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EXHIBIT 10.9
PLACEMENT AGENCY AGREEMENT
THIS AGREEMENT ("Agreement"), made as of the 3RD day of June, 1998, by
and between CityView Energy Corporation Limited, an Australian corporation
("Company"), and AIBC Investment Services Corporation., a Florida corporation
(the "Agent").
WITNESSETH:
WHEREAS, the Company proposes to issue and sell Convertible Debentures
(the "Securities") which shall be convertible into the Company's ordinary shares
("Common Stock") resulting in gross proceeds to the Company of a minimum of
$2,000,000 and up to a maximum of $30,000,000 (the "Offerings") not involving a
public offering without registration under the Securities Act of 1933, as
amended (the "Act"), pursuant to exemptions from the registration requirements
of the Act under Regulation D promulgated under the Act ("Regulation D"), as
described below; and
WHEREAS, the Agent has offered to assist the Company in placing the
Securities on a "best efforts basis" with respect to sales of Securities
thereafter up to the Maximum Shares (as defined below), and the Company desires
to secure the services of the Agent on the terms and conditions hereinafter set
forth;
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
promises, conditions and covenants herein contained, the parties hereto do
hereby agree as follows:
1. Engagement of Agent. The Company hereby appoints the Agent as its
exclusive placement agent for the Offering, to sell a minimum of $2,000,000 of
Securities (the "Minimum Shares") and up to $30,000,000 of Securities (the
"Maximum Shares") in a series of closings as shall be mutually agreed to on a
"best efforts basis," resulting in gross proceeds to the Company of a minimum of
$2,000,000 and a maximum of up to $30,000,000. The Agent proposes initially to
sell up to $2,000,000 of Securities for the initial closing (the "Initial
Offering"). The Agent, on the basis of the representations and warranties herein
contained, but subject to the terms and conditions herein set forth, accepts
such appointment and agrees to use its best efforts to find purchasers for the
Securities. This appointment shall be irrevocable for the period commencing as
of the date hereof and ending on December 31, 1998, subject to Section 5.1
herein, which period maybe extended by the consent of the Company and the Agent
(the "Offering Period").
2. Representations and Warranties of the Company. In order to induce
the Agent to enter into this Agreement, the Company hereby represents and
warrants to and agrees with the Agent as follows:
2.1 Offering Documents. The Company and the Placement Agent have
prepared a Subscription Agreement, certain exhibits thereto, Registration Rights
Agreement, and the Convertible Debentures regarding the Securities, which
documents have been or will be sent to proposed investors. In addition, proposed
investors have received or will receive prior to closing copies of the Company's
Audited Financials for the periods ended December 31, 1996, material agreements
entered into by the Company and possibly other documents that are to be filed
with the SEC ("SEC Documents"). The SEC Documents were prepared in conformity
with the requirements (to the extent applicable) of the Securities and Exchange
Act of 1934, as amended (the "Act") and the rules and regulations ("Rules and
Regulations") of the Commission promulgated thereunder. Since December 1996, the
Company has filed all reports, schedules, forms, statements, and other documents
required to be filed by it with the SEC as a foreign private issuer and is
eligible to utilize Form F-3 as a resale registration statement for the Common
Stock. As used in this Agreement, the term "Offering Documents" refers to and
means the SEC
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Documents, the Subscription Agreement and all amendments, exhibits and
supplements thereto, together with any other documents which are provided to the
Agent by, or approved for Agent's use by, the Company for the purpose of this
Offering.
2.2 Provision of Offering Documents. The Company shall deliver to the
Agent, without charge, as many copies of the Offering Documents as the Agent may
reasonably require for the purposes contemplated by this Agreement. The Company
authorizes the Agent, in connection with the Offering of the Securities, to use
the Offering Documents as from time to time amended or supplemented in
connection with the offering and sale of the Securities and in accordance with
the applicable provisions of the Act and Regulation D and applicable Australian
law. The Company consents to the Agent's distribution of the Offering Documents
to prospective subscribers as a disclosure document about the Company, its
business, prospects, financial condition and other matters.
2.3 Accuracy of Offering Documents. The Offering Documents, at the time
of delivery to subscribers for the Securities, conformed in all material
respects with the requirements, to the extent applicable, of the Act and the
applicable Rules and Regulations and did not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. On each Closing Date (as hereinafter
defined), the Offering Documents will contain all statements which are required
to be stated therein in accordance with the Act and the Rules and Regulations
for the purposes of the proposed Offering, and all statements of material fact
contained in the Offering Documents will be true and correct, and the Offering
Documents will not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that the Company does not make any
representations or warranties as to the information contained in or omitted from
the Offering Documents in reliance upon written information furnished on behalf
of the Agent with the Agent's written consent specifically for use therein.
2.4 Duty to Amend. If during such period of time as in the opinion of
the Agent or its counsel any Offering Documents relating to this offering are
required to be delivered under the Act, any event occurs or any event known to
the Company relating to or affecting the Company shall occur as a result of
which the Offering Documents as then amended or supplemented would include an
untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or if it is necessary at any time after
the date hereof to amend or supplement the Offering Documents to comply with the
Act or the applicable Rules and Regulations, the Company shall forthwith notify
the Agent thereof and shall prepare such further amendment or supplement to the
Offering Documents as may be required and shall furnish and deliver to the Agent
and to others, whose names and addresses are designated by the Agent, all at the
cost of the Company, a reasonable number of copies of the amendment or
supplement or of the amended or supplemented Offering Documents which, as so
amended or supplemented, will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the Offering
Documents not misleading in the light of the circumstances when it is delivered
to a purchaser or prospective purchaser, and which will comply in all respects
with the requirements (to the extent applicable) of the Act and the applicable
Rules and Regulations.
2.5 Corporation Condition. The Company's condition is as described in
its Offering Documents, except for changes in the ordinary course of business
and normal year-end adjustments that are not in the aggregate materially adverse
to the Company. The Offering Documents, taken as a whole, present fairly the
business and financial position of the Company as of each Closing Date.
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2.6 No Material Adverse Change. Except as may be reflected in or
contemplated by the Offering Documents, subsequent to the dates as of which
information is given in the Offering Documents, and prior to each Closing Date,
there shall not have been any material adverse change in the condition,
financial or otherwise, or in the results of operations of the Company or in its
business taken as a whole.
2.7 No Defaults. Except as disclosed in the Offering Documents or in
writing to the Agent, the Company is not in default in any material respect in
the performance of any obligation, agreement or condition contained in any
material debenture, note or other evidence of indebtedness or any material
indenture or loan agreement of the Company. The execution and delivery of this
Agreement, and the consummation of the transactions herein contemplated, and
compliance with the terms of this Agreement will not conflict with or result in
a breach of any of the terms, conditions or provisions of, or constitute a
default under, the Articles of Incorporation or By-Laws of the Company (in any
respect that is material to the Company), any material note, indenture,
mortgage, deed of trust, or other agreement or instrument to which the Company
is a party or by which the Company or any property of the Company is bound, or
to the Company's knowledge, any existing law, order, rule, regulation, writ,
injunction or decree of any government, governmental instrumentality, agency or
body, arbitration tribunal or court, domestic or foreign, having jurisdiction
over the Company or any property of the Company. The consent, approval,
authorization or order of any court or governmental instrumentality, agency or
body is not required for the consummation of the transactions herein
contemplated except such as may be required under the Act or under the Blue Sky
or securities laws of any state or jurisdiction.
2.8 Incorporation and Standing. The Company is, and at each Closing
Date will be, duly formed and validly existing in good standing as a corporation
under the laws of Australia and with full power and authority (corporate and
other) to own its properties and conduct its business, present and proposed, as
described in the Offering Documents; the Company, has full power and authority
to enter into this Agreement; and the Company is duly qualified and in good
standing as a foreign entity in each jurisdiction in which the failure to so
qualify would have a material adverse effect on the Company or its properties.
The Common Stock is listed for trading on the Australian Stock Exchange and with
the NASDAQ SmallCap over-the-counter market.
2.9 Legality of Outstanding Securities. Prior to each Closing Date, the
outstanding securities of the Company have been duly and validly authorized and
issued, fully paid and nonassessable and conform in all material respects to the
statements with regard thereto contained in the Offering Documents.
2.10 Legality of Securities. The Securities, when sold and delivered,
will constitute legal, valid and binding obligations of the Company, enforceable
in accordance with the terms thereof, and shall be duly and validly issued and
outstanding, fully paid and nonassessable. The Common Stock into which the
Securities are convertible, when converted in accordance with the Company's
Articles of Incorporation shall be duly and validly issued and outstanding,
fully paid and non-assessable.
2.11 Litigation. Except as set forth in the Offering Documents, there
is now, and at each Closing Date there will be, no action, suit or proceeding
before any court or governmental agency, authority or body pending or, to the
knowledge of the Company, threatened, which might result in judgements against
the Company not adequately covered by insurance or which collectively might
result in any material adverse change in the condition (financial or otherwise)
or business of the Company or which would materially adversely affect the
properties or assets of the Company.
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2.12 Finders. The Company does not know of any outstanding claims for
services in the nature of a finder's fee or origination fees with respect to the
sale of the Securities hereunder for which the Agent may be responsible, and the
Company will indemnify the Agent from any liability for such fees by any party
who has a claim for such compensation from the Company and for which person the
Agent is not legally responsible.
2.13 Tax Returns. The Company has filed all Australian and United
States federal and state tax returns which are required to be filed, and has
paid all taxes shown on such returns and on all assessments received by it to
the extent such taxes have become due. All taxes with respect to which the
Company is obligated have been paid or adequate accruals have been set up to
cover any such unpaid taxes.
2.14 Authority. The execution and delivery by the Company of this
Agreement have been duly authorized by all necessary action, and this Agreement
is the valid, binding and legally enforceable obligation of the Company subject
to standard qualifications as to the availability of equitable remedies, the
effect of bankruptcy and other laws relating to the protection of debtors and
public policy opinions promulgated by the Commission with respect to
indemnification against liabilities under the Act.
2.15 Actions by the Company. The Company will not take any action which
will impair the effectiveness of the transactions contemplated by this
Agreement.
3. Issue, Sale and Delivery of the Securities.
3.1 Deliveries of Securities. Certificates in such form that, subject
to applicable transfer restrictions as described in the Subscription Agreement,
they can be negotiated by the purchasers thereof (issued in such denominations
and in such names as the Agent may direct the Company to issue) for the
Securities, and warrants representing the Agent's warrant compensation described
in Section 3.6 below ("Warrants"), shall be delivered by the Company to the
Escrow Agent, with copies made available to the Agent for checking at least one
(1) full business day prior to each Closing Date, it being understood that the
directions from the Agent to the Company shall be given at least two (2) full
business days prior to each Closing Date. The certificates for the Securities
and the Warrants shall be delivered at the Initial Closing and at each
Subsequent Closing (as defined hereinafter).
3.2 Escrow of Funds. Pursuant to the Escrow Agreement, a copy of which
is attached hereto as Exhibit "A" (the "Escrow Agreement"), executed by the
Company, the Agent and the escrow agent (the "Escrow Agent"), the subscribers
shall place all funds for purchase of Securities for each Closing in an escrow
account set up by the Company. The Company shall have the right to approve or
object the subscriptions of each subscriber, as described in the Subscription
Agreement. At such time as subscribers subscribing for the Minimum Shares
delivered to the Escrow Agent their signed subscription documents, those
subscribers have been approved by the Company and all other Closing conditions
have been met, Escrow Agent shall release the subscription funds and signed
documents to the Company and release the certificates representing the
Securities to the subscribers (the "Closing"). In the event that the Initial
Closing shall be for an amount of Securities less than the Maximum Amount, the
Offering may be continued, and additional Closings may be held (each a
"Subsequent Closing") throughout the Offering Period. In addition, the Agent
shall have the right to act as agent for the sale of additional Securities or
other equity or debt of the Company as set forth in Section 5 herein.
3.3 Closing Date. The Initial Closing and any Subsequent Closing shall
take place at the offices of AIBC Investment Services Corporation, Xxxxx 0000,
Xxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at such time and date ("Closing
Date") as will be fixed either orally or in writing by notice to be given by the
Agent to the Company after consultation with the Company, such Closing Date to
be not less than one (1)
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full business day after the date on which such notice shall have been given and
not less than one (1)) and not more than ten (10) full business days after the
date on which the Escrow Agent shall have given written notice to the Company
and the Agent that funds deposited with the Escrow Agent total at least the
Minimum Proceeds. Each Closing Date may be changed by mutual agreement of the
Agent and the Company.
3.4 Agent's Compensation. The Company shall pay the Agent a commission
of ten percent (10%) of the gross subscription proceeds of the first five
million U.S. dollars of proceeds raised in the Offerings and six percent (6%) of
the gross subscription proceeds in excess of five million U.S. dollars.
3.5 Payment of Fees. The Escrow Agent shall be instructed to pay all
fees (including, but not limited to Agent's legal fees) and cost reimbursements
pursuant to section 3.4 of this Agreement, directly to the Agent from the
proceeds of the Initial Closing and all Subsequent Closings, simultaneous with
the transfer of proceeds to the Company.
4. Offering of the Securities on Behalf of the Company.
4.1 In offering the Securities for sale, the Agent shall offer them
solely as an agent for the Company, and such offer shall be made upon the terms
and subject to the conditions set forth in the Offering Documents. The Agent
shall commence making such offer as an agent for the Company as soon as possible
following delivery of the Offering Documents.
4.2 The Agent will not make offers to sell the Securities to, or
solicit offers to subscribe for any Securities from, persons or entities that
are not "accredited investors" as defined in Regulation D.
5. Right of First Refusal. The Company hereby grants Agent rights of
first refusal as follows:
5.1 The Agent has the right of first refusal to act as placement agent
for any future private financings of the Company, whether equity securities,
convertible debt securities, or securities or instruments convertible into or
exchangeable for debt or equity securities of the Company, mergers,
acquisitions, or similar transactions. The duration of the Agent's right of
first refusal under this Section 5.2 shall be for a period of one (1) year
following the Final Closing of this Offering and shall be limited to offers and
sales of the ordinary shares and other debt or equity securities of the Company
in or through the United States and/or the NASDAQ SmallCap Market.
5.2 In the event that the Company wishes to undertake a transaction
described in this Section 5, the Company must send Agent a written notice of the
proposed transaction (whether the transaction is initiated by the Company or is
offered to the Company by a third party), in sufficient specificity to allow the
Agent to understand the proposed transaction clearly. This notice must be
delivered to Agent at least twenty days prior to the proposed closing of the
transaction. The Agent shall have ten days from receipt of that notice to
determine whether or not it wishes to exercise its right of first refusal with
respect to that transaction. The Agent shall notify the Company in writing of
its decision to exercise its right of first refusal with respect to the
transaction described in the notice. If the Agent does not timely exercise its
right of first refusal, the Company may proceed with that transaction; provided,
however, that if the terms of the transaction are changed in any material way
from the terms set forth in the notice to the Agent, the Agent's right of first
refusal shall commence again. Agent's waiver of its rights of first refusal with
respect to any specific transaction shall not act as a waiver of its rights with
respect to future transactions within the applicable time period.
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5.3 The Company agrees to maintain the confidentiality of the Agent's
clients, except as required by applicable law. Such clients shall be those
entities which invest or have been offered an opportunity to invest by the Agent
in the Offering (the "Clients"). The Company will not solicit or enter into any
financing transaction with the clients without the written consent of Agent and
without payment to Agent no less than the compensation to be paid to Agent
hereunder for raising a like amount.
5.4 In the event that Company breaches Section 5.1, 5.2, or 5.3 of this
Agreement, Agent shall be entitled to receive compensation in the same
proportion to the financing done without Agent's participation as the
compensation to Agent under this Agreement bears to the financing raised in this
Offering.
6. Covenants of the Company. The Company covenants and agrees with the
Agent that:
6.1 After the date hereof, the Company will not at any time, prepare
and distribute any amendment or supplement to the Offering Documents, of which
amendment or supplement the Agent shall not previously have been advised and the
Agent and its counsel furnished with a copy within a reasonable time period
prior to the proposed adoption thereof, or to which the Agent shall have
reasonable objected in writing on the ground that it is not in compliance with
the Act or the Rules and Regulations (if applicable).
6.2 The Company will pay, whether or not the transactions contemplated
hereunder are consummated or this Agreement is prevented from becoming effective
or is terminated, all costs and expenses incident to the performance of its
obligations under this Agreement, including all expenses incident to the
authorization of the Securities and their issue and delivery to the Agent, any
original issue taxes in connection therewith, all transfer taxes, if any,
incident to the initial sale of the Securities, the fees and expenses of the
Company's counsel (except as provided below) and accountants, the cost of
reproduction and furnishing to the Agent copies of the Offering Documents.
6.3 As a condition precedent to the Initial Closing and each subsequent
closing, the Company will deliver to the Agent a true and correct copy of the
Articles of Incorporation of the Company, and all amendments and certificates of
designation of preferences of preferred stock, if any.
6.4 Prior to each Closing Date, the Company will cooperate with the
Agent in such investigation as it may make or cause to be made of all of the
properties, business and operations of the Company in connection with the
Offering of the Securities. The Company will make available to it in connection
therewith such information in its possession as the Agent may reasonably request
and will make available to such persons as the Agent shall deem reasonably
necessary and appropriate in order to verify or substantiate any such
information so supplied.
6.5 The Company shall be responsible for making any and all filings
required by the Blue Sky authorities and filings required by the laws of the
jurisdictions in which the subscribers who are accepted for purchase of
Securities are located, if any. Agent shall assist Company in this respect, but
such filings shall be the responsibility of Company.
6.6 Corporation Condition. The Company's condition is as described in
its Offering Documents, except for changes in the ordinary course of business
and normal year-end adjustments that are not individually or in the aggregate
materially adverse to the Company. The Offering Documents, taken as a whole,
will present fairly the business and financial position of the Company as of
each Closing Date.
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6.7 No Material Adverse Change. Except as may be reflected in or
contemplated by the Offering Documents, subsequent to the dates as of which
information is given in the Offering Documents, and prior to each Closing Date,
there shall not have been any material adverse change in the condition,
financial, or otherwise, or in the results of operations of the Company or in
its business taken as a whole.
7. Indemnification.
7.1 The Company agrees to indemnify and hold harmless the Agent, each
person who controls the Agent within the meaning of Section 15 of the Act and
the Agent's employees, accountants, attorneys and agents (the "Agent's
Indemnitees") against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act or any
other statute or at common law for any legal or other expenses (including the
costs of any investigation and preparation) incurred by them in connection with
any litigation, whether or not resulting in any liability, but only insofar as
such losses, claims, damages, liabilities and litigation arise out of or are
based upon any untrue statement of material fact contained in the Offering
Documents or any amendment or supplement thereto or any application or other
document filed in any state or jurisdiction in order to qualify the Securities
under the Blue Sky or securities laws thereof, or the omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, under the circumstances under which they were made, not
misleading, all as of the date of the Offering Documents or of such amendment as
the case may be; provided, however, that the indemnity agreement contained in
this Section 7.1 shall not apply to amount paid in settlement of any such
litigation, if such settlements are made without the consent of the Company, nor
shall it apply to the Agent's Indemnitees in respect to any such losses, claims,
damages or liabilities arising out of or based upon any such untrue statement or
alleged untrue statement or any such omission or alleged omission, if such
statement or omission was made in reliance upon information furnished in writing
to the Company by the Agent specifically for use in connection with the
preparation of the Offering Documents or any such amendment or supplement
thereto or any application or other document filed in any state or jurisdiction
in order to qualify the Securities under the Blue Sky or securities law thereof.
This indemnity agreement is in addition to any other liability which the Company
may otherwise have to the Agent's Indemnitees. The Agent's Indemnitees agree,
within ten (10) days after the receipt by them of written notice of the
commencement of any action against them in respect to which indemnity may be
sought from the Company under this Section 7.1, to notify the Company in
writing of the commencement of such action; provided, however, that the failure
of the Agent's Indemnitees to notify the Company of any such action shall not
relieve the Company from any liability which it may have to the Agent's
Indemnitees on account of the indemnity agreement contained in this Section 7.1,
and further shall not relieve the Company from any other liability which it may
have to the Agent's Indemnitees, and if the Agent's Indemnitees shall notify the
Company of the commencement thereof, the Company shall be entitled to
participate in (and, to the extent that the Company shall wish, to direct) the
defense thereof at its own expense, but such defense shall be conducted by
counsel of recognized standing and reasonably satisfactory to the Agent's
Indemnitees, defendant or defendants, in such litigation. The Company agrees to
notify the Agent's Indemnitees promptly of the commencement of any litigation or
proceedings against the Company or any of the Company's officers or directors of
which the Company may be advised in connection with the issue and sale of any of
the Securities and to furnish to the Agent's Indemnitees, at their request, to
provide copies of all pleadings therein and to permit the Company's Indemnitees
to be observers therein and apprise the Agent's Indemnitees of all developments
therein, all at the Company's expense.
7.2 The Agent agrees, in the same manner and to the same extent as set
forth in Section 7.1 above, to indemnify and hold harmless the Company, and the
Company's and Company's employees, accountants, attorneys and agents (the
"Company's Indemnitees") with respect to (i) any statement in or omission from
the Offering Documents or any amendment or supplement thereto or any application
or other document filed in any
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state or jurisdiction in order to qualify the Securities under the Blue Sky or
securities laws thereof, or any information furnished pursuant to Section 3.4
hereof, if such statement or omission was made in reliance upon information
furnished in writing to the Company by the Agent on its behalf specifically for
use in connection with the preparation thereof or supplement thereto, or (ii)
any untrue statement of a material fact made by the Agent or its agents not
based on statements in the Offering Documents or authorized in writing by the
Company, or with respect to any misleading statement made by the Agent or its
agents resulting from the omission of material facts which misleading statement
is not based upon the Offering Documents, or information furnished in writing by
the Company or, (iii) any breach of any representation, warranty or covenant
made by the Agent in this Agreement. The Agent's liability hereunder shall be
limited to the amount received by it for acting as Agent in connection with the
Offerings. The Agent shall not be liable for amounts paid in settlement of any
such litigation if such settlement was effected without its consent. In case of
the commencement of any action in respect of which indemnity may be sought from
the Agent, the Company's Indemnitees shall have the same obligation to give
notice as set forth in Section 7.1 above, subject to the same loss of indemnity
in the event such notice is not given, and the Agent shall have the same right
to participate in (and, to the extent that it shall wish, to direct) the defense
of such action at its own expense, but such defense shall be conducted by
counsel of recognized standing reasonably satisfactory to the Company. The Agent
agrees to notify the Company's Indemnitees and, at their request, to provide
copies of all pleadings therein and to permit the Company's Indemnitees to be
observers therein and apprise them of all the developments therein, all at the
Agent's expense.
8. Effectiveness of Agreement. This Agreement shall become effective
(i) at 9:00 A.M., New York City time, on the date hereof or (ii) upon release by
the Agent of the Securities for offering after the date hereof, whichever shall
last occur. The Agent agrees to notify the Company immediately after the Agent
shall have taken any action by such release or otherwise wherein this Agreement
shall have become effective. This Agreement shall, nevertheless, become
effective at such time earlier than the time specified above after the date
hereof as the Agent may determine by notice to the Company.
9. Conditions of the Agent's Obligations. The Agent's obligations to
act as agent of the Company hereunder and to find purchasers for the Securities
shall be subject to the accuracy, as of each Closing Date, of the
representations and warranties on the part of the Company herein contained, to
the fulfillment of or compliance by the Company with all covenants and
conditions hereof, and to the following additional conditions:
9.1 Counsel to the Agent shall not have objected in writing or shall
not have failed to give his consent to the Offering Documents (which objection
or failure to give consent shall not have been done unreasonably).
9.2 The Agent shall not have disclosed to the Company that the Offering
Documents, or any amendment thereof or supplement thereto, contains an untrue
statement of fact, which, in the opinion of counsel to the Agent, is material,
or omits to state a fact, which, in the opinion of such counsel, is material and
is required to be stated therein, or is necessary to make the statements
therein, under the circumstances in which they were made, not misleading.
9.3 Between the date hereof and each Closing Date, the Company shall
not have sustained any loss on account of fire, explosion, flood, accident,
calamity or any other cause of such character as would materially adversely
affect its business or property considered as an entire entity, whether or not
such loss is covered by insurance.
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9.4 Between the date hereof and each Closing Date, there shall be no
litigation instituted or threatened against the Company, and there shall be no
proceeding instituted or threatened against the Company before or by any federal
or state commission, regulatory body or administrative agency or other
governmental body, domestic or foreign, wherein an unfavorable ruling, decision
or finding would materially adversely affect the business, franchises, license,
permits, operations or financial condition or income of the Company considered
as an entity.
9.5 Except as contemplated herein or as set forth in the Offering
Documents, during the period subsequent to the most recent financial statements
contained in the Offering Documents, if any, and prior to each Closing Date, the
Company (i) shall have conducted its business in the usual and ordinary manner
as the same is being conducted as of the date hereof and (ii) except in the
ordinary course of business, the Company shall not have incurred any liabilities
or obligations (direct or contingent) or disposed of any assets, or entered into
any material transaction or suffered or experienced any substantially adverse
change in its condition, financial or otherwise. At each Closing Date, the
equity account of the Company shall be substantially the same or better as
reflected in the most recent balance sheet contained in the Offering Documents
without considering the proceeds from the sale of the Securities other than as
may be set forth in the Offering Documents.
9.6 The authorization of the Securities by the Company and all
proceedings and other legal matters incident thereto and to this Agreement shall
be reasonably satisfactory in all respects to counsel to the Agent, who shall
have furnished the Agent on each Closing Date with such favorable opinion with
respect to the sufficiency of all corporate proceedings and other legal matters
relating to this Agreement as the Agent may reasonably require, and the Company
shall have furnished such counsel such documents as he may have requested to
enable him to pass upon the matters referred to in this subparagraph.
9.7 The Company shall have furnished to the Agent the opinion, dated
each Closing Date, addressed to the Agent, from Australian and United States
counsel to the Company, as required by the Subscription Agreement.
9.8 The Company shall have furnished to the Agent a certificate of the
Chief Executive Officer and the Chief Financial Officer of the Company, dated as
of the Closing Date, to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects at and as of
the Closing Date (other than representations and warranties which by
their terms are specifically limited to a date other than the Closing
Date), and the Company has complied with all the agreements and has
satisfied all the conditions on its part to be performed or satisfied
at or prior to the Closing Date; and
(ii) the respective signers have each carefully examined the
Offering Documents, and any amendments and supplements thereto, and, to
the best of their knowledge, in the Offering memorandum, and any
amendments and supplements thereto, all statements contained in the
Offering Documents are true and correct, and neither the Offering
Documents, nor any amendment or supplement thereto, includes any untrue
statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein under
the circumstances in which they were made not misleading, and since the
date hereof, there has occurred no event required to be set forth in an
amended or supplemented Offering Documents, which has not been set
forth; except as set forth in the Offering Documents, since the
respective dates as of which or the periods for which the information
is given in the Offering Documents and prior to the date of such
certificate, (a) there has not been any substantially
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adverse change, financial and otherwise, in the affairs of condition in
the Company, and (b) the Company has not incurred any material
liabilities, direct or contingent, or entered into any material
transactions, otherwise than in the ordinary course of business.
10. Termination.
10.1 This Agreement may be terminated by the Agent by notice to the
Company in the event that the Company shall have failed or been unable to comply
with any of the terms, conditions or provisions of this Agreement on the part of
the Company to be performed, complied with or fulfilled within the respective
times, if any, herein provided for, unless compliance therewith or performance
or satisfaction thereof shall have been expressly waived by the Agent in
writing.
10.2 This Agreement may be terminated by the Company by notice to the
Agent in the event that (i) the Agent shall have failed or been unable to comply
with any of the terms, conditions or provisions of this Agreement on the part of
the Agent to be performed, complied with or fulfilled within the respective
times, if any, herein provided for, or (ii) in the event that the Agent is
unsuccessful in raising at least $2,000,000 for the Company in the form of
convertible debentures by June 30, 1998, unless compliance therewith or
performance or satisfaction thereof shall have been expressly waived by the
Company in writing.
10.3 This Agreement may be terminated by the Agent by notice to the
Company at any time, if, in the reasonable, good faith judgment of the Agent,
payment for and delivery of the Securities is rendered impracticable or
inadvisable because: (i) additional material governmental restrictions not in
force and effect on the date hereof shall have been imposed upon trading in
securities generally; (ii) a war or other national calamity shall have occurred;
or (iii) the condition of the market (either generally or with reference to the
sale of the Securities to be offered hereby) or the condition of any matter
affecting the Company or any other circumstance is such that it would be
undesirable, impracticable or inadvisable, in the judgment of the Agent, to
proceed with this Agreement or with the Offering. If subsection (iii) is
utilized by the Agent then the right of first refusal and exclusivity as
described herein shall terminate.
10.4 Any termination of this Agreement pursuant to this Section shall
be without liability of any character (including, but not limited to, loss of
anticipated profits or consequential damages) on the part of any party thereto,
except that the Company shall remain obligated to pay the costs and expenses
provided to be paid by it specified in Sections 3, 5, and 6; and the Company and
the Agent shall be obligated to pay, respectively, all losses, claims, damages
or liabilities, joint or several, under Section 7.1 in the case of the Company
and Section 7.2 in the case of the Agent.
11. Agent's Representations, Warranties, and Covenants. The Agent
represents and warrants to and agrees with the Company that:
11.1 Agent is a corporation duly incorporated and existing under the
laws of the state of Florida. Agent is registered with the Securities Exchange
Commission and the NASD.
11.2 There is not now pending or threatened against the Agent any
action or proceeding of which the Agent has been advised, either in any court of
competent jurisdiction, before the Commission or before any state securities
commission or the NASD, concerning the Agent's activities which would impair the
ability of the Agent to conduct the Offering as contemplated by this Agreement.
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11.3 In the event any action or proceeding of the type referred to in
Section 11.2 above shall be instituted or threatened against the Agent at any
time prior to each Closing Date or, in the event there shall be filed by or
against the Agent in any court, pursuant to any federal, state, local or
municipal statute, a petition in bankruptcy or insolvency or for reorganization
or for the appointment of a receiver or trustee of its assets or if the Agent
makes an assignment for the benefit of creditors, the Company shall have the
right, on three (3) days' written notice to the Agent, to terminate this
Agreement without any liability to the Agent of any kind, except for the payment
of all expenses provided herein.
11.4 Agent understands and acknowledges that the Securities are not
being registered under the Act, and that the Offering is to be conducted
pursuant to Regulation D. Accordingly, in conducting its activities under this
Agreement:
(a) Agent shall offer Securities only to "accredited
investors," as defined in Regulation D. The Investors are not and will not be
residents of Australia and the Offering will not be made in Australia.
11.5 Neither the Agent nor any of its Affiliates will take any action
which will impair the effectiveness of the transactions contemplated by this
Agreement.
11.6 All corporate actions by Agent required for the execution,
delivery and performance of this Agreement have been taken. The execution and
delivery of this Agreement by the Agent, the observance and performance thereof,
and the consummation of the transactions contemplated herein or in the Offering
Documents do not and will not constitute a material breach of, or a material
default under, any instrument or agreement by which the Agent is bound, and does
not and will not, to the best of the Agent's knowledge, contravene any existing
law, decree or order applicable to it. This Agreement constitutes a valid and
binding agreement of Agent, enforceable in accordance with its terms.
11.7 Agent understands that the Company is relying upon Agent's
representations and warranties in connection with the Offering and the sale of
the Securities contemplated by this Agreement.
11.8 Agent's representations and warranties under this Section shall be
true and correct as of the Closing, and shall survive the Closing for a period
of six months.
12. Notices. Except as otherwise expressly provided in this Agreement:
12.1 Whenever notice is required by the provisions of this Agreement to
be given to the Company, such notice shall be in writing, addressed to the
Company, at:
If to Company: CityView Energy Corporation Limited
00 Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx Xxxxxxxxx XX 0000
with a copy to: Xxxxx Xxxxxx LL.B
00 Xxx Xxxxxx
Xxxx Xxxxx, 0000
Xxxxxxx Xxxxxxxxx
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12.2 Whenever notice is required by the provisions of this Agreement to
be given to the Agent, such notice shall be given in writing, addressed to the
Agent, at:
If to the Agent: AIBC Investment Services Corporation
Xxxxx 0000
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Younis Zubchevich
with a copy to: Xxxxxxx X. Xxxx, Esq.
Xxxx Moss Kline & Xxxxx LLP
000 Xxxxxxxxx Xxxx Xxxxxx, Xxxxx 000
1000 Xxxxxxxxx Road, N.E.
Xxxxxxx, Xxxxxxx 00000
12.3 Any notice instructing the Escrow Agent to distribute monies or
Securities held in Escrow must be signed by authorized agents of both the
Company and the Agent in order to be valid.
13. Miscellaneous.
13.1 Benefit. This Agreement is made solely for the benefit of the
Agent and the Company, their respective officers and directors and any
controlling person referred to in Section 15 of the Act and their respective
successors and assigns, and no other person may acquire or have any right under
or by virtue of this Agreement, including, without limitation, the holders of
any Securities. The term "successor" or the term "successors and assigns" as
used in this Agreement shall not include any purchasers, as such, of any of the
Securities.
13.2 Survival. The respective indemnities, agreements, representations,
warranties, covenants and other statements of the Company and the Agent, or the
officers, directors or controlling persons of the Company and the Agent as set
forth in or made pursuant to this Agreement and the indemnity agreements of the
Company and the Agent contained in Section 7 hereof shall survive and remain in
full force and effect, regardless of (i) any investigation made by or on behalf
of the Company or the Agent or any such officer, director or controlling person
of the Company or of the Agent; (ii) delivery of or payment for the Securities;
or (iii) each Closing Date, and any successor of the Company or the Agent or any
controlling person, officer or director thereof, as the case may be, shall be
entitled to the benefits hereof.
13.3 Governing Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of New York without regard to the
principles of conflict of laws. Any dispute or controversy between the parties
arising in connection with this agreement or the subject matter contemplated by
this agreement shall be resolved by arbitration before a three-member panel of
the American Arbitration Association in accordance with the commercial
arbitration rules of said forum and the Federal Arbitration Act, 9 U.S.C. 1 et
seq., with the resulting award being final and conclusive. Said arbitrators
shall be empowered to award all forms of relief and damages claimed, including,
but not limited to, attorney's fees, expenses of litigation and arbitration,
exemplary damages, and prejudgment interest. Notwithstanding the foregoing,
Buyer may at any time and at its option, whether or not an arbitration action is
then pending, initiate a civil action for temporary and permanent injunctive and
other equitable relief against Company. Company acknowledges that upon any
breach of Buyer's conversion rights hereunder, Buyer's resulting injury may not
be adequately compensated by a remedy at law.
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Accordingly, upon such breach, Buyer, at its election and without limitation of
its other remedies, shall be entitled to pursue a claim for specific performance
of this Agreement, and Company hereby waives the right to assert any defense
thereto that Purchaser has an adequate remedy at law. The parties further agree
that any arbitration action between them shall be heard in New York, New York
and expressly consent to the jurisdiction and venue of the Supreme Court of New
York County, New York, and the United States District Court for the Southern
District of New York for the adjudication of any civil action asserted pursuant
to this Paragraph.
13.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be deemed an original and all of which together
will constitute one and the same instrument.
13.5 Confidential Information. All confidential financial or business
information (except publicly available or freely usable material otherwise
obtained from another source) respecting either party will be used solely by the
other party in connection with the within transactions, be revealed only to
employees or contractors of such other party who are necessary to the conduct of
such transactions, and be otherwise held in strict confidence.
13.6 Public Announcements. Prior to each Closing Date, neither party
hereto will issue any public announcement concerning the within transactions
without the approval of the other party.
13.7 Finders. The parties acknowledge that no person has acted as a
finder in connection with the transactions contemplated herein and each will
agree to indemnify the other with respect to any other claim for a finder's fee
in connection with the offering.
13.8 Recitals. The recitals to this Agreement are a material part
hereof, and each recital is incorporated into this Agreement by reference and
made a part of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement
to be executed as of the day and year first above written.
"THE COMPANY"
CITYVIEW ENERGY CORPORATION LIMITED
By:_____________________________________
Xxxx Xxxxx
Chairman and Chief Executive Officer
"THE AGENT"
AIBC INVESTMENT SERVICES CORPORATION
By:______________________________________
Younis Zubchevich
Executive Vice President
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