EX-1.1
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ex1-1.htm
PLACEMENT AGENCY AGREEMENT
Monaker Group, Inc. 8-K
Exhibit 1.1
MONAKER
GROUP, INC.
Placement Agency Agreement
Common Stock and Warrants
This Placement Agency Agreement (the “Agreement”)
is entered into by and between Monaker Group, Inc., a Nevada corporation (the “Company”), and Northland Securities,
Inc. (the “Agent”) effective as of July 31, 2017. The Agreement supplements that certain letter agreement
between the Company and Northland Securities, Inc. dated March 23, 2017 (the “Letter Agreement”) by providing
additional information with respect to the Private Placement (as defined below).
1. Engagement And Services.
1.1
Engagement. The Company hereby engages the Agent exclusively to act
as placement agent to the Company concerning a potential private placement (the “Private Placement”) of up to
$6,000,000.00 of shares (the “Shares”) of the Company’s common stock, par value $0.00001 per share (the
“Common Stock”) and warrants (the “Warrants”), which are exercisable for shares of the Common
Stock (the “Warrant Shares” and together with the Shares and the Warrants, the “Securities”).
The final terms of the Private Placement, however, will be negotiated between the Company and the investors who purchase the Securities
in the Private Placement. The Agent hereby accepts such engagement on a “reasonable efforts” basis upon the terms and
conditions set forth in this Agreement. This Agreement shall not give rise to any commitment by the Agent to purchase or sell any
of the Securities, and the Agent shall have no authority to bind the Company. The Company agrees that it will only sell Securities
in the Private Placement to sophisticated institutional or accredited investors (as defined in Rule 501(a)(1), (2), (3) and (7)
only). The Company and the Agent agree and acknowledge that the Agent is not acting as an underwriter with respect to the Private
Placement and the Company shall determine the purchasers in the Private Placement in its sole discretion.
1.2
Services. In undertaking this assignment, the Agent will, among other
things, provide the services to the Company outlined in the Letter Agreement, including identifying potential investors (the “Potential
Investors”). The Agent is permitted to engage selected dealers and co-agents in performing the services hereunder.
2. Fees And Expenses.
2.1
Agent Fees. The Company hereby agrees to pay the Agent, as compensation
for its services hereunder, the fees and expenses set forth in the Letter Agreement. For the avoidance of doubt, this includes
cash in the amount of 8% of the gross proceeds from the sale of Securities in the Private Placement and as set forth in the second
paragraph of Section 5(a) of the Letter Agreement, for the consideration of $50 at the Initial Closing Date, the Company will sell
to the Agent, a warrant or warrants to purchase shares of the Common Stock equal to 5.0% of the Shares sold in the Private Placement
(the “Agent Warrants”). The Agent Warrants will be in the form attached hereto as Attachment A. It is
understood and acknowledged that no commission or underwriting discount shall be payable to Agent from any exercise of warrants
on a cashless basis in any Company offering.
2.2
Expenses. In addition to the fees provided in Section 2.1 above, the
Company hereby agrees, to promptly reimburse Agent for (a) all reasonable out-of-pocket accountable fees and disbursements of counsel
retained by Agent, (b) all of Agent’s reasonable out-of-pocket accountable travel and related expenses arising out of Agent’s engagement
hereunder, and (c) any other reasonable out-of-pocket accountable expenses incurred by Agent in connection with the performance
of its services hereunder. Such total reimbursable expenses shall not exceed $150,000 and shall be supported by invoices and other
appropriate documents to verify such expenses.
3.
Representations And Warranties Of The Company. The Company represents
and warrants to the Agent as follows:
3.1
Authorization. All corporate action on the part of the Company, its
officers, directors and shareholders necessary for the authorization, execution and delivery of this Agreement has been taken.
The Company has the requisite corporate power to enter into this Agreement and carry out and perform its obligations under the
terms of this Agreement. At the closing of the Private Placement (the “Closing”), the Company will have the
requisite corporate power to issue and sell the Shares, the Warrants, the Agent Warrants, and the Common Stock issuable upon the
exercise of the Warrants and the exercise of the Agent Warrants (the “Agent Warrant Shares”). This Agreement
has been duly authorized, executed and delivered by the Company and, upon due execution and delivery by the Agent, this Agreement
will be a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally
or by equitable principles or to the extent the indemnification and contribution provisions of the Letter Agreement may be limited
by applicable federal or state securities laws.
3.2
No Conflict with Other Instruments. The execution, delivery and performance
of this Agreement, the issuance and sale of the Securities to be sold by the Company in the Private Placement, the issuance of
the Agent Warrants, the issuance of the Warrant Shares and the Agent Warrant Shares, and the consummation of the actions contemplated
by this Agreement (which for all purposes herein shall include the Private Placement, the sale of the Agent Warrants and the issuance
of the Agent Warrant Shares) will not (a) result in any violation of, be in conflict with, or constitute a default under, with
or without the passage of time or the giving of notice: (i) any provision of the Company’s or its subsidiaries articles of
incorporation or bylaws (or similar governing documents) as in effect on the date hereof or the date of a Closing; (ii) any provision
of any judgment, arbitration ruling, decree or order to which either of the Company or its subsidiaries are a party or by which
any of them is bound; (iii) any bond, debenture, note or other evidence of indebtedness, or any lease, contract, mortgage, indenture,
deed of trust, loan agreement, joint venture or other agreement, instrument or commitment to which the Company or its subsidiaries
are a party or by which any of them or their respective properties are bound; or (iv) any statute, rule, law or governmental regulation
applicable to the Company or its subsidiaries; or (b) result in the creation or imposition of any lien, encumbrance, claim, security
interest or restriction whatsoever upon any of the properties or assets of the Company or its subsidiaries or any acceleration
of indebtedness pursuant to any obligation, agreement or condition contained in any bond, debenture, note or any other evidence
of indebtedness or any indenture, mortgage, deed of trust or any other agreement or instrument to which the Company or its subsidiaries
are a party or by which either of them is bound or to which any of the property or assets of the Company or its subsidiaries are
subject. No consent, approval, authorization or other order of, or registration, qualification or filing with, any regulatory body,
administrative agency, or other governmental body is required for the execution and delivery of this Agreement by the Company and
the valid issuance or sale of the Securities, the Agent Warrants and the Agent Warrant Shares by the Company pursuant to this Agreement,
other than such as have been made or obtained and that remain in full force and effect, and except for the filing of a Form D or
any filings required to be made under state securities laws, which shall be timely filed by the Company.
3.3
Articles of Incorporation; Bylaws. The articles of incorporation and
bylaws of the Company attached as an exhibit to the Company’s filings with the Securities and Exchange Commission (the “SEC”),
are true, correct and complete copies of the articles of incorporation and bylaws of the Company, as in effect on the date hereof.
3.4
Organization, Good Standing and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the State of Nevada and has all requisite corporate power
and authority to carry on its business as now conducted. Each of the Company and its subsidiaries has full power and authority
to own, operate and occupy its properties and to conduct its business as presently conducted, as presently proposed to be conducted,
and is duly qualified to transact business and is in good standing in each jurisdiction in which the failure so to qualify would
have a material adverse effect on the Company’s and its subsidiaries’ business, financial condition, properties, operations,
prospects or assets or its ability to perform its obligations under this Agreement (a “Material Adverse Effect”).
3.5
SEC Filings. The consolidated financial statements contained in each
report, registration statement and definitive proxy statement filed by the Company with the SEC (all documents filed with the SEC,
the “Company SEC Documents”) and the Private Placement Documents: (i) complied as to form in all material respects
with the published rules and regulations of the SEC applicable thereto; (ii) the information contained therein as of the respective
dates thereof was accurate and complete and did not contain an untrue statement of a material fact or omit to state a 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; (iii) were prepared in accordance with generally accepted accounting principles applied on a consistent basis
throughout the periods covered, except as may be indicated in the notes to such financial statements and (in the case of unaudited
statements) as permitted by Form 10-Q of the SEC, and except that unaudited financial statements may not contain footnotes and
are subject to year-end audit adjustments; and (iv) fairly present the consolidated financial position of the Company and its subsidiaries
as of the respective dates thereof and the consolidated results of operations, cash flows and the changes in shareholders’
equity of the Company and its subsidiaries for the periods covered thereby. Except as set forth in the financial statements included
in the Company SEC Documents, neither the Company nor its subsidiaries has any liabilities, contingent or otherwise, other than
liabilities incurred in the ordinary course of business subsequent to May 31, 2017, and liabilities of the type not required under
generally accepted accounting principles to be reflected in such financial statements. Such liabilities incurred subsequent to
May 31, 2017, are not, in the aggregate, material to the financial condition or operating results of the Company and its subsidiaries,
taken as a whole.
3.6
Capitalization. The authorized capital stock of the Company consists of (i) 500,000,000 shares of Common Stock, of which (A) 11,424,047 shares were issued and outstanding as of the date of this Agreement, and (B) 6,203,867 shares were reserved for issuance
upon the exercise or conversion, as the case may be, of outstanding options, warrants or other convertible securities as of the
date of this Agreement; and (ii) 100,000,000 shares of preferred stock, of which 1,869,611
shares of Series A 10% Cumulative Convertible Preferred Stock were issued and outstanding as of the date of this Agreement, and
none are outstanding or reserved for issuance upon the exercise or conversion, as the case may be, of outstanding options, warrants
or other convertible securities. All issued and outstanding shares of Common Stock have been duly authorized and validly issued,
are fully paid and nonassessable, were not issued in violation of any preemptive rights or similar rights to subscribe for or purchase
securities, and, except as disclosed in the Company SEC Documents, have been issued and sold in compliance with the registration
requirements of federal and state securities laws or the applicable statutes of limitation have expired. Except as set forth in
the Letter Agreement, in the subscription agreements executed in connection with the Private Placement (collectively, the “Purchase
Agreement”) or in the Company SEC Documents, there are no (i) outstanding rights (including, without limitation, preemptive
rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any unissued shares of capital stock
or other equity interest in the Company, or any contract, commitment, agreement, understanding or arrangement of any kind to which
the Company or its subsidiaries is a party and relating to the issuance or sale of any capital stock or convertible or exchangeable
security of the Company or its subsidiaries; or (ii) obligations of the Company to purchase redeem or otherwise acquire any of
its outstanding capital stock or any interest therein or to pay any dividend or make any other distribution in respect thereof.
There are no anti-dilution or price adjustment provisions, co-sale rights, registration rights, rights of first refusal or other
similar rights contained in the terms governing any outstanding security of the Company that will be triggered by the issuance
of the Securities, the Agent Warrants or the Agent Warrant Shares.
3.7
Subsidiaries. Except as set forth in the Company SEC Documents, the
Company does not presently own or control, directly or indirectly, and has no stock or other interest as owner or principal in,
any other corporation or partnership, joint venture, association or other business venture or entity (each a “subsidiary”).
The Company’s subsidiaries are duly incorporated or organized, validly existing and in good standing under the laws of their
jurisdiction of incorporation or organization and have all requisite power and authority to carry on their business as now conducted.
Such subsidiaries are duly qualified to transact business and is in good standing in each jurisdiction in which the failure to
so qualify would have a material adverse effect on their respective business or properties. All of the outstanding capital stock
or other voting securities of such subsidiaries that are owned by the Company, are owned directly or indirectly, free and clear
of any liens, claims, or encumbrances.
3.8
Valid Issuance of Securities. The Securities, the Agent Warrants and
the Agent Warrant Shares are duly authorized and, when issued, sold, delivered and paid for in accordance with the terms of the
Purchase Agreement, the Securities or the Agent Warrants, as the case may be, the shares of common stock issuable pursuant to the
Warrants and the Agent Warrants will be duly and validly authorized and issued, fully paid and nonassessable, free from all taxes,
liens, claims, encumbrances and charges with respect to the issue thereof; provided, however, that the Securities, the Agent Warrants
and the Agent Warrant Shares may be subject to restrictions on transfer under state and/or federal securities laws or as otherwise
set forth herein. The issuance, sale and delivery of the Securities, the Agent Warrants and the Agent Warrant Shares in accordance
with the terms hereof or of the Purchase Agreement or the Agent Warrants (as the case may be) will not be subject to preemptive
rights of shareholders of the Company. The Warrant Shares and the Agent Warrant Shares have been duly reserved for issuance upon
exercise of the Warrants and Agent Warrants.
3.9
Private Placement. Assuming the accuracy of the representations of
the Purchasers in the Purchase Agreement, on each Closing Date and solely as this Section 3.9 relates to the issue and sale of
the Warrant Shares on the date(s) of exercise of the Warrants and the issue and sale of the Agent Warrant Shares on the date(s)
of exercise of the Agent Warrants, the offer, issue and sale of the Securities, the issuance of the Agent Warrant Shares upon exercise
of the Agent Warrant (assuming no change in applicable law prior to the date the Shares and Agent Warrant Shares are issued), are
and will be exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 (the “Securities
Act”) and have been or will be registered or qualified (or are or will be exempt from registration and qualification)
under the registration, permit or qualification requirements of all applicable state securities laws. Neither the Company, nor
any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales of any
security or solicited any offers to buy any security under circumstances that would require registration under the Securities Act
of the issuance of the Securities to the purchasers in the Private Placement or the Agent Warrants. The Shares, and upon the exercise
of the Warrants pursuant to their terms, the Warrant Shares and Agent Warrant Shares will be quoted on the NASDAQ Capital Market
or the OTCQB. Other than the Company SEC Documents, the Company has not distributed and will not distribute prior to a Closing
any offering material in connection with the offering and sale of the Securities, unless such offering materials are provided to
the Agent prior to or simultaneously with such delivery to the offerees of the Securities. The Company agrees that no Private Placement
Documents (as hereinafter defined) or materials presented or distributed to the Potential Investors, including the Company SEC
Documents, shall contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading.
3.10
Litigation. Except as set forth in the Company SEC Documents, there
is no action, suit, proceeding nor investigation pending or, to the Company’s knowledge, currently threatened against the
Company or its subsidiaries that (a) if adversely determined would reasonably be expected to have a Material Adverse Effect on
the Company or its subsidiaries or (b) would be required to be disclosed in the Company’s Annual Report on Form 10-K under
the requirements of Item 103 of Regulation S-K. The foregoing includes, without limitation, any action, suit, proceeding or investigation,
pending or threatened, that questions the validity of this Agreement or the right of the Company to enter into such Agreement and
perform its obligations hereunder. Except as set forth in the Company SEC Documents, neither the Company nor its subsidiaries are
subject to any injunction, judgment, decree or order of any court, regulatory body, arbitral panel, administrative agency or other
government body.
3.11
Governmental Consents. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any federal, state, local or provincial governmental
authority on the part of the Company is required in connection with the consummation of the transactions contemplated by this Agreement,
except for notices required or permitted to be filed with certain state and federal securities commissions, which notices will
be filed on a timely basis.
3.12
No Brokers. Except for any fees payable to the Agent, no broker, finder
or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions
contemplated by this Agreement based on arrangements made by the Company.
3.13
Compliance. Neither the Company nor its subsidiaries are in violation
of its articles of incorporation or bylaws (or similar governing documents). Neither the Company nor its subsidiaries have been
advised or have reason to believe, that it is not conducting its business in compliance with all applicable laws, rules and regulations
of the jurisdictions in which it is conducting business, including, without limitation, all applicable local, state and federal
environmental laws and regulations; except where failure to be so in compliance would not have a Material Adverse Effect. Each
of the Company and its subsidiaries has all necessary franchises, licenses, certificates and other authorizations from any foreign,
federal, state or local government or governmental agency, department or body that are currently necessary for the operation of
the business of the Company and its subsidiaries as currently conducted, except where the failure to currently possess such franchises,
licenses, certificates and other authorizations would not reasonably be expected to have a Material Adverse Effect.
3.14
No Material Adverse Changes. Except as disclosed in the Company SEC
Documents, since May 31, 2017, there has not been any change that has had a Material Adverse Effect. Since May 31, 2017, the Company
has not declared or paid any dividend or distribution on its capital stock.
3.15
Contracts. Except as set forth in the Company SEC Documents, and except
for matters which are not reasonably likely to have a Material Adverse Effect and those contracts that are substantially or fully
performed or expired by their terms, the contracts listed as exhibits to or described in the Company SEC Documents that are material
to the Company or its subsidiaries and all amendments thereto, are in full force and effect on the date hereof, and neither the
Company nor, to the Company’s knowledge, any other party to such contracts is in breach of or default under any of such contracts.
Neither the Company nor its subsidiaries has any contracts or agreements that would constitute a material contract as such term
is defined in Item 601(b)(10) of Regulation S-K, except for such contracts or agreements that are filed as exhibits to or described
in the Company SEC Documents.
3.16
Intellectual Property.
(a)
The Company has ownership or license or legal right to use all patents, copyrights, trade secrets, know-how, trademarks,
trade names, customer lists, designs, manufacturing or other processes, computer software, systems, data compilation, research
results or other proprietary rights used in the business of the Company or its subsidiaries (collectively “Intellectual
Property”). All of such patents, registered trademarks and registered copyrights have been duly registered in, filed
in or issued by the United States Patent and Trademark Office, the United States Register of Copyrights or the corresponding offices
of other jurisdictions and have been maintained and renewed in accordance with all applicable provisions of law and administrative
regulations in the United States and all such jurisdictions.
(b)
The Company believes it has taken all reasonable steps required in accordance with sound business practice and business
judgment to establish and preserve its and its subsidiaries’ ownership of all material Intellectual Property with respect
to their products and technology. To the knowledge of the Company, there is no infringement of the Intellectual Property by any
third party.
(c)
To the knowledge of the Company, the present business, activities and products of the Company and its subsidiaries do not
infringe any intellectual property of any other person. No proceeding charging the Company or its subsidiaries with infringement
of any adversely held Intellectual Property has been filed and the Company is unaware of any facts which are reasonably likely
to form a basis for any such proceeding.
(d)
No proceedings have been instituted or pending or, to the knowledge of the Company, threatened, which challenge the rights
of the Company or its subsidiaries to the use of the Intellectual Property. The Intellectual Property owned by the Company and
its subsidiaries, and to the knowledge of the Company, the Intellectual Property licensed to the Company and its subsidiaries,
has not been adjudged invalid or unenforceable, in whole or in part. There is no pending or, to the knowledge of the Company, threatened
proceeding by others challenging the validity or scope of any such Intellectual Property, and the Company is unaware of any facts
which are reasonably likely to form a basis for any such claim. Each of the Company and its subsidiaries has the right to use,
free and clear of material claims or rights of other persons, all of its customer lists, designs, computer software, systems, data
compilations, and other information that are required for its products or its business as presently conducted. Neither the Company
nor its subsidiaries is making unauthorized use of any confidential information or trade secrets of any person.
(e)
The activities of any of the employees on behalf of the Company or of its subsidiaries do not violate any agreements or
arrangements between such employees and third parties are related to confidential information or trade secrets of third parties
or that restrict any such employee’s engagement in business activity of any nature. Each former and current employee or consultant
of the Company or its subsidiaries is a party to a written contract with the Company or its subsidiaries that assigns to the Company
or its subsidiaries all rights to all inventions, improvements, discoveries and information relating to the Company or its subsidiaries,
except for any failure to so do as would not reasonably be expected to result in a Material Adverse Effect.
(f)
All licenses or other agreements under which (i) the Company or its subsidiaries employs rights in Intellectual Property,
or (ii) the Company or its subsidiaries has granted rights to others in Intellectual Property owned or licensed by the Company
or its subsidiaries are in full force and effect, and there is no default (and there exists no condition which, with the passage
of time or otherwise, would constitute a default by the Company or such subsidiary) by the Company or its subsidiaries with respect
thereto.
3.17
Securities Market Compliance. The Company has taken no action designed
to, or likely to have the effect of, terminating the quotation of the Common Stock (including the Shares, Warrant Shares and the
Agent Warrant Shares) on the OTCQB. The Company is and on each Closing Date will be in compliance with all of the then-applicable
requirements for continued quotation of the Common Stock on the OTCQB.
3.18
Accountants. LBB & Associates Ltd., LLP, who expressed its opinion
with respect to the consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year
ended February 28, 2017, have advised the Company that they are, and to the knowledge of the Company they are, independent accountants
as required by the Securities Act and the rules and regulations promulgated thereunder.
3.19
Taxes. The Company and its subsidiaries have filed all necessary federal, state, local and foreign income and franchise
tax returns and have paid or accrued all taxes shown as due thereon or has obtained an extension for such returns, and
the Company and its subsidiaries have no knowledge of a tax deficiency which has been or might be asserted or threatened against
it by any taxing jurisdiction, other than any deficiency
which the Company or its subsidiaries are contesting in good faith and with respect to which adequate reserves for payment have
been established.
3.20
Insurance. The Company and its subsidiaries maintain and will continue
to maintain insurance of the types and in the amounts that the Company reasonably believes are adequate for its and its subsidiaries’
business, including, but not limited to, insurance covering all real and personal property owned or leased by the Company or its
subsidiaries against theft, damage, destruction, acts of vandalism and all other risks customarily insured against by similarly
situated companies, all of which insurance is in full force and effect.
3.21
Transfer Taxes. On each Closing Date, all stock transfer or other taxes
(other than income taxes) that are required to be paid in connection with the sale and transfer of the Securities and the Agent
Warrants will be, or will have been, fully paid or provided for by the Company and the Company will have complied with all laws
imposing such taxes.
3.22
Investment Company. The Company (including its subsidiaries) is not
an “investment company” or an “affiliated person” of, or “promoter” or “principal underwriter”
for an investment company, within the meaning of the Investment Company Act of 1940 and will not be deemed an “investment
company” as a result of the transactions contemplated by the Purchase Agreement.
3.23
Related Party Transactions. To the knowledge of the Company, no transaction
has occurred between or among the Company or any of its affiliates (including, without limitation, its subsidiaries), officers
or directors or any affiliate or affiliates of any such affiliate officer or director that with the passage of time will be required
to be disclosed pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”)
(assuming the Company’s Common Stock was registered under the Exchange Act) other than those transactions that have already
been so disclosed.
3.24
Books and Records. The books, records and accounts of the Company and
its subsidiaries accurately and fairly reflect, in reasonable detail, the transactions in, and dispositions of, the assets of,
and the operations of, the Company and its subsidiaries.
3.25
Disclosure Controls and Internal Controls.
(a) Except as otherwise disclosed in the Company SEC Documents, the Company and its subsidiaries have established and maintain
disclosure controls and procedures (as such term is defined in Rule 13a-15 under the Exchange Act), which (i) are designed to ensure
that material information relating to the Company or its subsidiaries is made known to the Company’s principal executive
officer and its principal financial officer by others within those entities particularly during the periods in which the periodic
reports required under the Exchange Act are being prepared; and (ii) provide for the periodic evaluation of the effectiveness of
such disclosure controls and procedures as of the end of the period covered by the Company’s most recent annual or quarterly
report filed with the SEC.
(b) Except as described in the Company SEC Documents, the Company and its subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general
or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset and liability accountability, (iii) access to assets or incurrence
of liabilities is permitted only in accordance with management’s general or specific authorization and (iv) the recorded
accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate
action is taken with respect to any difference. The Company and its subsidiaries maintain disclosure controls and procedures (as
such term is defined in Rule 13a-15 under the Exchange Act) that are designed to be effective in ensuring that information required
to be disclosed by the Company in the reports that it files with or submits to the SEC is recorded, processed, summarized and reported,
within the time periods specified in the rules and forms of the SEC, including, without limitation, controls and procedures designed
to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act
is accumulated and communicated to the Company’s management, including its principal executive officer or officers and its
principal financial officer or officers, as appropriate, to allow timely decisions regarding required disclosure. Except as described
in the Company SEC Documents, the Company is not aware of (i) any significant deficiency in the design or operation of internal
controls which could adversely affect the Company’s or its subsidiaries’ ability to record, process, summarize and
report financial data or any material weaknesses in internal controls; or (ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company’s or its subsidiaries’ internal controls.
(c) Since the date of the most recent evaluation of such disclosure controls and procedures, there have been no changes that
have materially affected, or are reasonably likely to materially affect, the Company’s or its subsidiaries’ internal
control over financial reporting, including any corrective actions with regard to significant deficiencies and material weaknesses.
(d) Except as described in the Company SEC Documents, there are no material off-balance sheet arrangements (as defined in Item
303 of Regulation S-K), or any other relationships with unconsolidated entities (in which the Company or its control persons have
an equity interest) that may have a material current or future effect on the Company’s or its subsidiaries’ financial
condition, revenues or expenses, changes in financial condition, results of operations, liquidity, capital expenditures or capital
resources.
(e)
To the knowledge of the Company, except as described in the Company SEC Documents, the board of directors has not been informed,
nor is any director of the Company aware, of (1) any significant deficiencies in the design or operation of the internal controls
of the Company or its subsidiaries which could adversely affect the Company’s or its subsidiaries’ ability to record,
process, summarize and report financial data or any material weakness in the Company’s or its subsidiaries’ internal
controls; or (2) any fraud, whether or not material, that involves management or other employees of the Company or its subsidiaries
who have a significant role in the Company’s or its subsidiaries’ internal controls.
3.26
No General Solicitation. Neither the Company, nor any of its affiliates,
nor any person acting on its or their behalf, has engaged or will engage in any form of general solicitation or general advertising
(within the meaning of Regulation D promulgated under the Securities Act) in connection with the offer or sale of the Securities
or the Agent Warrants.
Placement Agency Agreement (PIPE) | Page 8 |
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3.27
Anti-Bribery. Each of the Company, its subsidiaries, its affiliates
and any of their respective officers, directors, supervisors, managers, agents, or employees, has not violated, its participation
in the offering will not violate, and the Company has instituted and maintains policies and procedures designed to ensure continued
compliance with, each of the following laws: (a) anti-bribery laws, including but not limited to, any applicable law, rule,
or regulation of any locality, including but not limited to any law, rule, or regulation promulgated to implement the OECD Convention
on Combating Bribery of Foreign Public Officials in International Business Transactions, signed December 17, 1997, including
the U.S. Foreign Corrupt Practices Act of 1977, as amended, or any other law, rule or regulation of similar purposes and scope,
(b) anti-money laundering laws, including but not limited to, applicable federal, state, international, foreign or other laws,
regulations or government guidance regarding anti-money laundering, including, without limitation, Title 18 US. Code section 1956
and 1957, the Patriot Act, the Bank Secrecy Act, and international anti-money laundering principles or procedures by an intergovernmental
group or organization, such as the Financial Action Task Force on Money Laundering, of which the United States is a member and
with which designation the United States representative to the group or organization continues to concur, all as amended, and any
Executive order, directive, or regulation pursuant to the authority of any of the foregoing, or any orders or licenses issued
thereunder or (c) laws and regulations imposing U.S. economic sanctions measures, including, but not limited to, the International
Emergency Economic Powers Act, the Trading with the Enemy Act, the United Nations Participation Act and the Syria Accountability
and Lebanese Sovereignty Act, all as amended, and any Executive Order, directive, or regulation pursuant to the authority of any
of the foregoing, including the regulations of the United States Treasury Department set forth under 31 CFR, Subtitle B, Chapter
V, as amended, or any orders or licenses issued thereunder. Neither the Company nor any director, officer, agent, employee
or other person acting on behalf of the Company has, in the course of its actions for, or on behalf of, the Company (i) used any
corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii)
made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; or
(iii) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.
3.28
Xxxxxxxx-Xxxxx Act. The Company is in compliance in all material respects
with any and all applicable requirements of the Xxxxxxxx-Xxxxx Act of 2002 that are effective as of the date hereof, and any and
all applicable rules and regulations promulgated by the SEC thereunder that are effective as of the date hereof.
3.29
Employee Relations. Neither the Company nor its subsidiaries is a party
to any collective bargaining agreement or employs any member of a union. The Company believes that its relations with its employees
are good. No executive officer of the Company (as defined in Rule 501(f) of Regulation D under the Securities Act) has notified
the Company that such officer intends to leave the Company or otherwise terminate such officer’s employment with the Company.
No executive officer of the Company, to the knowledge of the Company, is, or is now expected to be, in violation of any material
term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or
any other contract or agreement or any restrictive covenant, and the continued employment of each such executive officer does not
subject the Company to any liability with respect to any of the foregoing matters.
The Company and its subsidiaries are in
compliance with all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices
and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would not, either
individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
3.30
Environmental Laws. Each of the Company and its subsidiaries (i) is
in compliance with any and all Environmental Laws (as hereinafter defined), (ii) has received all permits, licenses or other approvals
required of it under applicable Environmental Laws to conduct its business and (iii) is in compliance with all terms and conditions
of any such permit, license or approval where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so comply could
be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. The term “Environmental Laws”
means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including,
without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation,
laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous
substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well
as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters,
orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.
Placement Agency Agreement (PIPE) | Page 9 |
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3.31
No Manipulation; Disclosure of Information. None of the Company, its
subsidiaries or any executive officer of the Company (as defined in Rule 501(f) of Regulation D under the Securities Act) has taken
and will not take any action designed to or that might reasonably be expected to cause or result in an unlawful manipulation of
the price of the Common Stock to facilitate the sale or resale of the Securities, the Agent Warrants or the Agent Warrant Shares.
The Company confirms that, to its knowledge, with the exception of the proposed sale of Securities contemplated in the Purchase
Agreement (as to which the Company makes no representation), neither it nor any other person acting on its behalf has provided
any of the Potential Investors or their agent or counsel with any information that constitutes or might constitute material, non-public
information. The Company understands and confirms that the Potential Investors shall be relying on the foregoing representations
in effecting transactions in securities of the Company. All disclosures provided to the Potential Investors regarding the Company,
its business and the transactions contemplated by the Purchase Agreement, including the exhibits to the Purchase Agreement and
the Company SEC Documents, furnished by the Company are true and correct and do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. No forward-looking statement (within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act) made by the Company or any of its officers or directors contained in any Company SEC Document
or made available to the public generally since January 1, 2012, has been made or reaffirmed without a reasonable basis or has
been disclosed other than in good faith. Statistical, industry-related and market-related data included in the Company SEC Documents
are based on or derived from sources that the Company reasonably and in good faith believes are reliable and accurate in all material
respects.
3.32
Application of Takeover Protections; Rights Agreement. The Company
and its board of directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition,
business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision
under the Company’s articles of incorporation or the laws of the jurisdiction of its formation which is or could become applicable
to any Potential Investor as a result of the transactions contemplated by the Purchase Agreement, including, without limitation,
the Company’s issuance of the Securities and any Potential Investor’s ownership of the Securities. The Company has
not adopted a shareholder rights plan or similar arrangement relating to accumulations of beneficial ownership of Common Stock
or a change in control of the Company.
3.33
Bad Actor Disqualification.
(a) With
respect to Securities to be offered and sold hereunder in reliance on Rule 506 under the Securities Act (“Regulation D
Securities”), none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other
officer of the Company participating in the Private Placement, any beneficial owner of 20% or more of the Company’s outstanding
voting equity securities (calculated on the basis of voting power), nor any promoter (as that term is defined in Rule 405 under
the Securities Act) connected with the Company in any capacity at the time of such sale (each, an “Issuer Covered Person”
and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications
described in Rule 506(d)(1)(i)–(viii) under the Securities Act (a “Disqualification Event”), except for
a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any
Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure
obligations under Rule 506(e), and has furnished to the Agent and the Potential Investors a copy of any disclosures provided thereunder.
(b) The
Company is not aware of any person (other than any Issuer Covered Person or Dealer Covered Person that has been or will be paid
(directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of the Securities. For the purposes
of this subsection, “Dealer Covered Person” shall mean Northland Securities, Inc. or any of its directors, executive
officers, general partners, managing members or other officers participating in the Private Placement.
Placement Agency Agreement (PIPE) | Page 10 |
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(c) The
Company will notify the Agent in writing, prior to each Closing Date of (i) any Disqualification Event relating to any Issuer Covered
Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Issuer Covered
Person.
4.
Further Agreements Of The Company. The Company covenants and agrees
as follows:
4.1
On each Closing Date, the Company will permit the Agent to rely on any representations and warranties made by the Company
to the investors and will cause its counsel to permit the Agent to rely upon any opinion furnished to the investors in the Private
Placement.
4.2
The Company will comply with all of its obligations and covenants set forth in its agreements with the Potential Investors.
The Company will promptly deliver to the Agent and their counsel copies of any and all filings with the SEC and each amendment
or supplement thereto, as well as all prospectuses and free writing prospectuses, prior to the closing of the Private Placement
and six months thereafter (if they are not filed on XXXXX). The Agent is authorized on behalf of the Company to use and distribute
copies of any documents provided to the Agent or Potential Investors in connection with the Private Placement, including Company
SEC Documents and the offering memorandum (as supplemented) (the “Private Placement Documents”) in connection
with the sale of the Securities as, and to the extent, permitted by federal and applicable state securities laws. The Private Placement
Documents do not contain any material, non-public information regarding the Company.
4.3
Neither the Company nor any of its affiliates has distributed, and none of them will distribute, any prospectus or other
offering material in connection with the Private Placement and the sale of the Securities other than any materials permitted by
the Securities Act to be distributed by the Company.
4.4
The Company will apply the net proceeds from the sale of the Securities substantially in the manner set forth in the Private
Placement Documents or for working capital of the Company.
4.5
On each Closing Date, the Company will provide the Agent with a legal opinion (or legal opinions) of the Company’s
counsel(s) in substantially the form attached as Attachment B.
4.6
The Company will make available to the Agent on a confidential basis all information concerning the business, assets, operations
and financial condition of the Company, which the Agent reasonably requests in connection with the performance of its obligations
hereunder and the due diligence investigation deemed appropriate by the Agent. The Company shall make members of management and
other employees available to the Agent and Potential Investors for purposes of satisfying such parties’ due diligence requirements
and consummating the Private Placement, and shall commit such time and other resources as are necessary or appropriate to secure
reasonable and timely success of a transaction. The Company shall inform the Agent of any material events or developments concerning
prospective material events that may come to the attention of the Company at any point prior to each Closing Date. The Agent will
be relying, without independent verification, on the accuracy and completeness of all financial and other information that is and
will be furnished to it by the Company.
4.7 On each Closing Date, the Company shall deliver to the Agent a certificate duly executed by an officer of the Company, stating
on behalf of the Company that:
(a)
The representations and warranties contained in Section 3 are true and correct in all material respects as of each Closing
Date as if they had been made on and as of said date.
(b)
The Company has performed and complied with all obligations and conditions herein required to be performed or complied with
by it on or prior to each Closing.
(c)
The appropriate Private Placement Documents, as of each Closing Date, contain all material statements that are required
to be made therein, do 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 not misleading.
Placement Agency Agreement (PIPE) | Page 11 |
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(d)
The Company will not, for a period beginning on the Initial Closing Date and ending six months following the final Subsequent
Closing Date, offer for sale or sell any securities except for any Securities to be sold in a Subsequent Closing pursuant to this
Agreement, unless, in the opinion of the Company’s counsel, concurred in by the Agent’s counsel, such offer or sale
does not jeopardize the availability of exemptions from the registration and qualification requirements under the applicable securities
laws with respect to the Private Placement. The foregoing shall not apply to securities issued in connection with any acquisition,
including by way of merger, or purchase of stock or all or substantially all of the assets of any third party.
(e)
The Company has or will promptly inform each of Agent (together with its affiliates, control persons, officers, directors,
employees and agents) if the Company is contacted by or on behalf of any party concerning a possible Offering (as defined in the
Letter Agreement) or acquisition or sale of all or a portion of the Company.
On each Closing Date,
the Company will also deliver to the Agent any additional documents or instruments reasonably requested by such Agent.
4.8
If in connection with the Private Placement, the Agent determines that they or the Company would be required to make a filing
with the Financial Industry Regulatory Authority, Inc. (“FINRA”) to enable the Agent to act as agent in the
Private Placement, the Company will do the following:
(a) The Company will cooperate with the Agent with respect to all FINRA filings that the Company or the Agent may be required
to make and provide all information and documentation necessary to make the filings in a timely manner.
(b) The Company will pay all expenses related to all FINRA filings that the Company or Agent may be required to make, including,
but not limited to, all printing costs related to all documents required or that the Agent may reasonably deem necessary, to comply
with FINRA rules; any FINRA filing fees; postage and express charges; and all other expenses incurred in making the FINRA filings.
4.9
The Company agrees and understands that this Agreement and the Letter Agreement in no way constitute a guarantee that the
Private Placement will be successful. Management acknowledges that the Company is ultimately responsible for the successful completion
of a transaction.
4.10
The Company hereby agrees to register or permit the continuance of sales and/or dealings in the shares underlying the Agent
Warrants on the same terms as those set forth in the Purchase Agreement applicable to the Warrants.
5.
Disclosure. The Company agrees that, except as required by applicable
law or the rules and regulations of the SEC or as permitted herein, any advice to be provided by an Agent under this Agreement
shall not be disclosed publicly or made available to third parties without the prior approval of such Agent, which approval shall
not be unreasonably withheld. The Agent agrees that, except as required by applicable law or the rules and regulations of the SEC
or as permitted herein, that they shall not disclose any material, non-public information provided to it by the Company to third
parties without the prior written consent of the Company.
Placement Agency Agreement (PIPE) | Page 12 |
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6.
Indemnification And Contribution. The indemnification and contribution
provision of the Letter Agreement shall apply to the Private Placement, except that (i) all references to the “Agreement”
therein will be deemed to include this Agreement, (ii) all references to “Northland” shall refer to the Agent and its
co-agent and selected dealers and (iii) the Company’s indemnification and contribution obligations thereunder will include
any and all losses, claims, damages, liabilities and expenses, joint or several, to which any Indemnified Person (as defined in
the Letter Agreement) may become subject arising out or relating to (x) any inaccuracy in the representations and warranties of
the Company herein or any failure of the Company to perform its obligations hereunder or (y) the transactions contemplated by this
Agreement or the Purchase Agreement. The Company hereby authorizes the Agent to agree to indemnify any selected dealers or co-agent
on the same terms and conditions as the Company has agreed to indemnify the Agent. Therefore, as a matter of clarification, the
Company agrees to indemnify and hold harmless the Agent, its agent, co-agent selected dealers, officers, directors, managers, members,
representatives, guarantors, sureties and each person who controls the Agent within the meaning of either Section 15 of the Act
or Section 20 of the Securities Exchange Act of 1934 from and against any and all losses, claims, damages, liabilities or expenses,
joint or several, (including reasonable legal or other expenses incurred by each such person in connection with defending or investigating
any such claims or liabilities, whether or not resulting in any liability to such person) which they or any of them may incur under
the Act, or any state securities law and the rules and regulations thereunder or the rules and regulations under any state securities
laws or any other statute or at common law or otherwise and to reimburse persons indemnified as above for any legal or other expense
(including the cost of any investigation and preparation) incurred by any of them in connection with any litigation, whether or
not resulting in any liability.
7.
Survival. The respective covenants, agreements, representations and
warranties of the Company and the Agent hereunder, as set forth in, or made pursuant to this Agreement, shall remain in full force
and effect regardless of any investigation made by or on behalf of any such party or any of its directors or officers or any controlling
person, and shall survive delivery of and payment for the Securities. The indemnification and contribution agreements and this
section regarding survival contained in this Agreement shall also survive any termination or expiration of this Agreement.
8.
Complete Agreement. This Agreement, together with the Letter Agreement,
incorporates the entire understanding of the parties with respect to the subject matter of this Agreement.
9.
Governing Law. This Agreement
shall be governed by and construed in accordance with the laws of the state of New York applicable to contracts executed and to
be wholly performed therein without giving effect to its conflicts of laws principles or rules. This agreement contains a predispute
arbitration clause. By signing an arbitration agreement the parties agree as follows:
| · | All parties to this Agreement are giving up the right to xxx each
other in court, including the right to a trial by jury, except as provided by the rules of the arbitration forum in which a claim
is filed. |
| · | Arbitration awards are generally final and binding; a party’s
ability to have a court reverse or modify an arbitration award is very limited. |
| · | The ability of the parties to obtain documents, witness statements
and other discovery is generally more limited in arbitration than in court proceedings. |
| · | The arbitrators do not have to explain the reason(s) for their award.
|
| · | The panel of arbitrators will typically include a minority of arbitrators
who were or are affiliated with the securities industry. |
| · | The rules of some arbitration forums may impose time limits for bringing
a claim in arbitration. In some cases, a claim that is ineligible for arbitration may be brought in court. |
| · | The rules of the arbitration forum in which the claim is filed, and
any amendments thereto, shall be incorporated into this Agreement. |
Placement Agency Agreement (PIPE) | Page 13 |
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Any dispute or controversy arising out of
this agreement or regarding the interpretation, application, or breach of this Agreement shall be determined by arbitration conducted
in accordance with the rules of FINRA as then in effect. Any arbitration award shall be final and binding upon the Company
and the Agent, and judgment on the award may be entered in any court having jurisdiction. No person shall bring a putative
or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against any person who has
initiated in court a putative class action; or who is a member of a putative class who has not opted out of the class with respect
to any claims encompassed by the putative class action until: (i) the class certification is denied; or (ii) the class is decertified;
or (iii) the customer is excluded from the class by the court. Such forbearance to enforce an agreement to arbitrate shall
not constitute a waiver of any rights under this Agreement except to the extent stated herein. Each party will bear its own
costs and attorneys’ fees, and will share equally in the fees and expenses of the arbitrator and the arbitration. The
proceedings will be conducted in English and venued in Minneapolis, Minnesota. Notwithstanding the foregoing, it is expressly
agreed that either party may seek injunctive relief, at any time, in an appropriate court of law or equity to enforce its rights
hereunder. This Section 9 supersedes Section 14 of the Letter Agreement in its entirety.
10.
Miscellaneous. This Agreement shall inure to the benefit of and be
binding upon the successors of the Agent and of the Company. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any person or corporation, other than the parties hereto and their successors, and the controlling persons
and directors and officers and other persons referred to in the indemnification and contribution provision of the Letter Agreement,
any legal or equitable right, remedy or claim under or in respect to this Agreement or any provision hereof. The term “successors”
shall not include any purchaser of the Securities, the Agent Warrants or the Agent Warrant Shares merely by reason of such purchase.
No subrogee of a benefited party shall be entitled to any benefits hereunder. Each party hereto disclaims any an intention to impose
any fiduciary obligation on any other party by virtue of the arrangements contemplated by this Agreement.
[Remainder of page left blank intentionally
– signature page follows]
Placement Agency Agreement (PIPE) | Page 14 |
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In witness whereof,
the parties have executed this Agreement as of the date first written above. This Agreement contains a predispute arbitration
provision in Section 9 hereof.
| Monaker Group,
Inc. | |
| | | |
| By: | | /s/ Xxxxxxx Xxxxx | |
| Name: | Xxxxxxx Xxxxx | |
| Its: | Chairman and Chief Executive Officer | |
| | | |
| Address: | |
| | | |
| Monaker Group, Inc. | |
| 0000 Xxxxxx Xxxx, Xxxxx 000 | |
| Xxxxxx, Xxxxxxx 00000 | |
| Attention: Xxxxxxx Xxxxx, Chief Executive Officer | |
Northland Securities,
Inc. | |
| | |
By: | | /s/ Xxxxx X. Xxxxxxx | |
Name: | Xxxxx X. Xxxxxxx | |
Its: | Head of Energy, Investment Banking | |
| | |
Address: | |
| |
Northland Capital Markets | |
00 Xxxxx 0xx Xxxxxx, Xxxxx 0000 | |
Xxxxxxxxxxx, XX 00000 | |
Attention: Xxxx Xxxxxxxx | |
[Signature Page to Placement Agency Agreement]
Attachment
A
FORM OF AGENT WARRANT
WARRANT
NEITHER THE SECURITIES REPRESENTED HEREBY NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES
LAWS OF ANY STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
UNLESS SOLD PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT, THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER
TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.
MONAKER GROUP, INC.
WARRANT
Warrant No. _____ | | Original Issue Date: | |
| | July 31, 2017 | |
Monaker Group,
Inc., a Nevada corporation (the “Company”),
hereby certifies that, for value received, Northland Securities, Inc. or its registered assigns (the “Holder”),
is entitled to purchase from the Company up to a total of ________ shares of Common Stock (each such share, a “Warrant
Share” and all such shares, the “Warrant Shares”), at any time and from time to time from and after
the Original Issue Date and through and including July 30, 2022 (the “Expiration Date”), and subject to the
following terms and conditions:
1. Definitions.
As used in this Warrant, the following terms shall have the respective definitions set forth in this Section 1. Capitalized terms
that are used and not defined in this Warrant that are defined in the Purchase Agreement (as defined below) shall have the respective
definitions set forth in the Purchase Agreement.
“Closing Price” means,
for any date of determination, the price determined by the first of the following clauses that applies: (i) if the Common Stock
is then listed or quoted on a Trading Market (other than the OTCQB), the closing price per share of the Common Stock for such date
(or the nearest preceding date) on such market; (ii) if prices for the Common Stock are then quoted on the OTCQB, the closing bid
price per share of the Common Stock for such date (or the nearest preceding date) so quoted; (iii) if prices for the Common Stock
are then reported in the “Pink Sheets” published by the National Quotation Bureau Incorporated (or a similar organization
or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported;
or (iv) in all other cases, the fair market value of a share of Common Stock as determined by an independent qualified appraiser
selected in good faith and paid for by the Company.
“Common
Stock” means the common stock of the Company, par value $0.00001 per share, and any securities into which such common
stock may hereafter be reclassified.
Placement Agency Agreement (PIPE) |
“Exercise Price” means
$2.10, subject to adjustment in accordance with Section 9.
“Fundamental
Transaction” means any of the following: (i) the Company effects any merger or consolidation of the Company with or into
another person, (ii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions,
(iii) any tender offer or exchange offer (whether by the Company or another person) is completed pursuant to which holders of Common
Stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property.
“Original
Issue Date” means the Original Issue Date first set forth on the first page of this Warrant or its predecessor instrument.
“Placement Agency Agreement”
means the Placement Agency Agreement, dated July 31, 2017, to which the Company and Northland Securities, Inc. are parties.
“Purchase Agreement” means
the Common Stock and Warrant Purchase Agreement, dated July 31, 2017, to which the Company and those purchasers listed on the Exhibit
A attached thereto are parties.
“Trading
Day” means (i) a day on which the Common Stock is traded on a Trading Market (other than the OTCQB), or (ii) if the Common
Stock is not listed on a Trading Market (other than the OTCQB), a day on which the Common Stock is traded in the over-the-counter
market, as reported by the OTCQB, or (iii) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock
is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization
or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or
quoted as set forth in clauses (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.
“Trading
Market” means whichever of the New York Stock Exchange, the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ
Global Market, the NASDAQ Capital Market, or the OTCQB on which the Common Stock is listed or quoted for trading on the date
in question.
2. Registration
of Warrant. The Company shall register this Warrant upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and
for all other purposes, absent actual notice to the contrary.
3. Registration
of Transfers. The Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon surrender
of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company at its address specified
herein. Upon any such registration or transfer, a new Warrant to purchase Common Stock, in substantially the form of this Warrant
(any such new Warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued
to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued
to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such
transferee of all of the rights and obligations of a holder of a Warrant.
4. Exercise
and Duration of Warrants.
(a) This Warrant shall be exercisable by the registered Holder in whole at any time and in part from time to time
from the Original Issue Date through and including the Expiration Date. At 5:30 p.m., Eastern Time on the Expiration Date, the
portion of this Warrant not exercised prior thereto shall be and become void and of no value. The Company may not call or redeem
any portion of this Warrant without the prior written consent of the affected Holder.
Placement Agency Agreement (PIPE) |
(b) Notwithstanding
anything to the contrary contained herein, the number of Warrant Shares that may be acquired by the Holder upon any exercise
of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following such
exercise (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its
affiliates (as defined under Rule 144, “Affiliates”) and any other persons whose beneficial ownership of
Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not exceed
4.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common
Stock issuable upon such exercise). For such purposes, beneficial ownership shall be determined in accordance with Section
13(d) of the Exchange Act and the rules and regulations promulgated thereunder. This provision shall not restrict the number
of shares of Common Stock which a Holder may receive or beneficially own in order to determine the amount of securities or
other consideration that such Holder may receive in the event of a Fundamental Transaction as contemplated in Section 9 of
this Warrant. By written notice to the Company, the Holder may waive the provisions of this Section 4(b) but any such waiver
will not be effective until the 61st day after delivery of such notice, nor will any such waiver effect any other Holder.
Notwithstanding
anything to the contrary contained herein, the number of Warrant Shares that may be acquired by the Holder upon any exercise of
this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following such exercise
(or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its Affiliates and any
other persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d)
of the Exchange Act, does not exceed 9.999% of the total number of issued and outstanding shares of Common Stock (including for
such purpose the shares of Common Stock issuable upon such exercise). For such purposes, beneficial ownership shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. This provision shall
not restrict the number of shares of Common Stock which a Holder may receive or beneficially own in order to determine the amount
of securities or other consideration that such Holder may receive in the event of a Fundamental Transaction as contemplated in
Section 9 of this Warrant. This restriction may not be waived.
5. Delivery
of Warrant Shares.
(a) To effect exercises hereunder, the Holder shall not be required to physically surrender this Warrant unless
the aggregate Warrant Shares represented by this Warrant are being exercised. Upon delivery of the Exercise Notice (in the form
attached hereto) to the Company (with the attached Warrant Shares Exercise Log) at its address for notice set forth herein and
upon payment of the Exercise Price multiplied by the number of Warrant Shares that the Holder intends to purchase hereunder, the
Company shall promptly (but in no event later than three Trading Days after the Date of Exercise (as defined herein)) issue and
deliver to the Holder, a certificate for the Warrant Shares issuable upon such exercise, which, unless otherwise required by the
Placement Agency Agreement, shall be free of restrictive legends. The Company shall, upon request of the Holder and subsequent
to the date on which a registration statement covering the resale of the Warrant Shares has been declared effective by the Securities
and Exchange Commission, use its reasonable best efforts to deliver Warrant Shares hereunder electronically through the Depository
Trust Corporation or another established clearing corporation performing similar functions, if available, provided, that, the Company
may, but will not be required to change its transfer agent if its current transfer agent cannot deliver Warrant Shares electronically
through the Depository Trust Corporation. A “Date of Exercise” means the date on which the Holder shall have
delivered to the Company: (i) the Exercise Notice (with the Warrant Exercise Log attached to it), appropriately completed and duly
signed and (ii) if such Holder is not utilizing the cashless exercise provisions set forth in this Warrant, payment of the Exercise
Price for the number of Warrant Shares so indicated by the Holder to be purchased.
(b) If
by the third Trading Day after a Date of Exercise the Company fails to deliver the required number of Warrant Shares in the manner
required pursuant to Section 5(a), then the Holder will have the right to rescind such exercise.
Placement Agency Agreement (PIPE) |
(c) If
by the third Trading Day after a Date of Exercise the Company fails to deliver the required number of Warrant Shares in the manner
required pursuant to Section 5(a), and if after such third Trading Day and prior to the receipt of such Warrant Shares, the Holder
purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder
of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company
shall (1) pay in cash to the Holder the amount by which (x) the Holder’s total purchase price (including brokerage commissions,
if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of Warrant Shares
that the Company was required to deliver to the Holder in connection with the exercise at issue by (B) the closing bid price of
the Common Stock at the time of the obligation giving rise to such purchase obligation and (2) at the option of the Holder, either
reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored or deliver
to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise
and delivery obligations hereunder. The Holder shall provide the Company written notice indicating the amounts payable to the
Holder in respect of the Buy-In.
(d) The
Company’s obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision
hereof, the recovery of any judgment against any person or any action to enforce the same, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the Holder or any other person of any obligation to the Company
or any violation or alleged violation of law by the Holder or any other person, and irrespective of any other circumstance which
might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely
deliver certificates representing Warrant Shares upon exercise of the Warrant as required pursuant to the terms hereof.
6. Charges,
Taxes and Expenses. Issuance and delivery of Warrant Shares upon exercise of this Warrant shall be made without charge to the
Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the
issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company
shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates
for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability
that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.
7. Replacement
of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange
and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity
(which shall not include a surety bond), if requested. Applicants for a New Warrant under such circumstances shall also comply
with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe.
If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant
to the Company as a condition precedent to the Company’s obligation to issue the New Warrant.
8. Reservation
of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate of its
authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise
of this entire Warrant, free from preemptive rights or any other contingent purchase rights of Persons other than the Holder (taking
into account the adjustments and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable and deliverable
shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly
authorized, issued and fully paid and nonassessable.
Placement Agency Agreement (PIPE) |
9. Certain
Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment
from time to time as set forth in this Section 9.
(a) Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common
Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides
outstanding shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of Common Stock into a
smaller number of shares, then in each such case the Exercise Price shall be adjusted to equal the product obtained by multiplying
the then-current Exercise Price by a fraction of which the numerator shall be the number of shares of Common Stock outstanding
immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately
after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record
date for the determination of shareholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause
(ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination.
(b) Fundamental
Transactions. If, at any time while this Warrant is outstanding there is a Fundamental Transaction, then the Holder shall
have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property
as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior
to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant
(the “Alternate Consideration”). For purposes of any such exercise, the determination of the Exercise Price
shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable
in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among
the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of
this Warrant following such Fundamental Transaction. At the Holder’s option and request, any successor to the Company or
surviving entity in such Fundamental Transaction shall, either (1) issue to the Holder a new warrant substantially in the form
of this Warrant and consistent with the foregoing provisions and evidencing the Holder’s right to purchase the Alternate
Consideration for the aggregate Exercise Price upon exercise thereof, or (2) purchase the Warrant from the Holder for a purchase
price, payable in cash within five Trading Days after such request (or, if later, on the effective date of the Fundamental Transaction),
equal to the Black Scholes value of the remaining unexercised portion of this Warrant on the date of such request. The terms of
any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving
entity to comply with the provisions of this paragraph (b) and insuring that the Warrant (or any such replacement security) will
be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.
Placement Agency Agreement (PIPE) |
(c) Price
Antidilution. If within twelve months from the Original Issue Date the Company shall issue any (i) Common Stock or (ii)
any securities of the Company or the subsidiary that would entitle the holder thereof to acquire at any time Common Stock, including
without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into
or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock (“Common Stock Equivalents”
and collectively “Additional Shares”), entitling any person or entity to acquire shares of Common Stock at an
effective price per share less than the Exercise Price then in effect, except for the Exempt Issuances (as defined in the Purchase
Agreement), the Exercise Price shall be amended to equal the then current Exercise Price x (A + B) ¸
(A + C). For purposes of the foregoing formula, the following
definitions shall apply: (I) “A” means the number of shares of Common Stock outstanding and deemed outstanding immediately
prior to such issue of Additional Shares (treating for this purpose as outstanding all shares of Common Stock issuable upon exercise
of options and convertible securities as outstanding immediately prior to such issue); (II) “B” means the number of
shares of Common Stock that would have been issued if such Additional Shares had been issued at a price per share equal to the
then current Exercise Price (determined by dividing the aggregate consideration received by the Company in respect of such issue
by the then current Exercise Price); and (III) “C” means the number of such Additional Shares issued in such transaction.
The sale of Common
Stock Equivalents shall be deemed to have occurred at the time of the issuance of the Common Stock Equivalents and the purchase
price covered thereby shall also include the actual exercise or conversion price thereof at the time of the issuance, without any
further adjustments to the exercise price upon the conversion or exercise of any Common Stock Equivalents. If shares are issued
for a consideration other than cash, the per share selling price shall be the fair value of such consideration as determined in
good faith by the board of directors of the Company. Notwithstanding anything to the contrary herein, this section shall not apply
to an Exempt Issuance (as defined in the Purchase Agreement).
In the event of
any adjustment under this Section 9(c), the Company shall promptly amend the Registration Statement or file a new Registration
Statement pursuant to the provisions of Section 6 of the Purchase Agreement to register the additional Warrant Shares issuable
upon exercise of this Warrant. In no event shall the number of Warrant Shares increase if such increase shall result in the Purchasers
acquiring, or obtaining the right to acquire, in excess of 19.999% of the outstanding shares of Common Stock or voting power of
the Company on a post-transaction basis that assumes that the closing of the Additional Shares shall have occurred.
(d) Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 9, the number of Warrant
Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate
Exercise Price in effect immediately prior to such adjustment.
(e) Calculations.
All calculations under this Section 9 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable.
The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account
of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.
(f) Notice
of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 9, the Company at its expense will promptly
compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including
a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise
of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon
which such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the
Holder and to the Company’s Transfer Agent.
10. Payment
of Exercise Price. The Holder may pay the Exercise Price in one of the following manners:
(a) Cash
Exercise. The Holder may deliver immediately available funds; or
Placement Agency Agreement (PIPE) |
(b) Cashless
Exercise. If the Company does not have an effective Registration Statement covering the resale of the Registrable
Securities within 180 days after Closing or anytime thereafter, then the Holder may notify the Company in an Exercise Notice
of its election to utilize cashless exercise, in which event the Company shall issue to the Holder the number of Warrant
Shares determined as follows:
X = Y [(A-B)/A]
where:
X = the
number of Warrant Shares to be issued to the Holder.
Y = the
number of Warrant Shares with respect to which this Warrant is being exercised.
A = the average of the Closing
Prices for the five Trading Days immediately prior to (but not including) the Exercise Date.
B = the Exercise Price.
For purposes of Rule 144 promulgated under
the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise transaction
shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced,
on the date this Warrant was originally issued.
11. No
Fractional Shares. No fractional shares of Warrant Shares will be issued in connection with any exercise of this Warrant. In
lieu of any fractional shares which would, otherwise be issuable, the Company may (a) pay cash equal to the product of such fraction
multiplied by the Closing Price of one Warrant Share on the date of exercise; or (b) round up the amount of any fractional share
to the next highest whole number of shares.
12. Notices.
Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise
Notice) shall be in writing and shall be deemed given and effective if provided pursuant to the Placement Agency Agreement. In
case any time: (1) the Company shall declare any cash dividend on its capital stock; (2) the Company shall pay any dividend payable
in stock upon its capital stock or make any distribution to the holders of its capital stock; (3) the Company shall offer for subscription
pro rata to the holders of its capital stock any additional shares of stock of any class or other rights; (4) there shall be any
capital reorganization, or reclassification of the capital stock of the Company, or consolidation or merger of the Company with,
or sale of all or substantially all of its assets to, another corporation; or (5) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company; then, in any one or more of said cases, the Company shall give prompt written notice
to the Holder. Such notice shall also specify the date as of which the holders of capital stock of record shall participate in
such dividend, distribution or subscription rights, or shall be entitled to exchange their capital stock for securities or other
property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding
up, or conversion or redemption, as the case may be. Such written notice shall be given at least 20 days prior to the action in
question and not less than 20 days prior to the record date or the date on which the Company’s transfer books are closed
in respect thereto.
13. Registration
Rights. The Holder shall be entitled to the registration rights set forth in Section 6 of the Purchase Agreement.
Furthermore, the Holder shall be entitled to its pro rata share of any Late Registration/Listing Warrants provided by the Company
to the Purchasers under Section 6 of the Purchase Agreement.
14. Lock
Up. In accordance with FINRA Rule 5110(g), this Warrant shall not be sold during the Offering, or sold, transferred,
assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would
result in the effective economic disposition of this Warrant or the Warrant Shares, by any person for a period of 180 days immediately
following the date of effectiveness or commencement of sales of the Offering, except as provided in paragraph (g)(2) of FINRA Rule
5110.
Placement Agency Agreement (PIPE) |
15. Miscellaneous.
(a) This
Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Subject
to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder
any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing signed
by the Company and the Holder and their successors and assigns.
(b) All
questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law
thereof.
(c) The
headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any
of the provisions hereof.
(d) In
case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability
of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will
attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor,
and upon so agreeing, shall incorporate such substitute provision in this Warrant.
(e) Prior
to exercise of this Warrant, the Holder hereof shall not, by reason of by being a Holder, be entitled to any rights of a shareholder
with respect to the Warrant Shares.
[Remainder of page intentionally left
blank, signature page follows]
Placement Agency Agreement (PIPE) |
In witness whereof, the Company has caused this Warrant to be
duly executed by its authorized officer as of the date first indicated above.
| MONAKER GROUP, INC. |
| |
| By: | |
| Name: Xxxxxxx Xxxxx |
| Title: Chairman and Chief Executive Officer |
Accepted and agreed:
NORTHLAND SECURITIES, INC. | |
| |
By: | | |
Name: | Xxxxx X. Xxxxxxx | |
Its: | Head of Energy Investment Banking | |
Placement Agency Agreement (PIPE) |
EXERCISE
NOTICE
The
undersigned Holder hereby irrevocably elects to purchase ____________shares of Common Stock pursuant to the attached Warrant. Capitalized
terms used herein and not otherwise defined have the respective meanings set forth in the Warrant.
(1)
The undersigned Holder hereby exercises its right to purchase ____________Warrant Shares pursuant to the Warrant.
(2)
The Holder intends that payment of the Exercise Price shall be made as (check one):
_________ “Cash
Exercise” under Section 10
_________ “Cashless Exercise”
under Section 10
(3)
If the holder has elected a Cash Exercise, the holder shall pay the sum of $____________ to the Company in accordance with the
terms of the Warrant.
(4)
The exercise will comply with the beneficial ownership limitation described in Section 4(b) of the Warrant.
(5)
Pursuant to this Exercise Notice, the Company shall deliver to the holder ____________Warrant Shares in accordance with the terms of the Warrant.
Dated | _________________ ___, _______ | | | | Name of Holder: |
| | | | | |
| | | | (Print) | |
| | | | |
| | | | | |
| | | | By: | |
| | | | Its: | |
| | | | (Signature must conform in all respects to name
of holder as specified on the face of the Warrant) |
| |
Placement Agency Agreement (PIPE) | Attachment A |
US.112844345.08
Warrant
Shares Exercise Log
Date | Number
of Warrant
Shares
Available
to
be Exercised
| Number
of Warrant
Shares
Exercised
| Number
of Warrant
Shares
Remaining
to
be Exercised
|
| | | |
| |
Placement Agency Agreement (PIPE) | |
FORM
OF ASSIGNMENT
[To
be completed and signed only upon transfer of Warrant]
FOR
VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto the right represented by the attached Warrant to purchase ____________
shares of Common Stock to which such Warrant relates and appoints ____________ attorney to transfer said right on the books of the Company
with full power of substitution in the premises.
Dated:
__________ __, _______
| | |
| (Signature must conform in all respects to name of holder as specified on the face of the Warrant) | |
| | |
| Address of Transferee | |
| | |
| | |
| | |
| | |
Attest: | | |
| | | | |
| |
Placement Agency Agreement (PIPE) | |
Attachment
B
FORM OF LEGAL OPINION
1. The Company is a
corporation duly organized, validly existing and in good standing under the laws of the State of Nevada.
2. The Company has
all necessary corporate power and authority to (i) execute and deliver, and to perform its obligations under, the Purchase Agreement
and the Agency Agreement and (ii) conduct its business as it is, to our knowledge, currently conducted and described in the Company
SEC Documents and the Private Placement Documents, and own, lease and license its properties and assets.
3. The Company is duly
qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary except where the failure to be so qualified and in good standing
would not result in a Material Adverse Effect.
4. The execution, delivery
and performance by the Company of the Purchase Agreement and the Agency Agreement and the consummation of the transactions contemplated
thereby, including the issuance of the Securities, the Agent Warrants and the Agent Warrant Shares, have been duly authorized by
all necessary corporate action of the Company.
5. The
Purchase Agreement and the Agency Agreement have been duly executed and delivered by the Company and constitute the legal, valid
and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as rights
to indemnity thereunder may be limited by federal or state securities laws and except as such enforceability may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance and similar
laws affecting the rights of creditors generally, in effect from time to time and general
equitable principles.
6. Except for filings,
authorizations or approvals contemplated by the Purchase Agreement and the Agency Agreement, no authorizations or approvals of,
and no filings with, any governmental or administrative agency, regulatory authority, stock market or trading facility are necessary
or required by the Company for the execution and delivery of the Purchase Agreement or the Agency Agreement or the consummation
of the transactions contemplated thereby.
7. Neither
the execution and delivery of the Purchase Agreement or the Agency Agreement by the Company, nor the consummation or performance
by the Company of any of the transactions contemplated thereby (including the issuance of the Securities, the Warrant Shares, the
Agent Warrants and the Agent Warrant Shares) (i) contravene, conflict with or result in a violation of any provisions of the Company’s
articles of incorporation or bylaws; (ii) constitute a violation of Covered Law relevant applicable
to the Company; (iii) violate any judgment, decree, order or award of any court, governmental body or arbitrator specifically naming
the Company which we have knowledge of; or (iv) with or without notice and/or the passage
of time, conflict with or result in the breach or termination of any term or provision of, or constitute a default under, or cause
any acceleration under, or cause the creation of any lien, charge or encumbrance upon the properties or assets of the Company or
its subsidiaries pursuant to, any agreement to which has been filed by the Company as an exhibit to the Company SEC Documents.
Placement Agency Agreement (PIPE) | Attachment B |
8. The authorized capital stock of the Company on the date hereof consists of 500,000,000 shares of Common Stock
and 100,000,000 shares of preferred stock. As of the date hereof, without giving effect to the transactions contemplated by the
Agreement to occur at the Closing, there are issued and outstanding of record: 11,424,047 shares of Common Stock and 1,869,611
shares of preferred stock. We have been advised by the Company that there are issued and outstanding of record warrants and options
to purchase 6,203,867 shares of Common Stock. The form of certificates for the Shares, the Warrant Shares and the Agent Warrant
Shares conforms to the requirements of the Nevada Revised Statutes. The capital stock of the Company substantially
conforms as to legal matters to the description thereof contained in the Company SEC Documents and the Private Placement Documents.
9. To our knowledge,
except as provided or disclosed in the Private Placement Documents, in the Agency Agreement or in the Company SEC Documents, no
person or entity is entitled to any preemptive, right of first refusal, contractual or similar rights with respect to the issuance
of the Securities, the Agent Warrants or the Agent Warrant Shares.
10. The Securities,
the Agent Warrants and the Agent Warrant Shares have been duly authorized or reserved for issuance by all necessary corporate action
on the part of the Company; and the Shares, when issued, sold and delivered against payment therefor in accordance with the provisions
of the Purchase Agreement, and the Warrant Shares and Agent Warrants Shares, when issued upon exercise of the Warrants and the
Agent Warrants in accordance with the terms thereof, will be duly and validly issued, fully paid and non-assessable.
11. Assuming the accuracy
of the representations and warranties of each of the investors set forth in the Purchase Agreement and of the Company set forth
in Section 3 of the Agency Agreement, the offer, issuance and sale of the Securities at the Closing pursuant to the Purchase Agreement
and the issuance of the Agent Warrants pursuant to the Agency Agreement are, and the issuance of the Warrant Shares and the Agent
Warrant Shares issuable upon exercise of the Warrants and the Agent Warrants will be exempt from the registration requirements
of the Securities Act and the securities or “blue sky” laws of the applicable states in which the subscribers reside.
12. Other
than as disclosed in the Private Placement Documents and the Company SEC Documents, we have no knowledge of
any actions, suits, arbitrations, claims, proceedings or investigations pending or threatened against the Company or its subsidiaries
or any of their respective operations, businesses, properties or assets by or before any court, arbitrator or government or regulatory
commission, board, body, authority or agency that challenges the validity of any actions taken or to be taken by the Company pursuant
to the Purchase Agreement or the Agency Agreement or the transaction contemplated thereby.
13. To our knowledge
and except as set forth in the Private Placement Documents, no holders of the Company’s securities have rights to the registration
of shares of Common Stock or other securities of the Company because of the Private Placement or the issuance of the Securities,
Agent Warrants or the Agent Warrant Shares.
14. The descriptions
in the Private Placement Documents and the Company SEC Documents of statutes, regulations, contracts and other documents (each
to the extent filed as exhibits to the Company SEC Documents) are substantially accurate and fairly present the information required
to be shown and we have been advised that the descriptions in the Private Placement Documents and the Company SEC Documents of
legal and governmental proceedings are substantially accurate and fairly present the information required to be shown; and we are
not aware of any statutes, regulations, legal or governmental proceedings or contracts or other documents required to be described
in the Private Placement Documents and the Company SEC Documents or included as exhibits to the Company SEC Documents that are
not described or included as required.
15. Nothing has come to our attention
that has caused us to be aware that any of the Private Placement Documents or Company SEC Documents contained an untrue statement
of a material fact or omitted to state a material fact necessary to make the statements therein, in light of the circumstances
in which they were made, not misleading. We do not express any belief as to the financial statements and related notes, financial
statement schedules or financial or accounting data and information contained in or omitted from the Private Placement Documents
or the Company SEC Documents.
Placement Agency Agreement (PIPE) | Attachment B |