Contract
THIS AGREEMENT (the “Agreement”), dated as
of December 29, 2009, is entered into by and among SteelCloud, Inc. (the “Company”) and
Westminster Securities, a division of Xxxxxx Securities Inc. (the “Placement
Agent”). Defined terms not otherwise defined herein
shall have the meanings set forth in the Engagement Agreement (as defined
below).
WHEREAS,
pursuant to an engagement agreement dated September 3, 2009, as amended to date
(the “Engagement
Agreement”) the Company engaged the Placement Agent as its placement
agent in connection with a proposed placement of registered securities of the
Company; and
WHEREAS,
the Company and the Placement Agent desire to amend the Engagement Agreement as
set forth hereunder.
NOW
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereby agrees as follows:
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1.
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Amendments.
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a. Section
3 of the Engagement Agreement is hereby amended and replaced in its entirety
with the following:
“Promptly following the final
closing, if the Financing involved equity or securities convertible or
exchangeable for equity, the Company shall issue to Westminster, or its
designee, warrants (“Agent Warrants”) to purchase 5% of the total common stock
issued in the Financing but excluding all common stock issued and issuable to
the individuals listed in section 2(i), 2(ii) and 2(iii) above. The
Agent Warrants shall have the same terms as the warrants (if any) issued to the
investors in the Financing except that the exercise price shall be 125% of the
public offering price per share and shall have a term of exercise expiring no
later than 5 years from the effective date of the registration statement filed
in connection with the Financing. The Agent Warrants shall not have
antidilution protections or be transferable for six months from the date of the
Financing except as permitted by Financial Industry Regulatory Authority
(“FINRA”) Rule 5110, in that such warrants
may be transferred during the restriction period: (i) by operation of law or by reason of
reorganization of the Company; (ii) to any FINRA member firm participating in
the offering and the officers or partners thereof, if all securities so
transferred remain subject to the lock-up restriction set forth in Rule 5110 for
the remainder of the time period; (iii) if the aggregate amount of
securities of the Company held by the holder of the warrant or related person do
not exceed 1% of the securities being offered; (iv) to the extent of a transfer
of a security that is beneficially owned on a pro-rata basis by all equity
owners of an investment fund, provided that no participating member manages or
otherwise directs investments by the fund, and participating members in the
aggregate do not own more than 10% of the equity in the fund; or (v)
in connection with the exercise or conversion of any security, if all securities
received remain subject to the lock-up restriction in this Section for the
remainder of the time period.”
(b) Section
10 of the Engagement Agreement is hereby amended and replaced in its entirety
with the following:
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2.
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“Expenses. Subject to
compliance with FINRA Rule 5110(f)(2)(D), the Company also agrees to
reimburse Westminster’s reasonable expenses (with supporting
invoices/receipts) up to a maximum of 2% of the aggregate gross proceeds
raised in the Financing (excluding
the investments made by investors listed in Section 2(i), 2(ii) and
2(iii)), but in
no event more than $35,000. Westminster shall obtain the
Company’s prior written consent for expenses over $20,000. Upon execution
of this Agreement, the Company shall pay $20,000 as an advance of such
reasonable expenses to Westminster, which amounts shall be non-refundable
to the extent Westminster provides the Company with supporting
invoices/receipts of actual expenses
incurred.”
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3.
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Miscellaneous.
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(a) Except
as expressly set forth above, all of the terms and conditions of the Engagement
Agreement shall continue in full force and effect after the execution of this
Agreement and shall not be in any way changed, modified or superseded by the
terms set forth herein.
(b) This
Agreement may be executed in two or more counterparts and by facsimile signature
or otherwise, and each of such counterparts shall be deemed an original and all
of such counterparts together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, this Agreement is
executed as of the date first set forth above.
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STEELCLOUD,
INC.
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By:
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/s/ Xxxxx Xxxxxx | |
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Name:
Xxxxx Xxxxxx
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Title:
President
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XXXXXX
SECURITIES, INC.
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By:
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Name:
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Title:
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