Comprehensive Placement Agent Agreement

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Comprehensive Placement Agreement between a company and agent who will act as exclusive agent to facilitate the offering and sale of preferred stock. This agreement includes warranties of both parties and how much agent will be paid.

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This Comprehensive Placement Agent Agreement is between a company and a placement agent who will act as its exclusive agent to facilitate the offering and sale of preferred stock. This agreement contains a grant of option and agreement to sell provision, procedures for purchase of stock through the placement agent and how subscription proceeds will be delivered to the company. It also contains detailed and specific warranties of both the company and the agent, effective date and termination of agreement procedures and fees and expenses the company will pay to the placement agent.

This Comprehensive Placement Agent Agreement includes the following:
  • Parties: Specifies the name of the company and the placement agent;
  • Private Placement Memorandum: Sets out the date of this agreement which describes the business and other affairs of the company;
  • Appointment of Agent: Appoints placement agent as the exclusive agent to facilitate the offering of sale of the company's preferred stock and that agent may discharge its responsibilities to broker-dealers who execute a Select Dealers Agreement with the company;
  • Fees to Agent: Specifies the amount of any retainer as partial compensation for services and any commissions payable;
  • Effective Date/Termination: Agreement is effective upon execution and that agent has the right to terminate the agreement upon giving written notice prior to its termination date, without liability to the placement agent;
  • Representations/Warranties: Company's representations and warranties including no adverse regulatory orders, disclosures, capitalization and validity of the shares;
  • Conditions to Agent's Obligations: Sets out that agent's obligations are conditioned upon the accuracy of the company's representations and warranties;
  • Signatures: A company representative must sign the agreement and the placement agent must "agree and accept" all provisions of the agreement by signing same.

Protect your rights and your company by using our attorney-prepared forms.

This attorney-prepared packet contains:
  1. General Information
  2. Instructions and Checklist
  3. Comprehensive Placement Agent Agreement
State Law Compliance: This form complies with the laws of all states
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.
 
 
Comprehensive Placement
Agent Agreement

 

Background
 
______, a[n] ______ [entity of company] (the "Company"), proposes to offer and sell to certain investors described herein and in the Private Placement Memorandum (as defined by this agreement), upon the terms and conditions stated herein, a minimum of ______ shares and up to a maximum of ______ shares (the "Firm Shares") of the Company's Series A Convertible Redeemable Preferred Stock (the "Preferred Stock").  A minimum investment in the Preferred Stock will consist of ______ shares of such stock, subject to the Company's right, in its sole discretion, to sell less than ______ shares to any investor.  In addition, to cover oversubscriptions in connection with the sale of the Firm Shares, the Company proposes to grant to ______, a[n] ______ [corporation/LLC/GP/LP/other] ("Placement Agent"), an option to offer for sale up to ______ additional shares of the Preferred Stock (the "Option Shares").  The Preferred Stock, which is convertible into shares of the Company's $______ par value common stock (the "Common Stock"), and the offering are more fully described in the Private Placement Memorandum.  The Company hereby confirms its agreement ("Agreement") with Placement Agent under which Placement Agent will act as the exclusive agent for the Company to facilitate the offering and sale of the Preferred Stock on a "best efforts" basis.
 
1.   Private Placement Memorandum
 
The Company has caused a Confidential Private Placement Memorandum dated ______, including all exhibits thereto, to be prepared, describing the business and affairs of the Company (all of which, together with the separate subscription documents and any amendments or other supplements to the Private Placement Memorandum which have been or which may hereafter from time to time be prepared, are referred to herein as the "Private Placement Memorandum").
 
2.   Appointment as Agent, Grant of Option and Agreement To Sell
 
(a)   The Company hereby appoints Placement Agent as its exclusive agent to facilitate the offering and sale of the Preferred Stock for the account and risk of the Company at the price and upon the terms and conditions set forth in the Private Placement Memorandum, and Placement Agent hereby accepts such appointment and agrees to use its best efforts, as agent, to obtain purchasers for the Preferred Stock who are "accredited investors" as that term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the "1933 Act"), all of whom are acceptable to the Company during the period commencing as of the date hereof and ending on the Termination Date (as defined in this agreement).
(b)   The Company hereby grants to Placement Agent an option to effect the offer for sale, solely for the purpose of covering oversubscriptions in the sale of the Firm Shares, of all or any portion of the Option Shares for a period commencing as of the date hereof and ending on the Termination Date (as defined in this agreement).  This option may be exercised during the term thereof by written notice to the Company from Placement Agent.  Such notice shall set forth the number of Option Shares as to which the option is being exercised.
 
(c)   Placement Agent may discharge its responsibilities under this Agreement by the use of selected brokerdealers who are members of the National Association of Securities Dealers ("NASD") (collectively, the "Selected Dealers "); provided, however, that any such Selected Dealer shall execute a Selected Dealers Agreement, which includes representations to Placement Agent that such Selected Dealers will conduct the offering in the manner set forth in, and in accordance with the terms of, this Agreement, including the agreements and representations contained in Section 12 of this Agreement, and agreements that such Selected Dealers will be bound by all of the provisions of this Agreement, including the indemnification provisions contained in Section 13 of this Agreement.
 
3.   Procedure for Purchases
 
(a)   Each person desiring to purchase Preferred Stock will be required, on or before the Termination Date, to execute and deliver to Placement Agent a subscription agreement, purchaser questionnaire, registration rights agreement and, if required, a purchaser representative's questionnaire (collectively, the "Subscription Agreement"), the forms of which are contained in the Private Placement Memorandum.
 
(b)   Placement Agent shall promptly deliver the subscription proceeds delivered with each Subscription Agreement following their receipt to ______ (the "Escrow Agent") for deposit in an account designated "______ Escrow," pursuant to an escrow established by the Company with the Escrow Agent.  Prior to the Initial Closing (as defined in this agreement) and any Subsequent Closing (as defined in this agreement), the proceeds in such account may be temporarily invested in money market accounts, federallyinsured bank certificates of deposit, shortterm United States government obligations, time and demand deposits or other types of permitted shortterm, highly liquid investments.  The income earned, if any, from such investments will be paid to the subscribers from the date of availability of the funds to the Escrow Agent to the date of acceptance or rejection of their respective subscriptions, as the case may be.  Should the Company determine to reject the tender of a subscription on or prior to the Termination Date, it shall notify Placement Agent immediately and shall return the Subscription Agreement promptly to the prospective purchaser and cause the Escrow Agent to return any funds of such prospective purchaser deposited with the Escrow Agent, with any interest earned thereon.
 
4.   Fees to Placement Agent
 
(a)   Placement Agent hereby acknowledges receipt from the Company of a nonrefundable retainer of $______ as partial compensation for services rendered and expenses incurred by Placement Agent in the offering and sale of the Preferred Stock.  The retainer fee shall be credited against fees payable to Placement Agent pursuant to Section 4(b) of this Agreement and against expenses reimbursable to Placement Agent pursuant to Section 5 of this Agreement.
 
(b)   As partial compensation for services rendered by Placement Agent and any Selected Dealers in facilitating the offer and sale of the Preferred Stock, the Company shall pay to Placement Agent a commission equal to ______% of the gross proceeds of the offering of the Preferred Stock as described in the Private Placement Memorandum.  The Company shall have no obligation or liability to pay any commission to the Selected Dealers for their services other than the commission payable to Placement Agent under this Section 4(b) which shall be disbursed to the Selected Dealers by Placement Agent.
 
5.   Expenses
 
(a)   The Company agrees with Placement Agent that, whether or not the transactions contemplated by this Agreement are consummated, the Company will pay or cause to be paid all fees and expenses incident to the performance of its obligations hereunder, including without limitation (1) costs and expenses of participating in the preparation and delivery (including delivery to the Selected Dealers) of the Private Placement Memorandum, including all drafts thereof and all amendments or supplements and exhibits thereto, (2) fees and expenses of accountants and counsel for the Company, (3) costs and expenses, including all filing fees and fees and expenses of counsel to Placement Agent, incurred in connection with (A) qualifying for the exemption from registration of the Preferred Stock provided in Rule 506 of Regulation D promulgated under the 1933 Act and any other applicable exemption from registration, and (B) the registration or qualification of the Preferred Stock for offering and sale under the securities, Blue Sky or similar laws of the jurisdictions designated by Placement Agent pursuant to Section 10(c) hereof, or qualifying for an exemption from such registration or qualification, (4) all travel, lodging and other expenses incurred by the Company in connection with meetings attended by the Company and/or Placement Agent in marketing the Preferred Stock, and all expenses incurred for selling materials used in connection therewith, (5) all costs and charges of the Company's transfer agent, Escrow Agent and registrar (if necessary under Delaware law) and the cost of preparing the certificates for the Preferred Stock, and (6) any stock transfer taxes payable upon transfer of the Preferred Stock.
 
(b)   In addition to the foregoing, the Company will reimburse Placement Agent for all travel and other reasonable outofpocket expenses (including fees and disbursements of counsel) incurred by Placement Agent in connection with investigating, preparing to market and marketing the Preferred Stock and in performance of their obligations hereunder, up to a maximum amount of $______.
 
6.   Warrants to Placement Agent
 
As partial compensation for services rendered by Placement Agent in the offering and sale of the Preferred Stock, the Company shall sell to Placement Agent warrants (the "Placement Agent Warrants"), for a purchase price of $______ per Placement Agent Warrant, to purchase the number of shares of Common Stock equal to ______% of the number of shares of Common Stock into which the Preferred Stock sold in the offering contemplated by this Agreement is convertible.  The Placement Agent Warrants will be exercisable at the conversion price of the Preferred Stock during the period commencing on the date of the Initial Closing and terminating on the date which is five years after the last Closing (as defined in this agreement) to occur, and shall be substantially in the form attached to this agreement as Exhibit ______.
 
7.   Effectiveness; Termination
 
(a)   This Agreement shall become effective upon its execution as of the date first above written.
 
(b)   The offering of the Preferred Stock shall terminate upon the earlier of (the "Termination Date"):
 
(1)   the last Closing (as defined in this agreement) to occur; or
 
(2)   ______, unless extended by written agreement between the Company and Placement Agent to no later than ______.
 
(c)   In the event that subscriptions for at least ______ shares of the Preferred Stock shall not have been accepted by the Company prior to the Termination Date, all subscriptions shall be canceled and all Subscription Agreements and the funds then held by the Escrow Agent on account of such Subscription Agreements shall be returned, with interest, to the appropriate prospective purchasers.
 
(d)   Placement Agent shall have the right to terminate this Agreement by giving notice to the Company at any time at or prior to the Termination Date (but, if after the date of the Initial Closing or any Subsequent Closing, only with respect to subscriptions not yet accepted by the Company and paid for):
 
(1)   if the Company shall have failed to satisfy any condition set forth in Section 11 of this Agreement;
 
(2)   if the Company shall have failed, refused or been unable to perform any obligation on its part to be performed hereunder;
 
(3)   if the Company shall have sustained a loss by strike, fire, flood, accident or other calamity of such a character as to interfere materially with the conduct of the business, operations or financial condition of the Company, regardless of whether or not such loss shall have been insured, or the Company, or any of the Company's properties, including without limitation its patents and patent applications, shall have become a party to or the subject of material litigation, or there shall have been, since the respective dates as of which information is given in the Private Placement Memorandum, any material adverse change in the general affairs, business, key personnel, capitalization, financial position or net worth of the Company or in the testing, Food and Drug Administration ("FDA") product license application process, competitive position or patent protection of or with respect to any of the Company's products, whether or not arising in the ordinary course of business, which, in Placement Agent's sole judgment, makes it inadvisable to offer or sell the Preferred Stock; or
 
(4)   if there shall have been such change in the condition or prospects of the Company or the general conditions of the securities markets which, in Placement Agent's sole judgment, makes it inadvisable to offer or sell the Preferred Stock.
 
(e)   Placement Agent and the Company may agree in writing to terminate this Agreement at any time prior to the Termination Date (but, if after the date of the Initial Closing or any Subsequent Closing, only with respect to subscriptions not yet accepted by the Company and paid for);
 
(f)   If Placement Agent or Placement Agent and the Company shall terminate this Agreement pursuant to Section 7(c), 7(d) or 7(e) above, such termination shall be without liability of Placement Agent to the Company except to the extent of returning funds and Subscription Agreements in Placement Agent's possession, if any, to the appropriate prospective purchasers and except as provided in Section 13 of this Agreement, and without liability of the Company to Placement Agent except as provided in Sections 4 (with respect to the retainer and fees already earned), 5 and 13 of this Agreement.
 
8.   Closing
 
Upon the receipt and acceptance by the Company of subscriptions for at least ______ shares of the Preferred Stock, a closing (the "Initial Closing") shall be scheduled to be held no later than 10 days after such acceptance at the offices of Placement Agent.  After the Initial Closing and prior to the Termination Date, the Company may continue to accept subscriptions for the Preferred Stock, for up to an aggregate of ______ shares thereof (or, if Placement Agent exercises its option granted in Section 2 of this Agreement, up to an aggregate of ______ shares thereof) and additional closings shall be scheduled therefor at the offices of Placement Agent (each, a "Subsequent Closing").  (The term "Closing" shall be used in this agreement to refer to the Initial Closing or any Subsequent Closing.)  In no event shall any Closing be held after the Termination Date.  At each Closing, the Company shall duly acknowledge its acceptance of the Subscription Agreements it has accepted and shall issue certificates representing shares of the Preferred Stock, and Placement Agent and the Company shall cause the Escrow Agent to deliver to the Company the funds for accepted subscriptions.  Any accrued interest on funds held by the Escrow Agent for accepted subscriptions shall be paid to the respective subscribers.
 
9.   Representations and Warranties of Company
 
The Company hereby represents and warrants to Placement Agent that:
 
9.1   No Adverse Regulatory Orders
 
Neither the Securities and Exchange Commission (the "Commission") nor any state securities agency or bureau has issued an order revoking any exemption of the offering from registration or qualification under the 1933 Act, or under any securities, Blue Sky or similar laws, or an order preventing or suspending the offering or the use of the Private Placement Memorandum, or of any part thereof, in connection with the sale of the Preferred Stock.
 
 
9.2   Disclosures
 
The Company and the Private Placement Memorandum have, as of the date of the Private Placement Memorandum, fully satisfied, and at the date of each Closing each will satisfy, all applicable requirements of the 1933 Act, the securities, Blue Sky or similar laws of each jurisdiction which Placement Agent has designated pursuant to Section 10(c) of this Agreement, and all applicable rules and regulations adopted under any of the foregoing, including without limitation the conditions and provisions of Regulation D promulgated under the 1933 Act, including, without limitation, those set forth in Rule 502 thereunder.  The Private Placement Memorandum, as of its date, did not contain, and at the date of the each Closing will not contain, any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were or will be made; provided, however, that the representations and warranties in this Section 9.2 shall not apply to statements in or omissions from the Private Placement Memorandum made in reliance upon and in conformity with information furnished to the Company in writing by Placement Agent specifically for use in the Private Placement Memorandum.
 
9.3   Organization and Standing; Licenses and Legal Rights
 
Each of the Company and its subsidiary, ______, a[n] ______ [corporation/LLC/GP/LP/other2] (the "Subsidiary"), has been duly organized and is validly existing as a [corporation/LLC/GP/LP/other2] in good standing under the laws of its respective jurisdiction, with full power and authority (corporate and other) to own, lease and operate its respective properties and conduct its respective business as described in the Private Placement Memorandum, and is duly qualified as a foreign [corporation/LLC/GP/LP/other2] and is in good standing in each jurisdiction in which the character of the business conducted by it or the location of the properties owned or leased by it requires such qualification.  Except as may be otherwise stated in the Private Placement Memorandum, each of the Company and the Subsidiary holds all material licenses, certificates, permits and similar authorities from state, federal and other regulatory authorities necessary for the conduct of its business as described in the Private Placement Memorandum and is in compliance with such licenses, certificates, permits and similar authorities, and each of the Company and the Subsidiary owns or possesses adequate rights to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights and licenses described in the Private Placement Memorandum as being owned by it or necessary for the conduct of its business as described therein and has not received any notice of conflict with the asserted rights of others in respect thereof.
 
9.4   Capitalization
 
The authorized, issued and outstanding capital stock of the Company as of ______, is as set forth in the Private Placement Memorandum under the caption "Capitalization".  The Company has all requisite power and authority to issue, sell and deliver the Common Stock into which the Preferred Stock is convertible, the Placement Agent Warrant and the Common Stock into which the Placement Agent Warrant is exercisable and, upon filing of a Certificate of Designation, Rights and Privileges for the Preferred Stock (the "Certificate of Designation") which is substantially in the form attached as Exhibit ______ to the Private Placement Memorandum, with the Secretary of State of the State of ______, the Preferred Stock in accordance with and upon the terms and conditions set forth in this Agreement and in the Private Placement Memorandum; the outstanding shares of Common Stock of the Company have been duly authorized and are validly issued, fully paid and nonassessable, with no personal liability attaching to the ownership thereof; and the outstanding Common Stock warrants of the Company have been duly authorized and are validly issued.  The capital stock of the Company conforms to the description thereof contained under the caption Description of Other Securities" in the Private Placement Memorandum.  Upon filing of the Certificate of Designation with the Secretary of State of the State of ______, the Preferred Stock of the Company will conform to the description thereof contained under the caption "Description of Preferred Stock" in the Private Placement Memorandum.
 
9.5   Validity of Shares
 
The Common Stock into which the Preferred Stock is convertible, the Placement Agent Warrant and the Common Stock into which the Placement Agent Warrant is exercisable have been and upon filing of the Certificate of Designation with the Secretary of State of the State of ______, the Preferred Stock will be duly authorized and upon issuance and delivery and payment therefor in the manner described in this Agreement and in the Private Placement Memorandum will be validly issued, fully paid and nonassessable, with no personal liability attaching to the ownership thereof, and will conform to the description thereof contained in the Private Placement Memorandum.  No further corporate approval or authority on behalf of the shareholders or the board of directors of the Company will be required for the issuance and sale of the Preferred Stock, the issuance of the Common Stock into which the Preferred Stock is convertible, the issuance and sale of the Placement Agent Warrant or the issuance and sale of the Common Stock into which the Placement Agent Warrant is exercisable.
 
9.6   Charter Documents; Conflicts; and Regulatory Approvals
 
Neither the Company nor the Subsidiary is in violation of its certificate of incorporation, bylaws or other charter or governing documents.  Except as described in the Private Placement Memorandum, neither the Company nor the Subsidiary is in default, nor with the giving of notice or lapse of time or both would it be in default, in the performance or observance of any material obligation, agreement, covenant or condition contained in any bond, debenture, note or other evidence of indebtedness or in any lease, material contract, indenture, mortgage, loan agreement, joint venture, license agreement or other agreement or instrument to which the Company or the Subsidiary is a party or by which it or any of its properties is bound.  The performance of this Agreement and the consummation of the transactions herein contemplated and in the Placement Agent Warrant will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, (1) any indenture, mortgage, deed of trust, loan agreement, bond, debenture, note or other evidence of indebtedness, lease, contract, license agreement or other agreement or instrument to which the Company is a party or by which the Company or any of its properties is bound, or (2) the Company's certificate of incorporation, as amended by the Certificate of Designation, bylaws or other charter or governing documents, or (3) any law, order, rule, regulation, writ, injunction or decree applicable to the Company of any court or governmental agency or body having jurisdiction over the Company or over any of its properties, or result in the creation or imposition of any lien, charge, claim or encumbrance upon any property or asset of the Company.  Except as required by the 1933 Act, and applicable securities, Blue Sky and other similar laws, and the filing of the Certificate of Designation with the Secretary of State of the State of ______, no consent, approval, authorization or order of any court or governmental agency or body is required in connection with the performance of this Agreement and the consummation by the Company of the transactions herein contemplated.
 
9.7   Compliance With Laws
 
Except as may otherwise be stated in the Private Placement Memorandum, neither the Company nor the Subsidiary is in violation of any law, order, rule, regulation, writ, injunction or decree of any government, governmental instrumentality or court, domestic or foreign, nor has it failed to obtain any license, permit, franchise or other governmental authorization necessary to the ownership of its properties or to the conduct of its business, where such default or violation or failure to obtain is likely to have any material adverse effect on the condition (financial or otherwise), properties, prospective results of operations or net worth of the Company or the Subsidiary.
 
9.8   Authorization
 
The Company has full right, power and authority to enter into this Agreement and to issue the Placement Agent Warrant, and this Agreement and the Placement Agent Warrant have been duly authorized, executed and delivered by the Company and constitute the valid and binding agreements of the Company enforceable in accordance with their terms.
 
9.9   Litigation
 
Except as described in the Private Placement Memorandum, there is no pending, or to the knowledge of the Company, threatened or contemplated, action, suit, proceeding or investigation to which the Company or the Subsidiary is a party or of which the Designated Product (or the patents and patent applications relating thereto) is a subject before any court, governmental agency or body or arbitrator, which might result in any material adverse change in the condition (financial or otherwise), business prospects, net worth or results of operations of the Company or the Subsidiary or which might prevent consummation of the transactions contemplated herein.
 
9.10   Financial Statements
 
The audited financial statements and the related notes and schedules included or incorporated by reference in the Private Placement Memorandum, present fairly the financial position, results of operations, shareholders' equity and changes in financial position of the Company as of the dates and for the periods to which they relate and have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods involved.  The interim unaudited financial statements included or incorporated in the Private Placement Memorandum reflect all adjustments necessary for a fair presentation of the operating results for the interim period presented.
 
 
 
9.11   Absence of Changes
 
Subsequent to the respective dates as of which information is given in the Private Placement Memorandum, and except as may be otherwise stated in the Private Placement Memorandum, there has not been (1) any material adverse change in the financial position, net worth, business, key personnel, properties or results of operations of the Company or the Subsidiary, or any change or any development involving a prospective change which might have a material adverse effect on such matters, (2) any transaction which is material to the Company or the Subsidiary entered into by it, except transactions in the ordinary course of business, (3) any obligation, material to the Company or the Subsidiary, direct or contingent, incurred by any of them, except obligations incurred in the ordinary course of business, (4) any material change in the capital stock of the Company or the Subsidiary, or any material increase in the shortterm debt or any increase in the longterm debt of the Company or the Subsidiary, (5) any dividend or distribution of any kind declared, paid or made on the Company's capital stock, or (6) any issuance by the Company of any securities, options, warrants, convertible securities or other rights to purchase the capital stock of the Company or the Subsidiary.
 
9.12   Title to Assets and Properties
 
Except as described in the Private Placement Memorandum, each of the Company and the Subsidiary has good and marketable title or license rights to its respective properties and assets, including without limitation all patents and patent applications, described in the Private Placement Memorandum as owned by it free and clear of all liens, charges, encumbrances or restrictions other than such as are not materially significant or important in relation to the respective business of the Company or the Subsidiary, and each of the Company and the Subsidiary has valid and enforceable leases to the real and/or personal properties described in the Private Placement Memorandum as leased by them.
 
9.13   Tax Matters
 
Each of the Company and the Subsidiary has filed all necessary tax returns and has paid all taxes shown thereon as due, and neither the Company nor the Subsidiary has any knowledge of any tax deficiency which has been or might be asserted against it which would materially and adversely affect the business, operation or financial condition of the Company or the Subsidiary, and all tax liabilities are adequately provided for on the books of the Company and the Subsidiary.
 
9.14   Insurance
 
Except as described in the Private Placement Memorandum, each of the Company and the Subsidiary maintains insurance of the types and in amounts which it deems adequate for its business and consistent with insurance coverage maintained by similar companies and businesses, including without limitation adequate product liability insurance, all of which insurance is in full force and effect.
 
 
 
9.15   Subsidiaries
 
Except for the Subsidiary, the Company owns no shares or other interest in any corporation, partnership, joint venture or other entity.  The Company owns of record all the issued and outstanding shares of capital stock of the Subsidiary and, except for the right of the company to acquire ______ shares of the Subsidiary's common stock, there are no outstanding rights, options or warrants to purchase any shares of the capital stock of the Subsidiary; and the outstanding shares of capital stock of the Subsidiary have been duly authorized and validly issued, are fully paid and nonassessable and are owned by the Company free and clear of any mortgage, pledge, claim, lien, security interest, encumbrance, option, warrant, voting trust or similar arrangement of any kind.
 
10.   Covenants and Further Agreements of Company
 
The Company covenants and agrees with Placement Agent that:
 
(a)   The Company will promptly prepare and furnish to Placement Agent any amendments or supplements to the Private Placement Memorandum which, in the opinion of Placement Agent or its counsel, may be necessary or advisable in connection with the offering and sale of the Preferred Stock by Placement Agent and as may be necessary for compliance with the requirements of the 1933 Act, any applicable securities, Blue Sky or similar laws or the applicable rules and regulations adopted under any of the foregoing, including without limitation the provisions of Regulation D promulgated under the 1933 Act, it will promptly prepare and furnish to Placement Agent any amendments or supplements to the Private Placement Memorandum which may be necessary to correct any misstatements or omissions, if, at any time prior to the Termination Date, any event shall have occurred as a result of which the Private Placement Memorandum would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading; and it will submit any amendments or supplements described in this Section 10(a) to Placement Agent for Placement Agent's approval, which approval shall not be unreasonably withheld.
 
(b)   The Company will notify Placement Agent, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any order by the Commission or any securities agency or bureau revoking the exemption of the offering from registration or qualification under the 1933 Act or under any securities, Blue Sky or similar laws or any order preventing or suspending the offering or the use of the Private Placement Memorandum, or any part thereof, in connection with the sale of the Preferred Stock, or of the initiation or threat of any proceeding for those purposes, and it will promptly use its best efforts to prevent the issuance of any such order, and, should such an order be issued, to obtain its withdrawal at the earliest possible moment.
 
(c)   The Company will use its best efforts to obtain appropriate exemptions from registration or qualification of the offering and sale of the Preferred Stock under the securities, Blue Sky or similar laws of any jurisdiction designated by Placement Agent, and to continue such exemptions in effect for as long as may be required for purposes of the distribution of the Preferred Stock, except that the Company shall not be required in connection therewith or as a condition thereof to execute a general consent to service of process in any jurisdiction or subject itself to taxation as doing business in any jurisdiction in which it is not now qualified.  In each state in which the Preferred Stock shall have been registered or qualified (or exempted) as above provided, the Company will make and file such statements and reports in each year as are or may be reasonably required by the laws of such state.
 
(d)   The Company will furnish to Placement Agent, as soon as available, copies of the Private Placement Memorandum, including any amendments or supplements thereto, in such quantities as Placement Agent may from time to time reasonably request.
 
(e)   The Company will not offer, sell or issue any Preferred Stock other than in connection with the offering contemplated by this Agreement and described in the Private Placement Memorandum.
 
(f)   Subject to the Company's normal confidentiality policies and practices, the Company will make its employees reasonably available for consultation with prospective purchasers of the Preferred Stock and their advisers and will answer all reasonable questions relating to the offering and the Company put to the employees by such persons and make copies of all material documents relating to the Company available to such persons for their inspection and analysis.  Nothing contained in this Agreement shall obligate Placement Agent, on behalf of the Company, to enforce such policies and practices.
 
(g)   The Company will use all reasonable efforts to insure that the persons designated as "Directors and Executive Officers" under the caption "Management" in the Private Placement Memorandum remain in such positions in the company until [spelled number of days] (______) days after the Termination Date.
 
(h)   The Company will, at all times through the Termination Date, use its best efforts to cause the conditions precedent to the obligations of Placement Agent set forth in Section 11 of this Agreement to occur.
 
(i)   The Company shall not make any press release or other public announcement without submitting such release or announcement to Placement Agent prior to making the release or announcement for its approval which shall not be unreasonably withheld.
 
(j)   The Company shall file with the Secretary of State of the State of ______ the Certificate of Designation at the time of or prior to the Initial Closing.
 
11.   Conditions to Placement Agent's Obligations
 
Placement Agent's obligations hereunder are conditioned upon the accuracy of the Company's representations and warranties contained herein as of the date of this Agreement and the time of each Closing (as if made on and as of each such Closing), the accuracy of the statements of the Company made pursuant to the provisions hereof, the performance by the Company of all of its covenants, agreements and obligations hereunder at or prior to each such Closing, and the following additional conditions:
 
(a)   At the time of each Closing, (1) no order denying or challenging any exemption of the offering from registration or qualification under the 1933 Act or any securities, Blue Sky or similar laws shall be in effect and no proceedings to that effect shall be pending before or threatened by the Commission or any state securities agency or bureau, and (2) no proceedings relating to the offering shall be pending before or threatened by the Commission or any state securities agency or bureau.
 
(b)   Placement Agent shall not have advised the Company that the Private Placement Memorandum contains an untrue statement of fact which, in Placement Agent's opinion, is material or omits to state a fact which, in Placement Agent's opinion, is material and is required to be stated therein or is necessary to make the statements therein not misleading.
 
(c)   On the date of each Closing, Placement Agent shall have received an opinion of ______, counsel for the Company, dated as of such date, substantially in the form attached hereto as Exhibit ______.
 
(d)   At the time of the execution of this Agreement, Placement Agent shall have received from ______ a letter dated as of the date of this Agreement, in form and substance satisfactory to Placement Agent and its counsel.
 
(e)   At the date of each Closing, Placement Agent shall have received from ______ a letter, dated as of such date, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (d) of this Section 11.  In the event such letters set forth any changes with respect to the financial information and other matters covered by previous letters, it shall be a further condition to Placement Agent's obligations that Placement Agent, in its sole discretion, shall have determined after discussions with officers of the Company responsible for financial and accounting matters and with ______, that such changes do not reflect a material adverse change in the financial condition or operations of the Company.
 
(f)   On the date of each Closing, Placement Agent shall have received a certificate, dated as of such date, signed by each of the chief executive officer and the chief financial officer of the Company, to the effect that:
 
(1)   The representations and warranties of the Company in this Agreement are true and correct as if made at and as of such Closing; and the Company has complied with all the obligations and satisfied all the conditions to be performed and satisfied on its part at or prior to such Closing;
 
(2)   All consents, approvals, authorizations or orders of any court, governmental agency or body required to be obtained in connection with the consummation of the transactions contemplated by this Agreement have been obtained;
 
(3)   At all times from the date of the Private Placement Memorandum to the date of delivery of such certificate, the Private Placement Memorandum contained all statements and information required to be included therein and did not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and, since the date of the Private Placement Memorandum, there has occurred no event required to be set forth in an amendment or supplement to the Private Placement Memorandum which has not been so set forth;
 
(4)   Subsequent to the respective dates as of which information is given in the Private Placement Memorandum, and except as contemplated thereby, the Company has not incurred any direct or contingent liabilities or obligations material to its business, operation or financial condition; the Company has not entered into any transactions not in the ordinary course of business material to its business, operation or financial condition; there has not been any material change in the Company's capital stock or outstanding indebtedness of the Company; there has not been any material adverse change in the business, operation or financial condition of the Company; and
 
(5)   Subsequent to the respective dates as of which information is given in the Private Placement Memorandum, the Company has not sustained any material loss of or damage to its properties, including without limitation its patents and patent applications, whether or not insured, which loss or damage is material to its business, operation or financial condition.
 
(g)   At the date of each Closing, Placement Agent shall have received a certificate, dated as of such date, signed by the secretary of the Company, to the effect that:
 
(1)   There has been no amendment to the certificate of incorporation of the Company since a specified date, the certificate of incorporation is in full force and effect and no action has been taken for the purpose of amending the certificate of incorporation;
 
(2)   The bylaws of the Company attached thereto as an exhibit were duly adopted, have not been amended and are in full force and effect, and no action has been taken for the purpose of amending the bylaws; and
 
(3)   Attached thereto as an exhibit is a full, true and correct copy of resolutions duly passed and adopted by the board of directors of the Company at meetings thereof authorizing the preparation and delivery of the Private Placement Memorandum, the sale of the Preferred Stock and the execution and delivery of the Agreement and other actions with regard thereto, which resolutions have not been amended, altered or repealed and are in full force and effect.
 
(h)   At the date of each Closing, there shall not have occurred any material adverse change, or any development involving a prospective material adverse change, in the general affairs, business, key personnel, capitalization, financial position or net worth of the Company or the Subsidiary, which, in the sole judgment of Placement Agent, materially impairs the investment quality of the Preferred Stock delivered at such Closing.
 
(i)   The Company shall have furnished to Placement Agent such further certificates and documents as Placement Agent or its counsel shall reasonably request.
 
The Company will furnish Placement Agent with such number of conformed copies of such opinions, certificates, letters and documents as Placement Agent shall request.  Any certificate signed by an officer of the Company and delivered to Placement Agent or to its counsel pursuant hereto shall be deemed to be a representation and warranty of the Company, as well as of such officer, to Placement Agent as to the statements made therein.
 
If any of the conditions specified in this Section 11 shall not have been fulfilled when and as required by this Agreement, or if any of the certificates, opinions, written statements or letters furnished to Placement Agent or to its counsel pursuant to this Section 11 shall not be in all material respects reasonably satisfactory in form and substance to Placement Agent and its counsel, this Agreement and all obligations of Placement Agent hereunder may be canceled at, or any time prior to, the date of any Closing by Placement Agent pursuant to Section 7(d)(1) of this Agreement.
 
12.   Offering and Sale of Securities by Placement Agent
 
(a)   Placement Agent agrees that it will comply in all material respects with the requirements of Sections 4(2), 12(2) and 17(a) of the 1933 Act (and the provisions of Regulation D promulgated thereunder) applicable to the offering of the Preferred Stock and all applicable securities, Blue Sky or other similar laws in the offering and sale of the Preferred Stock.
 
(b)   Placement Agent hereby represents to the Company that it is registered pursuant to the provisions of the 1934 Act as a brokerdealer and is a member in good standing of the NASD.
 
(c)   Placement Agent hereby represents to the Company that it is duly registered as a brokerdealer under the applicable statutes in each state in which it proposes to offer or sell the Preferred Stock, except such states in which Placement Agent is exempt from such registration or such registration is otherwise not required.  Placement Agent agrees that it will maintain all of the foregoing registrations in good standing through the Termination Date and will comply with all statutes and other requirements applicable to brokerdealers pursuant to those registrations.
 
(d)   Placement Agent agrees that it will facilitate the offering of the Preferred Stock in compliance with the Rules of Fair Practice of the NASD, the requirements of Regulation D under the 1933 Act, and the requirements of the securities, Blue Sky or other similar laws of each jurisdiction in which the Preferred Stock is offered or sold, and in this regard will:
 
(1)   During the course of the offering, with respect to the offering or any matters set forth in or contemplated by the Private Placement Memorandum, not make any untrue statement of a material fact or omit to state a material fact required to be stated or necessary to make any statement made not misleading;
(2)   Not offer, offer for sale or sell the Preferred Stock by means of:
 
(a)   Any advertisement, article, notice or other communication mentioning the Company or the Preferred Stock published in any newspaper, magazine or similar medium or broadcast over television or radio; or
 
(b)   Any seminar or meeting, the attendees of which have been invited by any general solicitation or general advertising;
 
(3)   Refrain from providing any sales materials to any offeree of the Preferred Stock unless such materials are accompanied or were preceded by the Private Placement Memorandum and approved in writing for use in this offering by the Company;
 
(4)   During the course of the offering, provide each offeree with a copy of the Private Placement Memorandum, keep complete and accurate records concerning the distribution of each numbered Private Placement Memorandum delivered to Placement Agent by the Company and not duplicate the Private Placement Memorandum or any sales materials provided by the Company; and
 
(5)   Until the Termination Date, if Placement Agent has been provided with a supplement or amendment to the Private Placement Memorandum pursuant to this Agreement, promptly distribute such supplement or amendment to all persons who previously received a copy of the Private Placement Memorandum from Placement Agent and include such supplement or amendment in all deliveries of the Private Placement Memorandum made after receipt of any such supplement or amendment.
 
(e)   As soon as practicable after the Termination Date, Placement Agent agrees that it will account to the Company for each copy of the Private Placement Memorandum delivered to Placement Agent hereunder and will return to the Company all numbered copies of the Private Placement Memorandum then in Placement Agent's possession or which thereafter come into Placement Agent's possession.
 
13.   Indemnification
 
(a)   The Company will indemnify and hold harmless Placement Agent and each person who controls Placement Agent within the meaning of applicable securities laws against any losses, claims, damages or liabilities, joint or several, to which Placement Agent or such controlling person may become subject, under such laws or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (1) any untrue statement, misstatement or omission or breach of any representation or warranty made by the Company in Section 9 hereof, or (2) any untrue statement or alleged untrue statement of any material fact contained in (A) the Private Placement Memorandum, or (B) any Blue Sky exemption application or other document executed by the Company, or based upon written information furnished by the Company or any person who controls the Company within the meaning of applicable securities laws, filed in any jurisdiction in order to obtain an exemption therefrom from any registration requirements which apply to any or all of the Preferred Stock under the securities laws thereof (any such application, document or information hereinafter a "Blue Sky Exemption Application"), (3) the omission or alleged omission to state in the Private Placement Memorandum or in any Blue Sky Exemption Application any material fact required to be stated therein or necessary to make the statements therein not misleading, or (4) any violation of any securities, Blue Sky or similar laws resulting from any act or omission on the part of the Company or any such person who controls the Company; and will reimburse Placement Agent and each such controlling person for any legal or other expenses reasonably incurred by Placement Agent or such controlling person in connection with investigating or defending against or appearing as a third party witness in connection with any such loss, claim, damage, liability or action; provided, however, that the Company shall not be liable in any such case to the extent, but only to the extent, that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Private Placement Memorandum or in any Blue Sky Exemption Application in reliance upon and in conformity with written information furnished to the Company by Placement Agent specifically for use in the Private Placement Memorandum or in any Blue Sky Exemption Application.  The indemnity provided for in this Section 13(a) will be in addition to any obligation to indemnify Placement Agent or such controlling person which the Company may otherwise have.
 
(b)   Placement Agent will indemnify and hold the Company harmless against any losses, claims, damages or liabilities to which the Company may become subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (1) any untrue statement or alleged untrue statement of any material fact contained in (A) the Private Placement Memorandum, or (B) in any Blue Sky Exemption Application, (2) the omission or the alleged omission to state in the Private Placement Memorandum, or in any Blue Sky Exemption Application, any material fact required to be stated therein or necessary to make the statements therein not misleading, in each case described in clauses (1) and (2) to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by Placement Agent specifically for use in the Private Placement Memorandum or any Blue Sky Exemption Application, or (3) any untrue statement, misstatement or omission or breach of any representation or warranty made by Placement Agent in Section 12 hereof; and will reimburse any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such loss, claim, damage, liability or action.
 
(c)   Promptly after receipt by a party entitled to indemnification under this Section 13 ("Indemnified Party") of notice of the commencement of any action, the Indemnified Party will, if a claim in respect thereof is to be made against a party required to provide indemnification under this Section 13 ("Indemnifying Party"), notify the Indemnifying Party of the commencement thereof within a reasonable time thereafter; the omission so to notify the Indemnifying Party shall relieve it from liability under this Section 13 to the extent of any prejudice, but the omission so to deliver notice to the Indemnifying Party to will not relieve it of any liability that it may have to any Indemnified Party otherwise then under this Section 13.  In case any such action, suit or proceeding is brought against any Indemnified Party, and it notifies the Indemnifying Party of the commencement thereof, the Indemnifying Party will be entitled to participate therein and, to the extent that it may wish to assume such defense, with counsel satisfactory to such Indemnified Party (who shall not, except with the consent of the Indemnified Party, be counsel to the Indemnifying Party), and after notice from the Indemnifying Party to such Indemnified Party of its election so to assume such defense, the Indemnifying Party will not be liable to such Indemnified Party under this Section 13 for any legal or other expenses subsequently incurred by such Indemnified Party in connection with such defense other than reasonable costs of investigation.
 
(d)   If the indemnification provided for in this Section 13 is unavailable or insufficient to hold harmless an Indemnified Party under subsection (a) or (b) above, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (1) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and Placement Agent on the other hand from the offering and sale of the Preferred Stock, or (2) if such allocation is not permitted by applicable law, then the relative fault of the Company on the one hand, and of Placement Agent on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations, shall also be considered.  The relative fault of the Company on the one hand, and Placement Agent on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by Placement Agent and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission.  The Company and Placement Agent agree that it would not be just and equitable if contribution pursuant to this Section 13(d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the first sentence of this Section 13(d).  The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages and liabilities referred to above in this Section 13(d) shall be deemed to include any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending against or appearing as a third party witness in any such action or claim that is subject to the provisions of this Section 13(d). Notwithstanding the provisions of this Section 13(d), neither Placement Agent nor any person who controls Placement Agent shall be required to contribute any amount in excess of the amount by which the total fees and other compensation paid to Placement Agent pursuant to this Agreement exceeds the amount of any damages that Placement Agent and its controlling persons in the aggregate have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
 
Promptly after receipt by any party to this Agreement of notice of the commencement of any action, suit or proceeding, such person will, if a claim for contribution in respect thereof is to be made against another party, notify any party from whom contribution may be sought of such commencement; but the failure so to notify any party shall relieve that party from any obligation it may have for contribution under this Section 13 to the extent of any prejudice, but the failure so to deliver notice will not relieve the contributing party of any liability that it may have to any party otherwise than under this Section 13. Any notice given pursuant to Section 13(a) or 13(b) hereof for purposes of indemnification shall also serve as notice under this Section 13(d).
 
 
14.   Survival of Representations, Warranties and Indemnities
 
All representations and warranties of the Company in Section 9 and of Placement Agent in Section 12(b) and (c) of this Agreement and the indemnity and contribution agreements contained in Section 13 of this Agreement shall remain operative and in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of Placement Agent or any controlling person of Placement Agent, or by or on behalf of the Company or any officer, director, or controlling person of the Company, and shall survive the offering and sale of the Preferred Stock contemplated by this Agreement.
 
15.   Notices
 
All notices and other communications hereunder shall be in writing, and, if sent to Placement Agent, shall be mailed or delivered and confirmed to Placement Agent at ______, or, if sent to the Company, shall be mailed or delivered and confirmed to the Company at the address set forth in the Private Placement Memorandum, or at such other addresses as Placement Agent and the Company shall designate to each other by notice in accordance with this Section 15.
 
16.   Parties
 
This Agreement shall inure to the benefit of and be binding upon Placement Agent, the Company and their respective successors and assigns.  Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person other than the parties hereto and their respective successors and assigns and the controlling persons, officers and directors referred to in Sections 13(a) and 13(b) of this Agreement, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained, this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and their respective successors and assigns and such controlling persons and such officers and directors, and for the benefit of no other person.  No purchaser of any of the Preferred Stock shall be deemed a successor or assign by reason of such purchase.
 
17.   Applicable Law
 
This Agreement shall be governed by, and construed in accordance with, the laws of the State of ______ without giving effect to the principles of conflicts of laws thereof.
 
18.   Entire Agreement
 
This Agreement contains the entire agreement between the Company and Placement Agent with respect to the transactions contemplated hereby and supersedes all negotiations, representations, warranties, commitments, offers, contracts and writings prior to the date hereof, including, but not limited to, the proposal letter dated ______.  No waiver, modification or amendment of any provision of this Agreement shall be effective unless specifically made in writing and duly signed by the parties to be bound thereby.
 
 
19.   Counterparts
 
This Agreement may be signed in several counterparts, each one of which will constitute an original.
 
If the foregoing correctly sets forth the understanding between the Company and Placement Agent, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement between the Company and Placement Agent.
 
Sincerely,
 
[Signature of Company]
 
AGREED AND ACCEPTED:
 
By:     
 
 
Number of Pages23
DimensionsDesigned for Letter Size (8.5" x 11")
EditableYes (.doc, .wpd and .rtf)
UsageUnlimited number of prints
Product number#43628
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.
 
 
Comprehensive Placement
Agent Agreement

 

Background
 
______, a[n] ______ [entity of company] (the "Company"), proposes to offer and sell to certain investors described herein and in the Private Placement Memorandum (as defined by this agreement), upon the terms and conditions stated herein, a minimum of ______ shares and up to a maximum of ______ shares (the "Firm Shares") of the Company's Series A Convertible Redeemable Preferred Stock (the "Preferred Stock").  A minimum investment in the Preferred Stock will consist of ______ shares of such stock, subject to the Company's right, in its sole discretion, to sell less than ______ shares to any investor.  In addition, to cover oversubscriptions in connection with the sale of the Firm Shares, the Company proposes to grant to ______, a[n] ______ [corporation/LLC/GP/LP/other] ("Placement Agent"), an option to offer for sale up to ______ additional shares of the Preferred Stock (the "Option Shares").  The Preferred Stock, which is convertible into shares of the Company's $______ par value common stock (the "Common Stock"), and the offering are more fully described in the Private Placement Memorandum.  The Company hereby confirms its agreement ("Agreement") with Placement Agent under which Placement Agent will act as the exclusive agent for the Company to facilitate the offering and sale of the Preferred Stock on a "best efforts" basis.
 
1.   Private Placement Memorandum
 
The Company has caused a Confidential Private Placement Memorandum dated ______, including all exhibits thereto, to be prepared, describing the business and affairs of the Company (all of which, together with the separate subscription documents and any amendments or other supplements to the Private Placement Memorandum which have been or which may hereafter from time to time be prepared, are referred to herein as the "Private Placement Memorandum").
 
2.   Appointment as Agent, Grant of Option and Agreement To Sell
 
(a)   The Company hereby appoints Placement Agent as its exclusive agent to facilitate the offering and sale of the Preferred Stock for the account and risk of the Company at the price and upon the terms and conditions set forth in the Private Placement Memorandum, and Placement Agent hereby accepts such appointment and agrees to use its best efforts, as agent, to obtain purchasers for the Preferred Stock who are "accredited investors" as that term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the "1933 Act"), all of whom are acceptable to the Company during the period commencing as of the date hereof and ending on the Termination Date (as defined in this agreement).
(b)   The Company hereby grants to Placement Agent an option to effect the offer for sale, solely for the purpose of covering oversubscriptions in the sale of the Firm Shares, of all or any portion of the Option Shares for a period commencing as of the date hereof and ending on the Termination Date (as defined in this agreement).  This option may be exercised during the term thereof by written notice to the Company from Placement Agent.  Such notice shall set forth the number of Option Shares as to which the option is being exercised.
 
(c)   Placement Agent may discharge its responsibilities under this Agreement by the use of selected brokerdealers who are members of the National Association of Securities Dealers ("NASD") (collectively, the "Selected Dealers "); provided, however, that any such Selected Dealer shall execute a Selected Dealers Agreement, which includes representations to Placement Agent that such Selected Dealers will conduct the offering in the manner set forth in, and in accordance with the terms of, this Agreement, including the agreements and representations contained in Section 12 of this Agreement, and agreements that such Selected Dealers will be bound by all of the provisions of this Agreement, including the indemnification provisions contained in Section 13 of this Agreement.
 
3.   Procedure for Purchases
 
(a)   Each person desiring to purchase Preferred Stock will be required, on or before the Termination Date, to execute and deliver to Placement Agent a subscription agreement, purchaser questionnaire, registration rights agreement and, if required, a purchaser representative's questionnaire (collectively, the "Subscription Agreement"), the forms of which are contained in the Private Placement Memorandum.
 
(b)   Placement Agent shall promptly deliver the subscription proceeds delivered with each Subscription Agreement following their receipt to ______ (the "Escrow Agent") for deposit in an account designated "______ Escrow," pursuant to an escrow established by the Company with the Escrow Agent.  Prior to the Initial Closing (as defined in this agreement) and any Subsequent Closing (as defined in this agreement), the proceeds in such account may be temporarily invested in money market accounts, federallyinsured bank certificates of deposit, shortterm United States government obligations, time and demand deposits or other types of permitted shortterm, highly liquid investments.  The income earned, if any, from such investments will be paid to the subscribers from the date of availability of the funds to the Escrow Agent to the date of acceptance or rejection of their respective subscriptions, as the case may be.  Should the Company determine to reject the tender of a subscription on or prior to the Termination Date, it shall notify Placement Agent immediately and shall return the Subscription Agreement promptly to the prospective purchaser and cause the Escrow Agent to return any funds of such prospective purchaser deposited with the Escrow Agent, with any interest earned thereon.
 
4.   Fees to Placement Agent
 
(a)   Placement Agent hereby acknowledges receipt from the Company of a nonrefundable retainer of $______ as partial compensation for services rendered and expenses incurred by Placement Agent in the offering and sale of the Preferred Stock.  The retainer fee shall be credited against fees payable to Placement Agent pursuant to Section 4(b) of this Agreement and against expenses reimbursable to Placement Agent pursuant to Section 5 of this Agreement.
 
(b)   As partial compensation for services rendered by Placement Agent and any Selected Dealers in facilitating the offer and sale of the Preferred Stock, the Company shall pay to Placement Agent a commission equal to ______% of the gross proceeds of the offering of the Preferred Stock as described in the Private Placement Memorandum.  The Company shall have no obligation or liability to pay any commission to the Selected Dealers for their services other than the commission payable to Placement Agent under this Section 4(b) which shall be disbursed to the Selected Dealers by Placement Agent.
 
5.   Expenses
 
(a)   The Company agrees with Placement Agent that, whether or not the transactions contemplated by this Agreement are consummated, the Company will pay or cause to be paid all fees and expenses incident to the performance of its obligations hereunder, including without limitation (1) costs and expenses of participating in the preparation and delivery (including delivery to the Selected Dealers) of the Private Placement Memorandum, including all drafts thereof and all amendments or supplements and exhibits thereto, (2) fees and expenses of accountants and counsel for the Company, (3) costs and expenses, including all filing fees and fees and expenses of counsel to Placement Agent, incurred in connection with (A) qualifying for the exemption from registration of the Preferred Stock provided in Rule 506 of Regulation D promulgated under the 1933 Act and any other applicable exemption from registration, and (B) the registration or qualification of the Preferred Stock for offering and sale under the securities, Blue Sky or similar laws of the jurisdictions designated by Placement Agent pursuant to Section 10(c) hereof, or qualifying for an exemption from such registration or qualification, (4) all travel, lodging and other expenses incurred by the Company in connection with meetings attended by the Company and/or Placement Agent in marketing the Preferred Stock, and all expenses incurred for selling materials used in connection therewith, (5) all costs and charges of the Company's transfer agent, Escrow Agent and registrar (if necessary under Delaware law) and the cost of preparing the certificates for the Preferred Stock, and (6) any stock transfer taxes payable upon transfer of the Preferred Stock.
 
(b)   In addition to the foregoing, the Company will reimburse Placement Agent for all travel and other reasonable outofpocket expenses (including fees and disbursements of counsel) incurred by Placement Agent in connection with investigating, preparing to market and marketing the Preferred Stock and in performance of their obligations hereunder, up to a maximum amount of $______.
 
6.   Warrants to Placement Agent
 
As partial compensation for services rendered by Placement Agent in the offering and sale of the Preferred Stock, the Company shall sell to Placement Agent warrants (the "Placement Agent Warrants"), for a purchase price of $______ per Placement Agent Warrant, to purchase the number of shares of Common Stock equal to ______% of the number of shares of Common Stock into which the Preferred Stock sold in the offering contemplated by this Agreement is convertible.  The Placement Agent Warrants will be exercisable at the conversion price of the Preferred Stock during the period commencing on the date of the Initial Closing and terminating on the date which is five years after the last Closing (as defined in this agreement) to occur, and shall be substantially in the form attached to this agreement as Exhibit ______.
 
7.   Effectiveness; Termination
 
(a)   This Agreement shall become effective upon its execution as of the date first above written.
 
(b)   The offering of the Preferred Stock shall terminate upon the earlier of (the "Termination Date"):
 
(1)   the last Closing (as defined in this agreement) to occur; or
 
(2)   ______, unless extended by written agreement between the Company and Placement Agent to no later than ______.
 
(c)   In the event that subscriptions for at least ______ shares of the Preferred Stock shall not have been accepted by the Company prior to the Termination Date, all subscriptions shall be canceled and all Subscription Agreements and the funds then held by the Escrow Agent on account of such Subscription Agreements shall be returned, with interest, to the appropriate prospective purchasers.
 
(d)   Placement Agent shall have the right to terminate this Agreement by giving notice to the Company at any time at or prior to the Termination Date (but, if after the date of the Initial Closing or any Subsequent Closing, only with respect to subscriptions not yet accepted by the Company and paid for):
 
(1)   if the Company shall have failed to satisfy any condition set forth in Section 11 of this Agreement;
 
(2)   if the Company shall have failed, refused or been unable to perform any obligation on its part to be performed hereunder;
 
(3)   if the Company shall have sustained a loss by strike, fire, flood, accident or other calamity of such a character as to interfere materially with the conduct of the business, operations or financial condition of the Company, regardless of whether or not such loss shall have been insured, or the Company, or any of the Company's properties, including without limitation its patents and patent applications, shall have become a party to or the subject of material litigation, or there shall have been, since the respective dates as of which information is given in the Private Placement Memorandum, any material adverse change in the general affairs, business, key personnel, capitalization, financial position or net worth of the Company or in the testing, Food and Drug Administration ("FDA") product license application process, competitive position or patent protection of or with respect to any of the Company's products, whether or not arising in the ordinary course of business, which, in Placement Agent's sole judgment, makes it inadvisable to offer or sell the Preferred Stock; or
 
(4)   if there shall have been such change in the condition or prospects of the Company or the general conditions of the securities markets which, in Placement Agent's sole judgment, makes it inadvisable to offer or sell the Preferred Stock.
 
(e)   Placement Agent and the Company may agree in writing to terminate this Agreement at any time prior to the Termination Date (but, if after the date of the Initial Closing or any Subsequent Closing, only with respect to subscriptions not yet accepted by the Company and paid for);
 
(f)   If Placement Agent or Placement Agent and the Company shall terminate this Agreement pursuant to Section 7(c), 7(d) or 7(e) above, such termination shall be without liability of Placement Agent to the Company except to the extent of returning funds and Subscription Agreements in Placement Agent's possession, if any, to the appropriate prospective purchasers and except as provided in Section 13 of this Agreement, and without liability of the Company to Placement Agent except as provided in Sections 4 (with respect to the retainer and fees already earned), 5 and 13 of this Agreement.
 
8.   Closing
 
Upon the receipt and acceptance by the Company of subscriptions for at least ______ shares of the Preferred Stock, a closing (the "Initial Closing") shall be scheduled to be held no later than 10 days after such acceptance at the offices of Placement Agent.  After the Initial Closing and prior to the Termination Date, the Company may continue to accept subscriptions for the Preferred Stock, for up to an aggregate of ______ shares thereof (or, if Placement Agent exercises its option granted in Section 2 of this Agreement, up to an aggregate of ______ shares thereof) and additional closings shall be scheduled therefor at the offices of Placement Agent (each, a "Subsequent Closing").  (The term "Closing" shall be used in this agreement to refer to the Initial Closing or any Subsequent Closing.)  In no event shall any Closing be held after the Termination Date.  At each Closing, the Company shall duly acknowledge its acceptance of the Subscription Agreements it has accepted and shall issue certificates representing shares of the Preferred Stock, and Placement Agent and the Company shall cause the Escrow Agent to deliver to the Company the funds for accepted subscriptions.  Any accrued interest on funds held by the Escrow Agent for accepted subscriptions shall be paid to the respective subscribers.
 
9.   Representations and Warranties of Company
 
The Company hereby represents and warrants to Placement Agent that:
 
9.1   No Adverse Regulatory Orders
 
Neither the Securities and Exchange Commission (the "Commission") nor any state securities agency or bureau has issued an order revoking any exemption of the offering from registration or qualification under the 1933 Act, or under any securities, Blue Sky or similar laws, or an order preventing or suspending the offering or the use of the Private Placement Memorandum, or of any part thereof, in connection with the sale of the Preferred Stock.
 
 
9.2   Disclosures
 
The Company and the Private Placement Memorandum have, as of the date of the Private Placement Memorandum, fully satisfied, and at the date of each Closing each will satisfy, all applicable requirements of the 1933 Act, the securities, Blue Sky or similar laws of each jurisdiction which Placement Agent has designated pursuant to Section 10(c) of this Agreement, and all applicable rules and regulations adopted under any of the foregoing, including without limitation the conditions and provisions of Regulation D promulgated under the 1933 Act, including, without limitation, those set forth in Rule 502 thereunder.  The Private Placement Memorandum, as of its date, did not contain, and at the date of the each Closing will not contain, any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were or will be made; provided, however, that the representations and warranties in this Section 9.2 shall not apply to statements in or omissions from the Private Placement Memorandum made in reliance upon and in conformity with information furnished to the Company in writing by Placement Agent specifically for use in the Private Placement Memorandum.
 
9.3   Organization and Standing; Licenses and Legal Rights
 
Each of the Company and its subsidiary, ______, a[n] ______ [corporation/LLC/GP/LP/other2] (the "Subsidiary"), has been duly organized and is validly existing as a [corporation/LLC/GP/LP/other2] in good standing under the laws of its respective jurisdiction, with full power and authority (corporate and other) to own, lease and operate its respective properties and conduct its respective business as described in the Private Placement Memorandum, and is duly qualified as a foreign [corporation/LLC/GP/LP/other2] and is in good standing in each jurisdiction in which the character of the business conducted by it or the location of the properties owned or leased by it requires such qualification.  Except as may be otherwise stated in the Private Placement Memorandum, each of the Company and the Subsidiary holds all material licenses, certificates, permits and similar authorities from state, federal and other regulatory authorities necessary for the conduct of its business as described in the Private Placement Memorandum and is in compliance with such licenses, certificates, permits and similar authorities, and each of the Company and the Subsidiary owns or possesses adequate rights to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights and licenses described in the Private Placement Memorandum as being owned by it or necessary for the conduct of its business as described therein and has not received any notice of conflict with the asserted rights of others in respect thereof.
 
9.4   Capitalization
 
The authorized, issued and outstanding capital stock of the Company as of ______, is as set forth in the Private Placement Memorandum under the caption "Capitalization".  The Company has all requisite power and authority to issue, sell and deliver the Common Stock into which the Preferred Stock is convertible, the Placement Agent Warrant and the Common Stock into which the Placement Agent Warrant is exercisable and, upon filing of a Certificate of Designation, Rights and Privileges for the Preferred Stock (the "Certificate of Designation") which is substantially in the form attached as Exhibit ______ to the Private Placement Memorandum, with the Secretary of State of the State of ______, the Preferred Stock in accordance with and upon the terms and conditions set forth in this Agreement and in the Private Placement Memorandum; the outstanding shares of Common Stock of the Company have been duly authorized and are validly issued, fully paid and nonassessable, with no personal liability attaching to the ownership thereof; and the outstanding Common Stock warrants of the Company have been duly authorized and are validly issued.  The capital stock of the Company conforms to the description thereof contained under the caption Description of Other Securities" in the Private Placement Memorandum.  Upon filing of the Certificate of Designation with the Secretary of State of the State of ______, the Preferred Stock of the Company will conform to the description thereof contained under the caption "Description of Preferred Stock" in the Private Placement Memorandum.
 
9.5   Validity of Shares
 
The Common Stock into which the Preferred Stock is convertible, the Placement Agent Warrant and the Common Stock into which the Placement Agent Warrant is exercisable have been and upon filing of the Certificate of Designation with the Secretary of State of the State of ______, the Preferred Stock will be duly authorized and upon issuance and delivery and payment therefor in the manner described in this Agreement and in the Private Placement Memorandum will be validly issued, fully paid and nonassessable, with no personal liability attaching to the ownership thereof, and will conform to the description thereof contained in the Private Placement Memorandum.  No further corporate approval or authority on behalf of the shareholders or the board of directors of the Company will be required for the issuance and sale of the Preferred Stock, the issuance of the Common Stock into which the Preferred Stock is convertible, the issuance and sale of the Placement Agent Warrant or the issuance and sale of the Common Stock into which the Placement Agent Warrant is exercisable.
 
9.6   Charter Documents; Conflicts; and Regulatory Approvals
 
Neither the Company nor the Subsidiary is in violation of its certificate of incorporation, bylaws or other charter or governing documents.  Except as described in the Private Placement Memorandum, neither the Company nor the Subsidiary is in default, nor with the giving of notice or lapse of time or both would it be in default, in the performance or observance of any material obligation, agreement, covenant or condition contained in any bond, debenture, note or other evidence of indebtedness or in any lease, material contract, indenture, mortgage, loan agreement, joint venture, license agreement or other agreement or instrument to which the Company or the Subsidiary is a party or by which it or any of its properties is bound.  The performance of this Agreement and the consummation of the transactions herein contemplated and in the Placement Agent Warrant will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, (1) any indenture, mortgage, deed of trust, loan agreement, bond, debenture, note or other evidence of indebtedness, lease, contract, license agreement or other agreement or instrument to which the Company is a party or by which the Company or any of its properties is bound, or (2) the Company's certificate of incorporation, as amended by the Certificate of Designation, bylaws or other charter or governing documents, or (3) any law, order, rule, regulation, writ, injunction or decree applicable to the Company of any court or governmental agency or body having jurisdiction over the Company or over any of its properties, or result in the creation or imposition of any lien, charge, claim or encumbrance upon any property or asset of the Company.  Except as required by the 1933 Act, and applicable securities, Blue Sky and other similar laws, and the filing of the Certificate of Designation with the Secretary of State of the State of ______, no consent, approval, authorization or order of any court or governmental agency or body is required in connection with the performance of this Agreement and the consummation by the Company of the transactions herein contemplated.
 
9.7   Compliance With Laws
 
Except as may otherwise be stated in the Private Placement Memorandum, neither the Company nor the Subsidiary is in violation of any law, order, rule, regulation, writ, injunction or decree of any government, governmental instrumentality or court, domestic or foreign, nor has it failed to obtain any license, permit, franchise or other governmental authorization necessary to the ownership of its properties or to the conduct of its business, where such default or violation or failure to obtain is likely to have any material adverse effect on the condition (financial or otherwise), properties, prospective results of operations or net worth of the Company or the Subsidiary.
 
9.8   Authorization
 
The Company has full right, power and authority to enter into this Agreement and to issue the Placement Agent Warrant, and this Agreement and the Placement Agent Warrant have been duly authorized, executed and delivered by the Company and constitute the valid and binding agreements of the Company enforceable in accordance with their terms.
 
9.9   Litigation
 
Except as described in the Private Placement Memorandum, there is no pending, or to the knowledge of the Company, threatened or contemplated, action, suit, proceeding or investigation to which the Company or the Subsidiary is a party or of which the Designated Product (or the patents and patent applications relating thereto) is a subject before any court, governmental agency or body or arbitrator, which might result in any material adverse change in the condition (financial or otherwise), business prospects, net worth or results of operations of the Company or the Subsidiary or which might prevent consummation of the transactions contemplated herein.
 
9.10   Financial Statements
 
The audited financial statements and the related notes and schedules included or incorporated by reference in the Private Placement Memorandum, present fairly the financial position, results of operations, shareholders' equity and changes in financial position of the Company as of the dates and for the periods to which they relate and have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods involved.  The interim unaudited financial statements included or incorporated in the Private Placement Memorandum reflect all adjustments necessary for a fair presentation of the operating results for the interim period presented.
 
 
 
9.11   Absence of Changes
 
Subsequent to the respective dates as of which information is given in the Private Placement Memorandum, and except as may be otherwise stated in the Private Placement Memorandum, there has not been (1) any material adverse change in the financial position, net worth, business, key personnel, properties or results of operations of the Company or the Subsidiary, or any change or any development involving a prospective change which might have a material adverse effect on such matters, (2) any transaction which is material to the Company or the Subsidiary entered into by it, except transactions in the ordinary course of business, (3) any obligation, material to the Company or the Subsidiary, direct or contingent, incurred by any of them, except obligations incurred in the ordinary course of business, (4) any material change in the capital stock of the Company or the Subsidiary, or any material increase in the shortterm debt or any increase in the longterm debt of the Company or the Subsidiary, (5) any dividend or distribution of any kind declared, paid or made on the Company's capital stock, or (6) any issuance by the Company of any securities, options, warrants, convertible securities or other rights to purchase the capital stock of the Company or the Subsidiary.
 
9.12   Title to Assets and Properties
 
Except as described in the Private Placement Memorandum, each of the Company and the Subsidiary has good and marketable title or license rights to its respective properties and assets, including without limitation all patents and patent applications, described in the Private Placement Memorandum as owned by it free and clear of all liens, charges, encumbrances or restrictions other than such as are not materially significant or important in relation to the respective business of the Company or the Subsidiary, and each of the Company and the Subsidiary has valid and enforceable leases to the real and/or personal properties described in the Private Placement Memorandum as leased by them.
 
9.13   Tax Matters
 
Each of the Company and the Subsidiary has filed all necessary tax returns and has paid all taxes shown thereon as due, and neither the Company nor the Subsidiary has any knowledge of any tax deficiency which has been or might be asserted against it which would materially and adversely affect the business, operation or financial condition of the Company or the Subsidiary, and all tax liabilities are adequately provided for on the books of the Company and the Subsidiary.
 
9.14   Insurance
 
Except as described in the Private Placement Memorandum, each of the Company and the Subsidiary maintains insurance of the types and in amounts which it deems adequate for its business and consistent with insurance coverage maintained by similar companies and businesses, including without limitation adequate product liability insurance, all of which insurance is in full force and effect.
 
 
 
9.15   Subsidiaries
 
Except for the Subsidiary, the Company owns no shares or other interest in any corporation, partnership, joint venture or other entity.  The Company owns of record all the issued and outstanding shares of capital stock of the Subsidiary and, except for the right of the company to acquire ______ shares of the Subsidiary's common stock, there are no outstanding rights, options or warrants to purchase any shares of the capital stock of the Subsidiary; and the outstanding shares of capital stock of the Subsidiary have been duly authorized and validly issued, are fully paid and nonassessable and are owned by the Company free and clear of any mortgage, pledge, claim, lien, security interest, encumbrance, option, warrant, voting trust or similar arrangement of any kind.
 
10.   Covenants and Further Agreements of Company
 
The Company covenants and agrees with Placement Agent that:
 
(a)   The Company will promptly prepare and furnish to Placement Agent any amendments or supplements to the Private Placement Memorandum which, in the opinion of Placement Agent or its counsel, may be necessary or advisable in connection with the offering and sale of the Preferred Stock by Placement Agent and as may be necessary for compliance with the requirements of the 1933 Act, any applicable securities, Blue Sky or similar laws or the applicable rules and regulations adopted under any of the foregoing, including without limitation the provisions of Regulation D promulgated under the 1933 Act, it will promptly prepare and furnish to Placement Agent any amendments or supplements to the Private Placement Memorandum which may be necessary to correct any misstatements or omissions, if, at any time prior to the Termination Date, any event shall have occurred as a result of which the Private Placement Memorandum would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading; and it will submit any amendments or supplements described in this Section 10(a) to Placement Agent for Placement Agent's approval, which approval shall not be unreasonably withheld.
 
(b)   The Company will notify Placement Agent, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any order by the Commission or any securities agency or bureau revoking the exemption of the offering from registration or qualification under the 1933 Act or under any securities, Blue Sky or similar laws or any order preventing or suspending the offering or the use of the Private Placement Memorandum, or any part thereof, in connection with the sale of the Preferred Stock, or of the initiation or threat of any proceeding for those purposes, and it will promptly use its best efforts to prevent the issuance of any such order, and, should such an order be issued, to obtain its withdrawal at the earliest possible moment.
 
(c)   The Company will use its best efforts to obtain appropriate exemptions from registration or qualification of the offering and sale of the Preferred Stock under the securities, Blue Sky or similar laws of any jurisdiction designated by Placement Agent, and to continue such exemptions in effect for as long as may be required for purposes of the distribution of the Preferred Stock, except that the Company shall not be required in connection therewith or as a condition thereof to execute a general consent to service of process in any jurisdiction or subject itself to taxation as doing business in any jurisdiction in which it is not now qualified.  In each state in which the Preferred Stock shall have been registered or qualified (or exempted) as above provided, the Company will make and file such statements and reports in each year as are or may be reasonably required by the laws of such state.
 
(d)   The Company will furnish to Placement Agent, as soon as available, copies of the Private Placement Memorandum, including any amendments or supplements thereto, in such quantities as Placement Agent may from time to time reasonably request.
 
(e)   The Company will not offer, sell or issue any Preferred Stock other than in connection with the offering contemplated by this Agreement and described in the Private Placement Memorandum.
 
(f)   Subject to the Company's normal confidentiality policies and practices, the Company will make its employees reasonably available for consultation with prospective purchasers of the Preferred Stock and their advisers and will answer all reasonable questions relating to the offering and the Company put to the employees by such persons and make copies of all material documents relating to the Company available to such persons for their inspection and analysis.  Nothing contained in this Agreement shall obligate Placement Agent, on behalf of the Company, to enforce such policies and practices.
 
(g)   The Company will use all reasonable efforts to insure that the persons designated as "Directors and Executive Officers" under the caption "Management" in the Private Placement Memorandum remain in such positions in the company until [spelled number of days] (______) days after the Termination Date.
 
(h)   The Company will, at all times through the Termination Date, use its best efforts to cause the conditions precedent to the obligations of Placement Agent set forth in Section 11 of this Agreement to occur.
 
(i)   The Company shall not make any press release or other public announcement without submitting such release or announcement to Placement Agent prior to making the release or announcement for its approval which shall not be unreasonably withheld.
 
(j)   The Company shall file with the Secretary of State of the State of ______ the Certificate of Designation at the time of or prior to the Initial Closing.
 
11.   Conditions to Placement Agent's Obligations
 
Placement Agent's obligations hereunder are conditioned upon the accuracy of the Company's representations and warranties contained herein as of the date of this Agreement and the time of each Closing (as if made on and as of each such Closing), the accuracy of the statements of the Company made pursuant to the provisions hereof, the performance by the Company of all of its covenants, agreements and obligations hereunder at or prior to each such Closing, and the following additional conditions:
 
(a)   At the time of each Closing, (1) no order denying or challenging any exemption of the offering from registration or qualification under the 1933 Act or any securities, Blue Sky or similar laws shall be in effect and no proceedings to that effect shall be pending before or threatened by the Commission or any state securities agency or bureau, and (2) no proceedings relating to the offering shall be pending before or threatened by the Commission or any state securities agency or bureau.
 
(b)   Placement Agent shall not have advised the Company that the Private Placement Memorandum contains an untrue statement of fact which, in Placement Agent's opinion, is material or omits to state a fact which, in Placement Agent's opinion, is material and is required to be stated therein or is necessary to make the statements therein not misleading.
 
(c)   On the date of each Closing, Placement Agent shall have received an opinion of ______, counsel for the Company, dated as of such date, substantially in the form attached hereto as Exhibit ______.
 
(d)   At the time of the execution of this Agreement, Placement Agent shall have received from ______ a letter dated as of the date of this Agreement, in form and substance satisfactory to Placement Agent and its counsel.
 
(e)   At the date of each Closing, Placement Agent shall have received from ______ a letter, dated as of such date, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (d) of this Section 11.  In the event such letters set forth any changes with respect to the financial information and other matters covered by previous letters, it shall be a further condition to Placement Agent's obligations that Placement Agent, in its sole discretion, shall have determined after discussions with officers of the Company responsible for financial and accounting matters and with ______, that such changes do not reflect a material adverse change in the financial condition or operations of the Company.
 
(f)   On the date of each Closing, Placement Agent shall have received a certificate, dated as of such date, signed by each of the chief executive officer and the chief financial officer of the Company, to the effect that:
 
(1)   The representations and warranties of the Company in this Agreement are true and correct as if made at and as of such Closing; and the Company has complied with all the obligations and satisfied all the conditions to be performed and satisfied on its part at or prior to such Closing;
 
(2)   All consents, approvals, authorizations or orders of any court, governmental agency or body required to be obtained in connection with the consummation of the transactions contemplated by this Agreement have been obtained;
 
(3)   At all times from the date of the Private Placement Memorandum to the date of delivery of such certificate, the Private Placement Memorandum contained all statements and information required to be included therein and did not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and, since the date of the Private Placement Memorandum, there has occurred no event required to be set forth in an amendment or supplement to the Private Placement Memorandum which has not been so set forth;
 
(4)   Subsequent to the respective dates as of which information is given in the Private Placement Memorandum, and except as contemplated thereby, the Company has not incurred any direct or contingent liabilities or obligations material to its business, operation or financial condition; the Company has not entered into any transactions not in the ordinary course of business material to its business, operation or financial condition; there has not been any material change in the Company's capital stock or outstanding indebtedness of the Company; there has not been any material adverse change in the business, operation or financial condition of the Company; and
 
(5)   Subsequent to the respective dates as of which information is given in the Private Placement Memorandum, the Company has not sustained any material loss of or damage to its properties, including without limitation its patents and patent applications, whether or not insured, which loss or damage is material to its business, operation or financial condition.
 
(g)   At the date of each Closing, Placement Agent shall have received a certificate, dated as of such date, signed by the secretary of the Company, to the effect that:
 
(1)   There has been no amendment to the certificate of incorporation of the Company since a specified date, the certificate of incorporation is in full force and effect and no action has been taken for the purpose of amending the certificate of incorporation;
 
(2)   The bylaws of the Company attached thereto as an exhibit were duly adopted, have not been amended and are in full force and effect, and no action has been taken for the purpose of amending the bylaws; and
 
(3)   Attached thereto as an exhibit is a full, true and correct copy of resolutions duly passed and adopted by the board of directors of the Company at meetings thereof authorizing the preparation and delivery of the Private Placement Memorandum, the sale of the Preferred Stock and the execution and delivery of the Agreement and other actions with regard thereto, which resolutions have not been amended, altered or repealed and are in full force and effect.
 
(h)   At the date of each Closing, there shall not have occurred any material adverse change, or any development involving a prospective material adverse change, in the general affairs, business, key personnel, capitalization, financial position or net worth of the Company or the Subsidiary, which, in the sole judgment of Placement Agent, materially impairs the investment quality of the Preferred Stock delivered at such Closing.
 
(i)   The Company shall have furnished to Placement Agent such further certificates and documents as Placement Agent or its counsel shall reasonably request.
 
The Company will furnish Placement Agent with such number of conformed copies of such opinions, certificates, letters and documents as Placement Agent shall request.  Any certificate signed by an officer of the Company and delivered to Placement Agent or to its counsel pursuant hereto shall be deemed to be a representation and warranty of the Company, as well as of such officer, to Placement Agent as to the statements made therein.
 
If any of the conditions specified in this Section 11 shall not have been fulfilled when and as required by this Agreement, or if any of the certificates, opinions, written statements or letters furnished to Placement Agent or to its counsel pursuant to this Section 11 shall not be in all material respects reasonably satisfactory in form and substance to Placement Agent and its counsel, this Agreement and all obligations of Placement Agent hereunder may be canceled at, or any time prior to, the date of any Closing by Placement Agent pursuant to Section 7(d)(1) of this Agreement.
 
12.   Offering and Sale of Securities by Placement Agent
 
(a)   Placement Agent agrees that it will comply in all material respects with the requirements of Sections 4(2), 12(2) and 17(a) of the 1933 Act (and the provisions of Regulation D promulgated thereunder) applicable to the offering of the Preferred Stock and all applicable securities, Blue Sky or other similar laws in the offering and sale of the Preferred Stock.
 
(b)   Placement Agent hereby represents to the Company that it is registered pursuant to the provisions of the 1934 Act as a brokerdealer and is a member in good standing of the NASD.
 
(c)   Placement Agent hereby represents to the Company that it is duly registered as a brokerdealer under the applicable statutes in each state in which it proposes to offer or sell the Preferred Stock, except such states in which Placement Agent is exempt from such registration or such registration is otherwise not required.  Placement Agent agrees that it will maintain all of the foregoing registrations in good standing through the Termination Date and will comply with all statutes and other requirements applicable to brokerdealers pursuant to those registrations.
 
(d)   Placement Agent agrees that it will facilitate the offering of the Preferred Stock in compliance with the Rules of Fair Practice of the NASD, the requirements of Regulation D under the 1933 Act, and the requirements of the securities, Blue Sky or other similar laws of each jurisdiction in which the Preferred Stock is offered or sold, and in this regard will:
 
(1)   During the course of the offering, with respect to the offering or any matters set forth in or contemplated by the Private Placement Memorandum, not make any untrue statement of a material fact or omit to state a material fact required to be stated or necessary to make any statement made not misleading;
(2)   Not offer, offer for sale or sell the Preferred Stock by means of:
 
(a)   Any advertisement, article, notice or other communication mentioning the Company or the Preferred Stock published in any newspaper, magazine or similar medium or broadcast over television or radio; or
 
(b)   Any seminar or meeting, the attendees of which have been invited by any general solicitation or general advertising;
 
(3)   Refrain from providing any sales materials to any offeree of the Preferred Stock unless such materials are accompanied or were preceded by the Private Placement Memorandum and approved in writing for use in this offering by the Company;
 
(4)   During the course of the offering, provide each offeree with a copy of the Private Placement Memorandum, keep complete and accurate records concerning the distribution of each numbered Private Placement Memorandum delivered to Placement Agent by the Company and not duplicate the Private Placement Memorandum or any sales materials provided by the Company; and
 
(5)   Until the Termination Date, if Placement Agent has been provided with a supplement or amendment to the Private Placement Memorandum pursuant to this Agreement, promptly distribute such supplement or amendment to all persons who previously received a copy of the Private Placement Memorandum from Placement Agent and include such supplement or amendment in all deliveries of the Private Placement Memorandum made after receipt of any such supplement or amendment.
 
(e)   As soon as practicable after the Termination Date, Placement Agent agrees that it will account to the Company for each copy of the Private Placement Memorandum delivered to Placement Agent hereunder and will return to the Company all numbered copies of the Private Placement Memorandum then in Placement Agent's possession or which thereafter come into Placement Agent's possession.
 
13.   Indemnification
 
(a)   The Company will indemnify and hold harmless Placement Agent and each person who controls Placement Agent within the meaning of applicable securities laws against any losses, claims, damages or liabilities, joint or several, to which Placement Agent or such controlling person may become subject, under such laws or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (1) any untrue statement, misstatement or omission or breach of any representation or warranty made by the Company in Section 9 hereof, or (2) any untrue statement or alleged untrue statement of any material fact contained in (A) the Private Placement Memorandum, or (B) any Blue Sky exemption application or other document executed by the Company, or based upon written information furnished by the Company or any person who controls the Company within the meaning of applicable securities laws, filed in any jurisdiction in order to obtain an exemption therefrom from any registration requirements which apply to any or all of the Preferred Stock under the securities laws thereof (any such application, document or information hereinafter a "Blue Sky Exemption Application"), (3) the omission or alleged omission to state in the Private Placement Memorandum or in any Blue Sky Exemption Application any material fact required to be stated therein or necessary to make the statements therein not misleading, or (4) any violation of any securities, Blue Sky or similar laws resulting from any act or omission on the part of the Company or any such person who controls the Company; and will reimburse Placement Agent and each such controlling person for any legal or other expenses reasonably incurred by Placement Agent or such controlling person in connection with investigating or defending against or appearing as a third party witness in connection with any such loss, claim, damage, liability or action; provided, however, that the Company shall not be liable in any such case to the extent, but only to the extent, that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Private Placement Memorandum or in any Blue Sky Exemption Application in reliance upon and in conformity with written information furnished to the Company by Placement Agent specifically for use in the Private Placement Memorandum or in any Blue Sky Exemption Application.  The indemnity provided for in this Section 13(a) will be in addition to any obligation to indemnify Placement Agent or such controlling person which the Company may otherwise have.
 
(b)   Placement Agent will indemnify and hold the Company harmless against any losses, claims, damages or liabilities to which the Company may become subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (1) any untrue statement or alleged untrue statement of any material fact contained in (A) the Private Placement Memorandum, or (B) in any Blue Sky Exemption Application, (2) the omission or the alleged omission to state in the Private Placement Memorandum, or in any Blue Sky Exemption Application, any material fact required to be stated therein or necessary to make the statements therein not misleading, in each case described in clauses (1) and (2) to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by Placement Agent specifically for use in the Private Placement Memorandum or any Blue Sky Exemption Application, or (3) any untrue statement, misstatement or omission or breach of any representation or warranty made by Placement Agent in Section 12 hereof; and will reimburse any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such loss, claim, damage, liability or action.
 
(c)   Promptly after receipt by a party entitled to indemnification under this Section 13 ("Indemnified Party") of notice of the commencement of any action, the Indemnified Party will, if a claim in respect thereof is to be made against a party required to provide indemnification under this Section 13 ("Indemnifying Party"), notify the Indemnifying Party of the commencement thereof within a reasonable time thereafter; the omission so to notify the Indemnifying Party shall relieve it from liability under this Section 13 to the extent of any prejudice, but the omission so to deliver notice to the Indemnifying Party to will not relieve it of any liability that it may have to any Indemnified Party otherwise then under this Section 13.  In case any such action, suit or proceeding is brought against any Indemnified Party, and it notifies the Indemnifying Party of the commencement thereof, the Indemnifying Party will be entitled to participate therein and, to the extent that it may wish to assume such defense, with counsel satisfactory to such Indemnified Party (who shall not, except with the consent of the Indemnified Party, be counsel to the Indemnifying Party), and after notice from the Indemnifying Party to such Indemnified Party of its election so to assume such defense, the Indemnifying Party will not be liable to such Indemnified Party under this Section 13 for any legal or other expenses subsequently incurred by such Indemnified Party in connection with such defense other than reasonable costs of investigation.
 
(d)   If the indemnification provided for in this Section 13 is unavailable or insufficient to hold harmless an Indemnified Party under subsection (a) or (b) above, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (1) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and Placement Agent on the other hand from the offering and sale of the Preferred Stock, or (2) if such allocation is not permitted by applicable law, then the relative fault of the Company on the one hand, and of Placement Agent on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations, shall also be considered.  The relative fault of the Company on the one hand, and Placement Agent on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by Placement Agent and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission.  The Company and Placement Agent agree that it would not be just and equitable if contribution pursuant to this Section 13(d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the first sentence of this Section 13(d).  The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages and liabilities referred to above in this Section 13(d) shall be deemed to include any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending against or appearing as a third party witness in any such action or claim that is subject to the provisions of this Section 13(d). Notwithstanding the provisions of this Section 13(d), neither Placement Agent nor any person who controls Placement Agent shall be required to contribute any amount in excess of the amount by which the total fees and other compensation paid to Placement Agent pursuant to this Agreement exceeds the amount of any damages that Placement Agent and its controlling persons in the aggregate have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
 
Promptly after receipt by any party to this Agreement of notice of the commencement of any action, suit or proceeding, such person will, if a claim for contribution in respect thereof is to be made against another party, notify any party from whom contribution may be sought of such commencement; but the failure so to notify any party shall relieve that party from any obligation it may have for contribution under this Section 13 to the extent of any prejudice, but the failure so to deliver notice will not relieve the contributing party of any liability that it may have to any party otherwise than under this Section 13. Any notice given pursuant to Section 13(a) or 13(b) hereof for purposes of indemnification shall also serve as notice under this Section 13(d).
 
 
14.   Survival of Representations, Warranties and Indemnities
 
All representations and warranties of the Company in Section 9 and of Placement Agent in Section 12(b) and (c) of this Agreement and the indemnity and contribution agreements contained in Section 13 of this Agreement shall remain operative and in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of Placement Agent or any controlling person of Placement Agent, or by or on behalf of the Company or any officer, director, or controlling person of the Company, and shall survive the offering and sale of the Preferred Stock contemplated by this Agreement.
 
15.   Notices
 
All notices and other communications hereunder shall be in writing, and, if sent to Placement Agent, shall be mailed or delivered and confirmed to Placement Agent at ______, or, if sent to the Company, shall be mailed or delivered and confirmed to the Company at the address set forth in the Private Placement Memorandum, or at such other addresses as Placement Agent and the Company shall designate to each other by notice in accordance with this Section 15.
 
16.   Parties
 
This Agreement shall inure to the benefit of and be binding upon Placement Agent, the Company and their respective successors and assigns.  Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person other than the parties hereto and their respective successors and assigns and the controlling persons, officers and directors referred to in Sections 13(a) and 13(b) of this Agreement, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained, this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and their respective successors and assigns and such controlling persons and such officers and directors, and for the benefit of no other person.  No purchaser of any of the Preferred Stock shall be deemed a successor or assign by reason of such purchase.
 
17.   Applicable Law
 
This Agreement shall be governed by, and construed in accordance with, the laws of the State of ______ without giving effect to the principles of conflicts of laws thereof.
 
18.   Entire Agreement
 
This Agreement contains the entire agreement between the Company and Placement Agent with respect to the transactions contemplated hereby and supersedes all negotiations, representations, warranties, commitments, offers, contracts and writings prior to the date hereof, including, but not limited to, the proposal letter dated ______.  No waiver, modification or amendment of any provision of this Agreement shall be effective unless specifically made in writing and duly signed by the parties to be bound thereby.
 
 
19.   Counterparts
 
This Agreement may be signed in several counterparts, each one of which will constitute an original.
 
If the foregoing correctly sets forth the understanding between the Company and Placement Agent, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement between the Company and Placement Agent.
 
Sincerely,
 
[Signature of Company]
 
AGREED AND ACCEPTED:
 
By:     
 
 

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