695,650 Shares ARTESIAN RESOURCES CORPORATION CLASS A NON-VOTING COMMON STOCK, PAR VALUE $1.00 PER SHARE UNDERWRITING AGREEMENT
Exhibit 1.1
May 19, 2023
May 19, 2023
XXXXXX XXXXXXXXXX XXXXX LLC
0000 Xxxx Xxxxxx
Philadelphia, PA 19103
Ladies and Gentlemen:
Artesian Resources Corporation, a Delaware corporation (the “Company”), proposes to issue and sell to Xxxxxx Xxxxxxxxxx Xxxxx LLC (the “Underwriter”),
subject to the terms and conditions set forth herein, an aggregate of 695,650 shares (the “Firm Shares”) of the Company’s Class A Non-Voting Common
Stock, par value $1.00 per share (the “Class A Common
Stock”).
The Company also proposes to issue and sell to the Underwriter subject to the terms and conditions set forth herein,
up to an aggregate of 104,348 additional shares (the “Additional Shares”) of Class A Common Stock, if and to the extent
that the Underwriter shall have determined to exercise the right to purchase such Additional Shares granted to the Underwriter in Section 2 hereof. The Firm Shares and the Additional Shares are collectively referred to
as the “Shares.”
In accordance with the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder
(collectively, the “Securities Act”), the Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (file number 333-266821), including a prospectus, relating to securities, including the Shares, to be issued from time
to time by the Company. Such registration statement and prospectus incorporate or are deemed to incorporate by reference documents that the Company has filed, or will file, with the Commission in accordance with the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder (collectively, the “Exchange Act”). The registration statement as amended at the
time it becomes effective, including the information deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A or Rule 430B under the Securities Act, is referred to herein as the “Registration Statement.” If the Company files an abbreviated registration statement to register additional shares of Class A Common Stock pursuant to Rule 462(b) under the
Securities Act (the “Rule 462 Registration Statement”), then any reference herein to the Registration Statement shall be deemed to include such
Rule 462 Registration Statement. The Company has also filed with, or transmitted for filing to, or shall promptly after the date hereof file with or transmit for filing to, the Commission a prospectus supplement (in the form first used to confirm
sales of the Shares (or in the form first made available to the Underwriter by the Company to meet requests of purchasers pursuant to Rule 173 under the Securities Act), the “Prospectus Supplement”) pursuant to Rule 424 under the Securities Act. The term “Base Prospectus” means the prospectus
dated September 29, 2022 relating to the Shares, in the form in which it has most recently been filed with the Commission as part of the Registration Statement on or prior to the date of this Agreement. The term “Prospectus” means the Base Prospectus as supplemented by the Prospectus Supplement. The term “Preliminary Prospectus” means any preliminary form of Prospectus (including without limitation the preliminary Prospectus Supplement dated May 18, 2023, filed with the Commission pursuant to Rule 424).
For purposes of this Agreement, “free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act; “Time of Sale Prospectus”
means the Base Prospectus and the Preliminary Prospectus included in the Registration Statement immediately prior to the Time of Sale, together with the free writing prospectuses, if any, each identified in Schedule I hereto (each, a “Permitted Free Writing Prospectus”), and the information set forth in Schedule I hereto; “Time of Sale” means 8:00 a.m. (Eastern Time) on the date of this Agreement; and “road show” has the
meaning set forth in Rule 433(h)(4) under the Securities Act. As used herein, the terms “Registration Statement,” “Base Prospectus,” “Preliminary Prospectus,” “Time of Sale Prospectus” and “Prospectus” shall include the documents, if any, deemed to
be incorporated by reference therein, including, unless the context otherwise requires, the documents, if any, filed as exhibits to such incorporated documents. The terms “supplement,” “amendment” and “amend” as used herein with respect to the
Registration Statement, the Base Prospectus, the Time of Sale Prospectus, any Preliminary Prospectus, the Prospectus or any free writing prospectus shall include all documents subsequently filed by the Company with the Commission pursuant to the
Exchange Act that are deemed to be incorporated by reference therein.
1. Representations and Warranties of the Company.
The Company represents and warrants to and agrees with the Underwriter on the date hereof, at the Closing Date (as defined in Section 3 hereof) and at each Option Closing Date (as defined in Section 2 hereof), if any, that:
(a) The Registration Statement has become effective under the Securities Act. No stop order suspending the effectiveness of the Registration Statement or preventing or suspending
the use of any Preliminary Prospectus or the Prospectus is in effect, and no proceedings for such purpose are pending before or, to the Company’s knowledge, threatened by the Commission.
(b) The Base Prospectus and any Preliminary Prospectus filed as part of the registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the Securities Act and the rules and regulations thereunder (including, without limitation, Rule 430B(a) or 430A(b)).
(c) (i) Each document incorporated by reference in the Time of Sale Prospectus or the Prospectus complied or will comply when it became effective or when it was filed with the
Commission, as the case may be, in all material respects with the Securities Act or the Exchange Act, as the case may be, and the applicable rules and regulations of the Commission thereunder and such documents did not contain, and any further
documents so filed and incorporated by reference in the Time of Sale Prospectus or the Prospectus or any further amendment or supplement thereto will contain, any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) each part of the Registration Statement, when such part became effective, did not contain and each such
part, as amended or supplemented, if applicable, did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and at the Closing
Date and any Option Closing Date will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (iii) the Registration Statement
complies and, as amended or supplemented, if applicable, will comply in all material respects with the Securities Act; the conditions to the use of Form S-3 in connection with the offering and sale of the Shares as contemplated hereby have been
satisfied; the Registration Statement meets, and the offering and sale of the Shares as contemplated hereby complies with, the requirements of Rule 415 under the Securities Act (including, without limitation, Rule 415(a)(5) thereof); the
Registration Statement is filed not earlier than three years prior to the date hereof, and the Company has not received notice that the Commission objects to the use of the Registration Statement; (iv) at no time during the period that begins on
the earlier of the date of the Preliminary Prospectus and the date on which the Preliminary Prospectus was filed with the Commission and ends immediately prior to the execution of this Agreement did any Preliminary Prospectus contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (v) the Time of Sale Prospectus
does not, and at the Time of Sale, at the Closing Date (as defined in Section 3) and each Option Closing Date (as defined in Section 2), if any, the Time of Sale Prospectus, as then amended
or supplemented by the Company, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; (vi) each Permitted Free Writing Prospectus does not conflict with the information contained in the Registration Statement, the Time of Sale Prospectus or the Prospectus and each such Permitted Free
Writing Prospectus, as supplemented by and taken together with the Time of Sale Prospectus, as of the Time of Sale, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; (vii) each road show, when considered together with the Time of Sale Prospectus, does not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (viii) the Prospectus, as of the date it is filed with the Commission
pursuant to Rule 424, at the Closing Date and at each Option Closing Date, if any, will comply in all material respects with the Securities Act (including without limitation Section 10(a) of the Securities Act) and will not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties set
forth in this Section 1(c) do not apply to statements or omissions in the Registration Statement, the Time of Sale Prospectus, any Preliminary Prospectus, any Permitted Free Writing Prospectus, any road show or the Prospectus or any amendments or
supplements thereto based upon information relating to the Underwriter furnished to the Company in writing by the Underwriter expressly for use therein, it being agreed that the only such information furnished by the Underwriter to the Company
expressly for use therein are the statements contained in the eleventh and twelfth paragraphs under the caption “Underwriting” in the Time of Sale Prospectus and the Prospectus Supplement relating to stabilizing transactions (collectively, the “Underwriter Information”).
(d) Prior to the execution of this Agreement, the Company has not, directly or indirectly, offered or sold any Shares by means of any “prospectus” (within the meaning of the
Securities Act) or used any prospectus in connection with the offer or sale of the Shares, in each case other than the Preliminary Prospectus and/or the Permitted Free Writing Prospectuses; the Company has not, directly or indirectly, prepared,
made, used, authorized, approved or referred to, and will not prepare, make, use, authorize, approve or refer to, any free writing prospectuses without the prior written consent of the Underwriter, other than the Permitted Free Writing Prospectuses
and any road shows furnished or presented to the Underwriter before first use. Each Permitted Free Writing Prospectus has been prepared, used or referred to in compliance with Rule 163 or with Rules 164 and 433 under the Securities Act. Assuming
that each Permitted Free Writing Prospectus is so sent or given after the Registration Statement was filed with the Commission (and after such Permitted Free Writing Prospectus was, if required pursuant to Rule 433(d) under the Securities Act,
filed with the Commission), the sending or giving, by the Underwriter, of any Permitted Free Writing Prospectus will satisfy the provisions of Rules 164 and 433 (without reliance on subsections (b), (c) and (d) of Rule 164); the conditions set
forth in one or more of subclauses (i) through (iv), inclusive, of Rule 433(b)(1) under the Securities Act are satisfied, and the registration statement relating to the offering of the Shares contemplated hereby, as initially filed with the
Commission, includes a prospectus that, other than by reason of Rule 433 or Rule 431 under the Securities Act, satisfies the requirements of Section 10 of the Securities Act. Neither the Company nor the Underwriter is disqualified, by reason of
subsection (f) or (g) of Rule 164 under the Securities Act, from using, in connection with the offer and sale of the Shares, free writing prospectuses pursuant to Rules 164 and 433 under the Securities Act. Each Permitted Free Writing Prospectus
that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act, or that was prepared by or on behalf of or used or referred to by the Company, complies or will comply in all material respects with the
requirements of the Securities Act. No Permitted Free Writing Prospectus conflicts with the information contained in the Registration Statement, any Preliminary Prospectus, Time of Sale Prospectus or Prospectus; and, to the Company’s knowledge, no
free writing prospectus prepared by or on behalf of or used by the Underwriter contains any “issuer information” within the meaning of Rule 433(h)(2) under the Securities Act.
(e) As of the time of filing of the Registration Statement and as of the filing of the Company’s most recent Annual Report on Form 10-K, the Company was a “smaller reporting
company,” as defined in Rule 12b-2 of the Exchange Act.
(f) The Class A Common Stock is listed on the Nasdaq Global Select Market (the “Exchange”),
and the Company has not received any notice from the Exchange regarding the delisting of the Class A Common Stock from the Exchange. The Shares are duly listed, and admitted and authorized for trading, subject to official notice of issuance, on
the Exchange. To the Company’s knowledge, there are no affiliations or associations between any member of the Financial Industry Regulatory Authority (“FINRA”),
on the one hand, and the Company, any of its subsidiaries or any of its or their respective officers or directors, or any beneficial owner of its unregistered equity securities that were acquired at any time on or after the 180th day immediately
preceding the date the Registration Statement was initially filed with the Commission, on the other hand, except as disclosed in the Registration Statement (excluding the exhibits thereto), the Time of Sale Prospectus and the Prospectus.
(g) The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation, has the corporate power and
authority to own its property and to conduct its business as described in the Time of Sale Prospectus and the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or to be in good standing would not (i) have a material adverse effect on the assets, business, condition (financial or
otherwise), results of operation or prospects of the Company and its subsidiaries, taken as a whole, (ii) prevent or materially interfere with the consummation of the transactions contemplated hereby or (iii) result in the delisting of the Class A
Common Stock from the Exchange (the occurrence of any such effect, prevention or interference described in the foregoing clauses (i), (ii) or (iii) being herein referred to as a “Material Adverse Effect”).
(h) Each subsidiary of the Company has been duly organized, is validly existing as an entity in good standing under the laws of the jurisdiction of formation, has the corporate
power and authority to own its property and to conduct its business as described in the Time of Sale Prospectus and the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have, individually or in the aggregate, a Material Adverse Effect. All of the
issued shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims; and no options, warrants or other rights to purchase, agreements or other obligations to issue, or other rights to convert any obligations into shares of capital stock or ownership interests in any of the subsidiaries or
securities convertible into or exchangeable for capital stock of, or other ownership interests in any of the subsidiaries are outstanding, except as disclosed in the Time of Sale Prospectus and the Prospectus. Neither the Company nor any of its
subsidiaries owns any stock or other interest whatsoever, whether equity or debt, in any corporation, partnership or other entity except as disclosed in the Time of Sale Prospectus and the Prospectus.
(i) This Agreement has been duly authorized, executed and delivered by the Company.
(j) The authorized and outstanding capitalization of the Company is as set forth under the caption “Capitalization” in the Time of Sale Prospectus. The authorized capital stock of
the Company conforms as to legal matters to the description thereof contained or incorporated by reference in the Time of Sale Prospectus and the Prospectus.
(k) The shares of Class A Common Stock outstanding prior to the issuance of the Shares to be sold by the Company have been duly authorized, are validly issued, fully paid and
non‑assessable, have been issued in compliance in all material respects with applicable securities laws and were not issued in violation of any preemptive or similar rights. Except as disclosed in the Time of Sale Prospectus and the Prospectus,
all prior offers and sales of securities by the Company were made in compliance in all material respects with the Securities Act and all other applicable laws and regulations.
(l) The Shares to be sold by the Company have been duly authorized and, when issued and delivered in accordance with the hereof, will be validly issued, fully paid and
non‑assessable, and the issuance of the Shares will not be subject to any preemptive or similar rights. Upon payment of the purchase price and issuance and delivery of the Shares in accordance herewith, the Underwriter will receive good, valid and
marketable title to the Shares, free and clear of all liens, charges, security interests, encumbrances or claims.
(m) Neither the execution and delivery by the Company of, nor the performance by the Company of its obligations under, this Agreement will conflict with, contravene, result in a
breach or violation of, or imposition of any lien, charge or encumbrance upon any assets of the Company or any of its subsidiaries pursuant to, or constitute a default or a Debt Repayment Triggering Event (as defined below) under: (i) any statute,
law, rule, regulation, judgment, order decree of any federal, state, local, municipal, foreign or other administrative, regulatory, governmental or quasigovernmental authority (each, a “Governmental Authority”); (ii) the certificate of incorporation or bylaws of the Company or any of its subsidiaries; or (iii) any contract, agreement, obligation, covenant or instrument to which the
Company, any of its subsidiaries or any of its or their respective assets is subject or bound, except, in the case of (i) and (iii), as would not, individually or in the aggregate, have a Material Adverse Effect. A “Debt Repayment Triggering Event” means any event or condition that gives, or with the giving of notice, lapse of time or both would give, the holder of any note, debenture
or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries.
(n) (i) Neither the Company nor any of its subsidiaries is in violation of its certificate of incorporation or bylaws, and (ii) neither the Company nor any of its subsidiaries is
(A) in violation of any statute, law, rule, regulation, judgment, order or decree of any Governmental Authority or (B) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound, except, in the case of the foregoing clause (ii), for such defaults as would not,
individually or in the aggregate, have a Material Adverse Effect.
(o) No approval, authorization, consent or order of or filing with any federal, state, local or foreign governmental or regulatory commission, board,
body, authority or agency, or of or with any self-regulatory organization or other non-governmental regulatory authority (including, without limitation, the Exchange), or approval of the Company’s securityholders, is required in connection with the
issuance or sale of the Shares or the consummation of the transactions contemplated hereby, other than (i) the registration of the Shares under the Securities Act, which has been effected (or, with respect to any Rule 462 Registration Statement,
will be effected in accordance with Rule 462(b) under the Securities Act), (ii) any necessary qualification under the securities or blue sky laws of the various jurisdictions in which the Shares are being offered by the Underwriter (iii) any
necessary filing of a supplemental listing application and related materials with the Exchange or (iv) any necessary approval by FINRA of the underwriting terms and arrangements.
(p) There are no actions, suits, claims, investigations or proceedings (collectively, “Actions”) pending or, to the Company’s knowledge, threatened or contemplated to which the Company, any of its subsidiaries or any of its or their respective directors or officers is or would be a party or of which any of its or
their respective properties is or would be subject at law or in equity, before or by any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency, or before or by any self-regulatory organization or
other non-governmental regulatory authority (including, without limitation, the Exchange), other than any such Action accurately described in the Registration Statement, the Time of Sale Prospectus and the Prospectus or which, if resolved adversely
to the Company or any of its subsidiaries, would not, individually or in the aggregate, have a Material Adverse Effect. There are no Actions that are required to be described in the Time of Sale Prospectus and the Prospectus and are not so
described. There are no statutes, regulations, contracts or other documents that are required to be described in the Registration Statement, the Time of Sale Prospectus or the Prospectus, or to be filed as exhibits to the Registration Statement,
that are not so described or filed as required.
(q) The Company and its subsidiaries are not and, immediately after giving effect to the offering and sale of the Shares and the application of the proceeds thereof as described
under the caption “Use of Proceeds” in the Prospectus, will not be required to register as an “investment company” (as defined in the Investment Company Act of 1940, as amended).
(r) BDO USA, LLP, who has certified certain financial statements of the Company and its subsidiaries and delivered its report with respect to audited consolidated financial
statements incorporated by reference in the Registration Statement, the Time of Sale Prospectus and the Prospectus, is an independent registered public accounting firm with respect to the Company within the applicable rules and regulations adopted
by the Commission and the Public Company Accounting Oversight Board and as required by the Securities Act.
(s) The financial statements included or incorporated by reference in the Registration Statement, the Time of Sale Prospectus and the Prospectus, together with the related notes and
schedules thereto, present fairly the consolidated financial position of the Company and its subsidiaries as of the dates indicated and the consolidated results of operations, cash flows and changes in shareholders’ equity of the Company for the
periods specified and have been prepared in compliance with the requirements of the Securities Act and Exchange Act and in conformity with U.S. generally accepted accounting principles (“GAAP”) applied on a consistent basis during the periods involved. The other financial and statistical data contained or incorporated by reference in the Registration Statement, the Time of Sale Prospectus
and the Prospectus are accurately and fairly presented and prepared on a basis consistent with the financial statements and books and records of the Company and its subsidiaries to which such data relate. There are no financial statements
(historical or pro forma) that are required to be included or incorporated by reference in the Registration Statement, the Time of Sale Prospectus or the Prospectus that are not included or incorporated by reference as required. The Company and
its subsidiaries do not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations), that are not described in the Time of Sale Prospectus and the Prospectus. All disclosures contained or
incorporated by reference in the Time of Sale Prospectus and the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply with Regulation G under the Exchange Act and Item 10
of Regulation S-K under the Securities Act, to the extent applicable.
(t) All statistical or market-related data included or incorporated by reference in the Registration Statement, the Time of Sale Prospectus and the Prospectus are based on or
derived from sources that the Company reasonably believes to be reliable and accurate, and the Company has obtained the written consent to the use of such data from such sources to the extent required. Each “forward-looking statement” (within the
meaning of Section 27A of the Securities Act or Section 21E of the Exchange Act) contained or incorporated by reference in the Registration Statement, the Time of Sale Prospectus, the Prospectus and the Permitted Free Writing Prospectuses has been
made or reaffirmed with a reasonable basis and in good faith.
(u) Except as disclosed in the Registration Statement, the Time of Sale Prospectus and the Prospectus: (i) neither the Company nor any of its subsidiaries (A) is, or has been, in
violation of, or has, or has had, any liability under, any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, other requirement or rule of law (including common law), or decision or order of any domestic or foreign
governmental agency, governmental body or court, relating to pollution, to the generation, use, handling, transportation, treatment, storage, discharge, disposal or release of toxic or hazardous materials or wastes, to the protection or restoration
of the environment or natural resources, to the protection of health and safety, including as such relates to exposure to toxic or hazardous materials or wastes, and to natural resource damages (collectively, “Environmental Laws”), (B) own, occupy, operate or use any real property that is known by the Company or any of its subsidiaries to be contaminated with Hazardous Substances,
(C) has, or reasonably anticipates to have, responsibility for conducting or funding any investigation, remediation, response action or monitoring of actual or suspected Hazardous Substances in the environment, (D) is liable or allegedly liable for
any release or threatened release of Hazardous Substances, including at any off-site treatment, storage or disposal site, (E) is subject to any pending, or to the Company’s knowledge threatened, claim, demand, proceeding or formal request by any
governmental agency or governmental body or person that arises under Environmental Laws or relates to Hazardous Substances and (F) is in non-compliance with the terms and conditions of, or has any actual or threatened liability under Environmental
Laws with respect to, any permits, licenses, authorizations, identification numbers or other approvals required under applicable Environmental Laws to conduct their business, except in each of (A)-(F) as would not, individually or in the aggregate,
result in a Material Adverse Effect; (ii) to the knowledge of the Company and its subsidiaries, there are no facts or circumstances that would reasonably be expected to result in a violation of, liability under, or claim, demand, proceeding or
formal request pursuant to, any Environmental Law that would result in a Material Adverse Effect; and (iii) there are no judicial or administrative proceedings that are pending against the Company or any of its subsidiaries under any Environmental
Laws in which a governmental entity is also a party and, to the knowledge of the Company, no such proceedings are threatened, in each case other than such proceedings regarding which it is reasonably believed no monetary sanctions of $100,000 or
more will be imposed. In the ordinary course of its business, the Company and its subsidiaries periodically evaluate the effect, including associated costs and liabilities, of Environmental Laws on the business, properties, results of operations
and financial condition of the Company, and, on the basis of such evaluation, the Company and its subsidiaries have reasonably concluded that such Environmental Laws will not, individually or in the aggregate, result in a Material Adverse Effect.
The term “Hazardous Substances” means (i) petroleum and petroleum products, by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and mold and (ii) any other chemical, material, substance or waste listed, classified, defined or otherwise regulated as flammable, toxic or hazardous or as a pollutant or contaminant under
Environmental Laws.
(v) Except as disclosed in the Time of Sale Prospectus and the Prospectus, there are no contracts, agreements or understandings between the Company or any of its subsidiaries, on
the one hand, and any person, on the other hand, granting such person the right to require the Company to (i) file a registration statement under the Securities Act with respect to any securities of the Company or (ii) include any securities of the
Company with the Shares registered pursuant to the Registration Statement.
(w) Except as disclosed in the Time of Sale Prospectus and the Prospectus, there are no contracts, agreements or understandings between the Company and
any person that would give rise to a valid claim against the Company or the Underwriter for a brokerage commission, finder’s fee or other like payment in connection with this offering.
(x) Subsequent to the respective dates of the financial statements included or incorporated by reference in each of the Registration Statement, the Time of Sale Prospectus and the
Prospectus, and any other specified dates as of which information is given in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus, (i) there has not occurred any Material Adverse Effect, or any development involving a
prospective Material Adverse Effect; (ii) the Company and its subsidiaries have not incurred any material liability or obligation, direct or contingent, nor entered into any material transaction; (iii) the Company and its subsidiaries have not
sustained any material loss or interference with its or their respective businesses from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree; (iv)
the Company has not purchased any of its outstanding capital stock, nor declared, paid or otherwise made any dividend or distribution of any kind on its capital stock other than ordinary and customary dividends; and (v) there has not been any
material change in the capital stock, short‑term debt or long‑term debt of the Company and its subsidiaries; except in each case as described in the Registration Statement, the Time of Sale Prospectus and the Prospectus.
(y) To the Company’s knowledge, the Company and its subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal
property owned by them which is material to the business of the Company and its subsidiaries, in each case free and clear of all defects, liens, charges, encumbrances or claims, in each case except as described in the Time of Sale Prospectus and
the Prospectus or except as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and its subsidiaries. Any real property and buildings held under lease
by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries, in each case except as described in the Time of Sale Prospectus and the Prospectus.
(z) To the Company’s knowledge, each of the Company and its subsidiaries owns or possesses all inventions, patent applications, patents, trademarks (both registered and
unregistered), trade names, service names, copyrights, trade secrets and other proprietary information described in the Registration Statement, the Time of Sale Prospectus and the Prospectus as being owned or licensed by it or which is otherwise
necessary for the conduct of, or material to, its respective businesses (collectively, the “Intellectual Property”). The Company is unaware of
any action, suit, proceeding or claim to the contrary or any challenge by any other person to the rights of the Company or any of its subsidiaries with respect to the Intellectual Property that would render any Intellectual Property invalid or
inadequate to protect the interests of the Company or any of its subsidiaries, and the Company is unaware of any facts that could form a reasonable basis for any such action, suit, proceeding or claim. To the Company’s knowledge, neither the
Company nor any of its subsidiaries has infringed or is infringing the intellectual property of a third party in a manner which would result in a Material Adverse Effect, and neither the Company nor any of its subsidiaries has received notice of a
claim by a third party to the contrary.
(aa) The Company and its subsidiaries (i) have implemented and maintain commercially reasonable controls, policies, procedures, and safeguards to maintain and protect their material
confidential information and the integrity, continuous operation, redundancy and security of all information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) and data (including all personal, personally identifiable, sensitive, confidential or regulated data (“Personal Data”)) used in connection with their respective businesses, and to the Company’s knowledge, there have been no breaches, violations, outages or unauthorized uses
of or accesses to the same, except for those that have been remedied without material cost or liability or the duty to notify any other person, except in each case above as would not, individually or in the aggregate, have a Material Adverse
Effect; and (ii) to the Company’s knowledge, are in material compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority relating to the privacy
and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification, except to the extent that the failure to do so would not result in a Material
Adverse Effect.
(bb) No strike, work stoppage, slowdown or other labor dispute with the employees of the Company or any of its subsidiaries exists, except as described in the Time of Sale Prospectus
and the Prospectus or, to the Company’s knowledge, is imminent. The Company is not aware of any existing, threatened or imminent labor disturbance by the employees of any of its principal suppliers, manufacturers or contractors that could have a
Material Adverse Effect on the Company and its subsidiaries, taken as a whole.
(cc) Neither the Company nor any of its subsidiaries is in violation of any provision of the Employee Retirement Income Security Act of 1974, as amended, or the rules and regulations
promulgated thereunder (collectively, “ERISA”), except for such violations as would not have a Material Adverse Effect. Each “employee benefit
plan” (as defined under ERISA) for which the Company, its subsidiaries or its or their respective ERISA Affiliates (as defined below) would have any liability (each, a “Plan”) has been maintained in compliance in all material respects with its terms and with the requirements of all applicable statutes, rules and regulations, including ERISA and the Internal Revenue Code of 1986, as
amended, and the regulations and published interpretations thereunder (collectively, the “Code”). “ERISA Affiliate” means, with respect to the Company or any of its subsidiaries, any member of any group of organizations described in Section 414(b), (c), (m) or (o) of the Code of which
the Company or such subsidiary is a member. No Plan is, and none of the Company, its subsidiaries or any of its or their respective ERISA Affiliates has within the past six years sponsored, maintained, participated in, contributed to or had any
obligation (contingent or otherwise) with respect to any (i) “multiemployer plan” (within the meaning of Section 3(37) of ERISA), (ii) pension plan subject to Title IV or Part 3 of Title I of ERISA or Section 412 of the Code, (iii) “multiple
employer plan” (within the meaning of Section 413(c) of the Code) or (iv) multiple employer welfare arrangement (within the meaning of Section 3(40) of ERISA). None of the Company, its subsidiaries or any of its or their respective ERISA
Affiliates has incurred or reasonably expects to incur any liability under Section 412, 4971, 4975 or 4980B of the Code. No prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) has occurred, excluding
transactions effected pursuant to a statutory or administrative exemption. Each Plan that is intended to be qualified under Section 401(a) of the Code is so qualified, and nothing has occurred, whether by action or failure to act, which would
cause the loss of such qualification. There is no pending audit or investigation by the U.S. Internal Revenue Service, the U.S. Department of Labor, the Pension Benefit Guaranty Corporation or any other governmental agency or any foreign
regulatory agency with respect to any Plan that could reasonably be expected to result in material liability to the Company or any of its subsidiaries.
(dd) The Company and each of its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and
customary in the businesses in which they are engaged. Neither the Company nor any of its subsidiaries has been refused any insurance coverage sought or applied for; and neither the Company nor any of its subsidiaries has any reason to believe
that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse
Effect.
(ee) Except as otherwise would not have a Material Adverse Effect, the buildings, structures and equipment owned by the Company and its subsidiaries are in good operating condition
and repair and have been reasonably maintained consistent with standards generally followed in the industry (giving due account to the age and length of use, ordinary wear and tear excepted), are adequate and suitable for their present uses and, in
the case of buildings and other structures, are structurally sound.
(ff) (i) The Company and its subsidiaries possess, and are operating in material compliance with, all certificates, approvals, clearances, registrations, exemptions, licenses,
authorizations and permits (each, a “Permit”) of the appropriate Governmental Authorities necessary to conduct their respective businesses, (ii)
neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such Permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a Material Adverse Effect, and (iii) except as described in the Time of Sale Prospectus and the Prospectus, such Permits contain no restrictions that materially affect the ability of the Company or any of its subsidiaries to conduct
their businesses.
(gg) Except as described in the Time of Sale Prospectus and the Prospectus, no subsidiary of the Company is subject to any material direct or indirect prohibition on the payment of
dividends to the Company, on making any other distribution on such subsidiary’s capital stock, on repaying the Company for any loans or advances to such subsidiary from the Company or on transferring any of such subsidiary’s property or assets to
the Company or to any other subsidiary of the Company.
(hh) The Company maintains a system of “internal control over financial reporting” (as defined in Rules 13a-15(f) under the Exchange Act) that complies with the requirements of the
Exchange Act and has been designed by the Company’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with GAAP, including, without limitation, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or
specific authorization, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets, (iii) access to assets is
permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any
differences. Except as disclosed in the Time of Sale Prospectus and the Prospectus, the Company’s internal control over financial reporting is effective in performing the functions for which it was established, and the Company is not aware of any
material weaknesses in its internal control over financial reporting. Except as disclosed in the Time of Sale Prospectus and the Prospectus, since the date of the latest audited financial statements in the Registration Statement, the Time of Sale
Prospectus and the Prospectus, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
(ii) The Company maintains “disclosure controls and procedures” (as defined in Rules 13a-15(e) under the Exchange Act) that
comply with the requirements of the Exchange Act and have been designed to ensure that material information relating to the Company and its subsidiaries is made known to the Company’s principal executive officer and principal financial officer by
others within those entities. Except as disclosed in the Registration Statement, the Time of Sale Prospectus and the Prospectus, the Company’s disclosure controls and procedures are effective in performing the functions for which they were
established. The principal executive officers (or their equivalents) and principal financial officers (or their equivalents) of the Company have made all certifications required by the Xxxxxxxx-Xxxxx Act of 2002 and any related rules and
regulations promulgated by the Commission (the “Xxxxxxxx-Xxxxx Act”), and the statements made in each such certification are accurate. The
Company, its subsidiaries and its and their respective directors and officers are each in compliance in all material respects with the applicable provisions of the Xxxxxxxx-Xxxxx Act.
(jj) Neither the Company nor any of its subsidiaries has sent or received any communication regarding the termination of, or the intention not to renew, any of the contracts or
agreements referred to or described in the Time of Sale Prospectus or the Prospectus, or referred to, described in or filed as an exhibit to, the Registration Statement, and no such termination or non-renewal has been threatened by the Company or
any of its subsidiaries or, to the Company’s knowledge, any other party to any such contract or agreement.
(kk) All federal, state, local and foreign tax returns required to be filed by the Company and its subsidiaries have been timely filed, and all taxes and other assessments of a
similar nature (whether imposed directly or through withholding), including any interest, additions to tax or penalties applicable thereto due or claimed to be due from such entities, have been timely paid, other than those being contested in good
faith and for which adequate reserves have been provided. Except as disclosed in the Time of Sale Prospectus and the Prospectus, there is no tax deficiency that has been, or could reasonably be expected to be, asserted against the Company, any of
its subsidiaries or any of its or their respective properties or assets.
(ll) Neither the Company nor any of its subsidiaries nor, to the Company’s knowledge, any of their respective directors, officers or employees, or any agent, affiliate or other
person associated with or acting on behalf of the Company or any of its subsidiaries, has (i) made, offered, promised or authorized any unlawful contribution, gift, entertainment or other unlawful expense, (ii) made, offered, promised or authorized
any direct or indirect unlawful payment or (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, the Bribery Act 2010 of the United Kingdom or any other applicable anti-bribery or
anti-corruption law.
(mm) The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable anti-money laundering laws, including, but not limited
to, the Bank Secrecy Act of 1970, as amended by the USA PATRIOT Act of 2001, and the rules and regulations promulgated thereunder, and the anti-money laundering laws of the various jurisdictions in which the Company and its subsidiaries conduct
business (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the Company’s knowledge, threatened.
(nn) Neither the Company nor any of its subsidiaries nor any of their respective directors, officers or employees nor, to the Company’s knowledge, any agent, affiliate or person
associated with or acting on behalf of the Company or any of its subsidiaries, is currently the subject or the target of any U.S. sanctions administered or enforced by the Office of Foreign Assets Control of the U.S. Treasury Department, the U.S.
Department of State, the European Union, His Majesty’s Treasury, the United Nations Security Council or any other relevant sanctions authority (collectively, “Sanctions”) or is located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Cuba, Iran, North Korea, Syria and the Crimea, Donetsk People’s Republic, and Luhansk
People’s Republic regions of Ukraine). The Company will not directly or indirectly use the proceeds of the offering of the Shares, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other
person or entity, to fund or facilitate any activities of or business with any person, or in any country or territory, that at such time is the subject or the target of Sanctions or in any other manner that will result in a violation by any person
(including any person participating in the transactions contemplated hereby, whether as an underwriter, advisor, investor or otherwise) of Sanctions. The Company and its subsidiaries are not knowingly engaged in, and for the past five years have
not knowingly engaged in, any dealings or transactions with any person, or in any country or territory, that at such time is or was the subject or the target of Sanctions.
(oo) Except as described in the Time of Sale Prospectus and the Prospectus, the Company has not sold, issued or distributed any shares of Class A Common Stock during the twelve-month
period preceding the date hereof, including any sales pursuant to Rule 144A under, or Regulation D or Regulation S of, the Securities Act, other than shares of Class A Common Stock issued pursuant to (i) employee benefit plans, (ii) qualified stock
option plans, (iii) its existing dividend reinvestment and direct share purchase plan, (iv) its existing employee stock purchase plan, (v) its existing 2015 Equity Compensation Plan, effective December 9, 2015, (vi) other employee compensation
plans or (vii) pursuant to outstanding options, rights or warrants; provided that the Company has notified the Underwriter of the number of
shares of Class A Common Stock issued, and the price at which such shares were issued, pursuant to clauses (i) – (vii) of this paragraph (oo) during the twelve-month period preceding the date hereof.
(pp) Neither the Company nor any of its subsidiaries nor any of their respective directors, officers, affiliates or controlling persons has taken, directly or indirectly, any action
designed, or which has constituted or might reasonably be expected, to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares.
(qq) The statements relating to legal matters, documents or proceedings included in (a) the Base Prospectus under “Description of Capital Stock” and “Plan of Distribution” (b) the
Time of Sale Prospectus and the Prospectus under the captions “Material United States Federal Income and Estate Tax Considerations to Non-U.S. Holders,” “Certain ERISA Considerations,” and “Underwriting” (c) Items 15 and 17 of the Registration
Statement and (d) Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, under the caption “Government Regulations,” in each case insofar as they purport to describe the provisions of laws, rules,
regulations, legal or governmental proceedings or contracts and other documents, are accurate, complete and fair in all material respects.
2. Agreements to Sell and
Purchase. The Company hereby agrees to issue and sell 695,650 Firm Shares to the Underwriter at a price of $50.00 per share (the “Purchase
Price”), and the Underwriter, upon the basis of the representations and warranties and subject to the conditions set forth herein, agrees to purchase from the Company at the Purchase Price such number of Firm Shares.
Moreover, the Company hereby agrees to issue and sell up to 104,348 Additional Shares to the Underwriter at the
Purchase Price less an amount per share equal to any cash dividend payable by the Company on the Firm Shares but only to the extent that such dividend is not payable on the Additional Shares due to the timing of the record date of the cash dividend,
and the Underwriter, upon the basis of the representations and warranties contained herein, but subject to the terms and conditions herein set forth, shall have the right (but not the obligation) to purchase Additional Shares at the Purchase Price
less an amount per share equal to any cash dividend payable by the Company on the Firm Shares but only to the extent that such dividend is not payable on the Additional Shares due to the timing of the record date of the cash dividend (the “Option”). The Underwriter may exercise this right to purchase Additional Shares in whole or from time to time in part by giving written notice of such
exercise not later than 30 days after the date hereof. Any exercise notice shall specify the number of Additional Shares to be purchased by the Underwriter and the date on which such Additional Shares are to be purchased. Each purchase date must be
at least one business day after the date on which such written notice is given and may not be earlier than the Closing Date or later than ten business days after the date on which such written notice is given. On each day, if any, that Additional
Shares are to be purchased (an “Option Closing Date”), the Underwriter agrees to purchase the number of Additional Shares set forth in such
exercise notice.
3. Payment and Delivery.
Payment for the Firm Shares to be sold by the Company shall be made to the Company in Federal or other funds immediately available in Philadelphia, PA against delivery of such Firm Shares for the account of the Underwriter at 11:00 a.m., Eastern
Time, on May 23, 2023, or at such other date and time as shall be designated in writing by the Underwriter (such date and time, the “Closing Date”).
Payment for any Additional Shares shall be made to the Company in Federal or other funds immediately available in
Philadelphia, PA against delivery of such Additional Shares for the account of the Underwriter at 11:00 a.m., Eastern Time, on the Option Closing Date specified in the corresponding exercise notice described in Section 2 hereof or at such other date and time as shall be designated in writing by the Underwriter.
The Firm Shares and the Additional Shares shall be registered in such names and in such denominations as the
Underwriter shall request in writing not later than one full business day prior to the Closing Date or the Option Closing Date, as applicable. The Firm Shares and the Additional Shares shall be delivered to the Underwriter on the Closing Date or the
Option Closing Date, as applicable, for the account of the Underwriter, with any transfer taxes payable in connection with the transfer of the Shares to the Underwriter duly paid, against payment of the Purchase Price therefor.
4. Conditions to the Underwriter’s Obligations.
The obligations of the Underwriter are subject to the condition that all representations and warranties of the Company contained herein are, at the date hereof, at the Closing Date and at each Option Closing Date, if any, true and correct, the
condition that the Company has performed its obligations required to be performed hereunder prior to the Closing Date and the following further conditions:
(a) Subsequent to the execution and delivery hereof and prior to the Closing Date and each Option Closing Date, if any, there shall not have occurred:
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(ii)
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any change, or any development involving a prospective change, in the assets, business, condition (financial
or otherwise), management, operations, earnings or prospects of the Company and its subsidiaries, taken as a whole, from that set forth in the Time of Sale Prospectus, that could reasonably be expected to result in a Material Adverse
Effect.
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(b) The Underwriter shall have received on the Closing Date and each Option Closing Date, if any, a certificate, dated the Closing Date or such Option Closing Date, as applicable,
and signed by the Chief Executive Officer and the Chief Financial Officer of the Company, to the effect that (i) the representations and warranties of the Company set forth herein are true and correct at and as if made on the Closing Date or such
Option Closing Date, as applicable, (ii) the Company has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied hereunder on or before the Closing Date or such Option Closing Date, as
applicable, (iii) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings or examinations for that purpose have been instituted or, to the knowledge of such officers, threatened, and (iv) as to
such other matters as the Underwriter may reasonably request. The delivery of such certificate shall constitute a representation and warranty of the Company as to the statements made therein.
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(i)
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an opinion of Xxxxxx, Xxxxx & Xxxxxxx LLP, outside counsel for the Company, dated the Closing Date or
such Option Closing Date, as applicable, in form and substance reasonably satisfactory to counsel for the Underwriter;
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(ii)
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a negative assurance letter of Xxxxxx, Xxxxx & Xxxxxxx LLP, outside counsel for the Company, dated the
Closing Date or such Option Closing Date, as applicable, in form and substance reasonably satisfactory to counsel for the Underwriter;
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(iii)
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an opinion and negative assurance letter of Xxxxxxx & Knight LLP, counsel for the Underwriter, dated the
Closing Date or such Option Closing Date, as applicable, in form and substance satisfactory to the Underwriter.
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(d) The Underwriter shall have received, on the date hereof, the Closing Date and each Option Closing Date, if any, a letter dated the date hereof, the Closing Date or the Option
Closing Date, as applicable, in form and substance satisfactory to the Underwriter, from BDO USA, LLP, independent public accountants, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to
underwriters with respect to the financial statements and certain financial information contained in the Registration Statement, the Time of Sale Prospectus and the Prospectus; provided that each such letter shall use a “cut-off date” not earlier than three days prior to the date thereof.
(e) No stop order suspending the effectiveness of the Registration Statement or preventing or suspending the use of any Preliminary Prospectus, the Time of Sale Prospectus or the
Prospectus shall have been issued, and no proceedings for such purpose shall have been instituted or threatened by the Commission; no notice of objection of the Commission to the use of the Registration Statement shall have been received; and all
requests for additional information on the part of the Commission shall have been complied with to the Underwriter’s satisfaction.
(f) The Underwriter shall have received, on the date hereof, “lock‑up” agreements, each substantially in the form of Exhibit A hereto, between the Underwriter, on the one hand, and the directors, officers and certain shareholders of the Company, on the other hand, relating to sales and certain other
dispositions of shares of Class A Common Stock and other securities of the Company, and such lock-up agreements shall be in full force and effect at the Closing Date, and each Option Closing Date, if any.
(g) The Shares shall have been duly listed on the Exchange.
(h) FINRA shall not have raised any objection with respect to the fairness or reasonableness of the terms and arrangements of the underwriting or the transactions contemplated
hereby.
(i) On or after the Time of Sale there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the Exchange; (ii)
a suspension or material limitation in trading in the Company’s securities on the Exchange; (iii) a general moratorium on commercial banking activities declared by either federal or New York State authorities or a material disruption in commercial
banking or securities settlement or clearance services in the United States; (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war; or (v) the occurrence of
any other calamity or crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (iv) or (v) in the judgment of the Underwriter makes it impracticable
or inadvisable to proceed with the public offering or the delivery of the Shares on the terms and in the manner contemplated in the Prospectus.
(j) The obligations of the Underwriter to purchase Additional Shares hereunder are subject to the delivery on each Option Closing Date of such documents as the Underwriter may
reasonably deem necessary, including certificates of officers of the Company, legal opinions and an accountant’s comfort letter, and other matters related to the issuance of such Additional Shares.
(a) The Company will furnish to the Underwriter without charge, prior to 11:00 a.m., Eastern Time, on the business day next succeeding the date hereof and during the period
referenced in Section 5(f) or 5(g) hereof, as many copies of the Registration Statement, Time of Sale Prospectus and the Prospectus, and any amendments or supplements to any of the
foregoing, as the Underwriter may request.
(b) Before amending or supplementing the Registration Statement, the Time of Sale Prospectus or the Prospectus, the Company will (i) furnish to the Underwriter
a copy of each such proposed amendment or supplement, (ii) not file any such proposed amendment or supplement to which the Underwriter objects, (iii) file with the Commission within the applicable period specified in Rule 424(b) under the
Securities Act, any prospectus required to be filed pursuant to such Rule and (iv) file any issuer free writing prospectus to the extent required by Rule 433 of the Securities Act.
(c) To furnish to the Underwriter a copy of each proposed free writing prospectus to be prepared by or on behalf of, used by, or referred to by the Company, and will not to use or
refer to any proposed free writing prospectus to which the Underwriter objects.
(d) The Company will not take any action that would result in the Underwriter or the Company being required to file with the Commission pursuant to Rule 433(d) under the Securities
Act a free writing prospectus prepared by or on behalf of the Underwriter that the Underwriter otherwise would not have been required to file thereunder.
(e) The Company will advise the Underwriter promptly of any request by the Commission for amendments or supplements to the Registration Statement, Base
Prospectus, any Preliminary Prospectus, Permitted Free Writing Prospectus, Prospectus Supplement or Prospectus or for additional information with respect thereto, or of any notice of institution of proceedings for, or the entry of a stop order,
suspending the effectiveness of the Registration Statement or preventing or suspending the use of any Preliminary Prospectus, the Time of Sale Prospectus or the Prospectus, and if the Commission should enter such a stop order, the Company will use
its best efforts to obtain the lifting or removal of such order as soon as possible.
(f) If the Time of Sale Prospectus is being used to solicit offers to buy the Shares at a time when the Prospectus is not yet available to prospective purchasers and any event shall
occur or any condition shall exist as a result of which it is necessary to amend or supplement the Time of Sale Prospectus in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if
any event shall occur or any condition shall exist as a result of which the Time of Sale Prospectus conflicts with the information contained in the Registration Statement then on file, or if, in the opinion of counsel for the Underwriter, it is
necessary to amend or supplement the Time of Sale Prospectus to comply with applicable law, the Company will forthwith prepare, file with the Commission and furnish, at its own expense, to the Underwriter and to any dealer upon request, such
amendments or supplements so that the statements in the Time of Sale Prospectus as so amended or supplemented will not, in the light of the circumstances when the Time of Sale Prospectus is delivered to a prospective purchaser, be misleading, or so
that the Time of Sale Prospectus, as amended or supplemented, will no longer conflict with the Registration Statement, or so that the Time of Sale Prospectus, as amended or supplemented, will comply with applicable law.
(g) If, during such period after the time of filing the Prospectus as in the opinion of counsel for the Underwriter the Prospectus (or, in lieu thereof,
the notice referred to in Rule 173(a) under the Securities Act) is required by law to be delivered in connection with sales by an Underwriter or dealer, any event shall occur or condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus (or, in lieu thereof, the notice referred to in Rule 173(a) under the Securities Act) is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriter, it is necessary to amend or supplement the Prospectus to comply with applicable law, the Company will forthwith prepare, file with the Commission and furnish, at its own expense, to
the Underwriter, to the dealers (whose names and addresses the Underwriter will furnish to the Company) to which Shares may have been sold by the Underwriter and to any other dealer upon request, such amendments or supplements so that the
statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus (or, in lieu thereof, the notice referred to in Rule 173(a) under the Securities Act) is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will comply with applicable law.
(h) If, at or after the date hereof, it is necessary or appropriate for a post-effective amendment to the Registration Statement, or a Registration
Statement under Rule 462(b) under the Securities Act, to be filed with the Commission and become effective before the Shares may be sold, the Company will use its best efforts to cause such post-effective amendment or such Rule 462(b) Registration
Statement, to be filed and become effective, and will pay any applicable fees in accordance with the Securities Act, as soon as possible. The Company will advise the Underwriter promptly and, if requested by the Underwriter, will confirm such
advice in writing, (i) when such post-effective amendment or such Rule 462(b) Registration Statement has become effective and (ii) if Rule 430A under the Securities Act is used, when the Prospectus is filed with the Commission pursuant to Rule
424(b) under the Securities Act (which the Company agrees to file in a timely manner in accordance with such Rules).
(i) If, at any time during the period when a prospectus is required by the Securities Act to be delivered (whether physically or through compliance with Rule 172 under the
Securities Act or any similar rule) in connection with any sale of Shares, the Registration Statement shall cease to comply with the requirements of the Securities Act with respect to eligibility for the use of the form on which the Registration
Statement was filed with the Commission or the Company shall have received, from the Commission, a notice, pursuant to Rule 401(g)(2) under the Securities Act, of objection to the use of the form on which the Registration Statement was filed with
the Commission, to (i) promptly notify the Underwriter, (ii) promptly file with the Commission a new registration statement under the Securities Act, relating to the Shares, or a post-effective amendment to the Registration Statement, which new
registration statement or post-effective amendment shall comply with the requirements of the Securities Act and shall be in a form satisfactory to the Underwriter, (iii) use its best efforts to cause such new registration statement or
post-effective amendment to become effective under the Securities Act as soon as practicable, (iv) promptly notify the Underwriter of such effectiveness and (v) take all other action necessary or appropriate to permit the public offering and sale
of the Shares to continue as contemplated in the Prospectus; all references herein to the Registration Statement shall be deemed to include each such new registration statement or post-effective amendment, if any.
(j) If the third anniversary of the initial effective date of the Registration Statement occurs before all the Shares have been sold by the Underwriter, the Company will, prior to
the third anniversary, file a new shelf registration statement and take any other action necessary to permit the public offering of the Shares to continue without interruption; references herein to the Registration Statement shall include the new
registration statement declared effective by the Commission.
(k) The Company will file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus (or, in lieu thereof, the notice referred to in Rule 173(a) under the Securities Act) is required in connection with the
offering or sale of the Shares.
(l) The Company will promptly furnish such information or take such action as the Underwriter may reasonably request and otherwise to qualify the Shares
for offer and sale under the securities or “blue sky” laws of such United States or Canadian provincial jurisdictions as the Underwriter shall reasonably request, and will comply with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete the distribution of the Shares; provided, however, that the Company shall not be required to qualify as a foreign corporation or to file a consent to service of process in any jurisdiction (excluding service
of process with respect to the offer and sale of the Shares). The Company will promptly advise the Underwriter of the receipt by the Company of any notification with respect to the suspension of the qualification of the Shares for offer or sale in
any jurisdiction or the initiation or threatening of any proceeding for such purpose.
(m) The Company will make generally available to the Company’s security holders and to the Underwriter as soon as practicable an earnings statement covering a period of at least
twelve months beginning after the effective date of the Registration Statement (as defined in Rule 158(c) under the Securities Act), which shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
(n) The Company will use its best efforts to cause the Shares to be listed on the Exchange and to maintain the listing of the Class A Common Stock, including the Shares, on the
Exchange.
(o) The Company will not, during the period beginning on the date of this Agreement and continuing to and including 60 days after the date of the
Prospectus, without the prior written consent of Xxxxxx Xxxxxxxxxx Xxxxx LLC with the authorization to release the lock-up letter on behalf of the Underwriter, (i) issue, offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Class A Common Stock or any securities convertible into or
exercisable or exchangeable for, or that represent the right to receive, Class A Common Stock, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of Class A
Common Stock, whether any such transaction described in clause (i) above or this clause (ii) is to be settled by delivery of Class A Common Stock or such other securities, in cash or otherwise, (iii) file any registration statement with the
Commission relating to the offering of any shares of Class A Common Stock or any securities convertible into or exercisable or exchangeable for Class A Common Stock, (iv) offer to sell shares of Class A Common Stock pursuant to a dividend
reinvestment plan or direct share purchase plan at a discount to fair market value or (v) publicly announce an intention to effect any transaction or action specified in clause (i), (ii), (iii) or (iv). The restrictions contained in the preceding
sentence shall not apply to (a) the Shares to be sold hereunder, (b)(1) the grant of Class A Common Stock or restricted shares of Class A Common Stock, or options to purchase shares of Class A Common Stock pursuant to the Company’s stock option or
equity-based compensation plans (including the 2015 Equity Compensation Plan, effective December 9, 2015), under the terms of such plans in effect on the date hereof, provided that such options are granted at fair market value and in amounts and with exercise terms consistent with the Company’s past practice, or (2) the grant of options to purchase, or offer, sale or issuance of,
shares of Class A Common Stock to employees of the Company pursuant to the Company’s existing employee stock purchase plans that are described in the Registration
Statement, the Time of Sale Prospectus and the Prospectus, (c) the offer, sale or issuance of shares of Class A Common Stock pursuant to the Company’s existing dividend reinvestment and direct share purchase plan under the terms of such plan in
effect on the date hereof under such plan, provided that clause (iv) of this paragraph (o) is complied with, (d) the issuance by the Company of
shares of Class A Common Stock upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof which the Underwriter has been advised in writing or (e) existing stock pledge
arrangements which have been previously disclosed in the Company’s public filings as of the date hereof. If the Underwriter agrees to release or waive any of the restrictions contained in a lock-up letter, as described in Section 4(f) hereof, for a director or officer of the Company, the Underwriter will notify the Company at least three business days before the effective date of such release or waiver, and the Company agrees to announce such
release or waiver by a press release through a major news service at least two business days before the effective date of such release or waiver.
(p) The Company will prepare, if the Underwriter so requests, a final term sheet relating to the offering of the Shares, containing only information that describes the final terms
of the Shares or the offering in a form consented to by the Underwriter, and to file such final term sheet within the period required by Rule 433(d)(5)(ii) under the Securities Act following the date the final terms have been established for the
offering of the Shares.
(q) The Company will pay the fees applicable to the Registration Statement in connection with the offering of the Shares within the time required by Rule 456(b)(1)(i) under the
Securities Act (without reliance on the proviso to Rule 456(b)(1)(i) under the Securities Act) and in compliance with Rule 456(b) and Rule 457(r) under the Securities Act.
(r) The Company will comply with Rules 433(d) (without reliance on Rule 164(b) under the Securities Act) and with Rule 433(g) under the Securities Act.
(s) The Company will not take, directly or indirectly, any action designed, or which has constituted or might reasonably be expected, to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares.
(t) The Company will not, at any time at or after the execution hereof, directly or indirectly, offer or sell any Shares by means of any “prospectus” (within the meaning of the
Securities Act) or use any prospectus in connection with the offer or sale of the Shares, except in each case other than the Prospectus.
(u) The Company will maintain a transfer agent and, if necessary under the jurisdiction of incorporation of the Company, a registrar for the Class A Common Stock.
(v) The Company will apply the net proceeds to the Company from the sale of the Shares in the manner set forth under the caption “Use of Proceeds” in the Prospectus Supplement.
6. Expenses. Whether or not the transactions
contemplated hereby are consummated or this Agreement is terminated, the Company agrees to pay or cause to be paid all costs and expenses incident to the performance of its obligations hereunder, including, but not limited to: (a) the fees,
disbursements and expenses of the Company’s counsel and the Company’s accountants in connection with the registration and delivery of the Shares under the Securities Act and all other fees or expenses in connection with the preparation and filing
of the Registration Statement, any Preliminary Prospectus, the Time of Sale Prospectus, the Prospectus, any free writing prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing, shipping and delivering of copies thereof to the Underwriter and dealers, in the quantities hereinabove specified; (b)(i) all costs and expenses related to the transfer
and delivery of the Shares to the Underwriter, including any transfer or other taxes payable thereon and (ii) any transfer or other taxes payable in connection with resales of Shares by the Underwriter; (c) the costs of printing or producing any
securities or blue sky memorandum in connection with the offer and sale of the Shares under the securities laws of the jurisdictions in which the Shares may be offered or sold and all expenses in connection with the qualification of the Shares for
offer and sale under such securities laws as provided in Section 5(l) hereof, including filing fees and reasonable legal fees of, and disbursements by, counsel for the Underwriter in connection with such qualification
and in connection with the “Blue Sky” or Legal Investment memorandum; (d) all filing fees and the reasonable fees and disbursements of counsel for the Underwriter incurred in connection with the review and qualification of the offering of the
Shares by FINRA; provided, that any disbursement of counsel for the Underwriter for fees and expenses pursuant to this Section 6 clauses (c) and (d) shall not exceed $10,000 in the aggregate, (e) all costs and expenses incident to listing the
Shares on the Exchange; (f) the cost of printing certificates representing the Shares (if any); (g) the costs and charges of any transfer agent, registrar or depositary; (h) the costs and expenses of the Company relating to investor presentations
on any “road show” undertaken in connection with the marketing of the offering of the Shares, including, without limitation, expenses associated with the preparation or dissemination of any road show, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, reasonable expenses for Company pre-approved travel and lodging of the representatives and
officers of the Company and any such consultants; (i) the document production charges and expenses associated with printing this Agreement; and (j) all other reasonable costs and expenses incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this Section 6.
The Underwriter will pay all of its costs and expenses, including fees and disbursements of its counsel, payable on
the resale of any of the Shares by it and any advertising expenses connected with any offers it may make. Notwithstanding the above, if the sale of the Shares provided for herein is not consummated because any condition to the obligations of the
Underwriter set forth in Section 4 is not satisfied, because of any termination of this Agreement by the Underwriter pursuant to Section 8 hereof or because of any refusal, inability or
failure on the part of the Company to perform any of its obligations or covenants hereunder or to comply with any provision hereof other than by reason of a default by the Underwriter, the Company will reimburse the Underwriter for all out-of-pocket
expenses (including reasonable fees and disbursements of counsel) reasonably incurred by the Underwriter in connection with this Agreement or the offering contemplated hereby.
The Company agrees to indemnify and hold harmless the Underwriter, each person, if any,
who controls the Underwriter (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and each affiliate of the Underwriter (within the meaning of Rule 405 under the Securities Act) (collectively, the “Underwriter Entities”) from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such action or claim) caused by, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any
amendment thereof, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Time of Sale Prospectus, any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act, any issuer information that the Company has filed, or is required to file, pursuant to Rule
433(d) of the Securities Act, any road show not constituting a free writing prospectus, or the Prospectus or any amendments or supplements to any of the foregoing, or any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances in which there were made, not misleading; provided, however, that the Company shall not be liable under this Section 7(a) to the extent that such losses, claims, damages or
liabilities are caused by, arise out of or are based upon any untrue statement or omission or alleged untrue statement or omission made therein in reliance upon and in conformity with the Underwriter Information.
(a) The Underwriter agrees to indemnify and hold harmless the Company, the directors of the Company, the officers of the
Company who sign the Registration Statement and each person, if any, who controls the Company (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by, arising from or based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any amendment thereof or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not
misleading, or (ii) any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Time of Sale Prospectus, any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act, any
Company information that the Company has filed, or is required to file, pursuant to Rule 433(d) of the Securities Act, any road show not constituting a free writing prospectus, or the Prospectus or any amendments or supplements to any of the
foregoing, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which there were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or omission or alleged untrue statement or omission was made therein in reliance upon and in conformity with the Underwriter Information.
(b) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 7(a) or Section 7(b) hereof, such person (the “indemnified party”) shall promptly
notify the person against whom such indemnity may be sought (the “indemnifying party”) in writing, and the indemnifying party, upon request of
the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for (i) all Underwriter Entities, (ii) the
Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), and that all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Underwriter and any control persons and affiliates of the Underwriter, such firm shall be designated in writing by the Underwriter. In the case of
any such separate firm for the Company, and such directors, officers and control persons of the Company, such firm shall be designated in writing by the Company. The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if there is a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and
third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of such request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding.
(c) To the extent the indemnification provided for in Section 7(a) or Section 7(b) hereof is
unavailable to an indemnified party or is insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying
party or parties, on the one hand, and the indemnified party or parties, on the other hand, from the offering of the Shares or if the allocation provided by clause above is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause above but also the relative fault of the indemnifying party or parties, on the one hand, and of the indemnified party or parties, on the other hand, in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriter, on the other hand, in connection
with the offering of the Shares shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Shares (before deducting expenses) received by the Company and the total underwriting discounts and commissions
received by the Underwriter, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate public offering price of the Shares. The relative fault of the Company, on the one hand, and the Underwriter, on the other
hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the
Underwriter and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
(d) The Company and the Underwriter agree that it would not be just or equitable if contribution pursuant to this Section 7 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in Section 7(d) hereof. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in Section 7(d) shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7, the Underwriter shall not be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds
the amount of any damages that the Underwriter has otherwise been required to pay by reason of such statement or omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
(e) The indemnity and contribution provisions set forth in this Section 7 shall remain operative and in full force and effect regardless of any
termination of this Agreement, any investigation made by or on behalf of the Underwriter Entity, the Company, any person controlling the Company (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) or the
Company’s officers or directors and acceptance of and payment for any of the Shares.
8. Termination. The Underwriter may terminate
this Agreement by notice to the Company, if after the execution and delivery hereof and prior to the Closing Date: (a) trading generally shall have been suspended or materially limited or minimum prices shall have been established on, or by, as the
case may be, any of the New York Stock Exchange, the NYSE American or the Nasdaq Global Select Market, (b) trading of any securities of the Company shall have been suspended or materially limited on any exchange or in any over‑the‑counter market,
(c) a material disruption in securities settlement, payment or clearance services in the United States shall have occurred, (d) any moratorium or material limitation on commercial banking activities shall have been declared by competent
authorities, (e) there shall have occurred any outbreak or escalation of hostilities, act of terrorism involving the United States or declaration by the United States of a national emergency or war, or (f) any other calamity or crisis or any change
in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (e) or (f), makes it, in the Underwriter’s judgment, impracticable or inadvisable to proceed with the offer, sale
or delivery of the Shares on the terms and in the manner contemplated in the Time of Sale Prospectus or the Prospectus (exclusive of any supplement thereto).
10. Representations and Indemnities to
Survive. The respective agreements, representations, warranties, indemnities and other statements of the Company and the Underwriter set forth or made pursuant to this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of the Underwriter, the Company or any of the officers, directors, employees, agents or controlling persons referred to in Section 7 hereof, and will survive delivery of and payment
for the Shares. The provisions of Sections 6 and 7 hereof shall survive the termination or cancellation of this Agreement.
11. Entire Agreement. This Agreement, together with any contemporaneous
written agreements and any prior written agreements (to the extent not superseded hereby) that relate to the offering of the Shares, represents the entire agreement between the Company, on the one hand, and the Underwriter, on the other hand, with
respect to the preparation of any Preliminary Prospectus, the Time of Sale Prospectus, the Prospectus, the conduct of the offering, and the purchase and sale of the Shares.
(a) The Company acknowledges that in connection with the offering of the Shares: the Underwriter has acted at arm’s length and it is not an agent of, and owes no fiduciary duties
to, the Company or any other person in respect of the transactions contemplated by this Agreement irrespective of whether the Underwriter has advised or is advising the Company on other matters; the Underwriter owes the Company only those duties
and obligations set forth herein and in prior written agreements (to the extent not superseded hereby), if any; the Underwriter may have interests that differ from those of the Company and the Purchase Price and the public offering price of the
Shares set forth in this Agreement were established and agreed to by the Company following arm’s length discussions with the Underwriter, and the Company understands and accepts the terms, risks and conditions of the transactions contemplated by
this Agreement. The Company waives to the fullest extent permitted by applicable law any claims it may have against the Underwriter arising from an alleged breach of fiduciary duty in connection with the offering of the Shares.
12. Intended Beneficiaries. This Agreement shall inure to the benefit of
and be binding upon the Underwriter, the Company and their respective successors. No purchaser of Shares from the Underwriter shall be deemed to be a successor by reason merely of such purchase. Nothing expressed or mentioned herein is intended
or shall be construed to give any individual or entity, other than the Underwriter, the Company and their respective successors, and the controlling persons, affiliates, officers and directors referred to in Section 7
and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement is intended to be for the sole and exclusive benefit of the
Underwriter, the Company and their respective successors and said controlling persons, affiliates, officers and directors and their heirs and legal representatives, and for the benefit of no one else.
13. Partial Unenforceability. The invalidity or unenforceability of any
Section, subsection, paragraph, clause or other provision hereof shall not affect the validity or enforceability of any other Section, subsection, paragraph, clause or other provision hereof. If any Section, subsection, paragraph, clause or other
provision hereof is for any reason determined to be invalid or unenforceable, then there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make the remainder of this Agreement valid and enforceable.
14. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart by facsimile
or electronic transmission shall be equally as effective as delivery of an original counterpart of this Agreement. The failure by a party to deliver an original executed counterpart to this Agreement shall not affect the validity, enforceability
and binding effect of this Agreement.
15. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
16. TRIAL BY JURY. THE COMPANY (ON ITS BEHALF AND, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, ON BEHALF OF ITS SUBSIDIARIES, STOCKHOLDERS AND AFFILIATES) AND THE UNDERWRITER EACH HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
17. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part hereof.
18. Notices. All communications hereunder shall be in writing and effective
only upon receipt and if to the Underwriter shall be delivered, mailed or sent to Xxxxxx Xxxxxxxxxx Xxxxx LLC, 0000 Xxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000, Attention: Xxxxxx Xxxxxxxx, Managing Director, email: xxxxxxxxx@xxxxxx.xxx, with a copy to the
Legal Department, Xxxxxx Xxxxxxxxxx Xxxxx LLC, 0000 Xxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000, and if to the Company shall be delivered, mailed or sent to Artesian Resources Corporation, 000 Xxxxxxxxxx Xxxx, Xxxxxx, XX 00000, Attention: Xxxx X. Xxxxxx,
President and Chief Executive Officer, email: xxxxxxx@xxxxxxxxxxxxx.xxx, with a copy to Xxxxxx, Xxxxx & Xxxxxxx LLP, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000, Attention: Xxxxxx X. Xxxxxx, Partner, email: xxxxxx.xxxxxx@xxxxxxxxxxx.xxx.
[Signature Page Follows]
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Very truly yours,
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ARTESIAN RESOURCES CORPORATION
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By:
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/s/ Xxxxx X. Xxxxxx
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Name:
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Xxxxx X. Xxxxxx
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Title:
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Chief Financial Officer
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Accepted as of the date hereof
XXXXXX XXXXXXXXXX XXXXX LLC
XXXXXX XXXXXXXXXX XXXXX LLC
As Underwriter
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By:
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XXXXXX XXXXXXXXXX XXXXX LLC
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/s/ Xxxxxx X. Xxxxxxxx
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Name:
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Xxxxxx X. Xxxxxxxx
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Title:
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Managing Director
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SCHEDULE I
Time of Sale Prospectus
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1.
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Preliminary Prospectus, including Preliminary Prospectus Supplement dated May 18, 2023 and Base Prospectus.
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2.
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Orally communicated pricing information to be included below on this Schedule I if a final term sheet is not used, including
the following:
Number of Firm Shares to be Sold by the Company: 695,650 Number of Additional Shares Subject to Option: 104,348 Price per share: $50.00 |
FORM OF LOCK-UP LETTER TO BE SIGNED BY OFFICERS AND DIRECTORS
[●], 2023
XXXXXX XXXXXXXXXX XXXXX LLC
Ladies and Gentlemen:
The undersigned understands that Xxxxxx Xxxxxxxxxx Xxxxx LLC (the “Underwriter”) proposes to enter into an Underwriting Agreement (the “Underwriting Agreement”)
with Artesian Resources Corporation, a Delaware corporation (the “Company”), providing for the public offering (the “Public Offering”) of 695,650 shares (the “Shares”) of Class A Non-Voting
Common Stock, par value $1.00 per share, of the Company (the “Class A Common Stock”).
To induce the Underwriter to continue its efforts in connection with the Public Offering, the undersigned hereby
agrees that, without the prior written consent of the Underwriter, it will not, during the period commencing on the date hereof and ending 60 days after the date of the final prospectus relating to the Public Offering (the “Restricted Period”), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, make any short sale,
grant any option, right or warrant to purchase, lend, or otherwise transfer, sell or dispose of, directly or indirectly, any shares of Class A Common Stock or any securities convertible into or exercisable or exchangeable for Class A Common Stock,
whether now owned or hereinafter acquired, owned directly by the undersigned (including holding as a custodian) or with respect to which the undersigned has beneficial ownership (as such term is used in Rule 13d-3 of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)), (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Class A Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Class A Common Stock or such other securities, in cash or otherwise, (3) file any
registration statement with the Commission relating to the offering of any shares of Class A Common Stock or any securities convertible into or exercisable or exchangeable for Class A Common Stock, or (4) publicly announce an intention to effect any
transaction specified in clause (1), (2) or (3).
The foregoing restrictions shall not apply to (a) transactions relating to shares of Class A Common Stock or other
securities acquired in open market transactions after the completion of the Public Offering, provided that no filing under Section 16(a) of
Exchange Act shall be required or shall be voluntarily made in connection with subsequent sales of Class A Common Stock or other securities acquired in such open market transactions, (b) transfers of shares of Class A Common Stock or any security
convertible into Class A Common Stock as a bona fide gift, (c) transfers by will or intestate succession to the undersigned’s legal representatives, heirs, beneficiary or immediate family, or to a trust, the beneficiaries of which are exclusively the
undersigned or members of the undersigned’s immediate family, (d) pro rata distributions of shares of Class A Common Stock or any security convertible into Class A Common Stock to limited partners or stockholders of the undersigned, or to the
undersigned’s affiliates or to any investment fund or other entity controlled or managed by the undersigned, (e) the establishment of any contract, instruction or plan (a “Plan”) that satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B) under the Exchange Act for the transfer of shares of Class A Common Stock; provided that no sales of Class A Common Stock shall be made pursuant to such a Plan prior to the expiration of the Restricted Period, and such a Plan may only be established if no public announcement of the
establishment or existence thereof and no filing with the Securities and Exchange Commission or other regulatory authority in respect thereof or transactions thereunder or contemplated thereby, by the undersigned, the Company or any other person,
shall be required, and no such announcement or filing is made voluntarily by the undersigned, the Company or any other person, prior to the expiration of the Restricted Period, (f) existing stock pledge arrangements which have been previously
disclosed in the Company’s public filings as of the date hereof or (g) receipt by the undersigned from the Company of Class A Common Stock, or any securities convertible into or exchangeable for Class A Common Stock, pursuant to employee and/or
director stock plans (including the 2015 Equity Compensation Plan, effective December 9, 2015), employee stock purchase plans, dividend reinvestment plans or direct share purchase plans existing on, or upon the conversion or exchange of convertible
or exchangeable securities outstanding as of, the date of this Letter Agreement and described in the Underwriting Agreement or the prospectus relating to the Public Offering; provided that, for the avoidance of doubt, any such Class A Common Stock or securities received by the undersigned shall be subject to all of the restrictions set forth in this Letter Agreement; provided that (i) in the case of any transfer or distribution pursuant to clause (b), (c) or (d), upon the request of the Underwriter, each donee or
distributee shall sign and deliver a lock‑up letter substantially in the form of this letter and (ii) in the case of any transfer or distribution pursuant to clause (c) or (d), no filing under Section 16(a) of the Exchange Act, reporting a reduction
in beneficial ownership of shares of Class A Common Stock, shall be required or shall be voluntarily made during the Restricted Period. For purposes of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage,
domestic partnership or adoption, not more remote than first cousin.
In addition, the undersigned agrees that, without the prior written consent of the Underwriter, not to, during the
Restricted Period, make any demand for or exercise any right with respect to, the registration of any shares of Class A Common Stock or any security convertible into or exercisable or exchangeable for Class A Common Stock. The undersigned also
agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s shares of Class A Common Stock except in compliance with the foregoing restrictions.
The undersigned understands that, if the Underwriting Agreement (other than the provisions thereof which survive
termination) shall terminate or be terminated prior to payment for and delivery of the Class A Common Stock to be sold thereunder, the undersigned shall be released from all obligations under this Letter Agreement. The undersigned understands that
the Underwriter is entering into the Underwriting Agreement and proceeding with the Public Offering in reliance upon this Letter Agreement. The undersigned further understands that this agreement is irrevocable and shall be binding upon the
undersigned’s heirs, legal representatives, successors and assigns.
Whether or not the Public Offering actually occurs depends on a number of factors, including market conditions. Any
Public Offering will only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Underwriter.
This Letter Agreement shall automatically terminate if no Public Offering shall have occurred on or before June 30,
2023.
This Letter Agreement shall be governed by and construed in accordance with the laws of the State of New York without
regard to principles of conflict of laws that would result in the application of any other law than the laws of the State of New York.
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(Address)
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