Exhibit 10.1
POWER REIT
Common Stock
($0.001 par value per share)
At Market Issuance Sales Agreement
March 28, 2013
MLV & Co. LLC
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
Power REIT, a Maryland real estate investment trust (the
"Company"),confirms its agreement (this "Agreement") with MLV & Co.
LLC, a Delaware limited liability company ("MLV" or "Agent"), as
follows:
1. Issuance and Sale of Shares. The Company agrees that, from
time to time during the term of this Agreement, on the terms and
subject to the conditions set forth herein, it may issue and sell
through MLV, acting as agent and/or principal, shares (the "Placement
Shares") of the Company's common stock, $0.001 par value per share
(the "Common Stock"); provided, however, that in no event shall the
Company issue or sell through MLV such number of Placement Shares that
(a) would cause the Company to exceed the limitations set forth in
General Instruction I.B.6. of Form S-3, to the extent applicable to
the Company, (b) exceeds the number of shares of Common Stock
registered on the effective Registration Statement (as defined below)
pursuant to which the offering is being made, or (c) exceeds the
number of authorized but unissued shares of the Company's Common Stock
(the lesser of (a), (b), and (c), the "Maximum Amount"). The Company
agrees that if MLV determines that MLV will purchase any Placement
Shares on a principal basis (other than as a "riskless principal"),
then the Company will enter into a separate underwriting or similar
agreement in form and substance satisfactory to both the Company and
MLV covering such purchase. Notwithstanding anything to the contrary
contained herein, the parties hereto agree that compliance with the
limitation set forth in this Section 1 on the number of Placement
Shares issued and sold under this Agreement shall be the sole
responsibility of the Company, and MLV shall have no obligation in
connection with such compliance. The issuance and sale of Placement
Shares through MLV will be effected pursuant to the Registration
Statement (as defined below) that became automatically effective when
filed by the Company with the Securities and Exchange Commission (the
"Commission"), although nothing in this Agreement shall be construed
as requiring the Company to use the Registration Statement to issue
Placement Shares.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (collectively, the "Securities Act"), with the
Commission a Registration Statement on Form S-3, including a base
prospectus, relating to certain securities, including the Placement
Shares to be issued from time to time by the Company, and which
incorporates by reference documents that the Company has filed or will
file in accordance with the provisions of the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated
thereunder (collectively, the "Exchange Act"). The Company has
prepared a prospectus supplement to the base prospectus included as
part of such registration statement specifically relating to the
Placement Shares (the "Prospectus Supplement"). The Company will
furnish to the Agent, for use by the Agent, copies of the prospectus
included as part of such registration statement, as supplemented by
the Prospectus Supplement, relating to the Placement Shares. Except
where the context otherwise requires, such registration statement, as
amended when it became effective, including all documents filed as
part thereof or incorporated by reference therein, and including any
information contained in a Prospectus (as defined below) subsequently
filed with the Commission pursuant to Rule 424(b) under the Securities
Act or deemed to be a part of such registration statement pursuant to
Rule 430B or 462(b) of the Securities Act, as well as any comparable
successor registration statement filed by the Company for the sale of
shares of its Common Stock, including the Placement Shares,
collectively are herein called the "Registration Statement." The base
prospectus, including all documents incorporated therein by reference,
included in the Registration Statement, as it may be supplemented by
the Prospectus Supplement, in the form in which such prospectus and/or
Prospectus Supplement have most recently been filed by the Company
with the Commission pursuant to Rule 424(b) under the Securities Act,
together with the then issued Issuer Free Writing Prospectus(es) (as
define herein), is herein called the "Prospectus." Any reference
herein to the Registration Statement, the Prospectus or any amendment
or supplement thereto shall be deemed to refer to and include the
documents incorporated by reference therein, and any reference herein
to the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement or the Prospectus shall be deemed to refer to
and include the filing after the execution hereof of any document with
the Commission deemed to be incorporated by reference therein (the
"Incorporated Documents"). For purposes of this Agreement, all
references to the Registration Statement, the Prospectus or to any
amendment or supplement thereto shall be deemed to include any copy
filed with the Commission pursuant to its Electronic Data Gathering
Analysis and Retrieval System or, if applicable, the Interactive Data
Electronic Applications (collectively, "XXXXX").
2. Placements. Each time that the Company wishes to issue and
sell the Placement Shares hereunder (each, a "Placement"), it will
notify the Agent by email notice (or other method mutually agreed to
in writing by the parties) (a "Placement Notice") containing the
parameters in accordance with which it desires the Placement Shares to
be sold, which shall at a minimum include the number of Placement
Shares to be issued, the time period during which sales are requested
to be made, any limitation on the number of Placement Shares that may
be sold in any one Trading Day (as defined in Section 3), and any
minimum price below which sales may not be made. A form of Placement
Notice, which contains such minimum required sales parameters, is
attached hereto as Exhibit 1. A Placement Notice shall originate from
any of the individuals from the Company set forth on Schedule 2 (with
a copy to each of the other individuals from the Company listed on
such schedule), and shall be addressed to each of the individuals the
Agent set forth on Schedule 2, as amended from time to time. The
Placement Notice shall be effective upon receipt by the Agent unless
and until (i) in accordance with the notice requirements set forth in
Section 4, the Agent declines to accept the terms contained therein
for any reason, in their respective, sole discretion, (ii) the entire
amount of the Placement Shares have been sold, (iii) in accordance
with the notice requirements set forth in Section 4, the Company
suspends or terminates the Placement Notice, (iv) the Company issues a
subsequent Placement Notice with parameters superseding those on the
earlier dated Placement Notice, (v) the Agent declines or continues to
make sales under an existing Placement Notice, for any reason, in
their respective, sole discretion, or (vi) the Agreement has been
terminated under the provisions of Section 11. The amount of any
discount, commission or other compensation to be paid by the Company
to the Agent in connection with the sale of the Placement Shares shall
be calculated in accordance with the terms set forth in Schedule 3.
It is expressly acknowledged and agreed that neither the Company nor
the Agent will have any obligation whatsoever with respect to a
Placement Notice or any Placement Shares unless and until the Company
delivers a Placement Notice to the Agent and the Agent does not
decline such Placement Notice pursuant to the terms set forth above,
and then only upon the terms specified therein and herein.
Notwithstanding anything to the contrary contained herein, no
Placement Notice shall be delivered by the Company at any such time as
the Company's trustees and officers would not be permitted to buy or
sell shares in the open market because of the existence of material
nonpublic information or applicable blackout periods (such as under
the Company's xxxxxxx xxxxxxx policy).
3. Sale of Placement Shares by the Agent.
(a) Subject to the terms and conditions herein set forth,
upon the Company's issuance of a Placement Notice, and unless the
sale of the Placement Shares described therein has been declined,
suspended, or otherwise terminated in accordance with the terms
of this Agreement, the Agent, for the period specified in the
Placement Notice, will use its commercially reasonable efforts
consistent with its customary trading and sales practices to sell
such Placement Shares up to the amount specified, and otherwise
in accordance with the terms of such Placement Notice. The Agent
acting under a Placement Notice will provide written confirmation
to the Company (including by email correspondence), no later than
the opening of the Trading Day (as defined below) immediately
following the Trading Day on which sales of Placement Shares have
been made hereunder setting forth the number of Placement Shares
sold on such day, the compensation payable by the Company to the
Agent pursuant to Section 2 with respect to such sales, and the
Net Proceeds (as defined below) payable to the Company. The
Agent may sell Placement Shares by any method permitted by law
deemed to be an "at-the-market" offering as defined in Rule 415
of the Securities Act, including without limitation sales made
directly on the NYSE MKT LLC (the "Exchange"), on any other
existing trading market for the Common Stock or to or through a
market maker. With the prior consent of the Company, the Agent
may also sell Placement Shares in privately negotiated
transactions. During the term of this Agreement and
notwithstanding anything to the contrary herein, the Agent agrees
that in no event will it or any Agent Affiliate (as defined in
Section 9(a), below) engage in any market making, bidding,
stabilization or other trading activity with regard to the Common
Stock if such activity would be prohibited under Regulation M or
other anti-manipulation rules under the Securities Act. For the
purposes hereof, "Trading Day " means any day on which shares of
the Common Stock are purchased and sold on the principal market
on which the Common Stock is listed or quoted.
(b) During the term of this Agreement, neither MLV nor any
of its affiliates or subsidiaries shall engage in (i) any short
sale of any security of the Company, or (ii) any sale of any
security of the Company that MLV does not own or any sale which
is consummated by the delivery of a security of the Company
borrowed by, or for the account of, MLV. Neither MLV nor any of
its affiliates or subsidiaries, shall engage in any proprietary
trading for MLV's (or its affiliates' or subsidiaries') own
account.
4. Suspension of Sales. The Company or the Agent may, upon
notice to the other parties in writing (including by email
correspondence to each of the individuals of the other parties set
forth on Schedule 2, if receipt of such correspondence is actually
acknowledged by any of the individuals to whom the notice is sent,
other than via auto-reply) or by telephone (confirmed immediately by
verifiable facsimile transmission or email correspondence to each of
the individuals of the other party set forth on Schedule 2), suspend
any sale of Placement Shares; provided, however, that such suspension
shall not affect or impair the other party's obligations with respect
to any Placement Shares sold hereunder prior to the receipt of such
notice. Each of the parties agrees that no such notice under this
Section 4 shall be effective against the other unless it is made to
one of the individuals named on Schedule 2 hereto, as such schedule
may be amended from time to time.
5. Representations and Warranties of the Company. The Company
represents and warrants to the Agent that as of each Applicable Time
(as defined below):
(a) Compliance with Registration Requirements. The
Registration Statement has been filed with the Commission under
the Securities Act and declared effective by the Commission under
the Securities Act. The Company has complied with all requests
of the Commission for additional or supplemental information. No
stop order suspending the effectiveness of the Registration
Statement is in effect and no proceedings for such purpose have
been instituted or are pending or, to the Company's knowledge,
are contemplated or threatened by the Commission. The Company
satisfied all applicable requirements for the use of Form S-3
under the Securities Act when the Registration Statement was
filed. The Commission has not issued an order preventing or
suspending the use of the base prospectus, any Free Writing
Prospectus (as defined below) or the Prospectus relating to the
proposed offering of the Placement Shares and no proceedings for
such purpose have been instituted or are pending or, to the
Company's knowledge, are contemplated or threatened by the
Commission. The Prospectus delivered to the Agent for use in
connection with the offering of Placement Shares was, at the time
of such delivery, identical to the electronically transmitted
copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T. At the
respective times and each Applicable Time, each part of the
Registration Statement and each amendment thereto became
effective or was deemed effective, as the case may be, the
Registration Statement complied and will comply in all material
respects with the Securities Act and did not and will not contain
an 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. The immediately preceding
sentence does not apply to statements in or omissions from the
Registration Statement or any amendments or supplements thereto
based upon and in conformity with written information furnished
to the Company by Agent specifically for use therein.
(b) Delivery of Offering Materials. The Company has
delivered to the Agent, or made available through XXXXX, one
complete copy of the Registration Statement and of each consent
of experts filed as a part thereof, and conformed copies of the
Registration Statement (without exhibits), and the Prospectus, as
amended or supplemented, in such quantities and at such places as
such Agent has reasonably requested.
(c) Prospectus. Neither the Prospectus nor any amendments
or supplements thereto, at the time the Prospectus or any such
amendment or supplement was issued, as of the date hereof and at
each Applicable Time, as the case may be, included or will
include an untrue statement of a material fact or omitted or will
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. The foregoing sentence does not
apply to statements in or omissions from the Prospectus or any
amendments or supplements thereto based upon and in conformity
with written information furnished to the Company by Agent
specifically for use therein. "Applicable Time " means the date
of this Agreement, each Representation Date (as defined in
Section 7(m) hereof), the date on which a Placement Notice is
given, any date on which Placement Shares are sold hereunder, and
such other times as agreed to by the Company and the Agent.
(d) Financial Information. The financial statements of
the Company, together with the related schedules and notes
thereto, set forth or included or incorporated by reference in
the Registration Statement and the Prospectus fairly present, in
all material respects, the financial condition of the Company as
of and at the dates indicated and the results of operations,
changes in financial position, stockholders' equity and cash
flows for the periods therein specified. Such financial
statements, schedules, and notes are in conformity with generally
accepted accounting principles as consistently applied in the
United States throughout the periods involved (except as
otherwise stated therein). Any selected financial data included
or incorporated by reference in the Registration Statement and
the Prospectus present fairly the information shown therein and,
to the extent based upon or derived from the financial
statements, have been compiled on a basis consistent with the
financial statements presented therein. Any pro forma financial
statements of the Company, and the related notes thereto,
included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the information shown
therein, have been prepared in accordance with the Commission's
rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the basis described
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to
give effect to the transactions and circumstances referred to
therein. The Company does not have any material liabilities or
obligations, direct or contingent (including any off-balance
sheet obligations), not disclosed in the Registration Statement
and the Prospectus. No other financial statements are required
to be set forth or to be incorporated by reference in the
Registration Statement or the Prospectus under the Securities
Act.
(e) Incorporated Documents. Each document incorporated or
deemed to be incorporated by reference in the Registration
Statement or the Prospectus heretofore filed, at the time it was
or hereafter is filed with the Commission, conformed and will
conform when filed in all material respects with the requirements
of the Exchange Act and the rules and regulations promulgated
thereunder; no such document when it was filed (or, if an
amendment with respect to any such document was filed, when such
amendment was filed), contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; and no such document, when it is filed, will contain
an untrue statement of a material fact or will omit to state a
material fact required to be stated therein or necessary in order
to make the statements therein not misleading.
(f) Distribution of Materials; Free Writing Prospectuses.
The Company is not an "ineligible issuer" in connection with the
offering pursuant to Rules 164, 405 and 433 under the Securities
Act. The Company has not, directly or indirectly, distributed
and will not distribute any prospectus or other offering material
in connection with the offering and sale of the Placement Shares
other than the Prospectus and other materials, if any, permitted
under the Securities Act to be distributed. Each "issuer free
writing prospectus" as defined in Rule 433 of the Securities Act,
relating to the Placement Shares ("Issuer Free Writing
Prospectus") that (i) is required to be filed with the Commission
by the Company, (ii) is a "road show" that is a "written
communication" within the meaning of Rule 433(d)(8)(i) of the
Securities Act whether or not required to be filed with the
Commission or (iii) is exempt from filing pursuant to Rule
433(d)(5)(i) of the Securities Act, in each case in the form
filed or required to be filed with the Commission or, if not
required to be filed, in the form retained in the Company's
records pursuant to Rule 433(g) of the Securities Act, as of its
issue date and as of each Applicable Time, did not, does not and
will not include any information that conflicted, conflicts or
will conflict with the information contained in the Registration
Statement or the Prospectus, including any incorporated document
deemed to be a part thereof that has not been superseded or
modified. The foregoing sentence does not apply to statements in
or omissions from any Issuer Free Writing Prospectus based upon
and in conformity with written information furnished to the
Company by Agent specifically for use therein. The Company has
satisfied or will satisfy the conditions in Rule 433 of the
Securities Act so as not to be required to file with the
Commission any electronic road show.
(g) Independent Auditors. Xxxxxxx and Xxxxxx, X.X. ("GK")
is an independent certified public accountant as required by the
Securities Act and the Public Company Accounting Oversight Board
(including the rules and regulations promulgated by such entity,
the "PCAOB"). To the knowledge of the Company, GK is duly
registered and in good standing with the PCAOB and has not during
the periods covered by the financial statements included in the
Registration Statement and in the Prospectus, provided to the
Company any non-audit services, as such term is defined in
Section 10A(g) of the Exchange Act.
(h) Organization. Each of the Company and its
subsidiaries ("Subsidiaries") has been duly organized and is
validly existing as a trust, corporation or other duly recognized
entity in good standing under the laws of the jurisdiction of its
organization, with full power and authority (corporate and other)
to own or lease its properties and conduct its business as
described in the Registration Statement and Prospectus, and is
duly qualified to do business and is in good standing as a
foreign trust, corporation or other duly recognized entity in
each jurisdiction in which the character of the business
conducted by it or the location of the properties owned or leased
by it makes such qualification necessary and, except where any
failure to do so could not reasonably be expected to result in a
material adverse effect on the condition (financial or
otherwise), business, prospects, properties or results of
operations of the Company and its Subsidiaries taken as a whole
(a "Material Adverse Effect"); each of the Company and its
Subsidiaries is in possession of and operating in compliance with
all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates and orders required for the
conduct of its business, all of which are valid and in full force
and effect, except where failure to do could not reasonably be
expected to have a Material Adverse Effect; and neither the
Company nor any of its Subsidiaries has received any notice of
proceedings relating to the revocation or modification of any
such franchise, grant, authorization, license, permit, easement,
consent, certificate or order which, individually or in the
aggregate, if the subject of an unfavorable decision, could
reasonably be expected to result, individually or in the
aggregate, in having a Material Adverse Effect.
(i) Capitalization. The capitalization of the Company is
as set forth under the caption "Selected Consolidated Financial
Data" in the Prospectus, and the Common Stock conforms to the
description thereof contained under the caption "Description of
Securities " in the Prospectus; the outstanding shares of capital
stock have been duly authorized, validly issued, fully paid and
nonassessable and have been issued in compliance with federal and
state securities laws. There are no preemptive rights or other
rights to subscribe for or to purchase, or any restriction upon
the voting or transfer of, any shares of capital stock pursuant
to the Company's certificate of incorporation, by-laws or other
governing documents or any agreement or other instrument to which
the Company or any of its Subsidiaries is a party or by which any
of them may be bound other than those described in the Prospectus
including beneficial or constructive ownership limits imposed by
Section 7.21 of the Company's Declaration of Trust, which
restricts individual beneficial or constructive ownership of more
than 9.9% of the Company's outstanding shares. None of the
outstanding shares of the Company's capital stock were issued in
violation of any preemptive rights, rights of first refusal or
other similar rights to subscribe for or purchase securities of
the Company. There are no authorized or outstanding options,
warrants, preemptive rights, rights of first refusal or other
rights to purchase, or equity or debt securities convertible into
or exchangeable or exercisable for, any capital stock of the
Company other than those specifically described in the
Prospectus. The description of the Company's stock option, stock
bonus and other stock plans or arrangements, and the options or
other rights granted thereunder, set forth in the Prospectus
accurately and fairly presents the information required to be
shown with respect to such plans, arrangements, options and
rights. Neither the filing of the Registration Statement nor the
offering or sale of the Placement Shares as contemplated by this
Agreement gives rise to any rights, other than those which have
been waived or satisfied, for or relating to the registration of
any shares of Common Stock or other securities. All of the
outstanding shares of capital stock of each Subsidiary of the
Company have been duly authorized and validly issued, are fully
paid and nonassessable and are owned directly by the Company,
free and clear of any claim, lien, encumbrance or security
interest. There are no authorized or outstanding options,
warrants, preemptive rights, rights of first refusal or other
rights to purchase, or equity or debt securities convertible into
or exchangeable or exercisable for, any capital stock of any
Subsidiary other than those described in the Prospectus.
(a) Market Capitalization. As of the close of trading on
the Exchange on the Trading Day immediately prior to the date of
this Agreement, the aggregate market value of the outstanding
voting and non-voting common equity (as defined in Securities Act
Rule 405) of the Company held by persons other than affiliates of
the Company (pursuant to Securities Act Rule 144, those that
directly, or indirectly through one or more intermediaries,
control, or are controlled by, or are under common control with,
the Company) (the "Non-Affiliate Shares"), was approximately
$15.3 million (calculated by multiplying (x) the price at which
the common equity of the Company was last sold on the Exchange on
the Trading Day immediately prior to the date of this Agreement
times (y) the number of Non-Affiliate Shares). The Company is
not a shell company (as defined in Rule 405 under the Securities
Act) and has not been a shell company for at least 12 calendar
months previously and if it has been a shell company at any time
previously, has filed current Form 10 information (as defined in
Instruction I.B.6 of Form S-3) with the Commission at least 12
calendar months previously reflecting its status as an entity
that is not a shell company.
(j) No Material Adverse Effect. Subsequent to the
respective dates as of which information is given in the
Prospectus, and except as described or contemplated in the
Prospectus or otherwise disclosed to the Agent in writing:
neither the Company nor any of its Subsidiaries has incurred any
liabilities or obligations, direct or contingent, nor entered
into any transactions not in the ordinary course of business,
which in either case are material to the Company or such
Subsidiary, as the case may be; there has not been any Material
Adverse Effect; and there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of
its capital stock.
(k) No Violations. Except as could reasonably be expected
not to have a Material Adverse Effect, neither the Company nor
any of its Subsidiaries is, or with the giving of notice or lapse
of time or both would be, in violation of or in default under,
nor will the execution or delivery hereof or consummation of the
transactions contemplated hereby result in a violation of, or
constitute a default under, the certificate of incorporation,
bylaws or other governing documents of the Company or any of its
Subsidiaries, or any agreement, contract, mortgage, deed of
trust, loan agreement, note, lease, indenture or other
instrument, to which the Company or any of its Subsidiaries is a
party or by which any of them is bound, or to which any of their
properties is subject, nor will the performance by the Company of
its obligations hereunder violate any law, rule, administrative
regulation or decree of any court, or any governmental agency or
body having jurisdiction over the Company, its Subsidiaries or
any of their properties, or result in the creation or imposition
of any lien, charge, claim or encumbrance upon any property or
asset of the Company or any of its Subsidiaries.
(l) Authority. This Agreement has been duly authorized,
executed and delivered by the Company and constitutes a legal,
valid and binding obligation of the Company and is enforceable
against the Company in accordance with its terms, except as may
be limited by bankruptcy, insolvency, reorganization or other
similar legal requirements affecting the enforcement of
creditors' rights generally and by general principles of equity.
(m) Placement Shares. The Placement Shares have been duly
authorized and reserved for issuance and sale pursuant to this
Agreement and, when issued and delivered by the Company pursuant
to this Agreement, will be validly issued, fully paid and
nonassessable. The issuance of the Placement Shares pursuant to
this Agreement will not be subject to any preemptive rights,
rights of first refusal or other similar rights to subscribe for
or purchase securities of the Company. There are no restrictions
upon the voting or transfer of the Placement Shares under the
Company's certificate of incorporation or by laws or any
agreement or other instrument to which the Company is a party or
otherwise filed as an exhibit to the Registration Statement,
other than beneficial or constructive ownership limits imposed by
Section 7.21 of the Company's Declaration of Trust, which
restricts individual beneficial or constructive ownership of more
than 9.9% of the Company's outstanding shares.
(n) Properties. The Company and its Subsidiaries have
good and marketable title in fee simple to all items of real
property owned by them and good and marketable title to all
personal property owned by them, in each case clear of all liens,
encumbrances and defects except such as are described or referred
to in the Prospectus or such as do not materially affect the
value of such property and do not interfere with the use made or
proposed to be made of such property by the Company or such
Subsidiaries; and any real property and buildings held under
lease by the Company and its Subsidiaries are held by them under
valid, existing and enforceable leases with such exceptions as
are not material and do not interfere with the use made or
proposed to be made of such property and buildings by the Company
or such Subsidiaries.
(o) No Actions. Except as disclosed in the Prospectus,
there is no litigation or governmental proceeding to which the
Company or any of its Subsidiaries is a party or to which any
property of the Company or any of its Subsidiaries is subject or
which is pending or, to the knowledge of the Company, threatened
against the Company which individually or in the aggregate could
reasonably be expected to result in any Material Adverse Effect,
which would materially and adversely affect the consummation of
this Agreement or the transactions contemplated hereby or which
is required to be disclosed in the Prospectus.
(p) Compliance with Law. Neither the Company nor any
Subsidiary is in violation of any law, ordinance, governmental
rule or regulation or court decree to which it may be subject
which violation could reasonably be expected to have a Material
Adverse Effect.
(q) No Stabilization Activity. The Company has not taken
and may not take, directly or indirectly, any action designed to
cause or result in, or which has constituted or which could
reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to
facilitate the sale or resale of the Placement Shares.
(r) Taxes. The Company and its Subsidiaries have filed
all necessary federal, state and foreign income and franchise tax
returns, and all such tax returns are complete and correct in all
material respects, and the Company and its Subsidiaries have not
failed to pay any taxes which were payable pursuant to said
returns or any assessments with respect thereto, except where any
failure to do so would not result in a material adverse effect on
the Company and its Subsidiaries. The Company has no knowledge
of any tax deficiency which has been or is likely to be
threatened or asserted against the Company or its Subsidiaries.
(s) Internal Controls. The Company maintains a system or
systems of internal accounting controls sufficient to provide
reasonable assurances 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 in the United States 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 existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
Except as disclosed in the Registration Statement or the
Prospectus, since the date of the most recent evaluation of such
system of internal accounting controls, there has been no
material change in internal control over financial reporting,
including any corrective actions with regard to significant
deficiencies or material weaknesses.
(t) Disclosure Controls. The Company has established and
maintains disclosure controls and procedures (as defined in Rule
13a-15 under the Exchange Act). Such disclosure controls and
procedures are designed to ensure that material information
relating to the Company is made known to the Company's principal
executive officer and its principal financial officer,
particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared. To the
Company's knowledge, such disclosure controls and procedures are
effective in timely alerting the Company's principal executive
officer and principal financial officer to material information
required to be included in the Company's periodic reports
required under the Exchange Act.
(u) Insurance. The Company and its Subsidiaries maintain
insurance, or are covered by its lessee's insurance or
indemnification policies, of the types and in the amounts
generally deemed adequate for its business, including, but not
limited to, directors' and officers' insurance, product liability
insurance, and insurance covering real and personal property
owned or leased by the Company and its Subsidiaries against
theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full
force and effect. The Company has not been refused any insurance
coverage sought or applied for, and the Company has no 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 could not reasonably be expected to
have a Material Adverse Effect.
(v) No Contributions. Neither the Company nor any of its
Subsidiaries nor, to the knowledge of the Company, any of its
employees or agents has at any time during the last five years
(i) made any unlawful contribution to any candidate for foreign
office, or failed to disclose fully any contribution in violation
of law, or (ii) made any payment to any foreign, federal or state
governmental officer or official or other person charged with
similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States or any
jurisdiction thereof.
(w) No Investment Company Status. The Company is not and,
after giving effect to the offering and sale of the Placement
Shares and the application of the proceeds thereof as described
under the caption "Use of Proceeds" in the Prospectus, will not
be an "investment company" as defined in the Investment Company
Act of 1940, as amended.
(x) No Brokerage Fees. Except as disclosed in the
Prospectus and as set forth herein between the Company and the
Agent, 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 Agent for a brokerage
commission, finder's fee or other like payment in connection with
the offering of Placement Shares.
(y) No Registration Rights. Except as disclosed in the
Prospectus, there are no contracts, agreements or understandings
between the Company and any person granting such person the right
to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company
owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to
a Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company
under the Securities Act.
(z) Exchange Listing. The Company's Common Stock is
listed on the Exchange and the Company is currently in compliance
with all continued listing standards and corporate governance
standards of the Exchange, and the Company has no knowledge of
any proceeding intended to suspend or terminate listing of its
securities on the Exchange. The Common Stock is registered under
Section 12(b) of the Exchange Act.
(aa) SOX Compliance. The Company is in material compliance
with all applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002
("SOX") that are currently effective and the rules and
regulations promulgated in connection therewith.
(bb) No Consents Required. No consent, approval,
authorization, or order of, or filing with, any governmental
agency or body or any court is required for the consummation of
the transactions contemplated by this Agreement in connection
with the issuance and sale of the Securities by the Company,
except such as have been obtained and made under the Securities
Act and such as may be required by the Exchange, the Financial
Industry Regulatory Authority ("FINRA") or under state securities
laws or the laws of any foreign jurisdiction.
(cc) No Conflicts. The execution, delivery and performance
of this Agreement and the issuance and sale of the Securities
will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, (i) any statute,
any rule, regulation or order of any governmental agency or body
or any court, domestic or foreign, having jurisdiction over the
Company, except in the case of this clause (i) for such breaches,
violations or defaults which could not, individually or in the
aggregate, reasonably expected to have a Material Adverse Effect
or (ii) any agreement or instrument to which the Company is a
party or by which the Company is bound, except in the case of
this clause (ii) for such breaches, violations or defaults which
could not, individually or in the aggregate, reasonably expected
to have a Material Adverse Effect, or (iii) the charter or by-
laws of the Company, and the Company has full power and authority
to authorize, issue and sell the Securities as contemplated by
this Agreement.
(dd) No Labor Disputes. No labor dispute with the
employees of the Company or any subsidiary exists or, to the
knowledge of the Company, is imminent that could reasonably be
expected to have a Material Adverse Effect.
(ee) Intellectual Property. Neither the Company nor its
Subsidiaries own or possess the right to use any trademarks,
trade names, patent rights, copyrights, domain names, licenses,
approvals, trade secrets, inventions, technology, know-how and
other similar rights (collectively, "Intellectual Property
Rights") that would reasonably be deemed (i) necessary or
material to conduct its business as now conducted and as
described in the Prospectus or that are (ii) necessary or
material for the commercialization of the products, services and
investments described in the Prospectus as being under
development. There is no pending or, to the knowledge of the
Company, threatened action, suit, proceeding, or claim by others
challenging the rights of the Company or any of its Subsidiaries
in or to any Intellectual Property Rights. There is no pending,
or to the Company's knowledge, threatened action, suit,
proceeding, or claim by others that the Company or any of its
Subsidiaries infringes, misappropriates, or otherwise violates
any Intellectual Property Rights of others.
(ff) Licenses. Except as could reasonably be expected not
to have a Material Adverse Effect, neither the Company nor any of
its Subsidiaries has breached and is currently in breach of any
provision of any license, contract or other agreement governing
the use by the Company or its Subsidiaries of Intellectual
Property Rights owned by third parties (collectively, the
"Licenses") and, except as described in the Prospectus, no third
party has alleged any such breach and the Company is unaware of
any facts that would form a reasonable basis for such a claim.
To the knowledge of the Company, no other party to the Licenses
has breached or is currently in breach of any provision of the
Licenses. Each of the Licenses is in full force and effect and
constitutes a valid and binding agreement between the parties
thereto, enforceable in accordance with its terms, and there has
not occurred any breach or default under any such Licenses or any
event that with the giving of notice or lapse of time would
constitute a breach or default thereunder. Except as could not
reasonably be expected to have a Material Adverse Effect, neither
the Company nor any of its Subsidiaries has been and is currently
involved in any disputes regarding the Licenses. To the
knowledge of the Company, all patents licensed to the Company
pursuant to the Licenses are valid, enforceable and being duly
maintained. To the knowledge of the Company, all patent
applications licensed to the Company pursuant to the Licenses are
being duly prosecuted.
(gg) Applicable Laws. Except as described in the
Registration Statement, the Prospectus, the Company and its
Subsidiaries: (A) are and at all times have been in compliance
in all material aspects with all statutes, rules, regulations, or
guidance applicable to the Company and its Subsidiaries
("Applicable Laws"), except as could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse
Change; (B) have not received any notice of adverse finding,
warning letter, untitled letter or other correspondence or notice
from the Internal Revenue Services or any other federal, state or
foreign governmental authority having authority over the Company
("Governmental Authority") alleging or asserting noncompliance
with any Applicable Laws or any licenses, certificates,
approvals, clearances, authorizations, permits and supplements or
amendments thereto required by any such Applicable Laws
("Authorizations"); (C) possess all material Authorizations and
such Authorizations are valid and in full force and effect and
are not in violation of any term of any such Authorizations; (D)
have not received notice of any claim, action, suit, proceeding,
hearing, enforcement, investigation, arbitration or other action
from any Governmental Authority or third party alleging that any
product operation or activity is in violation of any Applicable
Laws or Authorizations and the Company has no knowledge that any
such Governmental Authority or third party is considering any
such claim, litigation, arbitration, action, suit, investigation
or proceeding; (E) have not received notice that any Governmental
Authority has taken, is taking or intends to take action to
limit, suspend, modify or revoke any Authorizations and neither
the Company has no knowledge that any such Governmental Authority
is considering such action; and (F) have filed, obtained,
maintained or submitted all material reports, documents, forms,
notices, applications, records, claims, submissions and
supplements or amendments as required by any Applicable Laws or
Authorizations and that all such reports, documents, forms,
notices, applications, records, claims, submissions and
supplements or amendments were complete and correct in all
material respects on the date filed (or were corrected or
supplemented by a subsequent submission).
(hh) REIT Election. The Company, and prior to the Company
filing its first tax return, its wholly-owned subsidiary,
Pittsburgh & West Virginia Railroad ("PWV Railroad"), has made a
timely election to be subject to tax as a real estate investment
trust ("REIT") pursuant to Sections 856 through 860 of the Code
for its taxable years ended December 31, 2011 and 2010 and will
make a timely election to be subject to tax as a REIT for its
taxable year ended December 31, 2012. Commencing with its
taxable year ended December 31, 1967, the Company, and prior to
the Company filing its first tax return, PWV Railroad, has been
organized and operating in conformity with the requirements for
qualification and taxation as a REIT under the Code, and the
Company's actual and proposed method of operation as set forth in
the Registration Statement and the Prospectus does and will
enable it to meet the requirements for qualification and taxation
as a REIT under the Code. All statements regarding the Company's
qualification and taxation as a REIT and descriptions of the
Company's organization and proposed method of operation set forth
in the Prospectus are true, complete and correct in all material
respects.
(ii) Description of Operations and Business. The
description of the Company's organization and actual and proposed
method of operation and its qualification and taxation as a REIT
set forth in the Registration Statement and the Prospectus is
accurate and presents fairly the matters referred to therein in
all material respects; the Company's operating policies and
investment guidelines described in the Registration Statement and
the Prospectus accurately reflect in all material respects the
current intentions of the Company with respect to the operation
of its business, and no material deviation from such guidelines
or policies is currently contemplated.
(jj) Related-Party Transactions. There are no business
relationships or related-party transactions involving the Company
or any Subsidiary or any other person required to be described in
the Prospectus that have not been described as required.
(kk) Environmental Laws. Except as would not, individually
or in the aggregate, result in a Material Adverse Effect, (i) to
the best of the Company's knowledge, neither the Company nor any
of its Subsidiaries is in violation of any federal, state, local
or foreign law or regulation relating to pollution or protection
of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including without limitation,
laws and regulations relating to emissions, discharges, releases
or threatened releases of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum and
petroleum products (collectively, "Materials of Environmental
Concern"), or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of Materials of Environmental Concern (collectively,
"Environmental Laws"), which violation includes, but is not
limited to, noncompliance with any permits or other governmental
authorizations required for the operation of the business of the
Company under applicable Environmental Laws, or noncompliance
with the terms and conditions thereof, nor has the Company or any
of its Subsidiaries received any written communication, whether
from a governmental authority, citizens group, employee or
otherwise, that alleges that the Company or any of its
Subsidiaries is in violation of any Environmental Law; (ii) to
the knowledge of the Company, there is no claim, action or cause
of action filed with a court or governmental authority, no
investigation with respect to which the Company or any of its
Subsidiaries has received written notice, and no written notice
by any person or entity alleging potential liability for
investigatory costs, cleanup costs, governmental responses costs,
natural resources damages, property damages, personal injuries,
attorneys' fees or penalties arising out of, based on or
resulting from the presence, or release into the environment, of
any Material of Environmental Concern at any location owned,
leased or operated by the Company or any of its Subsidiaries, now
or in the past (collectively, "Environmental Claims"), pending
or, to the knowledge of the Company, threatened against the
Company, any of its Subsidiaries, or any person or entity whose
liability for any Environmental Claim the Company or any of its
Subsidiaries has retained or assumed either contractually or by
operation of law; and (iii) to the knowledge of the Company,
there are no past or present actions, activities, circumstances,
conditions, events or incidents, including, without limitation,
the release, emission, discharge, presence or disposal of any
Material of Environmental Concern, that reasonably could result
in a violation of any Environmental Law or form the basis of a
potential Environmental Claim against the Company, any of its
Subsidiaries, or against any person or entity whose liability for
any Environmental Claim the Company or any of its Subsidiaries
has retained or assumed either contractually or by operation of
law.
(ll) Intentionally Omitted.
(mm) Employee Benefit Plans. The Company and any "employee
benefit plan" (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and
published interpretations thereunder (collectively, "ERISA"))
established or maintained by the Company, or its "ERISA
Affiliates" (as defined below) are in compliance in all material
respects with ERISA. "ERISA Affiliates " means, with respect to
the Company, any member of any group of organizations described
in Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of
1986, as amended, and the regulations and published
interpretations thereunder (the "Code") of which the Company is a
member. No "reportable event" (as defined under ERISA) has
occurred or is reasonably expected to occur with respect to any
"employee benefit plan" established or maintained by the Company,
or any of its ERISA Affiliates. No "employee benefit plan"
established or maintained by the Company or any of its ERISA
Affiliates, if such "employee benefit plan" were terminated,
would have any "amount of unfunded benefit liabilities" (as
defined under ERISA). Neither the Company, nor any of its ERISA
Affiliates has incurred or reasonably expects to incur any
liability under (i) Title IV of ERISA with respect to termination
of, or withdrawal from, any "employee benefit plan" or (ii)
Sections 412, 4971, 4975 or 4980B of the Code. Each "employee
benefit plan" established or maintained by the Company or any of
its ERISA Affiliates 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.
(nn) No Insider Loans. There are no outstanding loans or
other extensions of credit made by the Company to any executive
officer (as defined in Rule 3b-7 under the Exchange Act) or
director of the Company. The Company has not taken any action
prohibited by Section 402 of SOX.
(oo) Certain Services. None of the Company or its
Subsidiaries (collectively and individually, an "Entity"), or, to
the knowledge of the Company, any director, officer, employee,
representative or agent of any Entity or any affiliates thereof
is providing services to the Company, except as described in the
Prospectus. No Entity or any director, officer, employee,
representative or agent of any Entity or any affiliate thereof
has taken or will take any action in furtherance of an offer,
payment, promise to pay, or authorization or approval of the
payment or giving of money, property, gifts or anything else of
value, directly or indirectly, to any "government official"
(including any officer or employee of a government or government-
owned or controlled entity or of a public international
organization, or any person acting in an official capacity for or
on behalf of any of the foregoing, or any political party or
party official or candidate for political office) to influence
official action or secure an improper advantage; and the Company
and its Subsidiaries have conducted their businesses in
compliance with applicable anti-corruption laws and have
instituted and maintain and will continue to maintain policies
and procedures designed to promote and achieve compliance with
such laws.
(pp) Patriot Act, Etc. The operations of the Company and
its Subsidiaries are and have been conducted at all times in
material compliance with all applicable financial recordkeeping
and reporting requirements, including those of the Bank Secrecy
Act, as amended by Title III of the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the
applicable anti-money laundering statutes of jurisdictions where
the Company or any of its subsidiaries conduct business, the
rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or
enforced by any governmental agency (collectively, the "Anti-
Money Laundering Laws"), and no action, suit or proceeding
(including any inquiries or investigations by any court or
governmental agency or body, domestic or foreign) with respect to
the Anti-Money Laundering Laws is pending, or to the knowledge of
the Company, threatened or contemplated.
(qq) No Foreign Ownership Sanctions Applicable. None of
the Entities, nor, to the Company's knowledge, any director,
officer, employee, agent, affiliate or representative of any of
the Entities is an individual or entity ("Person") that is, or is
owned or controlled by a Person that is (A) the subject of any
sanctions administered or enforced by the U.S. Department of
Treasury's Office of Foreign Assets Control ("Sanctions"), or (B)
located, organized or resident in a country or territory that is
the subject of Sanctions; the Entity will not, directly or
indirectly, use the proceeds of the Offering, or lend, contribute
or otherwise make available such proceeds to any Subsidiary,
joint venture partner or other Person: (A) to fund or facilitate
any activities or business of or with any Person or in any
country or territory that, at the time of such funding or
facilitation, is the subject of Sanctions; or (B) in any other
manner that will result in a violation of Sanctions by any Person
(including any Person participating in the offering of Placement
Shares, whether as agent, underwriter, advisor, investor or
otherwise); and the Entity has not engaged in, is not now engaged
in, and will not engage in, any dealings or transactions with any
Person, or in any country or territory, that at the time of the
dealing or transaction is or was the subject of Sanctions.
(rr) No Undisclosed Sales of Securities. Except as
disclosed in the Prospectus, the Company has not sold, issued or
distributed any shares of securities during the six-month period
preceding the date hereof.
(ss) Certain Other Data and Information in the Prospectus.
Any market data and industry forecasts included in the
Registration Statement and the Prospectus were obtained or
derived from industry publications that are and were not at any
time under the Company's control which the Company reasonably and
in good faith believes are reliable and accurate, and such data
agree with the sources from which they are derived.
(tt) Non-GAAP Information. All "non-GAAP financial
measures" (as defined in the Regulations) included in the
Registration Statement or the Prospectus comply with the
requirements of Regulation G and Item 10 of Regulation S-K under
the Regulations.
(uu) No Non-Compete Obligations. To the Company's
knowledge, no director or officer is subject to any non-
competition agreement or non-solicitation agreement with any
employer or prior employer which could materially affect each
director's or officer's ability to be and act in the capacity of
a director or officer of the Company.
(vv) No Unlawful Influence. The Company has not offered,
or caused the Agent to offer, the Placement Shares to any person
or entity with the intention of unlawfully influencing a
journalist or publication to write or publish favorable
information about the Company or any such affiliate.
(ww) Foreign Corrupt Practices Act. To the Company's
knowledge, no affiliate of the Company is aware of or has taken
any action, directly or indirectly, that: (i) would result in a
violation by such persons of the Foreign Corrupt Practices Act of
1977, as amended, and the rules and regulations thereunder (the
"FCPA") or otherwise subject the Company to any damage or penalty
in any civil, criminal or governmental litigation or proceeding;
(ii) if not done in the past, might have had a Material Adverse
Effect or (iii) if not continued in the future, might adversely
affect the assets, business or operations of the Company,
including, without limitation, given or agreed to give any money,
gift or similar benefit (other than legal price concessions to
customers in the ordinary course of business) to any customer,
supplier, employee or agent of a customer or supplier, or
official or employee of any governmental agency or
instrumentality of any government (domestic or foreign) or any
political party or candidate for office (domestic or foreign) or
any political party or candidate for office (domestic or foreign)
or other person who was, is, or may be in a position to help or
hinder the business of the Company (or assist it in connection
with any actual or proposed transaction). The Company's internal
accounting controls and procedures are sufficient to cause the
Company to comply with the Foreign Corrupt Practices Act of 1977,
as amended.
(xx) No Finder's Fees or Similar Agreements. Except as
described in the Registration Statement or the Prospectus, there
are no claims, payments, arrangements, agreements or
understandings relating to the payment of a finder's, consulting
or origination fee by the Company with respect to the sale of the
Securities hereunder or any other arrangements, agreements or
understandings of the Company or any affiliate of the Company
that may affect the Agent's compensation, as determined by FINRA.
(yy) No FINRA Member Payments. Except as described in the
Registration Statement, the Company has not made any direct or
indirect payments (in cash, securities or otherwise) to: (i) any
person, as a finder's fee, consulting fee or otherwise, in
consideration of such person raising capital for the Company or
introducing to the Company persons who raised or provided capital
to the Company; (ii) to any FINRA member; or (iii) to any person
or entity that has any direct or indirect affiliation or
association with any FINRA member, within the past twelve months,
other than payments to the Agent in connection with the offering
of Placement Shares.
(zz) No Loans to FINRA members. To the Company's
knowledge, no affiliate of the Company has made a subordinated
loan to any member of FINRA.
(aaa) No Proceeds to FINRA members. No proceeds from the
sale of the Placement Shares (excluding the Agent's compensation
prescribed herein) will be paid to any FINRA member, or any
persons associated or affiliated with a member of FINRA, except
as specifically authorized herein.
(bbb) No Conflict of Interest. To the Company's knowledge,
no FINRA member intending to participate in the purchase of
Placement Shares hereby has a conflict of interest with the
Company. For this purpose, a "conflict of interest" exists when
a member of FINRA and/or its associated persons, parent or
affiliates in the aggregate beneficially own 10% or more of the
Company's outstanding subordinated debt or common equity, or 10%
or more of the Company's preferred equity. "Members
participating" include managing agents, syndicate group members
and all dealers which are members of FINRA.
(ccc) No Agreements with Agents. The Company has not entered
into any agreement or arrangement (including, without limitation,
any consulting agreement or any other type of agreement) during
the 180-day period prior to the initial filing date of the
Registration Statement, which arrangement or agreement provides
for the receipt of any item of value and/or the transfer or
issuance of any warrants, options, or other securities from the
Company to a FINRA member, any person associated with a member
(as defined by FINRA rules), any potential agents in the offering
of Placement Shares and/or any related persons.
The Company acknowledges that the Agent and, for purposes of the
opinions to be delivered pursuant to this Agreement, counsel to the
Company and counsel to the Agent, will rely upon the accuracy and
truthfulness of the foregoing representations and hereby consents to
such reliance.
6. Sale and Delivery; Settlement.
(a) Sale of Placement Shares. On the basis of the
representations and warranties herein contained and subject to
the terms and conditions herein set forth, upon the Agent's
acceptance of the terms of a Placement Notice, and unless the
sale of the Placement Shares described therein has been declined,
suspended, or otherwise terminated in accordance with the terms
of this Agreement, the Agent, for the period specified in the
Placement Notice, will use their commercially reasonable efforts
consistent with their normal trading and sales practices to sell
such Placement Shares up to the amount specified, and otherwise
in accordance with the terms of such Placement Notice. The
Company acknowledges and agrees that (i) there can be no
assurance that the Agent will be successful in selling Placement
Shares, (ii) the Agent will determine between themselves the
allocation of Placement Shares to be sold by or through each of
them and the allocation of the commissions payable by the Company
under Section 2 hereof, (iii) no Agent will incur any liability
or obligation to the Company or any other person or entity if it
does not sell Placement Shares for any reason other than a
failure by such Agent to use its commercially reasonable efforts
consistent with its normal trading and sales practices to sell
such Placement Shares as required under this Agreement and (iii)
no Agent shall be under any obligation to purchase Placement
Shares on a principal basis pursuant to this Agreement.
(b) Settlement of Placement Shares. Unless otherwise
specified in the applicable Placement Notice, settlement for
sales of Placement Shares will occur on the third (3rd) Trading
Day (or such earlier day as is industry practice for regular-way
trading) following the date on which such sales are made (each,
a"Settlement Date" and the first such settlement date, the "First
Delivery Date"). The amount of proceeds to be delivered to the
Company on a Settlement Date against receipt of the Placement
Shares sold (the "Net Proceeds") will be equal to the aggregate
sales price received by the Agent at which such Placement Shares
were sold, after deduction for (i) the Agent's commission,
discount or other compensation for such sales payable by the
Company pursuant to Section 2 hereof, (ii) any other amounts due
and payable by the Company to the Agent hereunder pursuant to
Section 7(g) (Expenses) hereof and (iii) any transaction fees
imposed by any governmental or self-regulatory organization in
respect of such sales.
(c) Delivery of Placement Shares. On or before each
Settlement Date, the Company will, or will cause its transfer
agent to, electronically transfer the Placement Shares being sold
by crediting the Agent's or its designee's account at The
Depository Trust Company ("DTC") through its Deposit and
Withdrawal at Custodian System ("DWAC") or by such other means of
delivery as may be mutually agreed upon by the parties hereto
which in all cases shall be freely tradable, transferable,
registered shares in good deliverable form. On each Settlement
Date, the Agent acting under the applicable Placement Notice will
deliver the related Net Proceeds in same-day funds to an account
designated by the Company on, or prior to, the Settlement Date.
The Company agrees that if the Company, or its transfer agent (if
applicable), defaults in its obligation to deliver Placement
Shares on a Settlement Date, the Company will, in addition to and
in no way limiting the rights and obligations set forth in
Section 9(a) (Indemnification and Contribution), (i) hold the
Agent harmless against any loss, claim, damage, or expense
(including reasonable legal fees and expenses), as incurred,
arising out of or in connection with such default by the Company
and (ii) pay to the Agent any commission, discount, or other
compensation to which it would otherwise have been entitled
absent such default.
(d) Denominations; Registration. Certificates for the
Placement Shares, if any, shall be in such denominations and
registered in such names as the Agent may request in writing at
least one full business day before the Settlement Date. The
certificates for the Placement Shares, if any, will be made
available for examination and packaging by the Agent in The City
of New York not later than noon (New York time) on the business
day prior to the Settlement Date. Notwithstanding the foregoing,
Agent acknowledges that Company does not issue certificated
shares and all shares will be settled through DTC, or if
registered shares are required for settlement by Agent, in book-
entry format through the Company's transfer agent.
(e) Limitations on Offering Size. Under no circumstances
shall the Company cause or request the offer or sale of any
Placement Shares if, after giving effect to the sale of such
Placement Shares, such sale would exceed the Maximum Amount.
Under no circumstances shall the Company cause or request the
offer or sale of any Placement Shares at a price lower than the
minimum price authorized from time to time by the Company's board
of trustees, duly authorized committee thereof or a duly
authorized executive committee, and notified to the Agent in
writing.
7. Covenants of the Company. The Company covenants and agrees
with the Agent that:
(a) Registration Statement Amendments. After the date of
this Agreement and during any period in which a Prospectus
relating to any Placement Shares is required to be delivered by
the Agent under the Securities Act with respect to a pending sale
of the Placement Shares (including in circumstances where such
requirement may be satisfied pursuant to Rule 172 under the
Securities Act), the Company will notify the Agent promptly of
the time when any subsequent amendment to the Registration
Statement, other than documents incorporated by reference, has
been filed with the Commission and/or has become effective or any
subsequent supplement to the Prospectus has been filed and any
request by the Commission for any amendment or supplement to the
Registration Statement or Prospectus or for additional
information related to the Registration Statement, the Prospectus
or any Issuer Free Writing Prospectus.
(b) Notice of Commission Stop Orders. The Company will
advise the Agent, promptly after it receives notice or obtains
knowledge thereof, of the issuance or threatened issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or any other order preventing or
suspending the use of the Prospectus, of the suspension of the
qualification of the Placement Shares for offering or sale in any
jurisdiction, or of the initiation or threatening of any
proceeding for any such purpose or any examination pursuant to
Section 8(e) of the Securities Act, or if the Company becomes the
subject of a proceeding under Section 8A of the Securities Act in
connection with the offering of the Placement Shares; and the
Company will promptly use its commercially reasonable efforts to
prevent the issuance of any stop or other order or to obtain its
withdrawal if such a stop or other order should be issued.
(c) Delivery of Prospectus; Subsequent Changes. During any
period in which a Prospectus relating to the Placement Shares is
required to be delivered by the Agent under the Securities Act
with respect to a pending sale of the Placement Shares (including
in circumstances where such requirement may be satisfied pursuant
to Rule 172 under the Securities Act), the Company will comply
with all requirements imposed upon it by the Securities Act, as
from time to time in force, and to file on or before their
respective due dates all reports and any definitive proxy or
information statements required to be filed by the Company with
the Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or
any other provision of or under the Exchange Act. If during such
period any event occurs as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of
a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances
then existing, not misleading, or if during such period it is
necessary to amend or supplement the Registration Statement or
Prospectus to comply with the Securities Act, the Company will
promptly notify the Agent to suspend the offering of Placement
Shares during such period and the Company will promptly amend or
supplement the Registration Statement or Prospectus (at the
expense of the Company, unless such omission was in conformity
with written information furnished to the Company by Agent
specifically for use therein) so as to correct such statement or
omission or effect such compliance.
(d) Listing of Placement Shares. During any period in
which the Prospectus relating to the Placement Shares is required
to be delivered by the Agent under the Securities Act with
respect to a pending sale of the Placement Shares (including in
circumstances where such requirement may be satisfied pursuant to
Rule 172 under the Securities Act), the Company will use its
commercially reasonable efforts to cause the Placement Shares to
be listed on the Exchange (or the Company's then principal
trading market for its Common Stock).
(e) Delivery of Registration Statement and Prospectus. The
Company will furnish to the Agent and their counsel (at the
expense of the Company) copies of the Registration Statement and
the Prospectus (including all documents incorporated by reference
therein) and all amendments and supplements to the Registration
Statement or Prospectus that are filed with the Commission during
any period in which a Prospectus relating to the Placement Shares
is required to be delivered under the Securities Act. The copies
of the Registration Statement and the Prospectus and any
supplements or amendments thereto furnished to the Agent will be
identical to the electronically transmitted copies thereof filed
with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T. Notwithstanding the foregoing, the
Company will not be required to furnish any document (other than
the Prospectus) to the Agent to the extent such document is
available on XXXXX.
(f) Earnings Statement. The Company will make generally
available to its security holders as soon as practicable, but in
any event not later than 15 months after the end of the Company's
current fiscal quarter, an earnings statement covering a 12-month
period that satisfies the provisions of Section 11(a) and Rule
158 of the Securities Act. "Earnings statement" and "make
generally available" will have the meanings contained in Rule 158
under the Securities Act.
(g) Expenses. The Company will pay all expenses incident
to the performance of its obligations under this Agreement,
including (i) the preparation, filing, including any fees
required by the Commission, and printing of the Registration
Statement (including financial statements and exhibits) as
originally filed and of each amendment and supplement thereto, in
such number as MLV shall reasonably deem necessary, (ii) the
printing and delivery to MLV of this Agreement and such other
documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Placement Shares,
(iii) the preparation, issuance and delivery of the certificates,
if any, for the Placement Shares to MLV, including any stock or
other transfer taxes and any capital duties, stamp duties or
other duties or taxes payable upon the sale, issuance or delivery
of the Placement Shares to MLV, (iv) the fees and disbursements
of the counsel, accountants and other advisors to the Company,
(v) the reasonable fees and disbursements of counsel to MLV, up
to a maximum amount of $20,000, (vi) the printing and delivery to
MLV of copies of any permitted Free Writing Prospectus and the
Prospectus and any amendments or supplements thereto in such
number as MLV shall reasonably deem necessary, (vii) the fees and
expenses of the transfer agent and registrar for the Placement
Shares, (viii) the filing fees incident to any review by FINRA of
the terms of the sale of the Placement Shares, and (ix) the fees
and expenses incurred in connection with the listing of the
Placement Shares on the Exchange.
(h) Use of Proceeds. The Company will use the Net Proceeds
as described in the Prospectus in the section entitled "Use of
Proceeds."
(i) Notice of Other Sales. During either the pendency of
any Placement Notice given hereunder, or any period in which the
Prospectus relating to the Placement Shares is required to be
delivered by the Agent, the Company shall provide the Agent with
notice as promptly as reasonably possible before it offers to
sell, contracts to sell, sells, grants any option to sell or
otherwise disposes of any shares of Common Stock (other than
Placement Shares offered pursuant to the provisions of this
Agreement) or securities convertible into or exchangeable for
Common Stock, warrants or any rights to purchase or acquire
Common Stock; provided, that such notice shall not be required in
connection with the (i) issuance, grant or sale of Common Stock,
options to purchase shares of Common Stock or Common Stock
issuable upon the exercise of options or other equity awards
pursuant to any employee or director stock option or benefits
plan or stock ownership plan or issuances permitted by FINRA (ii)
the issuance or sale of Common Stock pursuant to any dividend
reinvestment plan that the Company may adopt from time to time or
(iii) the issuance of Common Stock upon the exercise of any
currently outstanding warrants, options or other rights in effect
or outstanding and disclosed in filings by the Company available
on XXXXX.
(j) Change of Circumstances. The Company will, at any time
during the pendency of a Placement Notice, advise the Agent
promptly after it shall have received notice or obtained
knowledge thereof, of any information or fact that would alter or
affect in any material respect any opinion, certificate, letter
or other document required to be provided to the Agent pursuant
to this Agreement.
(k) Due Diligence Cooperation. The Company will cooperate
with any reasonable due diligence review conducted by the Agent
or their representatives or agents in connection with the
transactions contemplated hereby, including, without limitation,
providing information and making available documents and senior
corporate officers, during regular business hours and at the
Company's principal offices or its counsel's office, as the Agent
may reasonably request.
(l) Required Filings Relating to Placement of Placement
Shares. The Company agrees that on such dates as the Securities
Act shall require, the Company will (i) file a prospectus
supplement with the Commission under the applicable paragraph of
Rule 424(b) under the Securities Act (each and every filing date
under Rule 424(b), a "Filing Date"), which prospectus supplement
will set forth, within the relevant period, the amount of
Placement Shares sold through the Agent, the Net Proceeds to the
Company and the compensation payable by the Company to the Agent
with respect to such Placement Shares, and (ii) deliver such
number of copies of each such prospectus supplement to each
exchange or market on which such sales were effected as may be
required by the rules or regulations of such exchange or market.
(m) Representation Dates; Certificate. Each time the
Company: (i) files the Prospectus relating to the Placement
Shares or amends or supplements (other than a prospectus
supplement relating solely to an offering of securities other
than the Placement Shares), the Registration Statement or the
Prospectus relating to the Placement Shares by means of a post-
effective amendment, sticker, or supplement, in any case such
that the audited financial information contained therein is
materially amended, but not by means of incorporation of
documents by reference into the Registration Statement or the
Prospectus relating to the Placement Shares; (ii) files an annual
report on Form 10-K under the Exchange Act (including any Form
10-K/A containing materially amended financial information or a
material amendment to the previously filed Form 10-K); (iii)
files its quarterly reports on Form 10-Q under the Exchange Act
or (iv) files a current report on Form 8-K containing material
amendments to audited financial statements that are incorporated
by reference into the Registration Statement (other than
information "furnished" pursuant to Items 2.02 or 7.01 of Form 8-
K) under the Exchange Act (each date of filing of one or more of
the documents referred to in clauses (i) through (iv) shall be a
"Representation Date"); the Company shall furnish the Agent with
a certificate, in the form attached hereto as Exhibit 7(m) within
three (3) Trading Days of any Representation Date. The
requirement to provide a certificate under this Section 7(m)
shall be waived for any Representation Date occurring at a time
at which no Placement Notice is pending, which waiver shall
continue until the earlier to occur of the date the Company
delivers a Placement Notice hereunder (which for such calendar
quarter shall be considered a Representation Date) and the next
occurring Representation Date; provided, however, that such
waiver shall not apply for any Representation Date on which the
Company files its annual report on Form 10-K. Notwithstanding
the foregoing, if the Company subsequently decides to sell
Placement Shares following a Representation Date when the Company
relied on such waiver and did not provide the Agent with a
certificate under this Section 7(m), then before the Company
delivers the Placement Notice or the Agent sells any Placement
Shares, the Company shall provide the Agent with a certificate,
in the form attached hereto as Exhibit 7(m), dated the date of
the Placement Notice.
(n) Legal Opinion. Within three (3) Trading Days of the
date the Company files its annual report on Form 10-K for the
fiscal year ended December 31, 2012 ("10-K Representation Date"),
the Company shall cause to be furnished to the Agent a written
opinion dated as of the date of such 10-K Representation Date of
Xxxxxxxx& Xxxxx LLP ("Company Counsel"), in a form reasonably
acceptable to the Agent and their counsel. Within three Trading
Days of each subsequent Representation Date with respect to which
the Company is obligated to deliver a certificate in the form
attached hereto as Exhibit 7(m) for which no waiver is
applicable, the Company shall cause to be furnished to the Agent
a written opinion of Company Counsel in the foregoing form;
provided, however, that in lieu of such opinion, Company Counsel
last furnishing such opinion to the Agent may furnish to the
Agent a letter substantially to the effect that the Agent may
rely on such prior opinion to the same extent as though dated the
date of such letter authorizing reliance.
(o) Comfort Letter. Within three (3) Trading Days of the
10-K Representation Date, the Company shall cause its independent
accountants (and/or any other independent accountants whose
report is included in the Registration Statement or the
Prospectus), to furnish the Agent with a letter (the "Initial
Comfort Letter") in form and substance satisfactory to the Agent
(i) confirming that they are an independent registered public
accounting firm within the meaning of the Securities Act, the
Exchange Act, and the PCAOB, and (ii) stating, as of such date,
the conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by
accountants' "comfort letters" to underwriters in connection with
registered public offerings. Within three Trading Days of each
subsequent Representation Date, other than pursuant to Section
7m(iii), with respect to which the Company is obligated to
deliver a certificate in the form attached hereto as Exhibit 7(m)
for which no waiver is applicable, the Company shall cause such
auditors to provide a supplemental comfort letter to the Agent
which shall state that such auditors have followed such
procedures as they deem necessary to determine that no changes or
modifications to the Initial Comfort Letter are necessary except
as set forth in such supplemental letter, together with a
customary "circle up" of the relevant sections of the 10-Q, 10-K
or other documents filed by the Company with the Commission that
contain updated or changed information of the type for which the
auditors customarily give comfort.
(p) Market Activities. The Company will not, directly or
indirectly, (i) take any action designed to cause or result in,
or that constitutes or might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Placement Shares or (ii) sell, bid for, or purchase the Placement
Shares to be issued and sold pursuant to this Agreement, or pay
anyone any compensation for soliciting purchases of the Placement
Shares to be issued and sold pursuant to this Agreement other
than the Agent.
(q) Filings with the Exchange. The Company will timely
file with the Exchange (and/or the Company's then principal
trading market for its Common Stock) all material documents and
notices required by the Exchange (or such other principal trading
market) of companies that have or will issue securities that are
traded on the Exchange (or such other principal trading market).
(r) Securities Act and Exchange Act. The Company will use
its commercially reasonable efforts to comply with all
requirements imposed upon it by the Securities Act and the
Exchange Act as from time to time in force, so far as necessary
to permit the continuance of sales of, or dealings in, the
Placement Shares as contemplated by the provisions hereof and the
Prospectus.
(s) No Offer to Sell. Other than a free writing
prospectus (as defined in Rule 405 under the Securities Act)
approved in advance in writing by the Company and the Agent in
its capacity as principal or agent hereunder, neither the Agent
nor the Company (including its agents and representatives) will,
directly or indirectly, make, use, prepare, authorize, approve or
refer to any free writing prospectus relating to the Placement
Shares to be sold by the Agent as principal or agent hereunder.
The Company will treat the Agent-approved Issuer Free Writing
Prospectus as an "issuer free writing prospectus," as defined in
Rule 433 of the Securities Act, and will comply with the
requirements of Rule 433 of the Securities Act applicable to any
Issuer Free Writing Prospectus, including timely filing with the
Commission where required, legending and record keeping.
(t) Xxxxxxxx-Xxxxx Act. The Company will maintain and
keep accurate books and records reflecting its assets and
maintain internal accounting controls in a manner designed to
provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted
accounting principles and including those policies and procedures
that (i) pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and
dispositions of the assets of the Company, (ii) provide
reasonable assurance that transactions are recorded as necessary
to permit the preparation of the Company's consolidated financial
statements in accordance with generally accepted accounting
principles, (iii) that receipts and expenditures of the Company
are being made only in accordance with management's and the
Company's trustees' authorization, and (iv) provide reasonable
assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company's
assets that could have a material effect on its financial
statements. The Company will maintain such controls and other
procedures, including, without limitation, those required by
Sections 302 and 906 of SOX, and the applicable regulations
thereunder that are designed to ensure that information required
to be disclosed by the Company in the reports that it files or
submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the
Commission's rules and forms, including, without limitation,
controls and procedures designed to ensure that information
required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is accumulated and
communicated to the Company's management, including its Chief
Executive Officer and principal financial officer, or persons
performing similar functions, as appropriate to allow timely
decisions regarding required disclosure and to ensure that
material information relating to the Company is made known to
them, particularly during the period in which such periodic
reports are being prepared.
(u) Transfer Agent. The Company shall maintain, at its
expense, a registrar and transfer agent for the Common Stock.
(v) Disclosure of Sales. The Company will disclose in its
quarterly reports on Form 10-Q and in its annual report on Form
10-K the number of Placement Shares sold through the Agent during
the relevant period.
(w) Market Stabilization. The Company will not, and will
use its commercially reasonable efforts to cause its officers,
trustees and affiliates not to, (i) take, directly or indirectly,
any action designed to stabilize or manipulate the price of any
security of the Company, or which may cause or result in, or
which might in the future 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 any
of the Placement Shares, (ii) sell, bid for, purchase or pay
anyone any compensation for soliciting purchases of the Placement
Shares during the pendency of any Placement Notice or (iii) pay
or agree to pay to any person any compensation for soliciting any
order to purchase any other securities of the Company during the
pendency of any Placement Notice; provided, however, that upon
consent of the Agent, the Company may bid for and purchase Common
Stock in accordance with Rule 10b-18 under the Exchange Act.
(x) Listing. During any period in which the Prospectus
relating to the Placement Shares is required to be delivered by
the Agent under the Securities Act with respect to a pending sale
of the Placement Shares (including in circumstances where such
requirement may be satisfied pursuant to Rule 172 under the
Securities Act), the Company will use its commercially reasonable
efforts to cause the Placement Shares to be listed on the
Exchange (or such other principal trading market for the
Company's Common Stock)
(y) Available Shares. The Company will ensure that there
are at all times sufficient shares of Common Stock to provide for
the issuance, free of any preemptive rights, out its authorized
but unissued shares of Common Stock, of the Maximum Amount.
8. Conditions to the Agent's Obligations. The obligations of
the Agent hereunder with respect to a Placement Notice will be subject
to the continuing accuracy and completeness of the representations and
warranties made by the Company herein, to the due performance by the
Company of its respective obligations hereunder, to the completion by
the Agent of a due diligence review satisfactory to them in their
reasonable judgment, and to the continuing satisfaction (or waiver by
the Agent in their sole discretion) of the following additional
conditions:
(a) Registration Statement Effective. The Registration
Statement shall have become effective and shall be available for
the sale of all Placement Shares contemplated to be issued by any
Placement Notice.
(b) No Material Notices. None of the following events
shall have occurred and be continuing: (i) receipt by the
Company of any request for additional information from the
Commission or any other federal or state governmental authority
during the period of effectiveness of the Registration Statement,
the response to which would require any post-effective amendments
or supplements to the Registration Statement or the Prospectus;
(ii) the issuance by the Commission or any other federal or state
governmental authority of any stop order suspending the
effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose; (iii) receipt by the Company of
any notification with respect to the suspension of the
qualification or exemption from qualification of any of the
Placement Shares for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose or (iv) the
occurrence of any event that makes any material statement made in
the Registration Statement or the Prospectus or any material
document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the
making of any changes in the Registration Statement, related
Prospectus or documents so that, in the case of the Registration
Statement, it will not contain any materially untrue statement of
a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading and, that in the case of the Prospectus, it will not
contain any materially untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(c) Material Changes. Except as contemplated in the
Prospectus, or disclosed in the Company's reports filed with the
Commission, there shall not have been any material adverse
change, on a consolidated basis, in the authorized capital stock
of the Company or any Material Adverse Effect, or any development
that could reasonably be expected to cause a Material Adverse
Effect, the effect of which, in the reasonable judgment of the
Agent (without relieving the Company of any obligation or
liability it may otherwise have), is so material as to make it
impracticable or inadvisable to proceed with the offering of the
Placement Shares on the terms and in the manner contemplated in
the Prospectus.
(d) Legal Opinion. The Agent shall have received the
opinion of Company Counsel required to be delivered pursuant to
Section 7(n) on or before the date on which such delivery of such
opinion is required pursuant to Section 7(n).
(e) Comfort Letter. The Agent shall have received the
Initial Comfort Letter and any update letters required to be
delivered pursuant to Section 7(o) on or before the date on which
such delivery of such opinion is required pursuant to Section
7(o).
(f) Representation Certificate. The Agent shall have
received the certificate required to be delivered pursuant to
Section 7(m) on or before the date on which delivery of such
certificate is required pursuant to Section 7(m).
(g) No Exchange Suspension or FINRA Objection. Trading in
the Common Stock shall not have been suspended on the Exchange.
FINRA shall not have objected to the fairness or reasonableness
of the terms or arrangements under this Agreement.
(h) Other Materials. On each date on which the Company is
required to deliver a certificate pursuant to Section 7(m), the
Company shall have furnished to the Agent such appropriate
further information, certificates and documents as the Agent may
reasonably request. All such opinions, certificates, letters and
other documents will be in compliance with the provisions hereof.
The Company will furnish the Agent with such conformed copies of
such opinions, certificates, letters and other documents as the
Agent shall reasonably request.
(i) Securities Act Filings Made. All filings with the
Commission required by Rule 424 under the Securities Act to have
been filed prior to the issuance of any Placement Notice
hereunder shall have been made within the applicable time period
prescribed for such filing by Rule 424.
(j) Approval for Listing. The Placement Shares shall
either have been (i) approved for listing on the Exchange,
subject only to notice of issuance, or (ii) the Company shall
have filed an application for listing of the Placement Shares on
the Exchange at, or prior to, the issuance of any Placement
Notice.
(k) Termination of Agreement. If any condition specified
in this Section 8 shall not have been fulfilled when and as
required to be fulfilled, this Agreement may be terminated by the
Agent by notice to the Company. Notice of such cancellation
shall be given in writing and addressed to each of the
individuals of the Company set forth on Schedule 2.
(l) No Termination Event. There shall not have occurred
any event or condition that would permit the Agent to terminate
this Agreement pursuant to Section 11.
9. Indemnification and Contribution.
(a) Company Indemnification. The Company agrees to
indemnify and hold harmless the Agent, and its respective
directors, officers, partners, employees and agents and each
person, if any, who (i) controls such Agent within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange
Act, or (ii) is controlled by or is under common control with
such Agent (an "Agent Affiliate") from and against any and all
losses, claims, liabilities, expenses and damages (including, but
not limited to, any and all reasonable investigative, legal and
other expenses incurred in connection with, and any and all
amounts paid in settlement (in accordance with Section 9(c)) of,
any action, suit or proceeding between any of the indemnified
parties and any indemnifying parties or between any indemnified
party and any third party, or otherwise, or any claim asserted),
as and when incurred, to which the Agent, or any such person, may
become subject under the Securities Act, the Exchange Act or
other federal or state statutory law or regulation, at common law
or otherwise, insofar as such losses, claims, liabilities,
expenses or damages arise out of or are based, directly or
indirectly, on any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or the
Prospectus, or any amendments thereto (including the information
deemed to be a part of the Registration Statement at the time of
effectiveness and at any subsequent time pursuant to Rules 430A
and 430B, if applicable) or the omission or alleged omission to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading or any breach of
any representation or warranty of the Company contained herein;
provided, however, that this indemnity agreement shall not apply
to the extent that such loss, claim, liability, expense or damage
arises from or is caused directly or indirectly by an untrue
statement or omission or alleged untrue statement or omission
made in reliance on and in conformity with information furnished
in writing to the Company by or on behalf of such Agent expressly
for inclusion in the Registration Statement or Prospectus. This
indemnity agreement will be in addition to any liability that the
Company might otherwise have.
(b) Agent Indemnification. The Agent agrees to indemnify
and hold harmless the Company and its trustees and each officer
of the Company who signed the Registration Statement, and each
person, if any, who (i) controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange
Act or (ii) is controlled by or is under common control with the
Company (a "Company Affiliate") against any and all losses,
liabilities, claims, damages and expenses (including, but not
limited to, any and all reasonable investigative, legal and other
expenses incurred in connection with, and any and all amounts
paid in settlement (in accordance with Section 9(c)) of, any
action, suit or proceeding between any of the indemnified parties
and any indemnifying parties or between any indemnified party and
any third party, or otherwise, or any claim asserted),to which
the Company, or any such person, may become subject under the
Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, as and
when incurred, but only insofar as such loss, liability, claim,
damage or expense arises from or is caused directly or indirectly
by an untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information
furnished in writing to the Company by or on behalf of such Agent
expressly for inclusion in the Registration Statement or
Prospectus.
(c) Procedure. Any party that proposes to assert the
right to be indemnified under this Section 9 will, promptly after
receipt of notice of commencement of any action against such
party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 9, notify each
such indemnifying party of the commencement of such action,
enclosing a copy of all papers served, but the omission so to
notify such indemnifying party will not relieve the indemnifying
party from (i) any liability that it might have to any
indemnified party otherwise than under this Section 9 and (ii)
any liability that it may have to any indemnified party under the
foregoing provision of this Section 9 unless, and only to the
extent that, such omission results in the forfeiture of
substantive rights or defenses by the indemnifying party. If any
such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in and, to the
extent that it elects by delivering written notice to the
indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume
the defense of the action, with counsel reasonably satisfactory
to the indemnified party, and after notice from the indemnifying
party to the indemnified party of its election to assume the
defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as
provided below. The indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses
and other charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the
indemnified party has been authorized in writing by the
indemnifying party, (2) the indemnified party has reasonably
concluded (based on the written advice of counsel) that there may
be legal defenses available to it or other indemnified parties
that are different from or in addition to those available to the
indemnifying party, (3) a conflict or potential conflict exists
(based on the written advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to
direct the defense of such action on behalf of the indemnified
party) or (4) the indemnifying party has not in fact employed
counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying
party or parties. It is understood that the indemnifying party
or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the
reasonable fees, disbursements and other charges of more than one
separate firm admitted to practice in such jurisdiction at any
one time for all such indemnified party or parties. All such
fees, disbursements and other charges will be reimbursed by the
indemnifying party promptly as they are incurred. An
indemnifying party will not, in any event, be liable for any
settlement of any action or claim effected without its written
consent, not to be unreasonably withheld. No indemnifying party
shall, without the prior written consent of each indemnified
party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding
relating to the matters contemplated by this Section 9 (whether
or not any indemnified party is a party thereto), unless such
settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising or
that may arise out of such claim, action or proceeding.
(d) Contribution. In order to provide for just and
equitable contribution in circumstances in which the
indemnification provided for in the foregoing paragraphs of this
Section 9 is applicable in accordance with its terms but for any
reason is held to be unavailable from the Company or the Agent,
the Company and the Agent will contribute to the total losses,
claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claim asserted, but after
deducting any contribution received by the Company from persons
other than the agents, if any), to which the Company and the
Agent may be subject in such proportion as shall be appropriate
to reflect the relative benefits received by the Company and MLV,
respectively. The relative benefits received by the parties
hereto shall be deemed to be in the same proportion as the total
net proceeds from the sale of the Placement Shares (before
deducting expenses) received by the Company bear to the total
compensation received by the applicable Agent from the sale of
Placement Shares on behalf of the Company. If, but only if, the
allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in
such proportion as is appropriate to reflect not only the
relative benefits referred to in the foregoing sentence but also
the relative fault of the Company and MLV, respectively, with
respect to the statements or omission that resulted in such loss,
claim, liability, expense or damage, or action in respect
thereof, as well as any other relevant equitable considerations
with respect to such offering. Such relative fault shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to
information supplied by the Company or MLV, respectively, and
their relative knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company
and the Agent agree that it would not be just and equitable if
contributions pursuant to this Section 9(d) were to be determined
by pro rata allocation or by any other method of allocation that
does not take into account the equitable considerations referred
to herein. The amount paid or payable by an indemnified party as
a result of the loss, claim, liability, expense, or damage, or
action in respect thereof, referred to above in this Section 9(d)
shall be deemed to include, for the purpose of this Section 9(d),
any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending
any such action or claim to the extent consistent with Section 9
hereof. Notwithstanding the foregoing provisions of this Section
9(d), Agent shall not be required to contribute any amount in
excess of the commissions received by it under this Agreement and
no person found guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) will be
entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section
9(d), any person who controls a party to this Agreement within
the meaning of the Securities Act, and any officers, directors,
trustees, partners, employees or agents of Agent, will have the
same rights to contribution as that party, and each trustee of
the Company and each officer of the Company who signed the
Registration Statement will have the same rights to contribution
as the Company, subject in each case to the provisions hereof.
Any party entitled to contribution, promptly after receipt of
notice of commencement of any action against such party in
respect of which a claim for contribution may be made under this
Section 9(d), will notify any such party or parties from whom
contribution may be sought, but the omission to so notify will
not relieve that party or parties from whom contribution may be
sought from any other obligation it or they may have under this
Section 9(d) except to the extent that the failure to so notify
such other party materially prejudiced the substantive rights or
defenses of the party from whom contribution is sought. Except
for a settlement entered into pursuant to the last sentence of
Section 9(c) hereof, no party will be liable for contribution
with respect to any action or claim settled without its written
consent, not to be unreasonably withheld.
10. Representations and Agreements to Survive Delivery. All
representations and warranties of the Company herein or in
certificates delivered pursuant hereto shall survive, as of their
respective dates, regardless of (i) any investigation made by or on
behalf of the Agent, any controlling persons, or the Company (or any
of their respective officers, trustees or controlling persons), (ii)
delivery and acceptance of the Placement Shares and payment therefore
or (iii) any termination of this Agreement.
11. Termination.
(a) Termination; General. The Agent may terminate this
Agreement, by notice to the Company, as hereinafter specified at
any time (1) if there has been, since the time of execution of
this Agreement or since the date as of which information is given
in the Prospectus, any change, or any development or event
involving a prospective change, which individually or in the
aggregate, in the sole judgment of the Agent has or could have a
Material Adverse Effect and makes it impractical or inadvisable
to market the Placement Shares or to enforce contracts for the
sale of the Placement Shares, (2) if there has occurred any
material adverse change in the financial markets in the United
States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in
national or international political, financial or economic
conditions, in each case the effect of which is such as to make
it, in the judgment of the Agent, impracticable or inadvisable to
market the Placement Shares or to enforce contracts for the sale
of the Placement Shares, (3) if trading in the Placement Shares
has been suspended or limited by the Commission or the Exchange,
or if trading generally on the Exchange has been suspended or
limited, (4) if any suspension of trading of any securities of
the Company on any exchange or in the over-the-counter market
shall have occurred and be continuing, (5) if a major disruption
of securities settlements or clearance services in the United
States shall have occurred and be continuing or (6) if a banking
moratorium has been declared by either U.S. Federal or New York
authorities.
(b) Termination by the Company. The Company shall have the
right to terminate this Agreement by giving ten days notice as
specified herein to the Agent.
(c) Termination by the Agent. In addition to the rights
set forth in Section 11(a), the Agent shall have the right to
terminate this Agreement by giving ten days notice to the
Company.
(d) Automatic Termination. Unless earlier terminated
pursuant to this Section 11, this Agreement shall automatically
terminate upon the issuance and sale of the Maximum Amount of
Placement Shares through the Agent pursuant to this Agreement.
(e) Effectiveness of Termination. Any termination of this
Agreement shall be effective on the date specified in such notice
of termination; provided, however, that such termination shall
not be effective until the close of business on the date
specified in such notice by Agent or the Company, as the case may
be. If such termination shall occur prior to the Settlement Date
for any sale of Placement Shares, such Placement Shares shall
settle in accordance with the provisions of this Agreement.
(f) Survival. The provisions of Sections 7(g), 9, 16 and
17 hereof and the obligation herein to pay any discount,
commission or other compensation accrued, but unpaid, shall
survive any expiration or termination of this Agreement.
12. Notices. All notices or other communications required or
permitted to be given by any party to any other party pursuant to the
terms of this Agreement shall be in writing, unless otherwise
specified in this Agreement, and if
sent to MLV,
MLV & Co. LLC
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Telephone: (000) 000-0000
Email: xxxxxxxx@xxxxx.xxx
with a copy to
LeClairRyan, A Professional Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Email: xxxxx.xxxxx@xxxxxxxxxxx.xxx
with copies in each case sent to,
sent to the Company,
Power REIT
000 Xxxxxxx Xxxx
Xxx Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Chairman and CEO
Telephone: 000-000-0000
Email: xxxxxxx@xxxxxx.xxx
with copies to,
Xxxxxxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Telephone: (000) 000-0000
Email: xxxxxxxx@xxxxxxxxxxxxx.xxx
Each party to this Agreement may change such address for notices by
sending to the parties to this Agreement written notice of a new
address for such purpose. Each such notice or other communication
shall be deemed given (i) when delivered personally or by verifiable
facsimile transmission (with an original to follow) on or before 4:30
p.m., New York City time, on a Business Day or, if such day is not a
Business Day, on the next succeeding Business Day, (ii) on the next
Business Day after timely delivery to a nationally-recognized
overnight courier and (iii) on the Business Day actually received if
deposited in the U.S. mail (certified or registered mail, return
receipt requested, postage prepaid). For purposes of this Agreement,
"Business Day" shall mean any day on which the Exchange and commercial
banks in the City of New York are open for business.
13. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the Company and the Agent and their
respective successors and the affiliates, controlling persons,
officers and trustees referred to in Section 9 hereof. References to
any of the parties contained in this Agreement shall be deemed to
include the successors and permitted assigns of such party. Nothing
in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and
permitted assigns any rights, remedies, obligations or liabilities
under or by reason of this Agreement, except as expressly provided in
this Agreement. No party may assign its rights or obligations under
this Agreement without the prior written consent of the other party.
14. Adjustments for Stock Splits. The parties acknowledge and
agree that all share-related numbers contained in this Agreement shall
be adjusted to take into account any stock split, stock dividend or
similar event effected with respect to the Placement Shares.
15. Entire Agreement; Amendment; Severability. This Agreement
(including all schedules and exhibits attached hereto and placement
notices issued pursuant hereto) constitutes the entire agreement and
supersedes all other prior and contemporaneous agreements and
undertakings, both written and oral, among the parties hereto with
regard to the subject matter hereof; provided, that nothing herein
shall be deemed to terminate or modify any ongoing or existing
obligations arising under the underwriting agreements entered into by
the Company and the Agent prior to the date hereof. Neither this
Agreement nor any term hereof may be amended except pursuant to a
written instrument executed by the Company and the Agent. In the
event that any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or
unenforceable as written by a court of competent jurisdiction, then
such provision shall be given full force and effect to the fullest
possible extent that it is valid, legal and enforceable, and the
remainder of the terms and provisions herein shall be construed as if
such invalid, illegal or unenforceable term or provision was not
contained herein, but only to the extent that giving effect to such
provision and the remainder of the terms and provisions hereof shall
be in accordance with the intent of the parties as reflected in this
Agreement.
16. Applicable Law; Consent to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the internal
laws of the State of New York without regard to the principles of
conflicts of laws. Each party hereby irrevocably submits to the non-
exclusive jurisdiction of the state and federal courts sitting in the
City of New York, Borough of Manhattan, for the adjudication of any
dispute hereunder or in connection with any transaction contemplated
hereby, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of
such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy
thereof (certified or registered mail, return receipt requested) to
such party at the address in effect for notices to it under this
agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.
17. WAIVER OF JURY TRIAL.EACH OF THE COMPANY AND THE AGENT
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY CLAIM BASED UPON OR ARISING OUT OF THIS AGREEMENT OR
ANY TRANSACTION CONTEMPLATED HEREBY.
18. Use of Information; Confidentiality. Agent shall hold all
information received from Company in connection with this Agreement in
strict confidence and shall not disseminate or share that information
with third-parties, other than in connection with the performance of
its obligations under this Agreement. Agent shall use non-public
information only in the performance of its duties under this
Agreement.
19. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
Delivery of an executed Agreement by one party to the other may be
made by facsimile transmission.
20. Absence of Fiduciary Relationship. The Company acknowledges
and agrees that:
(a) the Company is a sophisticated business enterprise
that has retained the Agent for the limited purposes set forth in
this Agreement, and MLV's, the Company's respective rights and
obligations are contractual in nature;
(b) the Company is capable of evaluating and understanding
and understands and accepts the terms, risks and conditions of
the transactions contemplated by this Agreement;
(c) the Company has been advised that the Agent and its
respective affiliates are engaged in a broad range of
transactions which may involve interests that differ from those
of the Company and that no Agent has any obligation to disclose
such interests and transactions to the Company by virtue of any
fiduciary, advisory or agency relationship;
(d) the Company disclaims any intention to impose
fiduciary obligations on the Agent by virtue of the engagement
contemplated by this Agreement;
(e) the Agent has not provided any legal, accounting,
regulatory or tax advice with respect to the transactions
contemplated by this Agreement and the Company has consulted its
own legal, accounting, regulatory and tax advisors to the extent
it has deemed appropriate;
(f) MLV is a full service securities firm and as such from
time to time, subject to applicable securities laws, may effect
transaction for its own account or the account of its customers
and hold long or short positions in the Common Stock; and
(g) the Company waives, to the fullest extent permitted by
law, any claims it may have against the Agent for breach of
fiduciary duty or alleged breach of fiduciary duty and agrees
that the Agent shall have no liability (whether direct or
indirect) to the Company in respect to such fiduciary claim or to
any person asserting a fiduciary duty claim on behalf of or in
right of the Company, including shareholders, partners, employees
or creditors of the Company.
[Remainder of Page Intentionally Blank]
If the foregoing correctly sets forth the understanding between
the Company and the Agent, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a
binding agreement between the parties.
Very truly yours,
POWER REIT
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Chairman and CEO
MLV & CO. LLC
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: President and Chief
Operating Officer
Exhibit 1
FORM OF PLACEMENT NOTICE
From:
[ ]
Cc:
[ ]
To:
[ ]
Subject: At The Market Issuance - Placement Notice
Gentlemen:
Pursuant to the terms and subject to the conditions contained in the
At Market Issuance Sales Agreement by and among Power REIT (the
"Company") and MLV & Co. LLC (the "Agent") dated March [*], 2013 (the
"Agreement"), I hereby request on behalf of the Company that the Agent
sell up to [ ] shares of the Company's Common Stock at a minimum
market price of $[ ] per share.
[ADDITIONAL SALES PARAMETERS MAY BE ADDED, SUCH AS THE MAXIMUM
AGGREGATE OFFERING PRICE, THE TIME PERIOD IN WHICH SALES ARE REQUESTED
TO BE MADE, SPECIFIC DATES THE SHARES MAY NOT BE SOLD ON, THE MANNER
IN WHICH SALES ARE TO BE MADE BY THE PLACEMENT AGENT, AND/OR THE
CAPACITY IN WHICH THE PLACEMENT AGENT MAY ACT IN SELLING SHARES (AS
PRINCIPAL, AGENT, OR BOTH)]
Schedule 2
Placement Notice Authorized Personnel
TO MLV:
Name Title Email Address
Xxxxxxx XxXxxxxx Chief Executive Officer xxxxxxxxx@xxxxx.xxx
Xxxx Xxxxxxx President xxxxxxxx@xxxxx.xxx
Xxxxx Xxxxxxxxx Head of Capital Markets xxxxxxxxxxx@xxxxx.xxx
Xxxx Xxxxxxx Institutional Sales & xxxxxxxx@xxxxx.xxx
Trading
With a copy to xxxxxxxxxx@xxxxx.xxx
TO POWER REIT:
Name Title Email Address
Xxxxx Xxxxxx Chairman and Chief xxxxxxx@xxxxxx.xxx
Executive Officer
Xxxx Xxxxxx Vice President xxxxxxx@xxxxxx.xxx
Xxxxxxx X. Xxxxxx Xxxxxxx xxxxxxxxxxxxx@xxxxx.xxx
Schedule 3
MLV shall be paid compensation equal to 3% of the gross proceeds from
the sales of the Placement Shares sold by MLV pursuant to the terms of
this Agreement.
Exhibit 7(m)
Pursuant to Section 7(m) of the At Market Issuance Sales
Agreement (the "Agreement"), dated as of March [*], 2013 by and among
Power REIT (the "Company") and MLV & Co. LLC ("MLV") the undersigned
Chief Executive Officer and Chief Financial Officer of the Company,
hereby represent and warrant to MLV that, as of the date indicated
below:
1. The representations and warranties of the Company in the
Agreement, as applicable, are true and correct, as if made at and as
of the date indicated next to the signatures below, and the Company
has complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to such date;
2. No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for that
purpose have been initiated or are pending or, to their knowledge,
contemplated;
3. Any and all filings required by Rules 424, 430A, 430B and
430C under the Securities Act have been timely made;
4. The undersigned have carefully examined the Registration
Statement and the Prospectus, and any amendments or supplements
thereto, and such documents contain all statements and information
required to be included therein; the Registration Statement or any
amendment thereto does not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading; and the
Prospectus or any supplements thereto do not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
5. Since the effective date of the Registration Statement,
there has occurred no event required to be set forth in an amendment
or supplement to the Registration Statement or the Prospectus which
has not been so set forth; and
6. Since the effective date of the Registration Statement,
neither the Company nor any of its Subsidiaries have sustained any
loss by strike, fire, flood, accident or other calamity (whether or
not insured), or have become a party to or the subject of any
litigation, which is material to the Company or its Subsidiaries taken
as a whole and has not been disclosed in the Prospectus or any
supplements thereto, nor has there been a material adverse change in
the general affairs, business, key personnel, capitalization,
financial position, earnings or net worth of the Company and its
Subsidiaries, whether or not arising in the ordinary course of
business.
By:________________________
Name:
Title:
7(n)-2
