, shall not be disclosed by the representative to any third party, and shall be dealt with in full compliance with federal and state securities laws. (o) [IF APPLICABLE] For a period of five years from the Termination Date, the Company shall use its best efforts to maintain its current listing on the OTC Bulletin Board, including taking such actions as are necessary to comply with any newly enacted listing standards. (p) For a period of one year from the Termination Date, the Company will not, without the Placement Agent's prior written consent, redeem any securities outstanding at the Termination Date nor declare or pay any dividends or make any other cash distribution in respect of its securities in excess of the amount of the Company's then current retained earnings as reflected on its most recent balance sheet. sell any securities, grant warrants or options to acquire any securities except pursuant to its existing Stock Option Plans or conversions of convertible securities or the exercise of outstanding options or Warrants. The Company shall advise the Placement Agent in writing at least five business days in advance of its intent to either redeem any outstanding securities or declare and pay dividends.

Appears in 1 contract

Samples: Placement Agency Agreement (AntriaBio, Inc.)

Common use of Further Covenants Clause in Contracts