Common use of The Placement Agent Clause in Contracts

The Placement Agent. The Placement Agent, a member firm of the Financial Industry Regulatory Authority (“FINRA”), is acting as the exclusive placement agent for the Company in placing this Offering. If all of the Minimum and Maximum Units are sold, the Company will receive gross proceeds of $208,000 and $1,092,000, respectively less the expenses of this Offering. Management estimates that these expenses, including the fee and expense allowance payable to the Placement Agent described below, will be approximately $52,000 and $181,000 in the event the Minimum and Maximum Units are sold, respectively. The Placement Agent will receive a fee equal to 10% and a non-accountable expense allowance equal to 3% of the aggregate gross purchase price of the Units sold. The Company will also grant to the Placement Agent, for nominal consideration, a warrant, exercisable over a three year period commencing on the final Closing Date of the Offering, to purchase such number of Units as shall equal 10% of the number of Units sold in the Offering at an exercise price equal to 120% of the Unit offering price, which is $62,400. The Company has agreed with the Placement Agent, that as long as any shares of C Preferred Stock are outstanding, but not later than five years from the Close, the Placement Agent shall have a right to have a representative approved by the Company attend and observe the Company’s board meetings in a non-voting capacity. The undersigned understands that, except as may be required by applicable regulations of FINRA, the Placement Agent has not independently verified the information provided to her/him with respect to the Company. Accordingly, there is no representation by the Placement Agent as to the completeness or accuracy of such information.