Registration of Securities by a Small-Business Issuer — Form SB-2
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SB-2 Registration of Securities by a Small-Business 85 419K
Issuer
2: EX-3.3 Articles of Incorporation/Organization or By-Laws 2 12K
3: EX-3.4 Articles of Incorporation/Organization or By-Laws 1 10K
4: EX-3.5 Articles of Incorporation/Organization or By-Laws 10 46K
5: EX-4.1 Instrument Defining the Rights of Security Holders 34 170K
6: EX-4.2 Instrument Defining the Rights of Security Holders 15 71K
7: EX-4.3 Instrument Defining the Rights of Security Holders 9 43K
8: EX-4.4 Instrument Defining the Rights of Security Holders 11 46K
9: EX-4.5 Instrument Defining the Rights of Security Holders 18 90K
10: EX-4.6 Instrument Defining the Rights of Security Holders 10 42K
11: EX-4.7 Instrument Defining the Rights of Security Holders 4 21K
12: EX-4.8 Instrument Defining the Rights of Security Holders 5 27K
13: EX-5 Opinion re: Legality 2 12K
14: EX-10.1 Material Contract 7 26K
15: EX-10.2 Material Contract 16 76K
16: EX-10.3 Material Contract 9 39K
17: EX-10.4 Material Contract 11 50K
18: EX-10.5 Material Contract 30 65K
19: EX-21 Subsidiaries of the Registrant 1 7K
20: EX-23.1 Consent of Experts or Counsel 1 9K
21: EX-23.2 Consent of Experts or Counsel 1 9K
22: EX-27 Financial Data Schedule (Pre-XBRL) 2 13K
EXHIBIT 10.2
PLACEMENT AGENT AGREEMENT
THIS PLACEMENT AGENT AGREEMENT ("Agreement"), is made as of March 28,
2000, by and between PROVIDENTIAL HOLDINGS, INC., a Nevada corporation (the
"Company"), and SOVEREIGN CAPITAL ADVISORS, LLC, a Nevada limited liability
company ("Agent").
BACKGROUND
The Company proposes to issue and sell Series 1 Secured Bridge Notes
(the "Securities") resulting in gross proceeds to the Company of up to
$4,000,000 (the "Offering") in a transaction not involving a public offering and
without registration under the Securities Act of 1933 (the "Securities Act"),
pursuant to exemptions from the registration requirements of the Securities Act
under Section 4(2) of the Securities Act and Regulation D promulgated under the
Securities Act ("Regulation D"). Agent has offered to introduce the Company to
prospective investors on a "best efforts basis" and give advise to the Company
in connection with the structure of the Offering and the terms of the
Securities, and the Company desires to secure the services of Agent on the terms
and conditions hereinafter set forth.
AGREEMENT
For and in consideration of the mutual covenants herein, and other good
and valuable consideration, the receipt and legal sufficiency of which is hereby
acknowledged, the parties hereto agree:
SECTION 1. ENGAGEMENT OF AGENT.
SECTION 1.1 APPOINTMENT. The Company hereby appoints Agent as its
exclusive agent in connection with the proposed issuance and sale by the Company
of Securities resulting in gross proceeds to the Company of up to $4,000,000.
Agent, on the basis of the representations and warranties herein contained, and
upon and subject to the terms and conditions herein set forth, accepts such
appointment. This appointment shall be irrevocable for the twenty (20) business
day period, commencing March 28, 2000 and ending April 25, 2000, which period
maybe extended by the consent of the Company and Agent (the "Offering Period").
SECTION 1.2 COMPENSATION. The Company shall pay Agent a finder's fee of
ten percent (10%) of the gross proceeds derived from the sale of the Securities
or any other securities issued by the Company during the Offering Period (the
"Gross Proceeds") plus a non-accountable expense allowance of three percent (3%)
of the Gross Proceeds. The Company agrees that the amount of such fees and
expenses shall be paid at such Closing and that it shall instruct the Escrow
Agent to deduct such amount, along with any amounts payable pursuant to Section
1.3 hereof, from the proceeds of the sale of the Securities prior to remittance
of the balance of such proceeds to the Company. In addition, the Company shall
issue to Agent at the Initial Closing and each Subsequent
Closing, a warrant (each a "Warrant" and collectively, the "Warrants"), in the
form of Exhibit 1 hereto, exercisable for 5,000 shares of the Company's common
stock for each $100,000 principal amount of Series 1 Bridge Notes issued at such
Closing.
SECTION 1.3 REIMBURSEMENT OF EXPENSES. In addition to the
non-accountable expense allowance, the Company shall be responsible for (i) fees
and expenses of counsel to Agent for the preparation of the Transaction
Agreements, (ii) the fees, if any, and expenses of the Escrow Agent and (iii)
fees and expenses of counsel to Agent in connection with any state securities or
"blue sky" filings or notices.
SECTION 1.4 LIMITED ROLE OF AGENT. Agent has acted only as an advisor
to the Company, and in such role, Agent has advised the Company on the structure
of the Offering and the terms of the Securities, and has identified potential
investors but has given no other advice. The Company, and not Agent, has offered
the Securities to the investors and the Company, and not Agent, has negotiated
directly with the investors in the Offering. Agent will use reasonable efforts
to introduce the Company only to "accredited investors" as defined in Regulation
D.
SECTION 1.5 RIGHT OF FIRST REFUSAL. The Company hereby grants Agent a
right of first refusal to act as placement agent for any future private
financings of the Company, whether of equity securities, convertible debt
securities or securities or instruments convertible into or exchangeable for
debt or equity securities of the Company or similar transactions. The duration
of Agent's right of first refusal under this Section 1.5 shall be for a period
of one (1) year following the final Closing of the Offering. In the event that
the Company wishes to undertake a transaction described in this Section 1.5, the
Company shall send Agent a written notice of the proposed transaction (whether
the transaction is initiated by the Company or is offered to the Company by a
third party) in sufficient specificity to allow Agent to understand the proposed
transaction clearly. This notice must be delivered to Agent at least twenty (20)
days prior to the contemplated closing of the proposed transaction. Agent shall
have ten (10) days from receipt of that notice to determine whether or not it
wishes to exercise its right of first refusal with respect to that transaction.
Agent shall notify the Company in writing of its decision to exercise or waive
its right of first refusal with respect to the transaction described in the
notice. If Agent waives its right of first refusal with respect to a particular
transaction, the Company may proceed with that transaction; provided, however,
that if the terms of the transaction are changed in any material way from the
terms set forth in the notice to Agent, Agent's right of first refusal shall
commence again. Agent's waiver of its rights of first refusal with respect to
any specific transaction shall not act as a waiver of its rights with respect to
any future transactions within the applicable time period.
SECTION 1.6 CONFIDENTIALITY. The Company agrees to maintain the
confidentiality of all prospective investors identified to the Company by Agent,
except as required by applicable law. For a period of two (2) years from the
date of the final Closing, the Company will not solicit or enter into any
financing transaction with such investors without the written consent of Agent
and payment to Agent of compensation no less than the compensation to be paid to
Agent hereunder for raising a like amount.
SECTION 1.7 REMEDIES. In addition to all other remedies Agent may have
at law or in equity, in the event that the Company breaches Section 1.5 hereof
or Section 1.6 hereof, Agent shall be entitled to receive compensation in
respect of the financing giving rise to the breach of this Agreement at the
rates set forth in Section 1.2 hereof.
SECTION 2. CONDUCT OF THE OFFERING.
SECTION 2.1 OFFERING DOCUMENTS. The Company shall utilize a Series 1
Bridge Note Purchase and Security Agreement (the "Purchase Agreement"),
including the Exhibits referred to therein, substantially in the form approved
to by the Company. Agent previously has furnished to the Company and its counsel
proposed drafts of such documents (collectively, the "Transaction Agreements"),
and the Company and its counsel have reviewed, commented upon, and approved the
Transaction Agreements.
SECTION 2.2 PUBLIC INFORMATION. The Company, within a reasonable amount
of time prior to any Closing, shall provide each prospective purchaser with a
copy of all information required by Rule 502(b)(2)(ii) of Regulation D
promulgated pursuant to the Securities Act (collectively, the "SEC Documents").
As used in this Agreement, the term "Offering Documents" means collectively the
SEC Documents and the Transaction Agreements, and all amendments, exhibits, and
supplements thereto, together with any other documents which are provided to
Agent by, or approved for Agent's use by, or on behalf of, the Company for this
Offering.
SECTION 2.3 ACCURACY OF OFFERING DOCUMENTS. The Company represents,
warrants and covenants to Agent that (a) at the time of delivery to each
prospective investor, the SEC Documents conformed in all material respects with
the requirements, to the extent applicable, of the Securities and Exchange Act
of 1934 (the "Exchange Act") and the rules and regulations promulgated
thereunder ("Rules and Regulations"), and none of the Offering Documents
included any untrue statement of a material fact, or omitted to state any
material fact required to be stated therein, or necessary, to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and (b) at each Closing, the SEC Documents will contain conform
in all material respects with the applicable Rules and Regulations, and none of
the Offering Documents will include at the time of Closing any untrue statement
of material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Agent has no
responsibility for the contents, accuracy or adequacy of the Offering Documents,
or for the compliance of the Offering Documents, with the requirements of Rule
502(b)(2)(ii) of Regulation D promulgated pursuant to the Securities Act.
SECTION 2.4 DUTY TO AMEND. If, at any time during the Offering, any
event occurs as a result of which the SEC Documents or any of the other Offering
Documents as then amended or supplemented would include an untrue statement of a
material fact, or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or if it is necessary at any time after the date hereof to amend
or supplement the SEC Documents to comply with the Exchange Act or the
applicable Rules and Regulations, the Company shall forthwith notify Agent
thereof and shall prepare such further amendment or supplement to the SEC
Documents or the other Offering Documents as may be required and shall furnish
and deliver to Agent and to others, whose names and addresses are designated by
Agent, all at the cost of the Company, a reasonable number of copies of the
amendment or supplement or of the amended or supplemented SEC Documents or the
other Offering Documents which, as so amended or supplemented, will not contain
an untrue statement of a material fact or omit to state any material fact
necessary in order to make the SEC Documents or the other Offering Documents not
misleading in the light of the circumstances when it is delivered to a purchaser
or prospective purchaser, and in order that the SEC Documents will comply in all
respects with the requirements (to the extent applicable) of the Exchange Act
and the applicable Rules and Regulations.
SECTION 2.5 ESCROW OF FUNDS. Pursuant to the Escrow Agreement, executed
by the Company, the person named as escrow agent in the Escrow Agreement (the
"Escrow Agent"), and the prospective investors who have executed signature pages
to the Purchase Agreement, the Registration Rights Agreement and the Escrow
Agreement (the "Purchasers"), the purchase price for the Securities to be
purchased as reflected on the Purchaser Signature Page to the Purchase Agreement
shall be wired to the Escrow Agent to be held by the Escrow Agent as provided in
the Escrow Agreement.
SECTION 2.6 APPROVAL OF PURCHASERS. Prior to each Closing, the Company
shall have the right to approve each Purchaser. If the Company withholds
approval of any Purchaser, the purchase price wired to the Escrow Agent by such
Purchaser shall be returned to such Purchaser along with the Purchase Agreement
and any other agreements signed by such Purchaser. The right to withhold
approval of any Purchaser shall be deemed to have been waived if the Company
authorizes the Escrow Agent to disburse funds provided by any Purchaser at any
Closing.
SECTION 2.7 DELIVERY OF SECURITIES. Securities in such form that,
subject to applicable transfer restrictions as described in the Purchase
Agreement, they can be negotiated by the holders
thereof (issued in such denominations and in such names as the Purchasers may
request shall be delivered by the Company to the counsel for Agent, with copies
made available to Agent for checking at least one (1) full business day prior to
the Closing Date, it being understood that the directions from Agent to the
Company shall be given at least two (2) full business days prior to the Closing
Date. The Securities shall be delivered at the Initial Closing and at each
Subsequent Closing.
SECTION 2.8 INITIAL CLOSING. The Initial Closing (the "Initial
Closing") shall occur at such time as (a) the Purchasers have delivered to the
Company (care of Warshaw Burstein Cohen Schlesinger & Kuh, LLP, counsel for
Agent) executed counterpart Purchaser Signature Pages to each of the Purchase
Agreement, the Registration Rights Agreement, and the Escrow Agreement and such
other documents as may be required to be delivered at the Closing, (b) the
Company has not withheld approval of such Purchasers, and (c) all other
conditions to the obligation of such Purchasers and the Company to close the
transactions contemplated by the Purchase Agreement have been satisfied or
waived.
SECTION 2.9 SUBSEQUENT CLOSINGS. In the event that the Initial Closing
shall be for an amount of Securities that is less than the amount of the
Offering, the Offering may be continued, and additional Closings may be held
(each a "Subsequent Closing") throughout the Offering Period; provided, however,
that (a) the Purchasers have delivered to the Company (care of Warshaw Burstein
Cohen Schlesinger & Kuh, LLP, counsel for Agent) executed counterpart Purchaser
Signature Pages to each of the Purchase Agreement, the Registration Rights
Agreement, and the Escrow Agreement and such other documents as may be required
to be delivered at the Closing, (b) the Company has not withheld approval of
such Purchasers, and (c) all other conditions to the obligation of such
Purchasers and the Company to close the transactions contemplated by the
Purchase Agreement have been satisfied or waived.
SECTION 2.10 DISBURSEMENTS AT CLOSING. At each Closing, the Company
shall execute a release notice that authorizes Escrow Agent to transmit to Agent
its fee and expenses of the Offering in the amounts specified, and effect a wire
transfer of the net proceeds of such Closing to the Company or another entity
designated therein by the Company. The authorization of the Company to release
the funds held by Escrow Agent is the Company's authorization to release the
executed Transaction Agreements and Securities to the Purchasers. One complete
set of executed Transaction Documents will be delivered by Escrow Agent to the
Company.
SECTION 2.11 TIME AND PLACE OF CLOSINGS. The Initial Closing and any
Subsequent Closing shall be held at the offices of Warshaw Burstein Cohen
Schlesinger & Kuh, LLP, 555 Fifth Avenue, New York, New York 10017, at 10:00
a.m. on such dates as are fixed in accordance with this Agreement and the
Purchase Agreement. The Closing Date may be changed by mutual agreement of Agent
and the Company. The Company agrees to rely on faxed signature pages from the
Purchasers, without the requirement of obtaining an originally signed version of
any of the Transactions Agreements to which a Purchaser is a party.
SECTION 3. CONDITIONS OF AGENT'S OBLIGATIONS.
Agent's obligations hereunder shall be subject to the accuracy, as of
the Closing Date, of the representations and warranties on the part of the
Company contained in this Agreement, to the
fulfillment of, or compliance by the Company with, all covenants herein and
conditions hereof, and to the following additional conditions:
(a) There shall be no outstanding objection to any Transaction
Agreement by the Company or its counsel or any Purchaser or its counsel.
(b) The Company shall not have disclosed that the Offering
Documents, or any amendment or supplement thereto, contains an untrue statement
of fact, which, in the opinion of counsel to Agent, is material, or omits to
state a fact, which, in the opinion of such counsel, is material and is required
to be stated therein, or is necessary to make the statements therein, under the
circumstances in which they were made, not misleading.
(c) Between the date hereof and the Closing, the Company shall not
have sustained any loss on account of fire, explosion, flood, accident, calamity
or any other cause of such character as would materially adversely affect its
business or property, considered as an entire entity, whether or not such loss
is covered by insurance.
(d) There shall be no litigation instituted or overtly threatened
against the Company, and there shall be no proceeding instituted or threatened
against the Company before or by any federal or state commission, regulatory
body, or administrative agency, or other governmental body, domestic or foreign,
wherein an unfavorable ruling, decision, or finding would materially adversely
affect the business, franchises, license, permits, operations, or financial
condition or income of the Company considered as an entity.
(e) Except as contemplated herein or as set forth in the Offering
Documents, during the period subsequent to the most recent financial statements
contained in the Offering Documents, if any, and prior to the Closing Date, the
Company (i) shall have conducted its business only in the usual and ordinary
manner as the same was being conducted prior to such time, and (ii) except in
the ordinary course of business, the Company shall not have incurred any
liabilities or obligations (direct or contingent) or disposed of any assets, or
entered into any material transaction, or suffered or experienced any
substantially adverse change in its condition, financial or otherwise. At the
Closing Date, the equity account of the Company shall be substantially the same
as reflected in the most recent balance sheet contained in the Offering
Documents without considering the proceeds from the sale of the Securities,
other than as may be set forth in the Offering Documents.
(f) The authorization of the Securities by the Company and all
proceedings and other legal matters incident thereto and to this Agreement shall
be reasonably satisfactory in all respects to Agent and its counsel.
(g) The Company shall have furnished to Agent the opinion, dated
the Initial Closing, addressed to Agent, from counsel to the Company, as
required by the Purchase Agreement, along with a letter stating that Agent may
rely on such opinion as if it was addressed to it,.
(h) The Company shall have furnished to Agent a copy of the
Compliance Certificate and the Secretary Certificate each dated as of the
Closing Date.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
For the purpose of inducing Agent to enter into this and perform this
Agreement, the Company represents and warrants to, and agrees with, Agent as
follows:
SECTION 4.1 CORPORATION CONDITION. The Company's condition is as
described in its most recent SEC Documents, except for changes in the ordinary
course of business and normal year-end adjustments that are not in the aggregate
materially adverse to the Company. The SEC Documents, taken as a whole, present
fairly the business and financial position of the Company as of the Closing
Date.
SECTION 4.2 NO MATERIAL ADVERSE CHANGE. Except as may be reflected in
or contemplated by the Offering Documents, subsequent to the dates as of which
information is given in the Offering Documents, and prior to the Closing Date,
there shall not have been any material adverse change in the condition,
financial or otherwise, or in the results of operations of the Company or in its
business taken as a whole.
SECTION 4.3 NO DEFAULTS. Except as disclosed in the Offering Documents
or in writing to Agent, the Company is not in default in any material respect in
the performance of any material obligation, agreement, or condition contained in
any debenture, note or other evidence of indebtedness or any indenture or loan
agreement of the Company. The execution and delivery of this Agreement, and the
consummation of the transactions herein contemplated, and compliance with the
terms of this Agreement, will not conflict with, or result in a breach of, any
of the terms, conditions, or provisions of, or constitute a default under, the
Certificate of Incorporation or bylaws of the Company (in any respect that is
material to the Company), any note, indenture, mortgage, deed of trust, or other
agreement or instrument which is material to the Company and to which the
Company is a party or by which the Company or any property of the Company is
bound, or, to the Company's knowledge, any existing law, order, rule,
regulation, writ, injunction or decree of any government, governmental
instrumentality, agency or body, arbitration tribunal or court, domestic or
foreign, having jurisdiction over the Company or any property of the Company.
The consent, approval, authorization, or order of any court or governmental
instrumentality, agency or body is not required for the consummation of the
transactions herein contemplated except such as may be required under the
Securities Act or under the blue sky or securities laws of any state or other
applicable jurisdiction.
SECTION 4.4 INCORPORATION AND STANDING. The Company is, and at the
Closing Date will be, duly formed and validly existing in good standing as a
corporation under the laws of the State of Nevada and with full power and
authority (corporate and other) to own its properties and conduct its business,
present and proposed, as described in the Offering Documents; the Company, has
full power and authority to enter into this Agreement; and the Company is duly
qualified and in good standing as a foreign entity in each jurisdiction in which
the failure to so qualify would have a material adverse effect on the Company or
its properties.
SECTION 4.5 LEGALITY OF SECURITIES. Prior to the Closing Date, the
Securities will have been duly and validly authorized and issued, will be valid,
binding and enforceable against the Company in accordance with their terms, and
will conform in all material respects to the statements with regard thereto
contained in the Offering Documents.
SECTION 4.6 LEGALITY OF CONVERSION SHARES. The Common Stock into which
the Securities are convertible, when converted in accordance with the Securities
will be duly and validly issued and outstanding, fully paid and non-assessable
and conform in all material respects to the statements with regard thereto
contained in the Offering Documents.
SECTION 4.7 LITIGATION. Except as set forth in the Offering Documents,
there is now, and at the Closing Date there will be, no action, suit or
proceeding before any court or governmental agency, authority or body pending
or, to the knowledge of the Company, threatened, which might result in judgments
against the Company not adequately covered by insurance or which collectively
might result in any material adverse change in the condition (financial or
otherwise) or business of the Company or which would materially adversely affect
the properties or assets of the Company.
SECTION 4.8 FINDERS. The Company does not know of any outstanding
claims for services in the nature of a finder's fee or origination fees with
respect to the sale of the Securities hereunder for which Agent may be
responsible, and the Company will indemnify Agent from any liability for such
fees by any party who has a claim for such compensation from the Company and for
which person Agent is not legally responsible.
SECTION 4.9 TAX RETURNS. The Company has properly completed in all
material respects and filed all federal and state tax returns which are required
to be filed, and has paid all taxes shown on such returns and on all assessments
received by it to the extent such taxes have become due. All taxes with respect
to which the Company is obligated have been paid or adequate accruals have been
set up to cover any such unpaid taxes.
SECTION 4.10 AUTHORITY. The execution and delivery by the Company of
this Agreement have been duly authorized by all necessary action, and this
Agreement is the valid, binding, and legally enforceable obligation of the
Company subject to standard qualifications as to the availability of equitable
remedies, the effect of bankruptcy and other laws relating to the protection of
debtors and public policy opinions promulgated by the Securities and Exchange
Commission with respect to indemnification against liabilities under the
Securities Act.
SECTION 4.11 ACTIONS BY THE COMPANY. The Company will not take any
action which is not contemplated by this Agreement and the Offering Documents or
which will impair the effectiveness of the transactions contemplated by this
Agreement.
SECTION 5. COVENANTS OF THE COMPANY.
The Company covenants and agrees with Agent that:
SECTION 5.1 RESTRICTIONS ON AMENDMENTS. After the date hereof, the
Company will not at any time, prepare and distribute any amendment or supplement
to the Offering Documents, of which amendment or supplement Agent shall not
previously have been advised and Agent and its counsel furnished with a copy
within a reasonable time period prior to the proposed adoption thereof, or to
which Agent shall have reasonable objected in writing on the ground that it is
not in compliance with the Securities Act, the Exchange Act or any applicable
rules and regulations thereunder.
SECTION 5.2 EXPENSES OF OFFERING. The Company will pay, whether or not
the transactions contemplated by the Transaction Agreements are consummated, all
costs and expenses incident to the Transaction Agreements, including all
expenses incident to the authorization of the Securities, their issue and
delivery to Escrow Agent, any original issue taxes in connection therewith, all
transfer taxes, if any, incident to the initial sale of the Securities, the fees
and expenses of Agent's and the Company's counsel (except as provided below) and
accountants, and the cost of reproduction and furnishing to Agent copies of the
Offering Documents as herein provided, provided, however,
that the Company shall not be responsible for the payment of fees and expenses
incurred by Agent's counsel with respect to any Purchaser, if Agent is unable to
procure Purchaser Signature Pages to the Transaction Agreements from such
Purchaser that the Company was willing to accept.
SECTION 5.3 AVAILABILITY OF INFORMATION. Prior to the Closing Date, the
Company will cooperate with Agent in such investigation as it may make or cause
to be made of all of the properties, business and operations of the Company in
connection with the Offering of the Securities. The Company will make available
to Agent and its counsel in connection therewith such information in its
possession as Agent may reasonably request and will make available to Agent such
persons as Agent shall deem reasonably necessary and appropriate in order to
verify or substantiate any such information so supplied.
SECTION 5.4 REPORTS AND FILINGS. The Company shall be responsible for
making any and all filings required by the blue sky authorities and filings
required by the laws of the jurisdictions in which the subscribers who are
accepted for purchase of Securities are located, if any. Agent shall assist the
Company in this respect, but such filings shall be the responsibility, and at
the cost of, the Company.
SECTION 5.5 NO UNDISCLOSED EVENTS, LIABILITIES, DEVELOPMENTS, OR
CIRCUMSTANCES. The Company's condition is as described in its Offering
Documents, except for changes in the ordinary course of business and normal
year-end adjustments that are not individually or in the aggregate materially
adverse to the Company. The Offering Documents, taken as a whole, will present
fairly the business and financial position of the Company as of each Closing
Date.
SECTION 5.6 NO MATERIAL ADVERSE CHANGE. Except as may be reflected in
or contemplated by the Offering Documents, subsequent to the dates as of which
information is given in the Offering Documents, and prior to each Closing Date,
there shall not have been any material adverse change in the condition,
financial, or otherwise, or in the results of operations of the Company or in
its business taken as a whole.
SECTION 6. INDEMNIFICATION.
SECTION 6.1 INDEMNIFICATION OF AGENT. The Company agrees to indemnify
and hold harmless Agent, its affiliates and their respective officers,
directors, employees, agents and controlling persons (collectively, the
"Indemnified Parties"), from and against any losses, claims, damages and
liabilities, joint or several, related to or arising in any manner out of the
Offering or any transaction, financing, proposal or any other matter
(collectively, the "Matters") contemplated by this Agreement hereunder, and will
promptly reimburse the Indemnified Parties for all reasonable expenses
(including reasonable fees and expenses of legal counsel) as incurred in
connection with the investigation of, preparation for or defense of any pending
or threatened claim related to or arising in any manner out of any Matter
contemplated by the engagement of Agent hereunder, or any action or proceeding
arising therefrom (collectively, "Proceedings"), whether or not such Indemnified
Party is a formal party to any such Proceeding. Notwithstanding the foregoing,
the Company shall not be liable in respect of any losses, claims, damages,
liabilities or expenses that a court of competent jurisdiction shall have
determined by final judgment resulted from the gross negligence or willful
misconduct of an Indemnified Party. The Company further agrees that it will not,
without the prior written consent of Agent, settle, compromise or consent to the
entry of any judgment in any pending or threatened Proceeding in respect of
which indemnification may be sought hereunder (whether or not Agent or any
Indemnified Party is an actual or potential party to such Proceeding), unless
such
settlement, compromise or consent includes an unconditional release of Agent and
each other Indemnified Party hereunder from all liability arising out of such
Proceeding.
SECTION 6.2 NOTICE OF CLAIMS. The Indemnified Parties shall promptly
give the Company notice (the "Indemnification Notice") of any matter which the
Indemnified Parties have determined has given or could give rise to a right of
indemnification under this agreement, provided that a failure on the part of an
Indemnified Party to notify the Company will not relieve the Company from any
liability that the Company may have on account of this indemnity or otherwise,
except to the extent that the Company shall have been materially prejudiced by
such failure. If, promptly after its receipt of the Indemnification Notice, the
Company acknowledges its obligation to indemnify the Indemnified Parties
hereunder against any losses that may result from such claim, then the Company
shall be entitled to assume and control the defense of such claim at its expense
and through counsel of its choice unless such counsel is reasonably
unsatisfactory to Agent. Any Indemnified Party shall have the right to employ
separate counsel in any such action and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such
Indemnified Party unless (i) the Company shall have failed promptly to assume
the defense thereof and employ counsel, or (ii) the named parties to such action
(including impleaded parties) include such Indemnified Party and the Company and
such Indemnified Party shall have been advised by counsel that there may be one
or more legal defenses available to it that are different from or in addition to
those available to the Company; provided that the Company shall not in any event
be responsible hereunder for the fees and expenses of more than one firm of
separate counsel in connection with any action in the same jurisdiction, in
addition to any local counsel. In the event that the Company exercises the right
to undertake any such defense against any such claim, the Indemnified Parties
shall cooperate with the Company in such defense and make available to the
Company all witnesses, pertinent records, materials and information in the
Indemnified Parties possession or under the Indemnified Parties' control
relating thereto as is reasonably required by the Company
SECTION 6.3 CONTRIBUTION. The Company agrees that if any
indemnification or reimbursement sought pursuant to this Agreement were for any
reason not to be available to any Indemnified Party or insufficient to hold it
harmless as and to the extent contemplated by this letter, then the Company
shall contribute to the amount paid or payable by such Indemnified Party in
respect of losses, claims, damages and liabilities in such proportion as is
appropriate to reflect the relative benefits to the Company and its stockholders
on the one hand, and Agent on the other, in connection with the Matters to which
such indemnification or reimbursement relates or, if such allocation is not
permitted by applicable law, not only such relative benefits but also the
relative faults of such parties as well as any other equitable considerations.
It is hereby agreed that the relative benefits to the Company and/or its
stockholders and to Agent with respect to Agent's engagement shall be deemed to
be in the same proportion as (i) the total value paid or received or to be paid
or received by the Company and/or its stockholders pursuant to the Matters
(whether or not consummated) for which Agent is engaged to render financial
advisory services bears to (ii) the fees paid (or agreed to be paid if the
transaction would be consummated) to Agent in connection with such engagement.
In no event shall the Indemnified Parties contribute or otherwise be liable for
an amount in excess of the aggregate amount of fees actually received by Agent
pursuant to such engagement (excluding amounts received by Agent as
reimbursement of expenses).
SECTION 6.4 LIMITATION OF LIABILITY OF AGENT. The Company further
agrees that no Indemnified Party shall have any liability (whether direct of
indirect, in contract or tort or otherwise) to the Company for or in connection
with Agent's engagement hereunder except for losses, claims, damages,
liabilities or expenses that a court of competent jurisdiction shall have
determined by final
judgment resulted from the gross negligence or willful misconduct of such
Indemnified Party. The indemnity, reimbursement and contribution obligations of
the Company shall be in addition to any liability which the Company may
otherwise have and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Company or an
Indemnified Party.
The indemnity, reimbursement, contribution provisions set forth herein
shall remain operative and in full force and effect regardless of (i) any
withdrawal, termination or consummation of or failure to initiate or consummate
any Matter referred to herein, (ii) any investigation made by or on behalf of
any party hereto or any person controlling (within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange) any party hereto, (iii) any
termination or the completion or expiration of this letter or Agent's engagement
and (iv) whether or not Agent shall, or shall not be called upon to, render any
formal or informal advice in the course of such engagement.
SECTION 7. TERMINATION.
SECTION 7.1 TERMINATION BY AGENT. This Agreement may be terminated at
any time during the Offering Period by Agent by written notice to the Company,
if the Company shall have failed or been unable to comply with any of the terms,
conditions or provisions of the Transaction Agreements to be performed, complied
with or fulfilled by the Company within the respective times, if any, herein
provided for, unless compliance therewith or performance or satisfaction thereof
shall have been expressly waived by Agent in writing.
SECTION 7.2 TERMINATION BY COMPANY. This Agreement may be terminated by
the Company at the conclusion of the Offering Period by notice to Agent if Agent
shall have failed or been unable to comply with any of the terms, conditions or
provisions of this Agreement to be performed, complied with or fulfilled by
Agent within the respective times, if any, herein provided for, unless
compliance therewith or performance or satisfaction thereof shall have been
expressly waived by the Company in writing.
SECTION 7.3 TERMINATION FOR FORCE MAJEURE EVENTS. This Agreement may be
terminated by Agent by notice to the Company at any time, if, in the reasonable,
good faith judgment of Agent, payment for and delivery of the Securities is
rendered impracticable or inadvisable because: (a) additional material
governmental restrictions not in force and effect on the date hereof shall have
been imposed upon trading in securities generally; (b) a war or other national
calamity shall have occurred; or (c) the condition of the market (either
generally or with reference to the sale of the Securities to be offered hereby)
or the condition of any matter affecting the Company or any other circumstance
is such that it would be undesirable, impracticable or inadvisable, in the
judgment of Agent, to proceed with this Agreement or with the Offering.
SECTION 7.4 TERMINATION WITHOUT LIABILITY. Any termination of this
Agreement pursuant to this Section 7 shall be without liability of any character
(including, but not limited to, loss of anticipated profits or consequential
damages) on the part of any party thereto, except that the Company shall remain
obligated to pay the costs and expenses provided to be paid by it specified in
Sections 1.3 and 5.2, and the Company and Agent shall be obligated to pay,
respectively, all losses, claims, damages or liabilities, joint or several,
under Section 6.1 in the case of the Company and Section 6.2 in the case of
Agent.
SECTION 8. MISCELLANEOUS.
SECTION 8.1 NOTICES. Any notice, consent, waiver, or other
communication required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered (a) upon
receipt, when delivered personally, (b) upon receipt, when sent by facsimile,
provided, that a copy is mailed by U.S. certified mail, return receipt
requested, (c) three (3) days after being sent by U.S. certified mail, return
receipt requested, or (d) one (1) day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:
If to Company: Providential Holdings, Inc.
8700 Warner Avenue
Fountain Valley, California 92708
Attn: Chief Executive Officer
Telephone: (714) 849-1503
Facsimile: (714) 596-0252
With a copy (which shall not constitute notice) to:
Dieterich & Associates
11300 W. Olympic Blvd
Suite 800
Los Angeles, CA 90064-1637
Attention: Christopher H. Dieterich, Esq.
Tel: (310) 312-6888
Fax: (310) 312-6680
If to Agent: Sovereign Capital Advisors, LLC
3340 Peachtree Road, N.E.
Suite 1965
Atlanta, Georgia 30326
Attention: Don Odom
Tel: (404) 814-3737
Fax: (404) 812-3738
With a copy (which shall not constitute notice) to:
Warshaw Burstein Cohen Schlesinger & Kuh, LLP
555 Fifth Avenue
New York, New York 10017
Attention: Michael D. Schwamm, Esq.
Tel: (212) 984-7700
Fax: (212) 972-9150;
Each party shall provide five (5) days prior written notice to the
other party of any change in address or facsimile number
SECTION 8.2 BENEFIT. This Agreement is made solely for the benefit of
Agent and the Company, their respective officers and directors and any
controlling person referred to in Section 15 of the Securities Act and their
respective successors and assigns, and no other person may acquire or have any
right under or by virtue of this Agreement, including, without limitation, the
holders of any
Securities. The term "successor" or the term "successors and assigns" as used in
this Agreement shall not include any purchasers, as such, of any of the
Securities.
SECTION 8.3 SURVIVAL. The respective indemnities, agreements,
representations, warranties, covenants and other statements of the Company and
Agent or the officers, directors or controlling persons of the Company and Agent
as set forth in or made pursuant to this Agreement and the indemnity agreements
of the Company and Agent contained in Section 6 hereof shall survive and remain
in full force and effect, regardless of (a) any investigation made by or on
behalf of the Company or Agent or any such officer, director or controlling
person of the Company or of Agent; (b) delivery of or payment for the
Securities; or (c) the Closing Date, and any successor of the Company or Agent
or any controlling person, officer or director thereof, as the case may be,
shall be entitled to the benefits hereof.
SECTION 8.4 GOVERNING LAW. The validity, interpretation and
construction of this Agreement will be governed by the laws of the State of New
York, without regard to conflicts of law principles. Each party hereby
irrevocably submits to the non-exclusive jurisdiction of the state and federal
courts sitting the City of New York, borough of Manhattan, for the adjudication
of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. If any provision of this Agreement shall
be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
SECTION 8.5 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which may be deemed an original and all of which
together will constitute one and the same instrument.
SECTION 8.6 CONFIDENTIAL INFORMATION. All confidential financial or
business information (except publicly available or freely usable material
otherwise obtained from another source) respecting either party will be used
solely by the other party in connection with the within transactions, be
revealed only to employees or contractors of such other party who are necessary
to the conduct of such transactions, and be otherwise held in strict confidence.
SECTION 8.7 PUBLIC ANNOUNCEMENTS. Prior to the Closing Date, neither
party will issue any public announcement concerning the within transactions
without the approval of the other party.
SECTION 8.8 FINDERS. The parties acknowledge that no person has acted
as a finder in connection with the transactions contemplated herein and each
will agree to indemnify the other with respect to any other claim for a finder's
fee in connection with the Offering.
SECTION 8.9 RECITALS. The recitals to this Agreement are a material
part hereof, and each recital is incorporated into this Agreement by reference
and made apart of this Agreement.
SECTION 8.10 DEFINITIONS. Capitalized terms used in this Agreement but
not otherwise define herein shall have the meanings assigned to such terms in
the Purchase Agreement.
IN WITNESS WHEREOF, the parties hereto have duly caused this agreement to be
executed as of the day and year first above written.
COMPANY SIGNATURE PAGE
TO
PLACEMENT AGENT AGREEMENT
THE COMPANY:
PROVIDENTIAL HOLDINGS, INC.
By: /s/ Henry Fahman
------------------
Name: Henry Fahman
Title: President and Chief
Executive Officer
AGENT SIGNATURE PAGE
TO
PLACEMENT AGENT AGREEMENT
AGENT:
SOVEREIGN CAPITAL ADVISORS, LLC
By: /s/ Paul Hamm
---------------
Paul Hamm, President
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘SB-2’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 9/28/00 | | | | | | | None on these Dates |
| | 4/25/00 | | 1 |
| | 3/28/00 | | 1 |
| List all Filings |
8 Subsequent Filings that Reference this Filing
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