Certain Covenants, Representations and Warranties of Client In connection with the Co-Managers’ activities hereunder, Client hereby represents, warrants, covenants, and agrees, as applicable, to each Co-Manager:
a. Client is duly organized and validly exists as a limited liability company in good standing under the laws of the state of Delaware, has all requisite power and authority to enter into this Agreement, and has all requisite power and authority to conduct its business as described in the Offering Circular.
b. No consent, approval, authorization, or other order of any governmental authority is required in connection with the execution or delivery by the Client of this Agreement or the issuance and sale by the Client of the Securities, except such as may be required under the Securities Act of 1933, as amended (the “Securities Act”) or applicable state securities laws.
c. No defaults exist in the due performance or observance of any material obligation, term, covenant, or condition of any agreement or instrument to which the Client is a party or by which it is bound.
d. At the time of the issuance of the Securities, the Securities will have been duly authorized and validly issued, and upon payment therefor, will be fully paid and non-assessable and will conform to the description in the Offering Circular.
e. Subject to the performance of the Client’s obligations hereunder, the holders of the Securities will have the rights described in the Offering Circular and associated transaction documents.
f. This Agreement, when executed by the Client, will have been duly authorized and will be a valid and binding agreement of the Client, enforceable in accordance with its terms.
g. Client will cooperate with each Co-Manager and provide it reasonable access to the officers, directors, employees, and advisers of Client and Masterworks, and furnish each Co-Manager all information and data regarding the business and financial condition of Client and Masterworks that any Co-Manager deems appropriate for purposes of the Offering (the “Information”).
h. As of each date of any offer of the Securities and each date of any closing of the Offering, the Offering Materials will be complete and correct in all material respects and, except for those statements for which written supplemental corrections or additions have been made or given to the investors participating in such closing, will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.
i. Client will allocate Securities to investors and take all steps reasonably necessary to ensure that the Offering is not over-allotted.
j. Client agrees to confirm all orders for purchase of Securities that are accepted by the Client and provide evidence of such confirmation to the Co-Managers.
k. Client will take reasonable steps to ensure that no officer, director, employee, or affiliate of the Client (except as otherwise described in the Offering Circular) buys or acquires any Securities in connection with the Offering.
l. Any projected or estimated financial information or other forward-looking information relating to issuer or administrator metrics and not the future performance of the securities offered, which the Client in the Offering Materials or otherwise provides to any Co-Manager will be made by Client in good faith, based on management’s best estimates at the time and based on facts and assumptions, which management believes are reasonable. A full management’s discussion of the underlying assumptions and risks relating to achieving such projections will accompany all such projections or estimates.
m. Client acknowledges and agrees that each Co-Manager, in rendering its services hereunder: (i) will be using and relying on the Information provided by Client (as well as information available from affiliates of Client and public sources and other sources deemed reliable by Co-Manager) (ii) is authorized to transmit to any potential investor the Offering Materials and forms of subscription agreements and any other legal documentation supplied to the Co-Manager for transmission to any potential investor by or on behalf of the Client in connection with the Offering; and (iii) does not and will not assume responsibility for the accuracy or completeness of the Offering Materials or any Information or other Information regarding the Client. Each Co-Manager reserves the right to investigate and independently verify the Client’s representations and claims.
n. Client will be solely responsible for the contents of the Offering Materials (as amended and supplemented and including any information incorporated therein by reference).
o. If at any time prior to the completion of the offer and sale of the Securities an event occurs or circumstance exists and the Offering Materials (as then amended and supplemented) include any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, Client will promptly notify each Co-Manager of such event and each Co-Manager will suspend solicitations of prospective purchasers of the Securities until such time as Client shall prepare (and Client agrees that, if it shall have notified each Co-Manager to suspend solicitations after Client has accepted orders from prospective purchasers, it will promptly prepare) a supplement or amendment to the Offering Circular, which corrects such statement(s) or omission(s).
p. Client shall not make any written or oral representations or statements to investors that contradict or are inconsistent with the statements made in the Offering Circular, as amended or supplemented.
q. Any advice rendered or material provided by a Co-Manager during the term of this Agreement or during the Offering process was and is intended solely for the benefit and confidential use of the Client and will not be reproduced, summarized, described, referred to, or given to any other person or entity for any purpose without the Co-Manager’s prior written consent. Each Co-Manager is an independent contractor and is being retained solely to assist Client in its efforts to effect the Offering.
r. Client understands and agrees that neither Co-Manager is or will be construed as a fiduciary of the Client and will have no duties or liabilities to the equity holders or creditors of the Client or to any other person or entity by virtue of this Agreement, other than fiduciary duties imposed under applicable law, rules, or regulations in connection with the arrangements contemplated hereby, and to the fullest extent permitted under applicable law, rules, or regulations, Client hereby expressly waives all of such duties and liabilities.
s. Client understands and agrees that neither Co-Manager will provide legal, accounting, and/or tax advice and Client agrees to retain its own counsel concerning any necessary legal, accounting, and tax matters; and nothing contained herein shall be construed to obligate a Co-Manager to purchase, as principal, any of the securities offered in the Offering.
t. There are no brokers, representatives, or other persons (other than persons associated with the Co-Managers), which have an interest in compensation due to either Co-Manager from any transaction contemplated herein.
u. The Offering of the Securities shall be at the price and upon the terms and conditions set forth in the Offering Circular and the exhibits and appendices thereto and any amendments or supplements thereto.
v. Client will comply with all requirements imposed upon it by of Regulation A, the regulations and rules thereunder, and applicable federal and state securities laws; and Client has not taken, and agrees that it will not take, any action, directly or indirectly, so as to cause the Offering to fail to be entitled to the exemption from registration afforded by Regulation A of Section 401 of the JOBS Act Section 3(b), as amended.
w. In effecting the Offering, Client agrees to comply in all material respects with applicable provisions of the Securities Act and any rules and regulations thereunder and any applicable state laws and requirements, as well as any federal, state, or foreign judicial decisions or opinions related thereto.
x. Client will not solicit investors unless such solicitation complies in all material respects with the requirements of applicable federal securities laws, including Rule 255 under the Securities Act, and will not make any sale of the Securities until the Offering Statement with respect to the Offering is qualified by the SEC, and Client covenants and agrees that the Offering does not and shall not violate any federal, state, local, foreign or other laws, rules, regulations or interpretations, including those rules, regulations and interpretations of the SEC, IRS, FINRA and any other self-regulatory organization or domestic or foreign governmental agency or entity.
y. Client will provide copies to Co-Manager of any current or previous filings with the SEC in the preceding twelve (12) months.
z. Client will collect and maintain investor funds in a segregated account and will treat investor funds and use the proceeds in a manner consistent with the description in the Offering Circular.
aa. Client will take such action as is necessary to qualify the Securities for offer and sale under the securities laws of such states and other jurisdictions of the United States (including but not limited to federal securities laws).
bb. Client agrees (i) that any subscription or other similar agreement pursuant to which Securities are sold shall be in form and substance reasonably satisfactory to each of the Co-Managers and its counsel, shall comply with all applicable federal and state laws, rules and regulations and such other terms and conditions as are customary for exempt transactions of securities pursuant to Regulation A, and (ii) to provide a copy of such executed document to each Co-Manager promptly following the execution and delivery thereof by an investor. The Client agrees that any representations and warranties made by it to any investor in the Offering shall be deemed also to be made to the Co-Managers for their benefit.
Certain Covenants (a) The Company covenants that all shares of Common Stock issued upon conversion of Notes will be fully paid and non-assessable by the Company and free from all taxes, liens and charges with respect to the issue thereof.
(b) The Company covenants that, if any shares of Common Stock to be provided for the purpose of conversion of Notes hereunder require registration with or approval of any governmental authority under any federal or state law before such shares of Common Stock may be validly issued upon conversion, the Company will, to the extent then permitted by the rules and interpretations of the Commission, secure such registration or approval, as the case may be.
(c) The Company further covenants that if at any time the Common Stock shall be listed on any national securities exchange or automated quotation system the Company will list and keep listed, so long as the Common Stock shall be so listed on such exchange or automated quotation system, any Common Stock issuable upon conversion of the Notes.
Certain Covenants and Acknowledgments The Company undertakes and agrees to make all necessary filings in connection with the exchange effected hereby under any United States laws and regulations, and to provide a copy thereof to ▇▇▇▇▇▇▇ promptly after such filing.
Certain Covenants and Agreements The Company hereby covenants and agrees that:
(a) without the prior written consent of the Trustee, it shall not vote or consent or take any other action to: (i) amend or terminate any partnership agreement, limited liability company agreement, certificate of incorporation, by-laws or other organizational documents of any Issuer in any way that changes the rights of the Company with respect to any Pledged Equity Interests or adversely affects the validity, perfection or priority of the Trustee's security interest therein, (ii) permit any issuer of any Pledged Equity Interest to issue to any Person other than the Company any additional stock, partnership interests, limited liability company interests or other equity interests of any nature or to issue securities convertible into or granting the right of purchase or exchange for any stock or other equity interest of any nature of such Issuer, (iii) other than as permitted under the Indenture or this Agreement, permit any Issuer to dispose of all or a material portion of its assets, (iv) waive any default under or breach of any terms, in each case which would adversely affect the validity, perfection or priority of the Trustee's security interest hereunder, of any organizational document relating to the issuer of any Pledged Equity Interest or (v) cause any Issuer of any Pledged Partnership Interests or Pledged LLC Interests which are not securities (for purposes of the Uniform Commercial Code) on the date hereof to elect or otherwise take any action to cause such Pledged Partnership Interests or Pledged LLC Interests to be treated as securities for purposes of the Uniform Commercial Code;
(b) without the prior written consent of the Trustee, it shall not permit any Issuer to merge or consolidate unless all the outstanding capital stock or other equity interests of the surviving or resulting corporation, limited liability company, partnership or other entity is, upon such merger or consolidation, pledged hereunder and no cash, securities or other property is distributed in respect of the outstanding equity interests of any other constituent Person;
(c) in the event that it acquires rights in any Pledged Equity Interests after the date hereof, it shall deliver to the Trustee a completed Pledge Supplement with respect to such Pledged Equity Interests; notwithstanding the foregoing, except in the case of a transaction contemplated by Section 4(k) hereof, the security interest of the Trustee shall attach to all Pledged Equity Interests immediately upon the Company's acquisition of rights therein and shall not be affected by the failure of the Company to deliver any such supplement;
(d) except as provided in the next sentence, in the event that the Company receives any dividends, interest or distributions on any Pledged Equity Interests, or any securities or other property upon the merger, consolidation, liquidation or dissolution of any Issuer, then (a) such dividends, interest or distributions and securities or other property shall be included in the definition of Collateral without, except in the case of a transaction contemplated by Section 4(k) hereof, further action and (b) the Company shall immediately take all steps, if any, necessary or advisable to ensure the validity, perfection, priority and, if applicable, control of the Trustee over the same, and pending any such action the Company shall be deemed to hold such dividends, interest, distributions, securities or other property in trust for the benefit of the Trustee and shall segregate the same from all other property of the Company; notwithstanding the foregoing, so long as no Event of Default shall have occurred and be continuing, the Company shall have the right to retain and utilize in its business all ordinary cash dividends and distributions paid in the normal course of the business of the applicable Issuer;
(e) it shall comply with all of its obligations under any partnership agreement or limited liability company agreement relating to Pledged Partnership Interests or Pledged LLC Interests and shall enforce all of its material rights with respect to any such Interests;
(f) it will defend the Pledged Equity Interests against the claims and demands of all Persons, other than holders of Permitted Liens herein;
(g) without the prior written consent of the Trustee, it shall not withdraw as a partner or member of any Issuer if such withdrawal would materially and adversely affect the value of the Collateral;
(h) it shall cause each Issuer to consent to the grant by the Company to the Trustee of a security interest in the Pledged Equity Interests issued by such Issuer and, without limiting the foregoing, to consent to the transfer of any such Pledged Partnership Interest or Pledged LLC Interest to the Trustee or its nominee following the occurrence and continuance of an Event of Default and to the substitution of the Trustee or its nominee as a partner in any partnership or as a member in any limited liability company with all the rights and powers related thereto;
(i) so long as no Event of Default shall have occurred and be continuing:
(i) except as otherwise provided in subsection (a) or (b) of this Section 4 or Section 8.01(a) hereof, the Company shall be entitled to exercise or refrain from exercising any and all voting and other consensual rights pertaining to the Pledged Equity Interests or any part thereof for any purpose not violating the terms of this Agreement or the Indenture; provided that the Company shall exercise or refrain from exercising any such right if the Trustee (which may act in its reasonable judgment or at the direction of the Holders of not less than a majority in aggregate principal amount of the then outstanding Notes) shall have notified the Company that such action would have a material adverse effect on the value of the Pledged Equity Interests or any part thereof; and provided further that the Company shall give the Trustee at least five (5) Business Days' prior written notice of the manner in which it intends to exercise, or the reasons for refraining from exercising, any such right; it being understood, however, that neither the voting by the Company of any Pledged Stock for, or the Company's consent to, the election of directors (or similar governing body) at a regularly scheduled annual or other meeting of stockholders or with respect to incidental matters at any such meeting, nor the Company's consent to or approval of any action otherwise permitted under this Agreement or the Indenture, shall be deemed to violate the terms of this Agreement within the meaning of this Section 4(i), and no notice of any such voting or consent need be given to the Trustee; and
(ii) the Trustee shall promptly execute and deliver (or cause to be executed and delivered) to the Company all proxies, and other instruments as the Company may from time to time reasonably request for the purpose of enabling the Company to exercise voting and other consensual rights when and to the extent to which it is entitled to exercise such rights pursuant to clause (i) above;
(j) upon the occurrence and during the continuance of an Event of Default:
(i) all rights of the Company to exercise or refrain from exercising the voting and other consensual rights which it would otherwise be entitled to exercise pursuant hereto shall cease, and all such rights shall thereupon become vested in the Trustee, which shall thereupon during any such period have the sole right to exercise such voting and other consensual rights; and
(ii) in order to permit the Trustee to exercise the voting and other consensual rights which it may be entitled to exercise pursuant hereto, the Company shall promptly execute and deliver (or cause to be executed and delivered) to the Trustee all proxies, orders and other instruments as the Trustee may from time to time reasonably request for any such purpose; and
(k) if the Company shall acquire Pledged Equity Interests referred to in clause (ii) of the definition of the term "Issuers" contained in Section 1 hereof, it shall, if it does not own directly all of the issued and outstanding Voting Stock of the Issuer of such Pledged Equity Interests, cause the Subsidiaries of the Company that own, directly or indirectly, such Voting Stock to become parties to this Agreement or a supplement hereto and to execute such other documents and instruments, and take such action, as shall be necessary to effect the pledge of and security interest in such Pledged Equity Interests provided for in this Agreement; and this Agreement, as so supplemented, may provide for changes hereto necessary if any such Pledged Equity Interests represent less than all of the outstanding Voting Stock of the Issuer.
Representations and Covenants of the Holder This Warrant has been entered into by the Company in reliance upon the following representations and covenants of the Holder, which by its execution hereof the Holder hereby confirms:
