Participation Right. Until six (6) months following [●], 2022 [date of the closing of the Company’s initial public offering], neither the Company nor any of its Subsidiaries shall, directly or indirectly, issue, offer, sell, grant any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities (as defined below), any debt, any preferred shares or any purchase rights (any such issuance, offer, sale, grant, disposition or announcement is referred to as a “Subsequent Placement”) unless the Company shall have first complied with this Section 5. The Company acknowledges and agrees that the right set forth in this Section 5 is a right granted by the Company, separately, to each Qualified Holder. a) Between the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement (or, if the Trading Day of the expected announcement of the Subsequent Placement is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the time period of 4:00 pm (New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New York City time) on the day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement), the Company shall deliver to each Qualified Holder a written notice (each such notice, a “Pre-Notice”), which Pre-Notice shall not contain any information (including, without limitation, material, non-public information) other than: (A) if the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public information and (z) a statement informing such Qualified Holder that it is entitled to receive an Offer Notice (as defined below) with respect to such Subsequent Placement upon its written request. Upon the written request of a Qualified Holder prior to 5:30 am (New York City time) on the Trading Day following the date on which such Pre-Notice is delivered to such Qualified Holder, and only upon a written request by such Qualified Holder, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver to such Qualified Holder an irrevocable written notice (the “Offer Notice”) of any proposed or intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged and (D) offer to issue and sell to or exchange with such Qualified Holder in accordance with the terms of the Offer such Qualified Holder’s pro rata portion of 30% of the Offered Securities, provided that the number of Offered Securities which such Qualified Holder shall have the right to subscribe for under this Section 5 shall be (x) based on such Qualified Holder’s pro rata purchased portion of the aggregate number of Qualified Warrants purchased by all Qualified Holders on the date of such Offer Notice (the “Initial Amount”), and (y) with respect to each Qualified Holder that elects to purchase its Initial Amount, any additional portion of the Offered Securities attributable to the Initial Amounts of other Qualified Holders as such Qualified Holder shall indicate it will purchase or acquire should the other Qualified Holders subscribe for less than their Initial Amounts (the “Undersubscription Amount”), which process shall be repeated until each Qualified Holder shall have an opportunity to subscribe for any remaining Undersubscription Amount. b) To accept an Offer, in whole or in part, such Qualified Holder must deliver a written notice to the Company prior to 6:30 am (New York City time) on the Trading Day following the date on which the Offer Notice is delivered to such Qualified Holder (the “Offer Period”), setting forth the portion of such Qualified Holder’s Initial Amount that such Qualified Holder elects to purchase and, if such Qualified Holder shall elect to purchase all of its Initial Amount, the Undersubscription Amount, if any, that such Qualified Holder elects to purchase (in either case, the “Notice of Acceptance”). If the Initial Amounts subscribed for by all Qualified Holders are less than the total of all of the Initial Amounts, then each Qualified Holder that has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Initial Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Initial Amounts and the Initial Amounts subscribed for (the “Available Undersubscription Amount”), each Qualified Holder that has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Initial Amount of such Qualified Holder bears to the total Initial Amounts of all Qualified Holders that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Qualified Holder a new Offer Notice and the Offer Period shall expire at 6:30 am (New York City time) on the Trading Day following the date after such Qualified Holder’s receipt of such new Offer Notice. c) The Company shall have two (2) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Qualified Holder (the “Refused Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Report on Form 6-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto. d) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 5(c) above), then each Qualified Holder may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Qualified Holder elected to purchase pursuant to Section 5(b) above multiplied by a fraction, (A) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Qualified Holders pursuant to this Section 5 prior to such reduction) and (B) the denominator of which shall be the original amount of the Offered Securities. In the event that any Qualified Holder so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Qualified Holders in accordance with Section 5(a) above. e) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Qualified Holder shall acquire from the Company, and the Company shall issue to such Qualified Holder, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 5(d) above if such Qualified Holder has so elected, upon the terms and conditions specified in the Offer. The purchase by such Qualified Holder of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Qualified Holder of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Qualified Holder and its counsel. f) Any Offered Securities not acquired by a Qualified Holder or other Persons in accordance with this Section 5 may not be issued, sold or exchanged until they are again offered to such Qualified Holder under the procedures specified in this Agreement. g) The Company and each Qualified Holder agree that if any Qualified Holder elects to participate in the Offer, neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”) shall include any term or provision whereby such Qualified Holder shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company. h) Notwithstanding anything to the contrary in this Section 5 and unless otherwise agreed to by such Qualified Holder, the Company shall either confirm in writing to such Qualified Holder that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Qualified Holder will not be in possession of any material, non-public information, by the 9:30 am (New York City time) second (2nd) Business Day following delivery of the Offer Notice. If by 9:30 am (New York City time) on such second (2nd) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received by such Qualified Holder, such transaction shall be deemed to have been abandoned and such Qualified Holder shall not be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall provide such Qualified Holder with another Offer Notice and such Qualified Holder will again have the right of participation set forth in this Section 5. The Company shall not be permitted to deliver more than one such Offer Notice to such Qualified Holder in any sixty (60) day period, except as expressly contemplated by the last sentence of Section 5(b). i) The restrictions contained in this Section 5 shall not apply in connection with the issuance of any Exempt Issuance. The Company shall not circumvent the provisions of this Section 5 by providing terms or conditions to one Qualified Holder that are not provided to all Qualified Holders.
Appears in 4 contracts
Samples: Ordinary Shares Purchase Warrant (ParaZero Technologies Ltd.), Ordinary Shares Purchase Warrant (Wearable Devices Ltd.), Ordinary Shares Purchase Warrant (ParaZero Technologies Ltd.)
Participation Right. Until six (6a) months following [●]During the period of time that the buyers in the Note Securities Purchase Agreement are entitled to a participation right pursuant to Section 4(o) thereof, 2022 [date of the closing of the Company’s initial public offering], neither upon any issuance by the Company nor or any of its Subsidiaries shallof shares of Common Stock or Common Stock Equivalents for cash consideration, directly indebtedness or indirectly, issue, offer, sell, grant any option or right to purchase, or otherwise dispose a combination of units thereof (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities (as defined below), any debt, any preferred shares or any purchase rights (any such issuance, offer, sale, grant, disposition or announcement is referred to as a “Subsequent PlacementFinancing”) unless ), the Company Purchasers shall have first complied with this Section 5. The Company acknowledges and agrees that the right set forth to participate in this Section 5 is a right granted by up to an aggregate amount of the CompanySubsequent Financing equal to 20% of the Subsequent Financing (the “Participation Maximum”), separately, pro rata to each Qualified HolderPurchaser’s Subscription Amount, on the same terms, conditions and price provided for in the Subsequent Financing.
a(b) Between the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement Financing (or, if the Trading Day of the expected announcement of the Subsequent Placement Financing is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the time period of 4:00 pm (New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New York City time) on the day immediately prior to the Trading Day of the expected announcement of the Subsequent PlacementFinancing), the Company shall deliver to each Qualified Holder Purchaser a written notice of the Company’s intention to effect a Subsequent Financing (each such notice, a “Pre-Subsequent Financing Notice”), which Pre-Notice notice shall not contain any information (including, without limitation, material, non-public information) other than: (A) if describe in reasonable detail the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public information and (z) a statement informing such Qualified Holder that it is entitled to receive an Offer Notice (as defined below) with respect to terms of such Subsequent Placement upon its written request. Upon the written request of a Qualified Holder prior to 5:30 am (New York City time) on the Trading Day following the date on which such Pre-Notice is delivered to such Qualified Holder, and only upon a written request by such Qualified HolderFinancing, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver to such Qualified Holder an irrevocable written notice (the “Offer Notice”) amount of any proposed or proceeds intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe the price and other terms upon which they are to be issued, sold or exchanged, raised thereunder and the number Person or amount of the Offered Securities Persons through or with whom such Subsequent Financing is proposed to be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged effected and (D) offer to issue shall include a term sheet and sell to or exchange with such Qualified Holder in accordance with the terms of the Offer such Qualified Holder’s pro rata portion of 30% of the Offered Securities, provided that the number of Offered Securities which such Qualified Holder shall have the right to subscribe for under this Section 5 shall be (x) based on such Qualified Holder’s pro rata purchased portion of the aggregate number of Qualified Warrants purchased by all Qualified Holders on the date of such Offer Notice (the “Initial Amount”), and (y) with respect to each Qualified Holder that elects to purchase its Initial Amount, any additional portion of the Offered Securities attributable to the Initial Amounts of other Qualified Holders transaction documents relating thereto as such Qualified Holder shall indicate it will purchase or acquire should the other Qualified Holders subscribe for less than their Initial Amounts (the “Undersubscription Amount”), which process shall be repeated until each Qualified Holder shall have an opportunity to subscribe for any remaining Undersubscription Amountattachment.
b(c) To accept an Offer, Any Purchaser desiring to participate in whole or in part, such Qualified Holder Subsequent Financing must deliver a provide written notice to the Company prior to by 6:30 am (New York City time) on the Trading Day following the date on which the Offer Subsequent Financing Notice is delivered to such Qualified Holder the Purchaser (the “Offer PeriodNotice Termination Time”), setting forth ) that the portion of such Qualified Holder’s Initial Amount that such Qualified Holder elects Purchaser is willing to purchase and, if such Qualified Holder shall elect to purchase all of its Initial Amountparticipate in the Subsequent Financing, the Undersubscription Amount, if any, that such Qualified Holder elects to purchase (in either case, the “Notice of Acceptance”). If the Initial Amounts subscribed for by all Qualified Holders are less than the total of all amount of the Initial AmountsPurchaser’s participation, then each Qualified Holder and representing and warranting that the Purchaser has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchasesuch funds ready, in addition to the Initial Amounts subscribed forwilling, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed and available for exceed the difference between the total of all the Initial Amounts and the Initial Amounts subscribed for (the “Available Undersubscription Amount”), each Qualified Holder that has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Initial Amount of such Qualified Holder bears to the total Initial Amounts of all Qualified Holders that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend investment on the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Qualified Holder a new Offer Notice and the Offer Period shall expire at 6:30 am (New York City time) on the Trading Day following the date after such Qualified Holder’s receipt of such new Offer Notice.
c) The Company shall have two (2) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Qualified Holder (the “Refused Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Report on Form 6-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.
d) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 5(c) above), then each Qualified Holder may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Qualified Holder elected to purchase pursuant to Section 5(b) above multiplied by a fraction, (A) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Qualified Holders pursuant to this Section 5 prior to such reduction) and (B) the denominator of which shall be the original amount of the Offered Securities. In the event that any Qualified Holder so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Qualified Holders in accordance with Section 5(a) above.
e) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Qualified Holder shall acquire from the Company, and the Company shall issue to such Qualified Holder, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 5(d) above if such Qualified Holder has so elected, upon the terms and conditions specified in the Offer. The purchase by such Qualified Holder of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Qualified Holder of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Qualified Holder and its counsel.
f) Any Offered Securities not acquired by a Qualified Holder or other Persons in accordance with this Section 5 may not be issued, sold or exchanged until they are again offered to such Qualified Holder under the procedures specified in this Agreement.
g) The Company and each Qualified Holder agree that if any Qualified Holder elects to participate in the Offer, neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”) shall include any term or provision whereby such Qualified Holder shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.
h) Notwithstanding anything to the contrary in this Section 5 and unless otherwise agreed to by such Qualified Holder, the Company shall either confirm in writing to such Qualified Holder that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Qualified Holder will not be in possession of any material, non-public information, by the 9:30 am (New York City time) second (2nd) Business Day following delivery of the Offer Financing Notice. If by 9:30 am (New York City time) on the Company receives no such second (2nd) Business Day, no public disclosure regarding notice from a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment Purchaser as of such transaction has been received by such Qualified HolderNotice Termination Time, such transaction the Purchaser shall be deemed to have been abandoned and such Qualified Holder shall not be in possession of any material, non-public information with respect to notified the Company that it does not elect to participate in such Subsequent Financing.
(d) If, by the Notice Termination Time, notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or any to cause their designees to participate) is, in the aggregate, less than the total amount of its Subsidiaries. Should the Subsequent Financing, then the Company decide to pursue may effect the remaining portion of such transaction Subsequent Financing on the terms and with respect to the Offered SecuritiesPersons set forth in the Subsequent Financing Notice.
(e) If, by the Notice Termination Time, the Company receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase more than the aggregate amount of the Participation Maximum, the Purchaser shall provide such Qualified Holder with another Offer Notice and such Qualified Holder will again have the right to purchase its Pro Rata Portion (as defined below) of participation set forth in the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription Amount of Securities purchased on the Closing Date by a Purchaser participating under this Section 5. The Company shall not be permitted to deliver more than one such Offer Notice to such Qualified Holder in any sixty 4.13 and (60y) day period, except as expressly contemplated the sum of the aggregate Subscription Amounts of Securities purchased on the Closing Date by the last sentence of Section 5(b).
i) The restrictions contained in all Purchasers participating under this Section 5 shall not apply in connection with the issuance of any Exempt Issuance. The Company shall not circumvent the provisions of this Section 5 by providing terms or conditions to one Qualified Holder that are not provided to all Qualified Holders4.13.
Appears in 3 contracts
Samples: Securities Purchase Agreement (Cryptyde, Inc.), Securities Purchase Agreement (Cryptyde, Inc.), Securities Purchase Agreement (Vinco Ventures, Inc.)
Participation Right. Until six (6a) months following [●], 2022 [From the date hereof until the date that is the first anniversary of the closing of the Company’s initial public offering]Closing Date, neither upon any issuance by the Company nor or any of its Subsidiaries shallof Ordinary Shares or Ordinary Shares Equivalents for cash consideration, directly Indebtedness or indirectly, issue, offer, sell, grant any option or right to purchase, or otherwise dispose a combination of units thereof (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities (as defined below), any debt, any preferred shares or any purchase rights (any such issuance, offer, sale, grant, disposition or announcement is referred to as a “Subsequent PlacementFinancing”), each Purchaser shall have the right to participate in up to an amount of the Subsequent Financing equal to 30% of the Subsequent Financing (the “Participation Maximum”) unless on the Company shall have first complied with this Section 5. The Company acknowledges same terms, conditions and agrees that price provided for in the right set forth in this Section 5 is a right granted by the Company, separately, to each Qualified HolderSubsequent Financing.
a(b) Between the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement Financing (or, if the Trading Day of the expected announcement of the Subsequent Placement Financing is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the time period of 4:00 pm (New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New York City time) on the day immediately prior to the Trading Day of the expected announcement of the Subsequent PlacementFinancing), the Company shall deliver to each Qualified Holder Purchaser a written notice of the Company’s intention to effect a Subsequent Financing (each such notice, a “Pre-Subsequent Financing Notice”), which Pre-Notice notice shall not contain any information (including, without limitation, material, non-public information) other than: (A) if describe in reasonable detail the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public information and (z) a statement informing such Qualified Holder that it is entitled to receive an Offer Notice (as defined below) with respect to terms of such Subsequent Placement upon its written request. Upon the written request of a Qualified Holder prior to 5:30 am (New York City time) on the Trading Day following the date on which such Pre-Notice is delivered to such Qualified Holder, and only upon a written request by such Qualified HolderFinancing, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver to such Qualified Holder an irrevocable written notice (the “Offer Notice”) amount of any proposed or proceeds intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe the price and other terms upon which they are to be issued, sold or exchanged, raised thereunder and the number Person or amount of the Offered Securities Persons through or with whom such Subsequent Financing is proposed to be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged effected and (D) offer to issue shall include a term sheet and sell to or exchange with such Qualified Holder in accordance with the terms of the Offer such Qualified Holder’s pro rata portion of 30% of the Offered Securities, provided that the number of Offered Securities which such Qualified Holder shall have the right to subscribe for under this Section 5 shall be (x) based on such Qualified Holder’s pro rata purchased portion of the aggregate number of Qualified Warrants purchased by all Qualified Holders on the date of such Offer Notice (the “Initial Amount”), and (y) with respect to each Qualified Holder that elects to purchase its Initial Amount, any additional portion of the Offered Securities attributable to the Initial Amounts of other Qualified Holders transaction documents relating thereto as such Qualified Holder shall indicate it will purchase or acquire should the other Qualified Holders subscribe for less than their Initial Amounts (the “Undersubscription Amount”), which process shall be repeated until each Qualified Holder shall have an opportunity to subscribe for any remaining Undersubscription Amountattachment.
b(c) To accept an Offer, Any Purchaser desiring to participate in whole or in part, such Qualified Holder Subsequent Financing must deliver a provide written notice to the Company prior to by 6:30 am (New York City time) on the Trading Day following the date on which the Offer Subsequent Financing Notice is delivered to such Qualified Holder Purchaser (the “Offer PeriodNotice Termination Time”)) that such Purchaser is willing to participate in the Subsequent Financing, setting forth the portion amount of such Qualified HolderPurchaser’s Initial Amount participation, and representing and warranting that such Qualified Holder elects to purchase andPurchaser has such funds ready, if such Qualified Holder shall elect to purchase all of its Initial Amountwilling, the Undersubscription Amount, if any, that such Qualified Holder elects to purchase (in either case, the “Notice of Acceptance”). If the Initial Amounts subscribed and available for by all Qualified Holders are less than the total of all of the Initial Amounts, then each Qualified Holder that has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Initial Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Initial Amounts and the Initial Amounts subscribed for (the “Available Undersubscription Amount”), each Qualified Holder that has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Initial Amount of such Qualified Holder bears to the total Initial Amounts of all Qualified Holders that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend investment on the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Qualified Holder a new Offer Notice and the Offer Period shall expire at 6:30 am (New York City time) on the Trading Day following the date after such Qualified Holder’s receipt of such new Offer Notice.
c) The Company shall have two (2) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Qualified Holder (the “Refused Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Report on Form 6-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.
d) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 5(c) above), then each Qualified Holder may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Qualified Holder elected to purchase pursuant to Section 5(b) above multiplied by a fraction, (A) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Qualified Holders pursuant to this Section 5 prior to such reduction) and (B) the denominator of which shall be the original amount of the Offered Securities. In the event that any Qualified Holder so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Qualified Holders in accordance with Section 5(a) above.
e) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Qualified Holder shall acquire from the Company, and the Company shall issue to such Qualified Holder, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 5(d) above if such Qualified Holder has so elected, upon the terms and conditions specified in the Offer. The purchase by such Qualified Holder of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Qualified Holder of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Qualified Holder and its counsel.
f) Any Offered Securities not acquired by a Qualified Holder or other Persons in accordance with this Section 5 may not be issued, sold or exchanged until they are again offered to such Qualified Holder under the procedures specified in this Agreement.
g) The Company and each Qualified Holder agree that if any Qualified Holder elects to participate in the Offer, neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”) shall include any term or provision whereby such Qualified Holder shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.
h) Notwithstanding anything to the contrary in this Section 5 and unless otherwise agreed to by such Qualified Holder, the Company shall either confirm in writing to such Qualified Holder that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Qualified Holder will not be in possession of any material, non-public information, by the 9:30 am (New York City time) second (2nd) Business Day following delivery of the Offer Financing Notice. If by 9:30 am (New York City time) on the Company receives no such second (2nd) Business Day, no public disclosure regarding notice from a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment Purchaser as of such transaction has been received by such Qualified HolderNotice Termination Time, such transaction Purchaser shall be deemed to have been abandoned and such Qualified Holder shall not be in possession of any material, non-public information with respect to notified the Company that it does not elect to participate in such Subsequent Financing.
(d) If, by the Notice Termination Time, notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or any to cause their designees to participate) is, in the aggregate, less than the total amount of its Subsidiaries. Should the Subsequent Financing, then the Company decide to pursue may effect the remaining portion of such transaction Subsequent Financing on the terms and with respect to the Offered SecuritiesPersons set forth in the Subsequent Financing Notice.
(e) If, by the Notice Termination Time, the Company receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase more than the aggregate amount of the Participation Maximum, each such Purchaser shall provide such Qualified Holder with another Offer Notice and such Qualified Holder will again have the right to purchase its Pro Rata Portion (as defined below) of participation set forth in the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription Amount of Securities purchased on the Closing Date by a Purchaser participating under this Section 5. The Company shall not be permitted to deliver more than one such Offer Notice to such Qualified Holder in any sixty 4.11 and (60y) day period, except as expressly contemplated the sum of the aggregate Subscription Amounts of Securities purchased on the Closing Date by the last sentence of Section 5(b).
i) The restrictions contained in all Purchasers participating under this Section 5 shall not apply in connection with the issuance of any Exempt Issuance. The Company shall not circumvent the provisions of this Section 5 by providing terms or conditions to one Qualified Holder that are not provided to all Qualified Holders4.12.
Appears in 2 contracts
Samples: Securities Purchase Agreement (Global Mofy Metaverse LTD), Securities Purchase Agreement (SunCar Technology Group Inc.)
Participation Right. Until six (6a) months following [●], 2022 [From the date hereof until the date that is the first anniversary of the closing of the Company’s initial public offering]Closing Date, neither upon any issuance by the Company nor or any of its Subsidiaries shallof Ordinary Shares or Ordinary Shares Equivalents for cash consideration, directly Indebtedness or indirectly, issue, offer, sell, grant any option or right to purchase, or otherwise dispose a combination of units thereof (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities (as defined below), any debt, any preferred shares or any purchase rights (any such issuance, offer, sale, grant, disposition or announcement is referred to as a “Subsequent PlacementFinancing”), each Purchaser shall have the right to participate in up to an amount of the Subsequent Financing equal to 35% of the Subsequent Financing (the “Participation Maximum”) unless on the Company shall have first complied with this Section 5. The Company acknowledges same terms, conditions and agrees that price provided for in the right set forth in this Section 5 is a right granted by the Company, separately, to each Qualified HolderSubsequent Financing.
a(b) Between the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement Financing (or, if the Trading Day of the expected announcement of the Subsequent Placement Financing is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the time period of 4:00 pm (New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New York City time) on the day immediately prior to the Trading Day of the expected announcement of the Subsequent PlacementFinancing), the Company shall deliver to each Qualified Holder Purchaser a written notice of the Company’s intention to effect a Subsequent Financing (each such notice, a “Pre-Subsequent Financing Notice”), which Pre-Notice notice shall not contain any information (including, without limitation, material, non-public information) other than: (A) if describe in reasonable detail the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public information and (z) a statement informing such Qualified Holder that it is entitled to receive an Offer Notice (as defined below) with respect to terms of such Subsequent Placement upon its written request. Upon the written request of a Qualified Holder prior to 5:30 am (New York City time) on the Trading Day following the date on which such Pre-Notice is delivered to such Qualified Holder, and only upon a written request by such Qualified HolderFinancing, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver to such Qualified Holder an irrevocable written notice (the “Offer Notice”) amount of any proposed or proceeds intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe the price and other terms upon which they are to be issued, sold or exchanged, raised thereunder and the number Person or amount of the Offered Securities Persons through or with whom such Subsequent Financing is proposed to be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged effected and (D) offer to issue shall include a term sheet and sell to or exchange with such Qualified Holder in accordance with the terms of the Offer such Qualified Holder’s pro rata portion of 30% of the Offered Securities, provided that the number of Offered Securities which such Qualified Holder shall have the right to subscribe for under this Section 5 shall be (x) based on such Qualified Holder’s pro rata purchased portion of the aggregate number of Qualified Warrants purchased by all Qualified Holders on the date of such Offer Notice (the “Initial Amount”), and (y) with respect to each Qualified Holder that elects to purchase its Initial Amount, any additional portion of the Offered Securities attributable to the Initial Amounts of other Qualified Holders transaction documents relating thereto as such Qualified Holder shall indicate it will purchase or acquire should the other Qualified Holders subscribe for less than their Initial Amounts (the “Undersubscription Amount”), which process shall be repeated until each Qualified Holder shall have an opportunity to subscribe for any remaining Undersubscription Amountattachment.
b(c) To accept an Offer, Any Purchaser desiring to participate in whole or in part, such Qualified Holder Subsequent Financing must deliver a provide written notice to the Company prior to by 6:30 am (New York City time) on the Trading Day following the date on which the Offer Subsequent Financing Notice is delivered to such Qualified Holder Purchaser (the “Offer PeriodNotice Termination Time”)) that such Purchaser is willing to participate in the Subsequent Financing, setting forth the portion amount of such Qualified HolderPurchaser’s Initial Amount participation, and representing and warranting that such Qualified Holder elects to purchase andPurchaser has such funds ready, if such Qualified Holder shall elect to purchase all of its Initial Amountwilling, the Undersubscription Amount, if any, that such Qualified Holder elects to purchase (in either case, the “Notice of Acceptance”). If the Initial Amounts subscribed and available for by all Qualified Holders are less than the total of all of the Initial Amounts, then each Qualified Holder that has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Initial Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Initial Amounts and the Initial Amounts subscribed for (the “Available Undersubscription Amount”), each Qualified Holder that has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Initial Amount of such Qualified Holder bears to the total Initial Amounts of all Qualified Holders that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend investment on the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Qualified Holder a new Offer Notice and the Offer Period shall expire at 6:30 am (New York City time) on the Trading Day following the date after such Qualified Holder’s receipt of such new Offer Notice.
c) The Company shall have two (2) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Qualified Holder (the “Refused Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Report on Form 6-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.
d) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 5(c) above), then each Qualified Holder may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Qualified Holder elected to purchase pursuant to Section 5(b) above multiplied by a fraction, (A) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Qualified Holders pursuant to this Section 5 prior to such reduction) and (B) the denominator of which shall be the original amount of the Offered Securities. In the event that any Qualified Holder so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Qualified Holders in accordance with Section 5(a) above.
e) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Qualified Holder shall acquire from the Company, and the Company shall issue to such Qualified Holder, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 5(d) above if such Qualified Holder has so elected, upon the terms and conditions specified in the Offer. The purchase by such Qualified Holder of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Qualified Holder of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Qualified Holder and its counsel.
f) Any Offered Securities not acquired by a Qualified Holder or other Persons in accordance with this Section 5 may not be issued, sold or exchanged until they are again offered to such Qualified Holder under the procedures specified in this Agreement.
g) The Company and each Qualified Holder agree that if any Qualified Holder elects to participate in the Offer, neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”) shall include any term or provision whereby such Qualified Holder shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.
h) Notwithstanding anything to the contrary in this Section 5 and unless otherwise agreed to by such Qualified Holder, the Company shall either confirm in writing to such Qualified Holder that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Qualified Holder will not be in possession of any material, non-public information, by the 9:30 am (New York City time) second (2nd) Business Day following delivery of the Offer Financing Notice. If by 9:30 am (New York City time) on the Company receives no such second (2nd) Business Day, no public disclosure regarding notice from a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment Purchaser as of such transaction has been received by such Qualified HolderNotice Termination Time, such transaction Purchaser shall be deemed to have been abandoned and such Qualified Holder shall not be in possession of any material, non-public information with respect to notified the Company that it does not elect to participate in such Subsequent Financing.
(d) If, by the Notice Termination Time, notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or any to cause their designees to participate) is, in the aggregate, less than the total amount of its Subsidiaries. Should the Subsequent Financing, then the Company decide to pursue may effect the remaining portion of such transaction Subsequent Financing on the terms and with respect to the Offered SecuritiesPersons set forth in the Subsequent Financing Notice.
(e) If, by the Notice Termination Time, the Company receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase more than the aggregate amount of the Participation Maximum, each such Purchaser shall provide such Qualified Holder with another Offer Notice and such Qualified Holder will again have the right to purchase its Pro Rata Portion (as defined below) of participation set forth in the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription Amount of Securities purchased on the Closing Date by a Purchaser participating under this Section 5. The Company shall not be permitted to deliver more than one such Offer Notice to such Qualified Holder in any sixty 4.11 and (60y) day period, except as expressly contemplated the sum of the aggregate Subscription Amounts of Securities purchased on the Closing Date by the last sentence of Section 5(b).
i) The restrictions contained in all Purchasers participating under this Section 5 shall not apply in connection with the issuance of any Exempt Issuance. The Company shall not circumvent the provisions of this Section 5 by providing terms or conditions to one Qualified Holder that are not provided to all Qualified Holders4.12.
Appears in 2 contracts
Samples: Securities Purchase Agreement (China Natural Resources Inc), Securities Purchase Agreement (Luokung Technology Corp.)
Participation Right. Until six (6) months following [●], 2022 [date of the closing of the Company’s initial public offering]Issue Date, neither the Company nor any of its Subsidiaries shall, directly or indirectly, issue, offer, sell, grant any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities (as defined below), any debt, any preferred shares or any purchase rights (any such issuance, offer, sale, grant, disposition or announcement is referred to as a “Subsequent Placement”) unless the Company shall have first complied with this Section 5. The Company acknowledges and agrees that the right set forth in this Section 5 is a right granted by the Company, separately, to each Qualified HolderBuyer.
a) Between the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement (or, if the Trading Day of the expected announcement of the Subsequent Placement is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the time period of 4:00 pm (New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New York City time) on the day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement), the Company shall deliver to each Qualified Holder Buyer Qualified Buyer a written notice (each such notice, a “Pre-Notice”), which Pre-Notice shall not contain any information (including, without limitation, material, non-public information) other than: (A) if the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public information and (z) a statement informing such Qualified Holder Buyer that it is entitled to receive an Offer Notice (as defined below) with respect to such Subsequent Placement upon its written request. Upon the written request of a Qualified Holder Buyer prior to 5:30 am (New York City time) on the Trading Day following the date on which such Pre-Notice is delivered to such Qualified HolderBuyer, and only upon a written request by such Qualified HolderBuyer, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver to such Qualified Holder Buyer an irrevocable written notice (the “Offer Notice”) of any proposed or intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged and (D) offer to issue and sell to or exchange with such Qualified Holder Buyer in accordance with the terms of the Offer such Qualified HolderBuyer’s pro rata portion of 30% of the Offered Securities, provided that the number of Offered Securities which such Qualified Holder Buyer shall have the right to subscribe for under this Section 5 shall be (x) based on such Qualified HolderBuyer’s pro rata purchased portion of the aggregate number of Qualified Warrants purchased held hereunder by all Qualified Holders Buyers on the date of such Offer Notice (the “Initial Amount”), and (y) with respect to each Qualified Holder Buyer that elects to purchase its Initial Amount, any additional portion of the Offered Securities attributable to the Initial Amounts of other Qualified Holders Buyers as such Qualified Holder Buyer shall indicate it will purchase or acquire should the other Qualified Holders Buyers subscribe for less than their Initial Amounts (the “Undersubscription Amount”), which process shall be repeated until each Qualified Holder Buyer shall have an opportunity to subscribe for any remaining Undersubscription Amount.
b) To accept an Offer, in whole or in part, such Qualified Holder Buyer must deliver a written notice to the Company prior to 6:30 am (New York City time) on the Trading Day following the date on which the Offer Notice is delivered to such Qualified Holder Buyer (the “Offer Period”), setting forth the portion of such Qualified HolderBuyer’s Initial Amount that such Qualified Holder Buyer elects to purchase and, if such Qualified Holder Buyer shall elect to purchase all of its Initial Basic Amount, the Undersubscription Amount, if any, that such Qualified Holder Buyer elects to purchase (in either case, the “Notice of Acceptance”). If the Initial Amounts subscribed for by all Qualified Holders Buyers are less than the total of all of the Initial Amounts, then each Qualified Holder that Buyer who has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Initial Basic Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Initial Amounts and the Initial Basic Amounts subscribed for (the “Available Undersubscription Amount”), each Qualified Holder that Buyer who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Initial Amount of such Qualified Holder Buyer bears to the total Initial Amounts of all Qualified Holders Buyers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Qualified Holder Buyer a new Offer Notice and the Offer Period shall expire at 6:30 am (New York City time) on the Trading Day following the date after such Qualified HolderBuyer’s receipt of such new Offer Notice.
c) The Company shall have two three (23) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Qualified Holder Buyer (the “Refused Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Report on Form 6-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.
d) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 5(c) above), then each Qualified Holder Buyer may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Qualified Holder Buyer elected to purchase pursuant to Section 5(b) above multiplied by a fraction, (A) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Qualified Holders Buyers pursuant to this Section 5 prior to such reduction) and (B) the denominator of which shall be the original amount of the Offered Securities. In the event that any Qualified Holder Buyer so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Qualified Holders Buyers in accordance with Section 5(a) above.
e) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Qualified Holder Buyer shall acquire from the Company, and the Company shall issue to such Qualified HolderBuyer, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 5(d) above if such Qualified Holder Buyer has so elected, upon the terms and conditions specified in the Offer. The purchase by such Qualified Holder Buyer of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Qualified Holder Buyer of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Qualified Holder Buyer and its counsel.
f) Any Offered Securities not acquired by a Qualified Holder Buyer or other Persons in accordance with this Section 5 may not be issued, sold or exchanged until they are again offered to such Qualified Holder Buyer under the procedures specified in this Agreement.
g) The Company and each Qualified Holder Buyer agree that if any Qualified Holder Buyer elects to participate in the Offer, neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”) shall include any term or provision whereby such Qualified Holder Buyer shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.
h) Notwithstanding anything to the contrary in this Section 5 and unless otherwise agreed to by such Qualified HolderBuyer, the Company shall either confirm in writing to such Qualified Holder Buyer that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Qualified Holder Buyer will not be in possession of any material, non-public information, by the 9:30 am (New York City time) on the second (2nd) Business Day following delivery of the Offer Notice. If by 9:30 am (New York City time) on such the second (2nd) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received by such Qualified HolderBuyer, such transaction shall be deemed to have been abandoned and such Qualified Holder Buyer shall not be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall provide such Qualified Holder Buyer with another Offer Notice and such Qualified Holder Buyer will again have the right of participation set forth in this Section 5. The Company shall not be permitted to deliver more than one such Offer Notice to such Qualified Holder Buyer in any sixty (60) day period, except as expressly contemplated by the last sentence of Section 5(b).
i) The restrictions contained in this Section 5 shall not apply in connection with the issuance of any Exempt Issuance. The Company shall not circumvent the provisions of this Section 5 by providing terms or conditions to one Qualified Holder Buyer that are not provided to all Qualified HoldersBuyers.
Appears in 2 contracts
Samples: Ordinary Shares Purchase Warrant (Jeffs' Brands LTD), Ordinary Shares Purchase Warrant (Jeffs' Brands LTD)
Participation Right. Until six (6) months following [●], 2022 [date of the closing of the Company’s initial public offering]For so long as this Warrant is outstanding by a Qualified Holder, neither the Company nor any of its Subsidiaries shall, directly or indirectly, issue, offer, sell, grant any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities (as defined below), any debt, any preferred shares or any purchase rights (any such issuance, offer, sale, grant, disposition or announcement is referred to as a “Subsequent Placement”) unless the Company shall have first complied with this Section 5. The Company acknowledges and agrees that the right set forth in this Section 5 is a right granted by the Company, separately, to each Qualified Holder.
a) Between the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement (or, if the Trading Day of the expected announcement of the Subsequent Placement is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the time period of 4:00 pm (New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New York City time) on the day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement), the Company shall deliver to each Qualified Holder a written notice (each such notice, a “Pre-Notice”), which Pre-Notice shall not contain any information (including, without limitation, material, non-public information) other than: (A) if the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public information and (z) a statement informing such Qualified Holder that it is entitled to receive an Offer Notice (as defined below) with respect to such Subsequent Placement upon its written request. Upon the written request of a Qualified Holder prior within three (3) Trading Days after the Company’s delivery to 5:30 am (New York City time) on the Trading Day following the date on which such Qualified Holder of such Pre-Notice is delivered to such Qualified HolderNotice, and only upon a written request by such Qualified Holder, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver to such Qualified Holder an irrevocable written notice (the “Offer Notice”) of any proposed or intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged and (D) offer to issue and sell to or exchange with such Qualified Holder in accordance with the terms of the Offer such Qualified Holder’s pro rata portion of 30% of the Offered Securities, provided that the number of Offered Securities which such Qualified Holder shall have the right to subscribe for under this Section 5 shall be (x) based on such Qualified Holder’s pro rata purchased portion of the aggregate number of Qualified Warrants Warrant Shares purchased hereunder by all Qualified Holders on the date of such Offer Notice (the “Initial Basic Amount”), and (y) with respect to each Qualified Holder that elects to purchase its Initial Basic Amount, any additional portion of the Offered Securities attributable to the Initial Basic Amounts of other Qualified Holders as such Qualified Holder shall indicate it will purchase or acquire should the other Qualified Holders subscribe for less than their Initial Basic Amounts (the “Undersubscription Amount”), which process shall be repeated until each Qualified Holder shall have an opportunity to subscribe for any remaining Undersubscription Amount.
b) To accept an Offer, in whole or in part, such Qualified Holder must deliver a written notice to the Company prior to 6:30 am (New York City time) on the Trading Day following the date on which the Offer Notice is delivered to such Qualified Holder (the “Offer Period”), setting forth the portion of such Qualified Holder’s Initial Basic Amount that such Qualified Holder elects to purchase and, if such Qualified Holder shall elect to purchase all of its Initial Basic Amount, the Undersubscription Amount, if any, that such Qualified Holder elects to purchase (in either case, the “Notice of Acceptance”). If the Initial Basic Amounts subscribed for by all Qualified Holders are less than the total of all of the Initial Basic Amounts, then each Qualified Holder that who has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Initial Basic Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Initial Basic Amounts and the Initial Basic Amounts subscribed for (the “Available Undersubscription Amount”), each Qualified Holder that who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Initial Basic Amount of such Qualified Holder bears to the total Initial Basic Amounts of all Qualified Holders that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Qualified Holder a new Offer Notice and the Offer Period shall expire at 6:30 am (New York City time) on the Trading Day following the date after such Qualified Holder’s receipt of such new Offer Notice.
c) The Company shall have two three (23) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Qualified Holder (the “Refused Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Report on Form 68-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.
d) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 5(c) above), then each Qualified Holder may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Qualified Holder elected to purchase pursuant to Section 5(b) above multiplied by a fraction, (A) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Qualified Holders pursuant to this Section 5 prior to such reduction) and (B) the denominator of which shall be the original amount of the Offered Securities. In the event that any Qualified Holder so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Qualified Holders in accordance with Section 5(a) above.
e) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Qualified Holder shall acquire from the Company, and the Company shall issue to such Qualified Holder, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 5(d) above if such Qualified Holder has so elected, upon the terms and conditions specified in the Offer. The purchase by such Qualified Holder of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Qualified Holder of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Qualified Holder and its counsel.
f) Any Offered Securities not acquired by a Qualified Holder or other Persons in accordance with this Section 5 may not be issued, sold or exchanged until they are again offered to such Qualified Holder under the procedures specified in this Agreement.
g) The Company and each Qualified Holder agree that if any Qualified Holder elects to participate in the Offer, neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”) shall include any term or provision whereby such Qualified Holder shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.
h) Notwithstanding anything to the contrary in this Section 5 and unless otherwise agreed to by such Qualified Holder, the Company shall either confirm in writing to such Qualified Holder that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Qualified Holder will not be in possession of any material, non-public information, by the 9:30 am (New York City time) on the second (2nd) Business Day following delivery of the Offer Notice. If by 9:30 am (New York City time) on such the second (2nd) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received by such Qualified Holder, such transaction shall be deemed to have been abandoned and such Qualified Holder shall not be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall provide such Qualified Holder with another Offer Notice and such Qualified Holder will again have the right of participation set forth in this Section 5. The Company shall not be permitted to deliver more than one such Offer Notice to such Qualified Holder in any sixty (60) day period, except as expressly contemplated by the last sentence of Section 5(b).
i) The restrictions contained in this Section 5 shall not apply in connection with the issuance of any Exempt Issuance. The Company shall not circumvent the provisions of this Section 5 by providing terms or conditions to one Qualified Holder that are not provided to all Qualified Holders.
Appears in 2 contracts
Samples: Common Stock Purchase Warrant (Elate Group, Inc.), Common Stock Purchase Warrant (Elate Group, Inc.)
Participation Right. Until six (6) months following [●], 2022 [date of the closing of the Company’s initial public offering], neither the Company nor any of its Subsidiaries shall, directly or indirectly, issue, offer, sell, grant any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities (as defined below), any debt, any preferred shares or any purchase rights (any such issuance, offer, sale, grant, disposition or announcement is referred to as a “Subsequent Placement”) unless the Company shall have first complied with this Section 5. The Company acknowledges and agrees that the right set forth in this Section 5 is a right granted by the Company, separately, to each Qualified Holder.
a) Between the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement (or, if the Trading Day of the expected announcement of the Subsequent Placement is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the time period of 4:00 pm (New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New York City time) on the day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement), the Company shall deliver to each Qualified Holder a written notice (each such notice, a “Pre-Notice”), which Pre-Notice shall not contain any information (including, without limitation, material, non-public information) other than: (A) if the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public information and (z) a statement informing such Qualified Holder that it is entitled to receive an Offer Notice (as defined below) with respect to such Subsequent Placement upon its written request. Upon the written request of a Qualified Holder prior to 5:30 am (New York City time) on the Trading Day following the date on which such Pre-Notice is delivered to such Qualified Holder, and only upon a written request by such Qualified Holder, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver to such Qualified Holder an irrevocable written notice (the “Offer Notice”) of any proposed or intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged and (D) offer to issue and sell to or exchange with such Qualified Holder in accordance with the terms of the Offer such Qualified Holder’s pro rata portion of 30% of the Offered Securities, provided that the number of Offered Securities which such Qualified Holder shall have the right to subscribe for under this Section 5 shall be (x) based on such Qualified Holder’s pro rata purchased portion of the aggregate number of Qualified Warrants purchased by all Qualified Holders on the date of such Offer Notice (the “Initial Amount”), and (y) with respect to each Qualified Holder that elects to purchase its Initial Amount, any additional portion of the Offered Securities attributable to the Initial Amounts of other Qualified Holders as such Qualified Holder shall indicate it will purchase or acquire should the other Qualified Holders subscribe for less than their Initial Amounts (the “Undersubscription Amount”), which process shall be repeated until each Qualified Holder shall have an opportunity to subscribe for any remaining Undersubscription Amount.
b) To accept an Offer, in whole or in part, such Qualified Holder must deliver a written notice to the Company prior to 6:30 am (New York City time) on the Trading Day following the date on which the Offer Notice is delivered to such Qualified Holder (the “Offer Period”), setting forth the portion of such Qualified Holder’s Initial Amount that such Qualified Holder elects to purchase and, if such Qualified Holder shall elect to purchase all of its Initial Amount, the Undersubscription Amount, if any, that such Qualified Holder elects to purchase (in either case, the “Notice of Acceptance”). If the Initial Amounts subscribed for by all Qualified Holders are less than the total of all of the Initial Amounts, then each Qualified Holder that has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Initial Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Initial Amounts and the Initial Amounts subscribed for (the “Available Undersubscription Amount”), each Qualified Holder that has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Initial Amount of such Qualified Holder bears to the total Initial Amounts of all Qualified Holders that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Qualified Holder a new Offer Notice and the Offer Period shall expire at 6:30 am (New York City time) on the Trading Day following the date after such Qualified Holder’s receipt of such new Offer Notice.
c) The Company shall have two (2) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Qualified Holder (the “Refused Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Report on Form 6-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.
d) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 5(c) above), then each Qualified Holder may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Qualified Holder elected to purchase pursuant to Section 5(b) above multiplied by a fraction, (A) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Qualified Holders pursuant to this Section 5 prior to such reduction) and (B) the denominator of which shall be the original amount of the Offered Securities. In the event that any Qualified Holder so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Qualified Holders in accordance with Section 5(a) above.
e) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Qualified Holder shall acquire from the Company, and the Company shall issue to such Qualified Holder, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 5(d) above if such Qualified Holder has so elected, upon the terms and conditions specified in the Offer. The purchase by such Qualified Holder of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Qualified Holder of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Qualified Holder and its counsel.
f) Any Offered Securities not acquired by a Qualified Holder or other Persons in accordance with this Section 5 may not be issued, sold or exchanged until they are again offered to such Qualified Holder under the procedures specified in this Agreement.
g) The Company and each Qualified Holder agree that if any Qualified Holder elects to participate in the Offer, neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”) shall include any term or provision whereby such Qualified Holder shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.
h) Notwithstanding anything to the contrary in this Section 5 and unless otherwise agreed to by such Qualified Holder, the Company shall either confirm in writing to such Qualified Holder that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Qualified Holder will not be in possession of any material, non-public information, by the 9:30 am (New York City time) second (2nd) Business Day following delivery of the Offer Notice. If by 9:30 am (New York City time) on such second (2nd) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received by such Qualified Holder, such transaction shall be deemed to have been abandoned and such Qualified Holder shall not be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall provide such Qualified Holder with another Offer Notice and such Qualified Holder will again have the right of participation set forth in this Section 5. The Company shall not be permitted to deliver more than one such Offer Notice to such Qualified Holder in any sixty (60) day period, except as expressly contemplated by the last sentence of Section 5(b).
i) The restrictions contained in this Section 5 shall not apply in connection with the issuance of any Exempt Issuance. The Company shall not circumvent the provisions of this Section 5 by providing terms or conditions to one Qualified Holder that are not provided to all Qualified Holders. Reserved.
Appears in 2 contracts
Samples: Ordinary Shares Purchase Warrant (Wearable Devices Ltd.), Ordinary Shares Purchase Warrant (Wearable Devices Ltd.)
Participation Right. Until six (6) months following [●], 2022 [date of the closing of the Company’s initial public offering], neither the Company nor any of its Subsidiaries shall, directly or indirectly, issue, offer, sell, grant any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities (as defined below), any debt, any preferred shares or any purchase rights (any such issuance, offer, sale, grant, disposition or announcement is referred to as a “Subsequent Placement”) unless the Company shall have first complied with this Section 5. The Company acknowledges and agrees that the right set forth in this Section 5 is a right granted by the Company, separately, to each Qualified Holder.
a) Between the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement (or, if the Trading Day of the expected announcement of the Subsequent Placement is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the time period of 4:00 pm (New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New York City time) on the day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement), the Company shall deliver to each Qualified Holder a written notice (each such notice, a “Pre-Notice”), which Pre-Notice shall not contain any information (including, without limitation, material, non-public information) other than: (A) if the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public information and (z) a statement informing such Qualified Holder that it is entitled to receive an Offer Notice (as defined below) with respect to such Subsequent Placement upon its written request. Upon the written request of a Qualified Holder prior to 5:30 am (New York City time) on the Trading Day following the date on which such Pre-Notice is delivered to such Qualified Holder, and only upon a written request by such Qualified Holder, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver to such Qualified Holder an irrevocable written notice (the “Offer Notice”) of any proposed or intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged and (D) offer to issue and sell to or exchange with such Qualified Holder in accordance with the terms of the Offer such Qualified Holder’s pro rata portion of 30% of the Offered Securities, provided that the number of Offered Securities which such Qualified Holder shall have the right to subscribe for under this Section 5 shall be (x) based on such Qualified Holder’s pro rata purchased portion of the aggregate number of Qualified Warrants purchased by all Qualified Holders on the date of such Offer Notice (the “Initial Amount”), and (y) with respect to each Qualified Holder that elects to purchase its Initial Amount, any additional portion of the Offered Securities attributable to the Initial Amounts of other Qualified Holders as such Qualified Holder shall indicate it will purchase or acquire should the other Qualified Holders subscribe for less than their Initial Amounts (the “Undersubscription Amount”), which process shall be repeated until each Qualified Holder shall have an opportunity to subscribe for any remaining Undersubscription Amount.
b) To accept an Offer, in whole or in part, such Qualified Holder must deliver a written notice to the Company prior to 6:30 am (New York City time) on the Trading Day following the date on which the Offer Notice is delivered to such Qualified Holder (the “Offer Period”), setting forth the portion of such Qualified Holder’s Initial Amount that such Qualified Holder elects to purchase and, if such Qualified Holder shall elect to purchase all of its Initial Amount, the Undersubscription Amount, if any, that such Qualified Holder elects to purchase (in either case, the “Notice of Acceptance”). If the Initial Amounts subscribed for by all Qualified Holders are less than the total of all of the Initial Amounts, then each Qualified Holder that has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Initial Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Initial Amounts and the Initial Amounts subscribed for (the “Available Undersubscription Amount”), each Qualified Holder that has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Initial Amount of such Qualified Holder bears to the total Initial Amounts of all Qualified Holders that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Qualified Holder a new Offer Notice and the Offer Period shall expire at 6:30 am (New York City time) on the Trading Day following the date after such Qualified Holder’s receipt of such new Offer Notice.
c) The Company shall have two (2) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Qualified Holder (the “Refused Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Report on Form 6-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.
d) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 5(c) above), then each Qualified Holder may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Qualified Holder elected to purchase pursuant to Section 5(b) above multiplied by a fraction, (A) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Qualified Holders pursuant to this Section 5 prior to such reduction) and (B) the denominator of which shall be the original amount of the Offered Securities. In the event that any Qualified Holder so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Qualified Holders in accordance with Section 5(a) above.
e) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Qualified Holder shall acquire from the Company, and the Company shall issue to such Qualified Holder, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 5(d) above if such Qualified Holder has so elected, upon the terms and conditions specified in the Offer. The purchase by such Qualified Holder of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Qualified Holder of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Qualified Holder and its counsel.
f) Any Offered Securities not acquired by a Qualified Holder or other Persons in accordance with this Section 5 may not be issued, sold or exchanged until they are again offered to such Qualified Holder under the procedures specified in this Agreement.
g) The Company and each Qualified Holder agree that if any Qualified Holder elects to participate in the Offer, neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”) shall include any term or provision whereby such Qualified Holder shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.
h) Notwithstanding anything to the contrary in this Section 5 and unless otherwise agreed to by such Qualified Holder, the Company shall either confirm in writing to such Qualified Holder that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Qualified Holder will not be in possession of any material, non-public information, by the 9:30 am (New York City time) second (2nd) Business Day following delivery of the Offer Notice. If by 9:30 am (New York City time) on such second (2nd) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received by such Qualified Holder, such transaction shall be deemed to have been abandoned and such Qualified Holder shall not be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall provide such Qualified Holder with another Offer Notice and such Qualified Holder will again have the right of participation set forth in this Section 5. The Company shall not be permitted to deliver more than one such Offer Notice to such Qualified Holder in any sixty (60) day period, except as expressly contemplated by the last sentence of Section 5(b).
i) The restrictions contained in this Section 5 shall not apply in connection with the issuance of any Exempt Issuance. The Company shall not circumvent the provisions of this Section 5 by providing terms or conditions to one Qualified Holder that are not provided to all Qualified Holders.
Appears in 2 contracts
Samples: Common Stock Purchase Warrant (Bruush Oral Care Inc.), Common Stock Purchase Warrant (Bruush Oral Care Inc.)
Participation Right. Until six (61) months following [●], 2022 [From the date hereof until the date that is the second anniversary of the closing of the Company’s initial public offering]Closing Date, neither upon any issuance by the Company nor or any of its Subsidiaries shallof Ordinary Shares or Ordinary Shares Equivalents for cash consideration, directly Indebtedness or indirectly, issue, offer, sell, grant any option or right to purchase, or otherwise dispose a combination of units thereof (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities (as defined below), any debt, any preferred shares or any purchase rights (any such issuance, offer, sale, grant, disposition or announcement is referred to as a “Subsequent PlacementFinancing”), each Buyer shall have the right to participate in up to an amount of the Subsequent Financing equal to 35% of the Subsequent Financing (the “Participation Maximum”) unless on the Company shall have first complied with this Section 5. The Company acknowledges same terms, conditions and agrees that price provided for in the right set forth in this Section 5 is a right granted by the Company, separately, to each Qualified HolderSubsequent Financing.
a(2) Between the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement Financing (or, if the Trading Day of the expected announcement of the Subsequent Placement Financing is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the time period of 4:00 pm (New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New York City time) on the day immediately prior to the Trading Day of the expected announcement of the Subsequent PlacementFinancing), the Company shall deliver to each Qualified Holder Buyer a written notice of the Company’s intention to effect a Subsequent Financing (each such notice, a “Pre-Subsequent Financing Notice”), which Pre-Notice notice shall not contain any information (including, without limitation, material, non-public information) other than: (A) if describe in reasonable detail the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public information and (z) a statement informing such Qualified Holder that it is entitled to receive an Offer Notice (as defined below) with respect to terms of such Subsequent Placement upon its written request. Upon the written request of a Qualified Holder prior to 5:30 am (New York City time) on the Trading Day following the date on which such Pre-Notice is delivered to such Qualified Holder, and only upon a written request by such Qualified HolderFinancing, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver to such Qualified Holder an irrevocable written notice (the “Offer Notice”) amount of any proposed or proceeds intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe the price and other terms upon which they are to be issued, sold or exchanged, raised thereunder and the number Person or amount of the Offered Securities Persons through or with whom such Subsequent Financing is proposed to be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged effected and (D) offer to issue shall include a term sheet and sell to or exchange with such Qualified Holder in accordance with the terms of the Offer such Qualified Holder’s pro rata portion of 30% of the Offered Securities, provided that the number of Offered Securities which such Qualified Holder shall have the right to subscribe for under this Section 5 shall be (x) based on such Qualified Holder’s pro rata purchased portion of the aggregate number of Qualified Warrants purchased by all Qualified Holders on the date of such Offer Notice (the “Initial Amount”), and (y) with respect to each Qualified Holder that elects to purchase its Initial Amount, any additional portion of the Offered Securities attributable to the Initial Amounts of other Qualified Holders transaction documents relating thereto as such Qualified Holder shall indicate it will purchase or acquire should the other Qualified Holders subscribe for less than their Initial Amounts (the “Undersubscription Amount”), which process shall be repeated until each Qualified Holder shall have an opportunity to subscribe for any remaining Undersubscription Amountattachment.
b(3) To accept an Offer, Any Buyer desiring to participate in whole or in part, such Qualified Holder Subsequent Financing must deliver a provide written notice to the Company prior to by 6:30 am (New York City time) on the Trading Day following the date on which the Offer Subsequent Financing Notice is delivered to such Qualified Holder Buyer (the “Offer PeriodNotice Termination Time”)) that such Buyer is willing to participate in the Subsequent Financing, setting forth the portion amount of such Qualified HolderBuyer’s Initial Amount participation, and representing and warranting that such Qualified Holder elects to purchase andBuyer has such funds ready, if such Qualified Holder shall elect to purchase all of its Initial Amountwilling, the Undersubscription Amount, if any, that such Qualified Holder elects to purchase (in either case, the “Notice of Acceptance”). If the Initial Amounts subscribed and available for by all Qualified Holders are less than the total of all of the Initial Amounts, then each Qualified Holder that has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Initial Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Initial Amounts and the Initial Amounts subscribed for (the “Available Undersubscription Amount”), each Qualified Holder that has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Initial Amount of such Qualified Holder bears to the total Initial Amounts of all Qualified Holders that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend investment on the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Qualified Holder a new Offer Notice and the Offer Period shall expire at 6:30 am (New York City time) on the Trading Day following the date after such Qualified Holder’s receipt of such new Offer Notice.
c) The Company shall have two (2) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Qualified Holder (the “Refused Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Report on Form 6-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.
d) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 5(c) above), then each Qualified Holder may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Qualified Holder elected to purchase pursuant to Section 5(b) above multiplied by a fraction, (A) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Qualified Holders pursuant to this Section 5 prior to such reduction) and (B) the denominator of which shall be the original amount of the Offered Securities. In the event that any Qualified Holder so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Qualified Holders in accordance with Section 5(a) above.
e) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Qualified Holder shall acquire from the Company, and the Company shall issue to such Qualified Holder, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 5(d) above if such Qualified Holder has so elected, upon the terms and conditions specified in the Offer. The purchase by such Qualified Holder of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Qualified Holder of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Qualified Holder and its counsel.
f) Any Offered Securities not acquired by a Qualified Holder or other Persons in accordance with this Section 5 may not be issued, sold or exchanged until they are again offered to such Qualified Holder under the procedures specified in this Agreement.
g) The Company and each Qualified Holder agree that if any Qualified Holder elects to participate in the Offer, neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”) shall include any term or provision whereby such Qualified Holder shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.
h) Notwithstanding anything to the contrary in this Section 5 and unless otherwise agreed to by such Qualified Holder, the Company shall either confirm in writing to such Qualified Holder that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Qualified Holder will not be in possession of any material, non-public information, by the 9:30 am (New York City time) second (2nd) Business Day following delivery of the Offer Financing Notice. If by 9:30 am (New York City time) on the Company receives no such second (2nd) Business Day, no public disclosure regarding notice from a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment Buyer as of such transaction has been received by such Qualified HolderNotice Termination Time, such transaction Buyer shall be deemed to have been abandoned and such Qualified Holder shall not be in possession of any material, non-public information with respect to notified the Company that it does not elect to participate in such Subsequent Financing.
(4) If, by the Notice Termination Time, notifications by the Buyers of their willingness to participate in the Subsequent Financing (or any to cause their designees to participate) is, in the aggregate, less than the total amount of its Subsidiaries. Should the Subsequent Financing, then the Company decide to pursue may effect the remaining portion of such transaction Subsequent Financing on the terms and with respect to the Offered SecuritiesPersons set forth in the Subsequent Financing Notice.
(5) If, by the Notice Termination Time, the Company receives responses to a Subsequent Financing Notice from Buyers seeking to purchase more than the aggregate amount of the Participation Maximum, each such Buyer shall provide such Qualified Holder with another Offer Notice and such Qualified Holder will again have the right to purchase its Pro Rata Portion (as defined below) of participation set forth in the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription Amount of Securities purchased on the Closing Date by a Buyer participating under this Section 5. The Company shall not be permitted to deliver more than one such Offer Notice to such Qualified Holder in any sixty 4(m)(iii) and (60y) day period, except as expressly contemplated the sum of the aggregate Subscription Amounts of Securities purchased on the Closing Date by the last sentence of all Buyers participating under this Section 5(b4(m)(iii).
i) The restrictions contained in this Section 5 shall not apply in connection with the issuance of any Exempt Issuance. The Company shall not circumvent the provisions of this Section 5 by providing terms or conditions to one Qualified Holder that are not provided to all Qualified Holders.
Appears in 1 contract
Samples: Securities Purchase Agreement (ParaZero Technologies Ltd.)
Participation Right. Until six (6) months following [●], 2022 [date of the closing of the Company’s initial public offering]Issuance Date, neither the Company nor any of its Subsidiaries shall, directly or indirectly, issue, offer, sell, grant any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities (as defined below), any debt, any preferred shares or any purchase rights (any such issuance, offer, sale, grant, disposition or announcement is referred to as a “Subsequent Placement”) unless the Company shall have first complied with this Section 5. The Company acknowledges and agrees that the right set forth in this Section 5 is a right granted by the Company, separately, to each Qualified HolderBuyer.
a) Between the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement (or, if the Trading Day of the expected announcement of the Subsequent Placement is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the time period of 4:00 pm (New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New York City time) on the day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement), the Company shall deliver to each Qualified Holder Buyer Qualified Buyer a written notice (each such notice, a “Pre-Notice”), which Pre-Notice shall not contain any information (including, without limitation, material, non-public information) other than: (A) if the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public information and (z) a statement informing such Qualified Holder Buyer that it is entitled to receive an Offer Notice (as defined below) with respect to such Subsequent Placement upon its written request. Upon the written request of a Qualified Holder Buyer prior to 5:30 am (New York City time) on the Trading Day following the date on which such Pre-Notice is delivered to such Qualified HolderBuyer, and only upon a written request by such Qualified HolderBuyer, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver to such Qualified Holder Buyer an irrevocable written notice (the “Offer Notice”) of any proposed or intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged and (D) offer to issue and sell to or exchange with such Qualified Holder Buyer in accordance with the terms of the Offer such Qualified HolderBuyer’s pro rata portion of 30% of the Offered Securities, provided that the number of Offered Securities which such Qualified Holder Buyer shall have the right to subscribe for under this Section 5 shall be (x) based on such Qualified HolderBuyer’s pro rata purchased portion of the aggregate number of Qualified Warrants purchased held hereunder by all Qualified Holders Buyers on the date of such Offer Notice (the “Initial Amount”), and (y) with respect to each Qualified Holder Buyer that elects to purchase its Initial Amount, any additional portion of the Offered Securities attributable to the Initial Amounts of other Qualified Holders Buyers as such Qualified Holder Buyer shall indicate it will purchase or acquire should the other Qualified Holders Buyers subscribe for less than their Initial Amounts (the “Undersubscription Amount”), which process shall be repeated until each Qualified Holder Buyer shall have an opportunity to subscribe for any remaining Undersubscription Amount.
b) To accept an Offer, in whole or in part, such Qualified Holder Buyer must deliver a written notice to the Company prior to 6:30 am (New York City time) on the Trading Day following the date on which the Offer Notice is delivered to such Qualified Holder Buyer (the “Offer Period”), setting forth the portion of such Qualified HolderBuyer’s Initial Amount that such Qualified Holder Buyer elects to purchase and, if such Qualified Holder Buyer shall elect to purchase all of its Initial Basic Amount, the Undersubscription Amount, if any, that such Qualified Holder Buyer elects to purchase (in either case, the “Notice of Acceptance”). If the Initial Amounts subscribed for by all Qualified Holders Buyers are less than the total of all of the Initial Amounts, then each Qualified Holder that Buyer who has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Initial Basic Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Initial Amounts and the Initial Basic Amounts subscribed for (the “Available Undersubscription Amount”), each Qualified Holder that Buyer who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Initial Amount of such Qualified Holder Buyer bears to the total Initial Amounts of all Qualified Holders Buyers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Qualified Holder Buyer a new Offer Notice and the Offer Period shall expire at 6:30 am (New York City time) on the Trading Day following the date after such Qualified HolderBuyer’s receipt of such new Offer Notice.
c) The Company shall have two three (23) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Qualified Holder Buyer (the “Refused Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Report on Form 6-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.
d) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 5(c) above), then each Qualified Holder Buyer may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Qualified Holder Buyer elected to purchase pursuant to Section 5(b) above multiplied by a fraction, (A) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Qualified Holders Buyers pursuant to this Section 5 prior to such reduction) and (B) the denominator of which shall be the original amount of the Offered Securities. In the event that any Qualified Holder Buyer so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Qualified Holders Buyers in accordance with Section 5(a) above.
e) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Qualified Holder Buyer shall acquire from the Company, and the Company shall issue to such Qualified HolderBuyer, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 5(d) above if such Qualified Holder Buyer has so elected, upon the terms and conditions specified in the Offer. The purchase by such Qualified Holder Buyer of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Qualified Holder Buyer of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Qualified Holder Buyer and its counsel.
f) Any Offered Securities not acquired by a Qualified Holder Buyer or other Persons in accordance with this Section 5 may not be issued, sold or exchanged until they are again offered to such Qualified Holder Buyer under the procedures specified in this Agreement.
g) The Company and each Qualified Holder Buyer agree that if any Qualified Holder Buyer elects to participate in the Offer, neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”) shall include any term or provision whereby such Qualified Holder Buyer shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.
h) Notwithstanding anything to the contrary in this Section 5 and unless otherwise agreed to by such Qualified HolderBuyer, the Company shall either confirm in writing to such Qualified Holder Buyer that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Qualified Holder Buyer will not be in possession of any material, non-public information, by the 9:30 am (New York City time) on the second (2nd) Business Day following delivery of the Offer Notice. If by 9:30 am (New York City time) on such the second (2nd) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received by such Qualified HolderBuyer, such transaction shall be deemed to have been abandoned and such Qualified Holder Buyer shall not be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall provide such Qualified Holder Buyer with another Offer Notice and such Qualified Holder Buyer will again have the right of participation set forth in this Section 5. The Company shall not be permitted to deliver more than one such Offer Notice to such Qualified Holder Buyer in any sixty (60) day period, except as expressly contemplated by the last sentence of Section 5(b).
i) The restrictions contained in this Section 5 shall not apply in connection with the issuance of any Exempt Issuance. The Company shall not circumvent the provisions of this Section 5 by providing terms or conditions to one Qualified Holder Buyer that are not provided to all Qualified HoldersBuyers.
Appears in 1 contract
Samples: Ordinary Shares Purchase Warrant (Jeffs' Brands LTD)
Participation Right. Until Other than the issuance of securities in connection with any investment made by a strategic investor, until six (6) months following [●], 2022 [date of the closing of the Company’s initial public offering]2022, neither the Company nor any of its Subsidiaries shall, directly or indirectly, issue, offer, sell, grant any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities (as defined below), any debt, any preferred shares or any purchase rights (any such issuance, offer, sale, grant, disposition or announcement is referred to as a “Subsequent Placement”) unless the Company shall have first complied with this Section 5. The Company acknowledges and agrees that the right set forth in this Section 5 is a right granted by the Company, separately, to each Qualified Holder.
a) Between the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement (or, if the Trading Day of the expected announcement of the Subsequent Placement is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the time period of 4:00 pm (New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New York City time) on the day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement), the Company shall deliver to each Qualified Holder a written notice (each such notice, a “Pre-Notice”), which Pre-Notice shall not contain any information (including, without limitation, material, non-public information) other than: (A) if the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public information and (z) a statement informing such Qualified Holder that it is entitled to receive an Offer Notice (as defined below) with respect to such Subsequent Placement upon its written request. Upon the written request of a Qualified Holder prior to 5:30 am (New York City time) on the Trading Day following the date on which such Pre-Notice is delivered to such Qualified Holder, and only upon a written request by such Qualified Holder, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver to such Qualified Holder an irrevocable written notice (the “Offer Notice”) of any proposed or intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged and (D) offer to issue and sell to or exchange with such Qualified Holder in accordance with the terms of the Offer such Qualified Holder’s pro rata portion of 30% of the Offered Securities, provided that the number of Offered Securities which such Qualified Holder shall have the right to subscribe for under this Section 5 shall be (x) based on such Qualified Holder’s pro rata purchased portion of the aggregate number of Qualified Warrants purchased by all Qualified Holders on the date of such Offer Notice (the “Initial Amount”), and (y) with respect to each Qualified Holder that elects to purchase its Initial Amount, any additional portion of the Offered Securities attributable to the Initial Amounts of other Qualified Holders as such Qualified Holder shall indicate it will purchase or acquire should the other Qualified Holders subscribe for less than their Initial Amounts (the “Undersubscription Amount”), which process shall be repeated until each Qualified Holder shall have an opportunity to subscribe for any remaining Undersubscription Amount.
b) To accept an Offer, in whole or in part, such Qualified Holder must deliver a written notice to the Company prior to 6:30 am (New York City time) on the Trading Day following the date on which the Offer Notice is delivered to such Qualified Holder (the “Offer Period”), setting forth the portion of such Qualified Holder’s Initial Amount that such Qualified Holder elects to purchase and, if such Qualified Holder shall elect to purchase all of its Initial Amount, the Undersubscription Amount, if any, that such Qualified Holder elects to purchase (in either case, the “Notice of Acceptance”). If the Initial Amounts subscribed for by all Qualified Holders are less than the total of all of the Initial Amounts, then each Qualified Holder that has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Initial Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Initial Amounts and the Initial Amounts subscribed for (the “Available Undersubscription Amount”), each Qualified Holder that has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Initial Amount of such Qualified Holder bears to the total Initial Amounts of all Qualified Holders that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Qualified Holder a new Offer Notice and the Offer Period shall expire at 6:30 am (New York City time) on the Trading Day following the date after such Qualified Holder’s receipt of such new Offer Notice.
c) The Company shall have two (2) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Qualified Holder (the “Refused Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Report on Form 68-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.
d) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 5(c) above), then each Qualified Holder may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Qualified Holder elected to purchase pursuant to Section 5(b) above multiplied by a fraction, (A) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Qualified Holders pursuant to this Section 5 prior to such reduction) and (B) the denominator of which shall be the original amount of the Offered Securities. In the event that any Qualified Holder so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Qualified Holders in accordance with Section 5(a) above.
e) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Qualified Holder shall acquire from the Company, and the Company shall issue to such Qualified Holder, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 5(d) above if such Qualified Holder has so elected, upon the terms and conditions specified in the Offer. The purchase by such Qualified Holder of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Qualified Holder of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Qualified Holder and its counsel.
f) Any Offered Securities not acquired by a Qualified Holder or other Persons in accordance with this Section 5 may not be issued, sold or exchanged until they are again offered to such Qualified Holder under the procedures specified in this Agreement.
g) The Company and each Qualified Holder agree that if any Qualified Holder elects to participate in the Offer, neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”) shall include any term or provision whereby such Qualified Holder shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.
h) Notwithstanding anything to the contrary in this Section 5 and unless otherwise agreed to by such Qualified Holder, the Company shall either confirm in writing to such Qualified Holder that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Qualified Holder will not be in possession of any material, non-public information, by the 9:30 am (New York City time) second (2nd) Business Day following delivery of the Offer Notice. If by 9:30 am (New York City time) on such second (2nd) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received by such Qualified Holder, such transaction shall be deemed to have been abandoned and such Qualified Holder shall not be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall provide such Qualified Holder with another Offer Notice and such Qualified Holder will again have the right of participation set forth in this Section 5. The Company shall not be permitted to deliver more than one such Offer Notice to such Qualified Holder in any sixty (60) day period, except as expressly contemplated by the last sentence of Section 5(b).
i) The restrictions contained in this Section 5 shall not apply in connection with the issuance of any Exempt Issuance. The Company shall not circumvent the provisions of this Section 5 by providing terms or conditions to one Qualified Holder that are not provided to all Qualified Holders.
Appears in 1 contract
Samples: Common Stock Purchase Warrant (Epien Medical, Inc.)
Participation Right. Until six (6) months following [●], 2022 [During the period commencing on the date hereof through the first anniversary of the closing of the Company’s initial public offering]Closing Date, neither the Company nor any of its Subsidiaries shall, directly or indirectly, issue, offer, sell, grant effect any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities (as defined below), any debt, any preferred shares or any purchase rights (any such issuance, offer, sale, grant, disposition or announcement is referred to as a “Subsequent Placement”) Placement unless the Company shall have first complied with this Section 54(q). The Company acknowledges and agrees that the right set forth in this Section 5 4(q) is a right granted by the Company, separately, to each Qualified HolderBuyer with a Purchase Price hereunder of at least $2 million (each, a “Major Buyer”).
a(i) Between the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement (or, if the Trading Day of the expected announcement of the Subsequent Placement is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the time period of 4:00 pm (New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New York City time) on the day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement), the Company shall deliver to each Qualified Holder Major Buyer a written notice (each such notice, a “Pre-Notice”), which Pre-Notice shall not contain any information (including, without limitation, material, non-public information) other than: (A) if the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor such Major Buyer is willing to accept material non-public information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public information and (z) a statement informing such Qualified Holder Major Buyer that it is entitled to receive an Offer Notice (as defined below) with respect to such Subsequent Placement upon its written request. Upon the written request of a Qualified Holder Major Buyer prior to 5:30 am (New York City time) on the Trading Day following the date on which such Pre-Notice is delivered to such Qualified HolderMajor Buyer, and only upon a written request by such Qualified HolderMajor Buyer, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver to such Qualified Holder Major Buyer an irrevocable written notice (the “Offer Notice”) of any proposed or intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged and (D) offer to issue and sell to or exchange with such Qualified Holder Major Buyer in accordance with the terms of the Offer such Qualified HolderMajor Buyer’s pro rata portion of 30% of the Offered Securities, provided that the number of Offered Securities which such Qualified Holder Major Buyer shall have the right to subscribe for under this Section 5 4(q) shall be (x) based on such Qualified HolderMajor Buyer’s pro rata purchased portion of the aggregate number of Qualified Warrants Purchased Shares purchased hereunder by all Qualified Holders on the date of such Offer Notice Major Buyers (the “Initial Basic Amount”), and (y) with respect to each Qualified Holder Major Buyer that elects to purchase its Initial Basic Amount, any additional portion of the Offered Securities attributable to the Initial Basic Amounts of other Qualified Holders Major Buyers as such Qualified Holder Major Buyer shall indicate it will purchase or acquire should the other Qualified Holders Major Buyers subscribe for less than their Initial Basic Amounts (the “Undersubscription Amount”), which process shall be repeated until each Qualified Holder Major Buyer shall have an opportunity to subscribe for any remaining Undersubscription Amount.
b(ii) To accept an Offer, in whole or in part, such Qualified Holder Major Buyer must deliver a written notice to the Company prior to 6:30 am (New York City time) on the Trading Day following the date on which the Offer Notice is delivered to such Qualified Holder Major Buyer (such period, the “Offer Period”), setting forth the portion of such Qualified HolderMajor Buyer’s Initial Basic Amount that such Qualified Holder Major Buyer elects to purchase and, if such Qualified Holder Major Buyer shall elect to purchase all of its Initial Basic Amount, the Undersubscription Amount, if any, that such Qualified Holder Major Buyer elects to purchase (in either case, the “Notice of Acceptance”). If the Initial Basic Amounts subscribed for by all Qualified Holders Major Buyers are less than the total of all of the Initial Basic Amounts, then each Qualified Holder that Major Buyer who has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Initial Basic Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Initial Basic Amounts and the Initial Basic Amounts subscribed for (the “Available Undersubscription Amount”), each Qualified Holder that Major Buyer who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Initial Basic Amount of such Qualified Holder Major Buyer bears to the total Initial Basic Amounts of all Qualified Holders Major Buyers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Qualified Holder Major Buyer a new Offer Notice and the Offer Period shall expire at 6:30 am (New York City time) on the Trading Day following the date after such Qualified HolderMajor Buyer’s receipt of such new Offer Notice.
c(iii) The Company shall have two (2) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Qualified Holder Major Buyer (the “Refused Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Report of Foreign Issuer
(iv) on Form 6-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto. For the avoidance of doubt, the Company must provide the Major Buyers with a second Subsequent Placement Notice, and the Major Buyers will again have the right of participation set forth above in this Section 4(q), if the definitive agreement related to the initial Subsequent Placement Notice is not entered into for any reason on the terms set forth in such Offer Notice within two (2) Trading Days after the date of delivery of the initial Offer Notice.
d(v) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 5(c4(q)(ii) above), then each Qualified Holder Major Buyer may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Qualified Holder Major Buyer elected to purchase pursuant to Section 5(b4(q)(ii) above multiplied by a fraction, (A) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Qualified Holders Major Buyers pursuant to this Section 5 4(q) prior to such reduction) and (B) the denominator of which shall be the original amount of the Offered Securities. In the event that any Qualified Holder Major Buyer so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Qualified Holders Major Buyers in accordance with Section 5(a4(q)(i) above.
e(vi) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Qualified Holder Major Buyer shall acquire from the Company, and the Company shall issue to such Qualified HolderMajor Buyer, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 5(d4(q)(iv) above if such Qualified Holder Major Buyer has so elected, upon the terms and conditions specified in the Offer. The purchase by such Qualified Holder Major Buyer of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Qualified Holder Major Buyer of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Qualified Holder Major Buyer and its counsel.
f(vii) Any Offered Securities not acquired by a Qualified Holder Major Buyer or other Persons in accordance with this Section 5 4(q) may not be issued, sold or exchanged until they are again offered to such Qualified Holder Major Buyer under the procedures specified in this Agreement.
g(viii) The Company and each Qualified Holder Major Buyer agree that if any Qualified Holder Major Buyer elects to participate in the Offer, neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”) shall include any term or provision whereby such Qualified Holder Major Buyer shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.
h(ix) Notwithstanding anything to the contrary in this Section 5 4(q) and unless otherwise agreed to by such Qualified HolderMajor Buyer, the Company shall either confirm in writing to such Qualified Holder Major Buyer that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Qualified Holder Major Buyer will not be in possession of any material, non-public information, by the 9:30 am (New York City city time) on the second (2nd) Business Day following delivery of the Offer Notice. If by 9:30 am (New York City city time) on such second (2nd) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received by such Qualified HolderMajor Buyer, such transaction shall be deemed to have been abandoned and such Qualified Holder Major Buyer shall not be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall provide such Qualified Holder Major Buyer with another Offer Notice and such Qualified Holder Major Buyer will again have the right of participation set forth in this Section 54(q). The Company shall not be permitted to deliver more than one such Offer Notice to such Qualified Holder Major Buyer in any sixty (60) day period, except as expressly contemplated by the last sentence of Section 5(b4(q)(ii).
i(x) The restrictions contained in this Section 5 4(q) shall not apply in connection with the issuance of any Exempt IssuanceExcluded Securities. The Company shall not circumvent the provisions of this Section 5 4(q) by providing terms or conditions to one Qualified Holder Major Buyer that are not provided to all Qualified HoldersMajor Buyers.
Appears in 1 contract
Samples: Securities Purchase Agreement (Dogness (International) Corp)
Participation Right. Until six (6) months following [●], 2022 [date At any time on or prior to the two year anniversary of the closing of the Company’s initial public offering]Closing Date, neither the Company nor any of its Subsidiaries shall, directly or indirectly, issue, offer, sell, grant any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities (as defined below), any debtCommon Stock Equivalents, any preferred shares stock or any purchase rights rights) (any such issuance, offer, sale, grant, disposition or announcement (whether pursuant to a public or private offering) is referred to as a “Subsequent Placement”) unless the Company shall have first complied with this Section 54.15. The Company shall provide notice to each Purchaser at least (i) 6 hours in advance of an intra-day Subsequent Placement pursuant to a registration statement, (ii) 18 hours in advance of an overnight Subsequent Placement pursuant to a registration statement, and (ii) 3 Business Days in advance of any other Subsequent Placement (the notice period referred to in (i), (ii) and (iii) is referred to as the “Applicable Placement Notice Time”). The Company acknowledges and agrees that the right set forth in this Section 5 4.15 is a right granted by the Company, separately, to each Qualified HolderPurchaser.
a(i) Between No later than the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately Applicable Placement Notice Time prior to the Trading Day of the expected announcement of the Subsequent Placement (or, if the Trading Day of the expected announcement of the Subsequent Placement is the first Trading Day following a holiday any proposed or a weekend (including a holiday weekend), between the time period of 4:00 pm (New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New York City time) on the day immediately prior to the Trading Day of the expected announcement of the intended Subsequent Placement), the Company shall deliver to each Qualified Holder a written notice (each such notice, a “Pre-Notice”), which Pre-Notice shall not contain any information (including, without limitation, material, non-public information) other than: (A) if the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public information and (z) a statement informing such Qualified Holder that it is entitled to receive an Offer Notice (as defined below) with respect to such Subsequent Placement upon its written request. Upon the written request of a Qualified Holder prior to 5:30 am (New York City time) on the Trading Day following the date on which such Pre-Notice is delivered to such Qualified Holder, and only upon a written request by such Qualified Holder, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver to such Qualified Holder Purchaser an irrevocable written notice (the “Offer Notice”) of any proposed or intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe the price and other material terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged, (C) identify include proposed drafts of the Persons Subsequent Placement Documents (if knownas defined below) to which or with and specify the proposed time at which the Offered Securities are Company intends to be offeredexecute the Subsequent Placement Documents, issued, sold or exchanged and (D) offer to issue and sell to or exchange with such Qualified Holder Purchaser in accordance with the terms of the Offer such Qualified HolderPurchaser’s pro rata portion of 30% thirty-five percent (35%) of the Offered Securities, provided that the number of Offered Securities which such Qualified Holder Purchaser shall have the right to subscribe for under this Section 5 4.15 shall be (x) based on such Qualified HolderPurchaser’s pro rata purchased portion of the aggregate number of Qualified Warrants purchased by Subscription Amount for all Qualified Holders on the date of such Offer Notice Purchasers pursuant to this Agreement (the “Initial Basic Amount”), and (y) with respect to each Qualified Holder Purchaser that elects to purchase its Initial Basic Amount, any additional portion of the Offered Securities attributable to the Initial Basic Amounts of other Qualified Holders Purchasers as such Qualified Holder Purchaser shall indicate it will purchase or acquire should the other Qualified Holders Purchasers subscribe for less than their Initial Basic Amounts (the “Undersubscription Amount”), which process shall be repeated until each Qualified Holder Purchaser shall have an opportunity to subscribe for any remaining Undersubscription Amount.
b(ii) To accept an Offer, in whole or in part, such Qualified Holder Purchaser must deliver a written notice to the Company prior to 6:30 am (New York City time) on the Trading Day following the date on which the receipt of an Offer Notice is delivered at least, as applicable, (i) 1 hour in advance of an intra-day Subsequent Placement pursuant to such Qualified Holder a registration statement, (ii) 3 hours in advance of an overnight Subsequent Placement pursuant to a registration statement, and (ii) 1 Business Day in advance of any other Subsequent Placement (as applicable, the “Offer Period”), setting forth the portion of such Qualified HolderPurchaser’s Initial Basic Amount that such Qualified Holder Purchaser elects to purchase and, if such Qualified Holder Purchaser shall elect to purchase all of its Initial Basic Amount, the Undersubscription Amount, if any, that such Qualified Holder Purchaser elects to purchase (in either case, the “Notice of Acceptance”). If the Initial Basic Amounts subscribed for by all Qualified Holders Purchasers are less than the total of all of the Initial Basic Amounts, then each Qualified Holder that Purchaser who has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Initial Basic Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Initial Basic Amounts and the Initial Basic Amounts subscribed for (the “Available Undersubscription Amount”), each Qualified Holder that Purchaser who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Initial Basic Amount of such Qualified Holder Purchaser bears to the total Initial Basic Amounts of all Qualified Holders Purchasers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Qualified Holder Purchaser a new Offer Notice and the Offer Period shall expire at 6:30 am one (New York City time1) on the Trading Day following the date after such Qualified HolderPurchaser’s receipt of such new Offer Notice.
c(iii) The Company shall have two forty-eight (248) Business Days hours from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Qualified Holder Purchaser (the “Refused Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Current Report on Form 68-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.
d(iv) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 5(c4.15(iii) above), then each Qualified Holder Purchaser may, at its sole option and in its sole discretion, withdraw its Notice of Acceptance or reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Qualified Holder Purchaser elected to purchase pursuant to Section 5(b4.15(ii) above multiplied by a fraction, (Ai) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Qualified Holders Purchasers pursuant to this Section 5 4.15 prior to such reduction) and (Bii) the denominator of which shall be the original amount of the Offered Securities. In the event that any Qualified Holder Purchaser so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Qualified Holders Purchasers in accordance with Section 5(a4.15(i) above.
e(v) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Qualified Holder Purchaser shall acquire from the Company, and the Company shall issue to such Qualified HolderPurchaser, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 5(d4.15(iv) above if such Qualified Holder Purchaser has so elected, upon the terms and conditions specified in the Offer. The purchase by such Qualified Holder Purchaser of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Qualified Holder Purchaser of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Qualified Holder Purchaser and its counsel.
f(vi) Any Offered Securities not acquired by a Qualified Holder Purchaser or other Persons in accordance with this Section 5 4.15 may not be issued, sold or exchanged until they are again offered to such Qualified Holder Purchaser under the procedures specified in this Agreement.
g(vii) The Company and each Qualified Holder Purchaser agree that if any Qualified Holder Purchaser elects to participate in the Offer, neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”) shall include any term or provision whereby such Qualified Holder Purchaser shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.
h(viii) Notwithstanding anything to the contrary in this Section 5 4.15 and unless otherwise agreed to by such Qualified HolderPurchaser, the Company shall either confirm in writing to such Qualified Holder Purchaser that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Qualified Holder Purchaser will not be in possession of any material, non-public information, by the 9:30 am forty-eighth (New York City time48th) second (2nd) Business Day hour following delivery of the Offer Notice. If by 9:30 am such forty-eight (New York City time48th) on such second (2nd) Business Dayhour, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received by such Qualified HolderPurchaser, such transaction shall be deemed to have been abandoned and such Qualified Holder Purchaser shall not be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall provide such Qualified Holder Purchaser with another Offer Notice and such Qualified Holder Purchaser will again have the right of participation set forth in this Section 5. The Company shall not be permitted to deliver more than one such Offer Notice to such Qualified Holder in any sixty (60) day period, except as expressly contemplated by the last sentence of Section 5(b)4.15.
i(ix) The restrictions contained in this Section 5 4.15 shall not apply in connection with the issuance of any Exempt Issuance. The Company shall not circumvent the provisions of Issuance (as defined in this Section 5 by providing terms or conditions to one Qualified Holder that are not provided to all Qualified HoldersAgreement).
Appears in 1 contract
Participation Right. Until six (6a) months following [●], 2022 [From the date hereof until the 12-month anniversary of the closing of date on which the Company’s initial public offering]Common Stock is listed on a National Exchange, neither upon any issuance by the Company nor or any of its Subsidiaries shallof Common Stock or Common Stock Equivalents for cash consideration, directly indebtedness or indirectly, issue, offer, sell, grant any option or right to purchase, or otherwise dispose a combination of units thereof (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities (as defined below), any debt, any preferred shares or any purchase rights (any such issuance, offer, sale, grant, disposition or announcement is referred to as a “Subsequent PlacementFinancing”) unless ), the Company Purchasers shall have first complied with this Section 5. The Company acknowledges and agrees that the right set forth to participate in this Section 5 is a right granted by up to an aggregate amount of the CompanySubsequent Financing equal to 50% of the Subsequent Financing (the “Participation Maximum”), separately, pro rata to each Qualified HolderPurchaser’s Subscription Amount, on the same terms, conditions and price provided for in the Subsequent Financing.
a(b) Between the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement Financing (or, if the Trading Day of the expected announcement of the Subsequent Placement Financing is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the time period of 4:00 pm (New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New York City time) on the day immediately prior to the Trading Day of the expected announcement of the Subsequent PlacementFinancing), the Company shall deliver to each Qualified Holder Purchaser a written notice of the Company’s intention to effect a Subsequent Financing (each such notice, a “Pre-Subsequent Financing Notice”), which Pre-Notice notice shall not contain any information (including, without limitation, material, non-public information) other than: (A) if describe in reasonable detail the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public information and (z) a statement informing such Qualified Holder that it is entitled to receive an Offer Notice (as defined below) with respect to terms of such Subsequent Placement upon its written request. Upon the written request of a Qualified Holder prior to 5:30 am (New York City time) on the Trading Day following the date on which such Pre-Notice is delivered to such Qualified Holder, and only upon a written request by such Qualified HolderFinancing, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver to such Qualified Holder an irrevocable written notice (the “Offer Notice”) amount of any proposed or proceeds intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe the price and other terms upon which they are to be issued, sold or exchanged, raised thereunder and the number Person or amount of the Offered Securities Persons through or with whom such Subsequent Financing is proposed to be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged effected and (D) offer to issue shall include a term sheet and sell to or exchange with such Qualified Holder in accordance with the terms of the Offer such Qualified Holder’s pro rata portion of 30% of the Offered Securities, provided that the number of Offered Securities which such Qualified Holder shall have the right to subscribe for under this Section 5 shall be (x) based on such Qualified Holder’s pro rata purchased portion of the aggregate number of Qualified Warrants purchased by all Qualified Holders on the date of such Offer Notice (the “Initial Amount”), and (y) with respect to each Qualified Holder that elects to purchase its Initial Amount, any additional portion of the Offered Securities attributable to the Initial Amounts of other Qualified Holders transaction documents relating thereto as such Qualified Holder shall indicate it will purchase or acquire should the other Qualified Holders subscribe for less than their Initial Amounts (the “Undersubscription Amount”), which process shall be repeated until each Qualified Holder shall have an opportunity to subscribe for any remaining Undersubscription Amountattachment.
b(c) To accept an Offer, Any Purchaser desiring to participate in whole or in part, such Qualified Holder Subsequent Financing must deliver a provide written notice to the Company prior to by 6:30 am (New York City time) on the Trading Day following the date on which the Offer Subsequent Financing Notice is delivered to such Qualified Holder the Purchaser (the “Offer PeriodNotice Termination Time”), setting forth ) that the portion of such Qualified Holder’s Initial Amount that such Qualified Holder elects Purchaser is willing to purchase and, if such Qualified Holder shall elect to purchase all of its Initial Amountparticipate in the Subsequent Financing, the Undersubscription Amount, if any, that such Qualified Holder elects to purchase (in either case, the “Notice of Acceptance”). If the Initial Amounts subscribed for by all Qualified Holders are less than the total of all amount of the Initial AmountsPurchaser’s participation, then each Qualified Holder and representing and warranting that the Purchaser has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchasesuch funds ready, in addition to the Initial Amounts subscribed forwilling, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed and available for exceed the difference between the total of all the Initial Amounts and the Initial Amounts subscribed for (the “Available Undersubscription Amount”), each Qualified Holder that has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Initial Amount of such Qualified Holder bears to the total Initial Amounts of all Qualified Holders that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend investment on the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Qualified Holder a new Offer Notice and the Offer Period shall expire at 6:30 am (New York City time) on the Trading Day following the date after such Qualified Holder’s receipt of such new Offer Notice.
c) The Company shall have two (2) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Qualified Holder (the “Refused Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Report on Form 6-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.
d) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 5(c) above), then each Qualified Holder may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Qualified Holder elected to purchase pursuant to Section 5(b) above multiplied by a fraction, (A) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Qualified Holders pursuant to this Section 5 prior to such reduction) and (B) the denominator of which shall be the original amount of the Offered Securities. In the event that any Qualified Holder so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Qualified Holders in accordance with Section 5(a) above.
e) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Qualified Holder shall acquire from the Company, and the Company shall issue to such Qualified Holder, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 5(d) above if such Qualified Holder has so elected, upon the terms and conditions specified in the Offer. The purchase by such Qualified Holder of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Qualified Holder of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Qualified Holder and its counsel.
f) Any Offered Securities not acquired by a Qualified Holder or other Persons in accordance with this Section 5 may not be issued, sold or exchanged until they are again offered to such Qualified Holder under the procedures specified in this Agreement.
g) The Company and each Qualified Holder agree that if any Qualified Holder elects to participate in the Offer, neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”) shall include any term or provision whereby such Qualified Holder shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.
h) Notwithstanding anything to the contrary in this Section 5 and unless otherwise agreed to by such Qualified Holder, the Company shall either confirm in writing to such Qualified Holder that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Qualified Holder will not be in possession of any material, non-public information, by the 9:30 am (New York City time) second (2nd) Business Day following delivery of the Offer Financing Notice. If by 9:30 am (New York City time) on the Company receives no such second (2nd) Business Day, no public disclosure regarding notice from a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment Purchaser as of such transaction has been received by such Qualified HolderNotice Termination Time, such transaction the Purchaser shall be deemed to have been abandoned and such Qualified Holder shall not be in possession of any material, non-public information with respect to notified the Company that it does not elect to participate in such Subsequent Financing.
(d) If, by the Notice Termination Time, notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or any to cause their designees to participate) is, in the aggregate, less than the total amount of its Subsidiaries. Should the Subsequent Financing, then the Company decide to pursue may effect the remaining portion of such transaction Subsequent Financing on the terms and with respect to the Offered SecuritiesPersons set forth in the Subsequent Financing Notice.
(e) If, by the Notice Termination Time, the Company receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase more than the aggregate amount of the Participation Maximum, the Purchaser shall provide such Qualified Holder with another Offer Notice and such Qualified Holder will again have the right to purchase its Pro Rata Portion (as defined below) of participation set forth in the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription Amount of Securities purchased on the Closing Date by a Purchaser participating under this Section 5. The Company shall not be permitted to deliver more than one such Offer Notice to such Qualified Holder in any sixty 4.17 and (60y) day period, except as expressly contemplated the sum of the aggregate Subscription Amounts of Securities purchased on the Closing Date by the last sentence of Section 5(b).
i) The restrictions contained in all Purchasers participating under this Section 5 shall not apply in connection with the issuance of any Exempt Issuance. The Company shall not circumvent the provisions of this Section 5 by providing terms or conditions to one Qualified Holder that are not provided to all Qualified Holders4.17.
Appears in 1 contract
Samples: Securities Purchase Agreement (International Land Alliance Inc.)
Participation Right. Until six (6i) From the date hereof until the date that is twelve (12) months following [●]after the final Closing to occur hereunder, 2022 [date of the closing of the Company’s initial public offering], neither upon the Company nor or any of its Subsidiaries shallSubsidiary, directly or indirectlyindirectly issuing, issueoffering, offerselling, sell, grant granting any option or right to purchase, or otherwise dispose disposing of (or announce announcing any issuance, incurrence, offer, sale, grant of any option or right to purchase or other disposition of) any debt security or other indebtedness, equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities (as defined below)Securities, any debt, any preferred shares preference stock or any purchase rights rights) (any such issuance, offer, sale, grant, disposition or announcement (whether occurring while Preference Shares remain outstanding or at any time thereafter), is referred to as a “Subsequent Placement”) unless the Company ), each Buyer shall have first complied with this Section 5. The Company acknowledges and agrees that the right set forth to participate in this Section 5 is a right granted by up to an aggregate amount among all Buyers of the CompanySubsequent Placement equal to 25% of the Subsequent Placement (the “Participation Maximum”) on the same terms, separately, to each Qualified Holderconditions and price provided for in the Subsequent Placement.
a(ii) Between the time period of 4:00 pm p.m. (New York City time) and 6:00 pm p.m. (New York City time) on the Trading Day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement (or, if the Trading Day of the expected announcement of the Subsequent Placement is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the time period of 4:00 pm p.m. (New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm p.m. (New York City time) on the day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement), the Company shall deliver to each Qualified Holder Buyer a written notice of the Company’s intention to effect a Subsequent Placement (each such notice, a “Pre-Subsequent Placement Notice”), which Pre-Notice notice shall not contain any information (including, without limitation, material, non-public information) other than: (A) if describe in reasonable detail the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a terms of such Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public information amount of proceeds intended to be raised thereunder and (z) a statement informing such Qualified Holder that it is entitled to receive an Offer Notice (as defined below) the Person or Persons through or with respect to whom such Subsequent Placement upon its written request. Upon the written request of a Qualified Holder prior to 5:30 am (New York City time) on the Trading Day following the date on which such Pre-Notice is delivered to such Qualified Holder, and only upon a written request by such Qualified Holder, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver to such Qualified Holder an irrevocable written notice (the “Offer Notice”) of any proposed or intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe the price and other terms upon which they are to be issued, sold or exchanged, effected and the number or amount of the Offered Securities to be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged shall include a term sheet and (D) offer to issue and sell to or exchange with such Qualified Holder in accordance with the terms of the Offer such Qualified Holder’s pro rata portion of 30% of the Offered Securities, provided that the number of Offered Securities which such Qualified Holder shall have the right to subscribe for under this Section 5 shall be (x) based on such Qualified Holder’s pro rata purchased portion of the aggregate number of Qualified Warrants purchased by all Qualified Holders on the date of such Offer Notice (the “Initial Amount”), and (y) with respect to each Qualified Holder that elects to purchase its Initial Amount, any additional portion of the Offered Securities attributable to the Initial Amounts of other Qualified Holders transaction documents relating thereto as such Qualified Holder shall indicate it will purchase or acquire should the other Qualified Holders subscribe for less than their Initial Amounts (the “Undersubscription Amount”), which process shall be repeated until each Qualified Holder shall have an opportunity to subscribe for any remaining Undersubscription Amountattachment.
b(iii) To accept an Offer, Any Buyer desiring to participate in whole or in part, such Qualified Holder Subsequent Placement must deliver a provide written notice to the Company prior to by 6:30 am a.m. (New York City time) on the Trading Day following the date on which the Offer Subsequent Placement Notice is delivered to such Qualified Holder Buyer (the “Offer PeriodNotice Termination Time”)) that such Buyer is willing to participate in the Subsequent Placement, setting forth the portion amount of such Qualified HolderBuyer’s Initial Amount participation, and representing and warranting that such Qualified Holder elects to purchase andBuyer has such funds ready, if such Qualified Holder shall elect to purchase all of its Initial Amountwilling, the Undersubscription Amount, if any, that such Qualified Holder elects to purchase (in either case, the “Notice of Acceptance”). If the Initial Amounts subscribed and available for by all Qualified Holders are less than the total of all of the Initial Amounts, then each Qualified Holder that has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Initial Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Initial Amounts and the Initial Amounts subscribed for (the “Available Undersubscription Amount”), each Qualified Holder that has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Initial Amount of such Qualified Holder bears to the total Initial Amounts of all Qualified Holders that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend investment on the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Qualified Holder a new Offer Notice and the Offer Period shall expire at 6:30 am (New York City time) on the Trading Day following the date after such Qualified Holder’s receipt of such new Offer Notice.
c) The Company shall have two (2) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Qualified Holder (the “Refused Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Report on Form 6-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.
d) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 5(c) above), then each Qualified Holder may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Qualified Holder elected to purchase pursuant to Section 5(b) above multiplied by a fraction, (A) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Qualified Holders pursuant to this Section 5 prior to such reduction) and (B) the denominator of which shall be the original amount of the Offered Securities. In the event that any Qualified Holder so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Qualified Holders in accordance with Section 5(a) above.
e) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Qualified Holder shall acquire from the Company, and the Company shall issue to such Qualified Holder, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 5(d) above if such Qualified Holder has so elected, upon the terms and conditions specified in the Offer. The purchase by such Qualified Holder of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Qualified Holder of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Qualified Holder and its counsel.
f) Any Offered Securities not acquired by a Qualified Holder or other Persons in accordance with this Section 5 may not be issued, sold or exchanged until they are again offered to such Qualified Holder under the procedures specified in this Agreement.
g) The Company and each Qualified Holder agree that if any Qualified Holder elects to participate in the Offer, neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”) shall include any term or provision whereby such Qualified Holder shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.
h) Notwithstanding anything to the contrary in this Section 5 and unless otherwise agreed to by such Qualified Holder, the Company shall either confirm in writing to such Qualified Holder that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Qualified Holder will not be in possession of any material, non-public information, by the 9:30 am (New York City time) second (2nd) Business Day following delivery of the Offer Notice. If by 9:30 am (New York City time) on the Company receives no such second (2nd) Business Day, no public disclosure regarding notice from a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment Buyer as of such transaction has been received by such Qualified HolderNotice Termination Time, such transaction Buyer shall be deemed to have been abandoned and such Qualified Holder shall not be in possession of any material, non-public information with respect to notified the Company that it does not elect to participate in such Subsequent Placement.
(iv) If, by the Notice Termination Time, notifications by the Buyers of their willingness to participate in the Subsequent Placement (or any to cause their designees to participate) is, in the aggregate, less than the total amount of its Subsidiaries. Should the Subsequent Placement, then the Company decide to pursue may effect the remaining portion of such transaction Subsequent Placement on the terms and with respect to the Offered SecuritiesPersons set forth in the Subsequent Placement Notice.
(v) If, by the Notice Termination Time, the Company receives responses to a Subsequent Placement Notice from Buyers seeking to purchase more than the aggregate amount of the Participation Maximum, each such Buyer shall provide such Qualified Holder with another Offer Notice and such Qualified Holder will again have the right to purchase its Pro Rata Portion (as defined below) of participation set forth in the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription Amount of Securities purchased on the Closing Date by a Buyer participating under this Section 5. The Company shall not be permitted to deliver more than one such Offer Notice to such Qualified Holder in any sixty 4(o) and (60y) day period, except as expressly contemplated the sum of the aggregate Subscription Amounts of Securities purchased on the Closing Date by the last sentence of all Buyers participating under this Section 5(b4(o).
i) The restrictions contained in this Section 5 shall not apply in connection with the issuance of any Exempt Issuance. The Company shall not circumvent the provisions of this Section 5 by providing terms or conditions to one Qualified Holder that are not provided to all Qualified Holders.
Appears in 1 contract
Participation Right. Until six (6) months following [●], 2022 [date At any time on or prior to the eighteen month anniversary of the closing of the Company’s initial public offering]Closing Date, neither the Company nor any of its Subsidiaries shall, directly or indirectly, issue, offer, sell, grant effect any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities (as defined below), any debt, any preferred shares or any purchase rights (any such issuance, offer, sale, grant, disposition or announcement is referred to as a “Subsequent Placement”) Placement unless the Company shall have first complied with this Section 54(p). The Company acknowledges and agrees that the right set forth in this Section 5 4(p) is a right granted by the Company, separately, to each Qualified HolderBuyer.
a(i) Between the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement (or, if the Trading Day of the expected announcement of the Subsequent Placement is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the time period of 4:00 pm (New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New York City time) on the day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement), the Company shall deliver to each Qualified Holder Buyer a written notice (each such notice, a “Pre-Notice”), which Pre-Notice shall not contain any information (including, without limitation, material, non-public information) other than: (A) if the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor such Buyer is willing to accept material non-public information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public information and (z) a statement informing such Qualified Holder Buyer that it is entitled to receive an Offer Notice (as defined below) with respect to such Subsequent Placement upon its written request. Upon the written request of a Qualified Holder Buyer prior to 5:30 am (New York City time) on the Trading Day following the date on which such Pre-Notice is delivered to such Qualified HolderBuyer, and only upon a written request by such Qualified HolderBuyer, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver to such Qualified Holder Buyer an irrevocable written notice (the “Offer Notice”) of any proposed or intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the material terms of the Offered Securities, (B) describe the anticipated price and other material terms upon which they are to be issued, sold issued or exchangedsold, and the approximate number or amount of the Offered Securities to be issued, sold issued or exchangedsold, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, issued or sold or exchanged and (D) offer to issue and sell to or exchange with such Qualified Holder Buyer in accordance with the terms of the Offer such Qualified HolderBuyer’s pro rata portion of 3025% of the Offered Securities, provided that the number of Offered Securities which such Qualified Holder Buyer shall have the right to subscribe for under this Section 5 4(p) shall be (x) based on such Qualified HolderBuyer’s pro rata purchased portion of the aggregate number principal amount of Qualified Warrants Notes purchased hereunder by all Qualified Holders on the date of such Offer Notice Buyers (the “Initial Basic Amount”), and (y) with respect to each Qualified Holder Buyer that elects to purchase its Initial Basic Amount, any additional portion of the Offered Securities attributable to the Initial Basic Amounts of other Qualified Holders Buyers as such Qualified Holder Buyer shall indicate it will purchase or acquire should the other Qualified Holders Buyers subscribe for less than their Initial Basic Amounts (the “Undersubscription Amount”), which process shall be repeated until each Qualified Holder Buyer shall have an opportunity to subscribe for any remaining Undersubscription Amount.
b(ii) To accept an Offer, in whole or in part, such Qualified Holder Buyer must deliver a written notice to the Company prior to 6:30 am (New York City time) on the Trading Day following the date on which the Offer Notice is delivered to such Qualified Holder Buyer (such period, the “Offer Period”), setting forth the portion of such Qualified HolderBuyer’s Initial Basic Amount that such Qualified Holder Buyer elects to purchase and, if such Qualified Holder Buyer shall elect to purchase all of its Initial Basic Amount, the Undersubscription Amount, if any, that such Qualified Holder Buyer elects to purchase (in either case, the “Notice of Acceptance”). If the Initial Basic Amounts subscribed for by all Qualified Holders Buyers are less than the total of all of the Initial Basic Amounts, then each Qualified Holder that Buyer who has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Initial Basic Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Initial Basic Amounts and the Initial Basic Amounts subscribed for (the “Available Undersubscription Amount”), each Qualified Holder that Buyer who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Initial Basic Amount of such Qualified Holder Buyer bears to the total Initial Basic Amounts of all Qualified Holders Buyers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Qualified Holder Buyer a new Offer Notice and the Offer Period shall expire at 6:30 am (New York City time) on the Trading Day following the date after such Qualified HolderBxxxx’s receipt of such new Offer Notice.
c(iii) The Company shall have two (2) Business Days from the expiration of the Offer Period above (A) to offer, issue, issue or sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Qualified Holder Buyer (the “Refused Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not materially more favorable to the acquiring Person or Persons or materially less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Current Report on Form 68-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto. For the avoidance of doubt, the Company must provide the Buyers with a second Subsequent Placement Notice, and the Buyers will again have the right of participation set forth above in this Section 4(p), if the definitive agreement related to the initial Subsequent Placement Notice is not entered into for any reason on materially the same terms as set forth in such Offer Notice within two (2) Trading Days after the date of delivery of the initial Offer Notice.
d(iv) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 5(c4(p)(ii) above), then each Qualified Holder Buyer may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Qualified Holder Buyer elected to purchase pursuant to Section 5(b4(p)(ii) above multiplied by a fraction, (A) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, issue or sell or exchange (including Offered Securities to be issued or sold to Qualified Holders Buyers pursuant to this Section 5 4(p) prior to such reduction) and (B) the denominator of which shall be the original amount of the Offered Securities. In the event that any Qualified Holder Buyer so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, issue or sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Qualified Holders Buyers in accordance with Section 5(a4(p)(i) above.
e(v) Upon the closing of the issuance, issuance or sale or exchange of all or less than all of the Refused Securities, such Qualified Holder Buyer shall acquire from the Company, and the Company shall issue to such Qualified HolderBuyer, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 5(d4(p)(iv) above if such Qualified Holder Buyer has so elected, upon the terms and conditions specified in the Offer. The purchase by such Qualified Holder Buyer of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Qualified Holder Buyer of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Qualified Holder Buyer and its counsel.
f(vi) Any Offered Securities not acquired by a Qualified Holder Buyer or other Persons in accordance with this Section 5 4(p) may not be issued, issued or sold or exchanged until they are again offered to such Qualified Holder Buyer under the procedures specified in this Agreement.
g(vii) The Company and each Qualified Holder Buyer agree that if any Qualified Holder Buyer elects to participate in the Offer, neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”) shall include any term or provision whereby such Qualified Holder Buyer shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.
h(viii) Notwithstanding anything to the contrary in this Section 5 4(p) and unless otherwise agreed to by such Qualified HolderBuyer, the Company shall either confirm in writing to such Qualified Holder Buyer that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Qualified Holder Buyer will not be in possession of any material, non-public information, by the 9:30 am (New York City city time) on the second (2nd) Business Day following delivery of the Offer Notice. If by 9:30 am (New York City city time) on such second (2nd) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received by such Qualified HolderBuyer, such transaction shall be deemed to have been abandoned and such Qualified Holder Buyer shall not be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall provide such Qualified Holder Buyer with another Offer Notice and such Qualified Holder Buyer will again have the right of participation set forth in this Section 54(p). The Company shall not be permitted to deliver more than one such Offer Notice to such Qualified Holder Buyer in any sixty (60) day period, except as expressly contemplated by the last sentence of Section 5(b4(p)(ii).
i(ix) The restrictions contained in this Section 5 4(p) shall not apply in connection with the issuance of any Exempt IssuanceExcluded Securities. The Company shall not circumvent the provisions of this Section 5 4(p) by providing terms or conditions to one Qualified Holder Buyer that are not provided to all Qualified Holdersall.
Appears in 1 contract
Samples: Securities Purchase Agreement (Vinco Ventures, Inc.)
Participation Right. Until six (6a) months following [●], 2022 [From the date hereof until the closing date of the closing of first issuance after the Company’s initial public offering], neither date hereof by the Company nor any of its Subsidiaries shallCommon Stock or Common Stock Equivalents for cash consideration, directly Indebtedness or indirectly, issue, offer, sell, grant any option or right to purchase, or otherwise dispose a combination of units thereof (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities (as defined below), any debt, any preferred shares or any purchase rights (any such issuance, offer, sale, grant, disposition or announcement is referred to as a “Subsequent PlacementFinancing”), the Purchaser shall have the right to participate in up to an amount of the Subsequent Financing equal to the Subscription Amount (the “Participation Maximum”) unless on the Company shall have first complied with this Section 5. The Company acknowledges same terms, conditions and agrees that price provided for in the right set forth in this Section 5 is a right granted by the Company, separately, to each Qualified HolderSubsequent Financing.
a(b) Between the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement Financing (or, if the Trading Day of the expected announcement of the Subsequent Placement Financing is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the time period of 4:00 pm (New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New York City time) on the day immediately prior to the Trading Day of the expected announcement of the Subsequent PlacementFinancing), the Company shall deliver to each Qualified Holder Purchaser a written notice of the Company’s intention to effect a Subsequent Financing (each such notice, a “Pre-Subsequent Financing Notice”), which Pre-Notice notice shall not contain any information (including, without limitation, material, non-public information) other than: (A) if describe in reasonable detail the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public information and (z) a statement informing such Qualified Holder that it is entitled to receive an Offer Notice (as defined below) with respect to terms of such Subsequent Placement upon its written request. Upon the written request of a Qualified Holder prior to 5:30 am (New York City time) on the Trading Day following the date on which such Pre-Notice is delivered to such Qualified Holder, and only upon a written request by such Qualified HolderFinancing, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver to such Qualified Holder an irrevocable written notice (the “Offer Notice”) amount of any proposed or proceeds intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe the price and other terms upon which they are to be issued, sold or exchanged, raised thereunder and the number Person or amount of the Offered Securities Persons through or with whom such Subsequent Financing is proposed to be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged effected and (D) offer to issue shall include a term sheet and sell to or exchange with such Qualified Holder in accordance with the terms of the Offer such Qualified Holder’s pro rata portion of 30% of the Offered Securities, provided that the number of Offered Securities which such Qualified Holder shall have the right to subscribe for under this Section 5 shall be (x) based on such Qualified Holder’s pro rata purchased portion of the aggregate number of Qualified Warrants purchased by all Qualified Holders on the date of such Offer Notice (the “Initial Amount”), and (y) with respect to each Qualified Holder that elects to purchase its Initial Amount, any additional portion of the Offered Securities attributable to the Initial Amounts of other Qualified Holders transaction documents relating thereto as such Qualified Holder shall indicate it will purchase or acquire should the other Qualified Holders subscribe for less than their Initial Amounts (the “Undersubscription Amount”), which process shall be repeated until each Qualified Holder shall have an opportunity to subscribe for any remaining Undersubscription Amountattachment.
b(c) To accept an Offer, Any Purchaser desiring to participate in whole or in part, such Qualified Holder Subsequent Financing must deliver a provide written notice to the Company prior to by 6:30 am (New York City time) on the Trading Day following the date on which the Offer Subsequent Financing Notice is delivered to such Qualified Holder Purchaser (the “Offer PeriodNotice Termination Time”)) that such Purchaser is willing to participate in the Subsequent Financing, setting forth the portion amount of such Qualified HolderPurchaser’s Initial Amount participation, and representing and warranting that such Qualified Holder elects to purchase andPurchaser has such funds ready, if such Qualified Holder shall elect to purchase all of its Initial Amountwilling, the Undersubscription Amount, if any, that such Qualified Holder elects to purchase (in either case, the “Notice of Acceptance”). If the Initial Amounts subscribed and available for by all Qualified Holders are less than the total of all of the Initial Amounts, then each Qualified Holder that has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Initial Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Initial Amounts and the Initial Amounts subscribed for (the “Available Undersubscription Amount”), each Qualified Holder that has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Initial Amount of such Qualified Holder bears to the total Initial Amounts of all Qualified Holders that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend investment on the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Qualified Holder a new Offer Notice and the Offer Period shall expire at 6:30 am (New York City time) on the Trading Day following the date after such Qualified Holder’s receipt of such new Offer Notice.
c) The Company shall have two (2) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Qualified Holder (the “Refused Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Report on Form 6-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.
d) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 5(c) above), then each Qualified Holder may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Qualified Holder elected to purchase pursuant to Section 5(b) above multiplied by a fraction, (A) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Qualified Holders pursuant to this Section 5 prior to such reduction) and (B) the denominator of which shall be the original amount of the Offered Securities. In the event that any Qualified Holder so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Qualified Holders in accordance with Section 5(a) above.
e) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Qualified Holder shall acquire from the Company, and the Company shall issue to such Qualified Holder, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 5(d) above if such Qualified Holder has so elected, upon the terms and conditions specified in the Offer. The purchase by such Qualified Holder of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Qualified Holder of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Qualified Holder and its counsel.
f) Any Offered Securities not acquired by a Qualified Holder or other Persons in accordance with this Section 5 may not be issued, sold or exchanged until they are again offered to such Qualified Holder under the procedures specified in this Agreement.
g) The Company and each Qualified Holder agree that if any Qualified Holder elects to participate in the Offer, neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”) shall include any term or provision whereby such Qualified Holder shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.
h) Notwithstanding anything to the contrary in this Section 5 and unless otherwise agreed to by such Qualified Holder, the Company shall either confirm in writing to such Qualified Holder that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Qualified Holder will not be in possession of any material, non-public information, by the 9:30 am (New York City time) second (2nd) Business Day following delivery of the Offer Financing Notice. If by 9:30 am (New York City time) on the Company receives no such second (2nd) Business Day, no public disclosure regarding notice from a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment Purchaser as of such transaction has been received by such Qualified HolderNotice Termination Time, such transaction Purchaser shall be deemed to have been abandoned and such Qualified Holder shall not be in possession of any material, non-public information with respect to notified the Company that it does not elect to participate in such Subsequent Financing.
(d) If, by the Notice Termination Time, notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or any to cause their designees to participate) is, in the aggregate, less than the total amount of its Subsidiaries. Should the Subsequent Financing, then the Company decide to pursue may effect the remaining portion of such transaction Subsequent Financing on the terms and with respect to the Offered SecuritiesPersons set forth in the Subsequent Financing Notice.
(e) If, by the Notice Termination Time, the Company receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase more than the aggregate amount of the Participation Maximum, each such Purchaser shall provide such Qualified Holder with another Offer Notice and such Qualified Holder will again have the right to purchase its Pro Rata Portion (as defined below) of participation set forth in the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription Amount of Securities purchased on the Closing Date by a Purchaser participating under this Section 5. The Company shall not be permitted to deliver more than one such Offer Notice to such Qualified Holder in any sixty 4.13 and (60y) day period, except as expressly contemplated the sum of the aggregate Subscription Amounts of Securities purchased on the Closing Date by the last sentence of Section 5(b).
i) The restrictions contained in all Purchasers participating under this Section 5 shall not apply in connection with the issuance of any Exempt Issuance. The Company shall not circumvent the provisions of this Section 5 by providing terms or conditions to one Qualified Holder that are not provided to all Qualified Holders4.13.
Appears in 1 contract
Participation Right. Until six (6a) months following [●], 2022 [From the date hereof until the closing date of the closing of first issuance after the Company’s initial public offering], neither date hereof by the Company nor any of its Subsidiaries shallCommon Stock or Common Stock Equivalents for cash consideration, directly Indebtedness or indirectly, issue, offer, sell, grant any option or right to purchase, or otherwise dispose a combination of units thereof (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities (as defined below), any debt, any preferred shares or any purchase rights (any such issuance, offer, sale, grant, disposition or announcement is referred to as a “Subsequent PlacementFinancing”), the Purchaser shall have the right to participate in up to an amount of the Subsequent Financing equal to the Subscription Amount (the “Participation Maximum”) unless on the Company shall have first complied with this Section 5. The Company acknowledges same terms, conditions and agrees that price provided for in the right set forth in this Section 5 is a right granted by the Company, separately, to each Qualified HolderSubsequent Financing.
a(b) Between the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement Financing (or, if the Trading Day of the expected announcement of the Subsequent Placement Financing is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the time period of 4:00 pm (New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New York City time) on the day immediately prior to the Trading Day of the expected announcement of the Subsequent PlacementFinancing), the Company shall deliver to each Qualified Holder Purchaser a written notice of the Company’s intention to effect a Subsequent Financing (each such notice, a “Pre-Subsequent Financing Notice”), which Pre-Notice notice shall not contain any information (including, without limitation, material, non-public information) other than: (A) if describe in reasonable detail the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public information and (z) a statement informing such Qualified Holder that it is entitled to receive an Offer Notice (as defined below) with respect to terms of such Subsequent Placement upon its written request. Upon the written request of a Qualified Holder prior to 5:30 am (New York City time) on the Trading Day following the date on which such Pre-Notice is delivered to such Qualified Holder, and only upon a written request by such Qualified HolderFinancing, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver to such Qualified Holder an irrevocable written notice (the “Offer Notice”) amount of any proposed or proceeds intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe the price and other terms upon which they are to be issued, sold or exchanged, raised thereunder and the number Person or amount of the Offered Securities Persons through or with whom such Subsequent Financing is proposed to be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged effected and (D) offer to issue shall include a term sheet and sell to or exchange with such Qualified Holder in accordance with the terms of the Offer such Qualified Holder’s pro rata portion of 30% of the Offered Securities, provided that the number of Offered Securities which such Qualified Holder shall have the right to subscribe for under this Section 5 shall be (x) based on such Qualified Holder’s pro rata purchased portion of the aggregate number of Qualified Warrants purchased by all Qualified Holders on the date of such Offer Notice (the “Initial Amount”), and (y) with respect to each Qualified Holder that elects to purchase its Initial Amount, any additional portion of the Offered Securities attributable to the Initial Amounts of other Qualified Holders transaction documents relating thereto as such Qualified Holder shall indicate it will purchase or acquire should the other Qualified Holders subscribe for less than their Initial Amounts (the “Undersubscription Amount”), which process shall be repeated until each Qualified Holder shall have an opportunity to subscribe for any remaining Undersubscription Amountattachment.
b(c) To accept an Offer, Any Purchaser desiring to participate in whole or in part, such Qualified Holder Subsequent Financing must deliver a provide written notice to the Company prior to by 6:30 am (New York City time) on the Trading Day following the date on which the Offer Subsequent Financing Notice is delivered to such Qualified Holder Purchaser (the “Offer PeriodNotice Termination Time”)) that such Purchaser is willing to participate in the Subsequent Financing, setting forth the portion amount of such Qualified HolderPurchaser’s Initial Amount participation, and representing and warranting that such Qualified Holder elects to purchase andPurchaser has such funds ready, if such Qualified Holder shall elect to purchase all of its Initial Amountwilling, the Undersubscription Amount, if any, that such Qualified Holder elects to purchase (in either case, the “Notice of Acceptance”). If the Initial Amounts subscribed and available for by all Qualified Holders are less than the total of all of the Initial Amounts, then each Qualified Holder that has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Initial Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Initial Amounts and the Initial Amounts subscribed for (the “Available Undersubscription Amount”), each Qualified Holder that has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Initial Amount of such Qualified Holder bears to the total Initial Amounts of all Qualified Holders that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend investment on the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Qualified Holder a new Offer Notice and the Offer Period shall expire at 6:30 am (New York City time) on the Trading Day following the date after such Qualified Holder’s receipt of such new Offer Notice.
c) The Company shall have two (2) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Qualified Holder (the “Refused Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Report on Form 6-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.
d) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 5(c) above), then each Qualified Holder may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Qualified Holder elected to purchase pursuant to Section 5(b) above multiplied by a fraction, (A) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Qualified Holders pursuant to this Section 5 prior to such reduction) and (B) the denominator of which shall be the original amount of the Offered Securities. In the event that any Qualified Holder so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Qualified Holders in accordance with Section 5(a) above.
e) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Qualified Holder shall acquire from the Company, and the Company shall issue to such Qualified Holder, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 5(d) above if such Qualified Holder has so elected, upon the terms and conditions specified in the Offer. The purchase by such Qualified Holder of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Qualified Holder of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Qualified Holder and its counsel.
f) Any Offered Securities not acquired by a Qualified Holder or other Persons in accordance with this Section 5 may not be issued, sold or exchanged until they are again offered to such Qualified Holder under the procedures specified in this Agreement.
g) The Company and each Qualified Holder agree that if any Qualified Holder elects to participate in the Offer, neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”) shall include any term or provision whereby such Qualified Holder shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.
h) Notwithstanding anything to the contrary in this Section 5 and unless otherwise agreed to by such Qualified Holder, the Company shall either confirm in writing to such Qualified Holder that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Qualified Holder will not be in possession of any material, non-public information, by the 9:30 am (New York City time) second (2nd) Business Day following delivery of the Offer Financing Notice. If by 9:30 am (New York City time) on the Company receives no such second (2nd) Business Day, no public disclosure regarding notice from a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment Purchaser as of such transaction has been received by such Qualified HolderNotice Termination Time, such transaction Purchaser shall be deemed to have been abandoned and such Qualified Holder shall not be in possession of any material, non-public information with respect to notified the Company that it does not elect to participate in such Subsequent Financing.
(d) If, by the Notice Termination Time, notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or any to cause their designees to participate) is, in the aggregate, less than the total amount of its Subsidiaries. Should the Subsequent Financing, then the Company decide to pursue may effect the remaining portion of such transaction Subsequent Financing on the terms and with respect to the Offered SecuritiesPersons set forth in the Subsequent Financing Notice.
(e) If, by the Notice Termination Time, the Company receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase more than the aggregate amount of the Participation Maximum, each such Purchaser shall provide such Qualified Holder with another Offer Notice and such Qualified Holder will again have the right to purchase its Pro Rata Portion (as defined below) of participation set forth in the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription Amount of Securities purchased on the Closing Date by a Purchaser participating under this Section 5. The Company shall not be permitted to deliver more than one such Offer Notice to such Qualified Holder in any sixty 4.13 and (60y) day period, except as expressly contemplated the sum of the aggregate Subscription Amounts of Securities purchased on the Closing Date by the last sentence of Section 5(b).
i) The restrictions contained in all Purchasers participating under this Section 5 shall not apply in connection with the issuance of any Exempt Issuance. The Company shall not circumvent the provisions of this Section 5 by providing terms or conditions to one Qualified Holder that are not provided to all Qualified Holders4.13.
Appears in 1 contract
Participation Right. Until six (6a) months following [●], 2022 [From the date hereof until the date that is the first anniversary of the closing of the Company’s initial public offering]Closing Date, neither upon any issuance by the Company nor or any of its Subsidiaries shallof Ordinary Shares or Ordinary Shares Equivalents for cash consideration, directly Indebtedness or indirectly, issue, offer, sell, grant any option or right to purchase, or otherwise dispose a combination of units thereof (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities (as defined below), any debt, any preferred shares or any purchase rights (any such issuance, offer, sale, grant, disposition or announcement is referred to as a “Subsequent PlacementFinancing”), each Purchaser shall have the right to participate in up to an amount of the Subsequent Financing equal to __% of the Subsequent Financing (the “Participation Maximum”) unless on the Company shall have first complied with this Section 5. The Company acknowledges same terms, conditions and agrees that price provided for in the right set forth in this Section 5 is a right granted by the Company, separately, to each Qualified HolderSubsequent Financing.
a(b) Between the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately prior to the Trading Day of the expected announcement of the Subsequent Placement Financing (or, if the Trading Day of the expected announcement of the Subsequent Placement Financing is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the time period of 4:00 pm (New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New York City time) on the day immediately prior to the Trading Day of the expected announcement of the Subsequent PlacementFinancing), the Company shall deliver to each Qualified Holder Purchaser a written notice of the Company’s intention to effect a Subsequent Financing (each such notice, a “Pre-Subsequent Financing Notice”), which Pre-Notice notice shall not contain any information (including, without limitation, material, non-public information) other than: (A) if describe in reasonable detail the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public information and (z) a statement informing such Qualified Holder that it is entitled to receive an Offer Notice (as defined below) with respect to terms of such Subsequent Placement upon its written request. Upon the written request of a Qualified Holder prior to 5:30 am (New York City time) on the Trading Day following the date on which such Pre-Notice is delivered to such Qualified Holder, and only upon a written request by such Qualified HolderFinancing, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver to such Qualified Holder an irrevocable written notice (the “Offer Notice”) amount of any proposed or proceeds intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe the price and other terms upon which they are to be issued, sold or exchanged, raised thereunder and the number Person or amount of the Offered Securities Persons through or with whom such Subsequent Financing is proposed to be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged effected and (D) offer to issue shall include a term sheet and sell to or exchange with such Qualified Holder in accordance with the terms of the Offer such Qualified Holder’s pro rata portion of 30% of the Offered Securities, provided that the number of Offered Securities which such Qualified Holder shall have the right to subscribe for under this Section 5 shall be (x) based on such Qualified Holder’s pro rata purchased portion of the aggregate number of Qualified Warrants purchased by all Qualified Holders on the date of such Offer Notice (the “Initial Amount”), and (y) with respect to each Qualified Holder that elects to purchase its Initial Amount, any additional portion of the Offered Securities attributable to the Initial Amounts of other Qualified Holders transaction documents relating thereto as such Qualified Holder shall indicate it will purchase or acquire should the other Qualified Holders subscribe for less than their Initial Amounts (the “Undersubscription Amount”), which process shall be repeated until each Qualified Holder shall have an opportunity to subscribe for any remaining Undersubscription Amountattachment.
b(c) To accept an Offer, Any Purchaser desiring to participate in whole or in part, such Qualified Holder Subsequent Financing must deliver a provide written notice to the Company prior to by 6:30 am (New York City time) on the Trading Day following the date on which the Offer Subsequent Financing Notice is delivered to such Qualified Holder Purchaser (the “Offer PeriodNotice Termination Time”)) that such Purchaser is willing to participate in the Subsequent Financing, setting forth the portion amount of such Qualified HolderPurchaser’s Initial Amount participation, and representing and warranting that such Qualified Holder elects to purchase andPurchaser has such funds ready, if such Qualified Holder shall elect to purchase all of its Initial Amountwilling, the Undersubscription Amount, if any, that such Qualified Holder elects to purchase (in either case, the “Notice of Acceptance”). If the Initial Amounts subscribed and available for by all Qualified Holders are less than the total of all of the Initial Amounts, then each Qualified Holder that has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Initial Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Initial Amounts and the Initial Amounts subscribed for (the “Available Undersubscription Amount”), each Qualified Holder that has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Initial Amount of such Qualified Holder bears to the total Initial Amounts of all Qualified Holders that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend investment on the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Qualified Holder a new Offer Notice and the Offer Period shall expire at 6:30 am (New York City time) on the Trading Day following the date after such Qualified Holder’s receipt of such new Offer Notice.
c) The Company shall have two (2) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Qualified Holder (the “Refused Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Report on Form 6-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.
d) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 5(c) above), then each Qualified Holder may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Qualified Holder elected to purchase pursuant to Section 5(b) above multiplied by a fraction, (A) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Qualified Holders pursuant to this Section 5 prior to such reduction) and (B) the denominator of which shall be the original amount of the Offered Securities. In the event that any Qualified Holder so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Qualified Holders in accordance with Section 5(a) above.
e) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Qualified Holder shall acquire from the Company, and the Company shall issue to such Qualified Holder, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 5(d) above if such Qualified Holder has so elected, upon the terms and conditions specified in the Offer. The purchase by such Qualified Holder of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Qualified Holder of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Qualified Holder and its counsel.
f) Any Offered Securities not acquired by a Qualified Holder or other Persons in accordance with this Section 5 may not be issued, sold or exchanged until they are again offered to such Qualified Holder under the procedures specified in this Agreement.
g) The Company and each Qualified Holder agree that if any Qualified Holder elects to participate in the Offer, neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”) shall include any term or provision whereby such Qualified Holder shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.
h) Notwithstanding anything to the contrary in this Section 5 and unless otherwise agreed to by such Qualified Holder, the Company shall either confirm in writing to such Qualified Holder that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Qualified Holder will not be in possession of any material, non-public information, by the 9:30 am (New York City time) second (2nd) Business Day following delivery of the Offer Financing Notice. If by 9:30 am (New York City time) on the Company receives no such second (2nd) Business Day, no public disclosure regarding notice from a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment Purchaser as of such transaction has been received by such Qualified HolderNotice Termination Time, such transaction Purchaser shall be deemed to have been abandoned and such Qualified Holder shall not be in possession of any material, non-public information with respect to notified the Company that it does not elect to participate in such Subsequent Financing.
(d) If, by the Notice Termination Time, notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or any to cause their designees to participate) is, in the aggregate, less than the total amount of its Subsidiaries. Should the Subsequent Financing, then the Company decide to pursue may effect the remaining portion of such transaction Subsequent Financing on the terms and with respect to the Offered SecuritiesPersons set forth in the Subsequent Financing Notice.
(e) If, by the Notice Termination Time, the Company receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase more than the aggregate amount of the Participation Maximum, each such Purchaser shall provide such Qualified Holder with another Offer Notice and such Qualified Holder will again have the right to purchase its Pro Rata Portion (as defined below) of participation set forth in the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription Amount of Securities purchased on the Closing Date by a Purchaser participating under this Section 5. The Company shall not be permitted to deliver more than one such Offer Notice to such Qualified Holder in any sixty 4.11 and (60y) day period, except as expressly contemplated the sum of the aggregate Subscription Amounts of Securities purchased on the Closing Date by the last sentence of Section 5(b).
i) The restrictions contained in all Purchasers participating under this Section 5 shall not apply in connection with the issuance of any Exempt Issuance. The Company shall not circumvent the provisions of this Section 5 by providing terms or conditions to one Qualified Holder that are not provided to all Qualified Holders4.12.
Appears in 1 contract
Samples: Securities Purchase Agreement (Primech Holdings LTD)
