Exhibit 1.1
Common
Stock
(par
value $0.001 per share)
August
18, 2020
X.
Xxxxx Securities, Inc.
000
Xxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX 00000
The
Benchmark Company, LLC
000
Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX 00000
Spartan
Capital Securities, LLC
00
Xxxxxxxx - 00xx Xxxxx
Xxx
Xxxx, XX 00000
Ladies
and Gentlemen:
WidePoint
Corporation, a Delaware corporation (the “Company”), confirms its
agreement (this “Agreement”) with X. Xxxxx
Securities, Inc. (“X. Xxxxx FBR”), The
Benchmark Company, LLC (“Benchmark”) and Spartan
Capital Securities, LLC (“Spartan”; each of X.
Xxxxx FBR, Benchmark and Spartan individually an
“Agent”
and collectively, the “Agents”) as
follows:
the
term of this Agreement, on the terms and subject to the conditions
set forth herein, it may issue and sell through or to the Agents,
as sales agent or principal, shares (the “Placement
Shares”); of the Company’s common
stock, par value $0.001 per share (the “Common Stock”);
provided however, that in
no event shall the Company issue or sell through the Agents such
number of Placement Shares that (a) exceeds the number of shares or
dollar amount of Common Stock registered on the effective
Registration Statement (as defined below) pursuant to which the
offering is being made or (b) exceeds the number of shares or
dollar amount registered on the Prospectus Supplement (as defined
below) (the lesser of (a) or (b) the “Maximum Amount”).
Notwithstanding anything to the contrary contained herein, the
parties hereto agree that compliance with the limitations set forth
in this Section 1
on the number or dollar amount of Placement Shares issued and sold
under this Agreement shall be the sole responsibility of the
Company and that the Agents shall have no obligation in connection
with such compliance. The issuance and sale of Placement Shares
through the Agents will be effected pursuant to the Registration
Statement (as defined below), although nothing in this Agreement
shall be construed as requiring the Company to use the Registration
Statement to issue any Placement Shares.
The
Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended and the rules and regulations
thereunder (the “Securities Act”), with
the Securities and Exchange Commission (the
“Commission”), a registration statement on Form S-3
(File No. 333-239303), 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 thereunder (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 Agents, for use by the Agents,
electronic copies of the base 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, and any
post-effective amendment thereto, 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 of the Securities
Act, or any subsequent registration statement on Form S-3 filed
pursuant to Rule 415(a)(6) under the Securities Act by the Company
to cover any Placement Shares, as a result of the end of the
three-year period described in Rule 415(a)(5) of the Securities
Act, is herein called the “Registration Statement.”
The base prospectus, including all documents incorporated or deemed
incorporated therein by reference to the extent such information
has not been superseded or modified in accordance with Rule 412
under the Securities Act (as qualified by Rule 430B(g) of the
Securities Act), included in the Registration Statement, as it may
be supplemented by the Prospectus Supplement, in the form in which
such base 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 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 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 the most recent copy filed with the
Commission pursuant to its Electronic Data Gathering Analysis and
Retrieval System, or if applicable, the Interactive Data Electronic
Application system when used by the Commission (collectively,
“XXXXX”).
2. Placements.
Each time that the Company wishes to issue and sell Placement
Shares hereunder (each, a “Placement”), it will
notify an Agent (the “Designated Agent”) by
electronic mail (or other method mutually agreed to in writing by
the parties) of 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 day and any minimum price below which sales may not be made
(a “Placement
Notice”), the form of which is attached hereto as
Schedule 1. The
Placement Notice shall originate from any of the individuals from
the Company set forth on Schedule 3 (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 from the
Designated Agent set forth on Schedule 3, as such
Schedule 3 may be
amended from time to time. The Placement Notice shall be effective
immediately upon receipt by the Designated Agent unless and until
(i) the Designated Agent declines to accept the terms contained
therein for any reason, in its sole discretion, within two (2)
Business Days (as defined below) of receipt of such Placement
Notice (ii) the entire amount of the Placement Shares thereunder
has been sold, (iii) the Company suspends or terminates the
Placement Notice, which suspension and termination rights may be
exercised by the Company in its sole discretion, (iv) the Company
issues a subsequent Placement Notice with parameters superseding
those included in the earlier dated Placement Notice, or (v) this
Agreement has been terminated under the provisions of Section 13. The amount of any
discount, commission or other compensation to be paid by the
Company to the Designated Agent in connection with the sale of the
Placement Shares shall be calculated in accordance with the terms
set forth in Schedule
2. It is expressly acknowledged and agreed that neither the
Company nor the Designated Agent will have any obligation
whatsoever with respect to a Placement or any Placement Shares
unless and until the Company delivers a Placement Notice to the
Designated Agent and the Designated Agent does not decline such
Placement Notice pursuant to the terms set forth above, and then
only upon the terms specified therein and herein. In the event of a
conflict between the terms of Sections 2 or 3 of this Agreement and the
terms of a Placement Notice, the terms of the Placement Notice will
control.
3. Sale
of Placement Shares by the Agents. Subject to the terms and
conditions of this Agreement, for the period specified in a
Placement Notice, the Designated Agent will use its commercially
reasonable efforts consistent with its normal trading and sales
practices and applicable state and federal laws, rules and
regulations and the rules of the NYSE American (the
“Exchange”), to sell the
Placement Shares up to the amount specified in, and otherwise in
accordance with the terms of, such Placement Notice. The Designated
Agent will provide written confirmation to the Company no later
than the opening of the Trading Day (as defined below) immediately
following the Trading Day on which it has made sales of Placement
Shares hereunder setting forth the number of Placement Shares sold
on such day, the compensation payable by the Company to the
Designated Agent pursuant to Section 2 with respect to such
sales, and the Net Proceeds (as defined below) payable to the
Company, with an itemization of the deductions made by the
Designated Agent (as set forth in Section 5(b)) from the gross
proceeds that it receives from such sales. Subject to the terms of
a Placement Notice, the Designated Agent shall 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. “Trading
Day” means any day on which shares of Common Stock are
purchased and sold on the Exchange. During the term of this
Agreement, none of the Agents nor any of their respective
affiliates or subsidiaries shall, for their own account, engage in
(i) any short sale of any security of the Company, (ii) any sale of
any security of the Company that such Agent 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, such Agent, or (iii)
any market making, bidding, purchasing, stabilization or other
trading activity with regard to the Common Stock, or attempting to
induce another person to do any of the foregoing, if such activity
would be prohibited under applicable law. None of the Agents nor
any of their respective affiliates or subsidiaries shall engage in
any proprietary trading or trading for such Agent’s (or its
affiliates’ or subsidiaries’) own account.
Notwithstanding the foregoing, these restrictions shall not apply
to bona fide transactions executed by the Agents in the furtherance
of the distribution contemplated hereunder or on behalf and at the
direction of any third party customer account.
4. Suspension
of Sales. The Company or the Designated Agent may, upon
notice to the other party in writing (including by email
correspondence to each of the individuals of the other party set
forth on Schedule
3, 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 3),
suspend any sale of Placement Shares (a “Suspension”);
provided, however, that
such suspension shall not affect or impair any party’s
obligations with respect to any Placement Shares sold hereunder
prior to the receipt of such notice. While a Suspension is in
effect, any obligation under Sections 7(l), 7(m), and 7(n) with respect to the
delivery of certificates, opinions, or comfort letters to the
Agents, shall be waived. Each of the parties agrees that no such
notice under this Section
4 shall be effective against any other party unless it is
made to one of the individuals named on Schedule 3 hereto, as such
Schedule may be amended from time to time.
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 Designated 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 Designated Agent, for the period specified in the
Placement Notice, will use its commercially reasonable efforts
consistent with its normal trading and sales practices and
applicable state and federal laws, rules and regulations and the
rules of the Exchange to sell such Placement Shares up to the
amount specified in, 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 Designated Agent will be
successful in selling Placement Shares, (ii) the Designated Agent
will incur no 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 the Designated Agent to use its
commercially reasonable efforts consistent with its normal trading
and sales practices and applicable state and federal laws, rules
and regulations and the rules of the Exchange to sell such
Placement Shares as required under this Agreement and (iii) the
Designated Agent shall be under no obligation to purchase Placement
Shares on a principal basis pursuant to this Agreement, except as
otherwise agreed by the Designated Agent and the
Company.
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
Designated Agent’s or its designee’s account (provided
the Designated Agent shall have given the Company written notice of
such designee and such designee’s account information at
least one Trading Day prior to the Settlement Date) at The
Depository Trust Company through its Deposit and Withdrawal at
Custodian System 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 Designated Agent
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 Designated Agent will be responsible for obtaining DWAC
instructions or instructions for delivery by other means with
regard to the transfer of Placement Shares being sold. 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 through no fault of the Designated Agent, then in
addition to and in no way limiting the rights and obligations set
forth in Section
11(a) hereto, it will (i) hold the Designated Agent harmless
against any loss, claim, damage, or reasonable, documented expense
(including reasonable and documented legal fees and expenses), as
incurred, arising out of or in connection with such default by the
Company or its transfer agent (if applicable) and (ii) pay to the
Designated Agent (without duplication) any commission, discount, or
other compensation to which it would otherwise have been entitled
absent such default.; provided,
however, that the Company shall not be obligated to so
indemnify and reimburse the Designated Agent if the Placement
Shares are not delivered due to (1) a suspension or material
limitation in trading in securities generally on the New York Stock
Exchange or the Exchange; (2) a general moratorium on commercial
banking activities declared by either federal or New York State
authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States;
(3) an outbreak or escalation of hostilities or acts of terrorism
involving the United States or a declaration by the United States
of a national emergency or war; or (4) any other calamity or crisis
or any change in financial, political or economic conditions in the
United States or elsewhere.
e. Sales
Through Agents. The Company agrees that any offer to sell,
any solicitation of an offer to buy, or any sales of Placement
Shares or any other equity security of the Company shall only be
effected by or through an Agent, and only a single Agent, on any
single given date, and in no event shall the Company request that
more than one Agent sell Shares on the same day; provided however
that (i) the foregoing limitation shall not apply to (A) exercise
of any option, warrant, right or any conversion privilege set forth
in the instruction governing such securities, (B) sales solely to
employees, directors or security holders of the Company or its
subsidiaries, or to a trustee or other person acquiring such
securities for the accounts of such person and (ii) such limitation
shall not apply (A) on any day during which no sales are made
pursuant to this Agreement or (B) during a period in which the
Company has notified the Agents that it will not sell Common Stock
under this Agreement and (1) no Placement Notice is pending or (2)
after a Placement Notice has been withdrawn.
a. Registration
Statement and Prospectus. Assuming no act or omission on the
part of the Agents that would make this statement untrue, the
transactions contemplated by this Agreement meet the requirements
for and comply with the conditions for the use of Form S-3
under the Securities Act. The Registration Statement has been filed
with the Commission and has been declared effective under the
Securities Act. The Prospectus Supplement will name X. Xxxxx FBR,
Benchmark and Spartan as the agents in the section entitled
“Plan of Distribution.” The Company has not received,
and has no notice of, any order of the Commission preventing or
suspending the use of the Registration Statement, or instituting
proceedings for that purpose. The Registration Statement and the
offer and sale of Placement Shares as contemplated hereby meet the
requirements of Rule 415 under the Securities Act and comply in all
material respects with said Rule. Any statutes, regulations,
contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement have been so described or
filed, as applicable. Copies of the Registration Statement, the
Prospectus, and any such amendments or supplements and all
documents incorporated by reference therein that were filed with
the Commission on or prior to the date of this Agreement have been
delivered, or are available through XXXXX, to the Agents and their
counsel. The Company has not distributed and, prior to the later to
occur of each Settlement Date and completion of the distribution of
the Placement Shares, will not distribute any offering material in
connection with the offering or sale of the Placement Shares other
than the Registration Statement and the Prospectus and any Issuer
Free Writing Prospectus (as defined below) to which the Agents have
consented, which consent will not be unreasonably withheld or
delayed, or that is required by applicable law or the listing
maintenance requirements of the Exchange. The Common Stock is
currently quoted on the Exchange under the trading symbol
“WYY.” The Company has not, in the 12 months
preceding the date hereof, received notice from the Exchange to the
effect that the Company is not in compliance with the listing or
maintenance requirements of the Exchange. To the Company’s
knowledge, it is in compliance with all such listing and
maintenance requirements.
b. No
Misstatement or Omission. At each Settlement Date, the
Registration Statement and the Prospectus, as of such date, will
conform in all material respects with the requirements of the
Securities Act. The Registration Statement, when it became or
becomes effective, 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 Prospectus and any amendment and
supplement thereto, on the date thereof and at each Applicable Time
(defined below), did not or will not include an untrue statement of
a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading, provided, however, that the Company
makes no warranty or representation with respect to any statement
contained in the Prospectus in reliance upon and in conformity with
information furnished in writing from the Agents to the Company
expressly for use in the Prospectus. The documents incorporated by
reference in the Prospectus or any Prospectus Supplement did not,
and any further documents filed and incorporated by reference
therein will not, when filed with the Commission, contain an untrue
statement of a material fact or omit to state a material fact
required to be stated in such document or necessary to make the
statements in such document, in light of the circumstances under
which they were made, not misleading. The foregoing shall not apply
to, and the Company neither makes nor shall make any representation
or warranty in respect of, statements in, or omissions from, any
such document made in reliance upon, and in conformity with,
information furnished to the Company by an Agent specifically for
use in the preparation thereof.
d. Financial
Information. The consolidated financial statements of the
Company included or incorporated by reference in the Registration
Statement and the Prospectus, together with the related notes and
schedules, present fairly, in all material respects, the
consolidated financial position of the Company and the Subsidiaries
(as defined below) as of the dates indicated and the consolidated
results of operations, cash flows and changes in
stockholders’ equity of the Company and the Subsidiaries for
the periods specified (subject, in the case of unaudited
statements, to normal year-end audit adjustments which will not be
material, either individually or in the aggregate) and have been
prepared in compliance with the published requirements of the
Securities Act and Exchange Act, as applicable, and in conformity
with generally accepted accounting principles in the United States
(“GAAP”) applied on a
consistent basis (except (i) for such adjustments to accounting
standards and practices as are noted therein and (ii) in the case
of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) during the
periods involved; the other financial and statistical data with
respect to the Company and the Subsidiaries contained or
incorporated by reference in the Registration Statement and the
Prospectus, are accurately and fairly presented in all material
respects and prepared on a basis consistent with the financial
statements and books and records of the Company; there are no
financial statements (historical or pro forma) that are required to
be included or incorporated by reference in the Registration
Statement, or the Prospectus that are not included or incorporated
by reference as required; the Company and the Subsidiaries do not
have any material liabilities or obligations, direct or contingent
(including any off balance sheet obligations), not described in the
Registration Statement, and the Prospectus which are required to be
described in the Registration Statement or Prospectus; and all
disclosures contained or incorporated by reference in the
Registration Statement and the Prospectus, if any, regarding
“non-GAAP financial measures” (as such term is defined
by the rules and regulations of the Commission) comply in all
material respects with Regulation G of the Exchange Act and Item 10
of Regulation S-K under the Securities Act, to the extent
applicable.
f. Organization.
The Company and any subsidiary that is a significant subsidiary (as
such term is defined in Rule 1-02 of Regulation S-X promulgated by
the Commission) (each, a “Subsidiary,”
collectively, the “Subsidiaries”), are, and
will be, duly organized, validly existing as a corporation and in
good standing under the laws of their respective jurisdictions of
organization. The Company and the Subsidiaries are duly licensed or
qualified as a foreign corporation for transaction of business and
in good standing under the laws of each other jurisdiction in which
their respective ownership or lease of property or the conduct of
their respective businesses requires such license or qualification,
and have all corporate power and authority necessary to own or hold
their respective properties and to conduct their respective
businesses as described in the Registration Statement and the
Prospectus, except where the failure to be so qualified or in good
standing or have such power or authority would not, individually or
in the aggregate, have a material adverse effect on the assets,
business, operations, earnings, properties, condition (financial or
otherwise), prospects, stockholders’ equity or results of
operations of the Company and the Subsidiaries taken as a whole, or
prevent the consummation of the transactions contemplated hereby (a
“Material Adverse
Effect”).
g. Subsidiaries.
As of the date hereof, the Company’s only Subsidiaries are
set forth on Schedule
6(g).The Company owns directly or indirectly, all of the
equity interests of the Subsidiaries free and clear of any lien,
charge, security interest, encumbrance, right of first refusal or
other restriction, and all the equity interests of the Subsidiaries
are validly issued and are fully paid, nonassessable and free of
preemptive and similar rights. The Company does not own or control,
directly or indirectly, any corporation, association or other
entity other than the subsidiaries listed in Exhibit 21.1 to the
Company’s Annual Report on Form 10-K for the most recently
ended fiscal year and other than (i) those subsidiaries not
required to be listed on Exhibit 21.1 by Item 601 of Regulation S-K
under the Exchange Act and (ii) those subsidiaries formed since the
last day of the most recently ended fiscal year.
h. No
Violation or Default. Neither the Company nor any Subsidiary
is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no event has
occurred that, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of
any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other similar agreement
or instrument to which the Company or any Subsidiary is a party or
by which the Company or any Subsidiary is bound or to which any of
the property or assets of the Company or any Subsidiary is subject;
or (iii) in violation of any law or statute or any judgment, order,
rule or regulation of any court or arbitrator or governmental or
regulatory authority having jurisdiction over the Company or such
Subsidiary, as the case may be, except, in the case of each of
clauses (ii) and (iii) above, for any such violation or default
that would not, individually or in the aggregate, have a Material
Adverse Effect. To the Company’s knowledge, no other party
under any material contract or other agreement to which it or any
Subsidiary is a party is in default in any respect thereunder where
such default would have a Material Adverse Effect.
i. No
Material Adverse Effect. Since the date of the most recent
financial statements of the Company included or incorporated by
reference in the Registration Statement and Prospectus, there has
not been (i) any Material Adverse Effect or any development that
would result in a Material Adverse Effect, (ii) any transaction
which is material to the Company and the Subsidiaries taken as a
whole, (iii) any obligation or liability, direct or contingent
(including any off-balance sheet obligations), incurred by the
Company or the Subsidiaries, which is material to the Company and
the Subsidiaries taken as a whole, (iv) any material change in the
capital stock (other than (A) the grant of additional equity
awards, options or other securities exercisable for, or convertible
into, Common Stock under the Company’s existing stock option
or equity incentive plans, (B) changes in the number of shares of
outstanding Common Stock of the Company due to the issuance of
shares upon the exercise or conversion of securities exercisable
for, or convertible into, Common Stock outstanding on the date
hereof, or the vesting of restricted stock (C) as a result of the
issuance of Placement Shares, (D) any repurchases of capital stock
of the Company, (E) as described in a proxy statement filed on
Schedule 14A or a Registration Statement on Form S-4, or
(F) otherwise publicly announced) or outstanding long-term
indebtedness of the Company or the Subsidiaries or (v) any dividend
or distribution of any kind declared, paid or made on the capital
stock of the Company or any Subsidiary, other than in each case
above in the ordinary course of business or as otherwise disclosed
in the Registration Statement or Prospectus (including any document
incorporated by reference therein).
j. Capitalization.
The issued and outstanding shares of capital stock of the Company
have been validly issued, are fully paid and non-assessable and,
other than as disclosed in the Registration Statement or the
Prospectus, are not subject to any preemptive rights, rights of
first refusal or similar rights. The Company has an authorized,
issued and outstanding capitalization as set forth in the
Registration Statement and the Prospectus as of the dates referred
to therein (other than (i) the grant of additional options and
shares under the Company’s existing stock option or equity
incentive plans, (ii) changes in the number of outstanding Common
Stock of the Company due to the issuance of shares upon the
exercise or conversion of securities exercisable for, or
convertible into, Common Stock outstanding on the date hereof,
(iii) as a result of the issuance of Placement Shares, or (iv) any
repurchases of capital stock of the Company) and such authorized
capital stock conforms to the description thereof set forth in the
Registration Statement and the Prospectus. The description of the
Common Stock in the Registration Statement and the Prospectus is
complete and accurate in all material respects. Except as disclosed
in or contemplated by the Registration Statement or the Prospectus,
the Company did not have outstanding any rights (other than stock
options or other equity awards under the Company’s equity
incentive plan) or warrants to subscribe for, or any securities or
obligations convertible into, or exchangeable for, or any contracts
or commitments to issue or sell, any shares of capital stock or
other securities.
k. S-3
Eligibility. (i) At the time of filing the Registration
Statement and (ii) at the time of the most recent amendment thereto
for the purposes of complying with Section 10(a)(3) of the
Securities Act (whether such amendment was by post-effective
amendment, incorporated report filed pursuant to Section 13 or
15(d) of the Exchange Act or form of prospectus), the Company met
the then applicable requirements for use of Form S-3 under the
Securities Act, including compliance with General Instruction I.B.6
of Form S-3, as applicable. As of the close of trading on the
Exchange on August 13, 2020, the aggregate market value of the
outstanding voting and non-voting common equity (as defined in Rule
405) of the Company held by persons other than affiliates of the
Company (pursuant to Rule 144 of the Securities Act, 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 $73.3 million (calculated by multiplying (x) the
price at which the common equity of the Company was last sold on
the Exchange on August 13, 2020 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 General 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.
m. Authorization
of Placement Shares. The Placement Shares, when issued and
delivered pursuant to the terms approved by the board of directors
of the Company or a duly authorized committee thereof, or a duly
authorized executive committee, against payment therefor as
provided herein, will be duly and validly authorized and issued and
fully paid and nonassessable, free and clear of any pledge, lien,
encumbrance, security interest or other claim (other than any
pledge, lien, encumbrance, security interest or other claim arising
from an act or omission of an Agent or a purchaser), including any
statutory or contractual preemptive rights, resale rights, rights
of first refusal or other similar rights, and will be registered
pursuant to Section 12 of the Exchange Act. The Placement Shares,
when issued, will conform in all material respects to the
description thereof set forth in or incorporated into the
Prospectus.
n. No
Consents Required. No consent, approval, authorization,
order, registration or qualification of or with any court or
arbitrator or any governmental or regulatory authority having
jurisdiction over the Company is required for the execution,
delivery and performance by the Company of this Agreement, and the
issuance and sale by the Company of the Placement Shares as
contemplated hereby, except for such consents, approvals,
authorizations, orders and registrations or qualifications (i) as
may be required under applicable state securities laws or by the
by-laws and rules of the Financial Industry Regulatory Authority
(“FINRA”) or the Exchange,
including any notices that may be required by the Exchange, in
connection with the sale of the Placement Shares by the Agents,
(ii) as may be required under the Securities Act and (iii) as have
been previously obtained by the Company.
o. No
Preferential Rights. (i) No person, as such term is defined
in Rule 1-02 of Regulation S-X promulgated under the Securities Act
(each, a “Person”), has the right,
contractual or otherwise, to cause the Company to issue or sell to
such Person any Common Stock or shares of any other capital stock
or other securities of the Company (other than upon the exercise of
options or warrants to purchase Common Stock or upon the exercise
of options that may be granted from time to time under the
Company’s stock option or equity incentive plans), (ii) no
Person has any preemptive rights, rights of first refusal, or any
other rights (whether pursuant to a “poison pill”
provision or otherwise) to purchase any Common Stock or shares of
any other capital stock or other securities of the Company from the
Company which have not been duly waived with respect to the
offering contemplated hereby, (iii) no Person has the right to act
as an underwriter or as a financial advisor to the Company in
connection with the offer and sale of the Common Stock, and (iv) no
Person has the right, contractual or otherwise, to require the
Company to register under the Securities Act any Common Stock or
shares of any other capital stock or other securities of the
Company, or to include any such shares or other securities in the
Registration Statement or the offering contemplated thereby,
whether as a result of the filing or effectiveness of the
Registration Statement or the sale of the Placement Shares as
contemplated thereby or otherwise, except in each case for such
rights as have been waived on or prior to the date
hereof.
q. Enforceability
of Agreements. All agreements between the Company and third
parties expressly referenced in the Prospectus, other than such
agreements that have expired by their terms or whose termination is
disclosed in documents filed by the Company on XXXXX, are legal,
valid and binding obligations of the Company and, to the
Company’s knowledge, enforceable in accordance with their
respective terms, except to the extent that (i) enforceability
may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights
generally and by general equitable principles and (ii) the
indemnification provisions of certain agreements may be limited by
federal or state securities laws or public policy considerations in
respect thereof, and except for any unenforceability that,
individually or in the aggregate, would not have a Material Adverse
Effect.
s. Licenses
and Permits. The Company and the Subsidiaries possess or
have obtained, all licenses, certificates, consents, orders,
approvals, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal,
state, local or foreign governmental or regulatory authorities that
are necessary for the ownership or lease of their respective
properties or the conduct of their respective businesses as
currently conducted, as described in the Registration Statement and
the Prospectus (the “Permits”), except where
the failure to possess, obtain or make the same would not,
individually or in the aggregate, have a Material Adverse Effect.
Neither the Company nor any Subsidiary has received written notice
of any proceeding relating to revocation or modification of any
such Permit, except where the failure to obtain any such renewal
would not, individually or in the aggregate, have a Material
Adverse Effect.
u. Certain
Market Activities. Neither the Company, nor any Subsidiary,
nor, to the knowledge of the Company, any of their respective
directors, officers or controlling persons has taken, directly or
indirectly, any action designed, or that has constituted or would
cause or result in, under the Exchange Act or otherwise, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Placement
Shares.
w. [Reserved]
x. Taxes.
The Company and the Subsidiaries have filed all federal, state,
local and foreign tax returns which have been required to be filed
and paid or accrued all taxes shown thereon through the date
hereof, to the extent that such taxes have become due and are not
being contested in good faith, except where the failure to do so
would not have a Material Adverse Effect. Except as otherwise
disclosed in or contemplated by the Registration Statement or the
Prospectus, no tax deficiency has been determined adversely to the
Company or any Subsidiary which has had, or would have,
individually or in the aggregate, a Material Adverse Effect. The
Company has no knowledge of any federal, state or other
governmental tax deficiency, penalty or assessment which has been
or might be asserted or threatened against it which would have a
Material Adverse Effect.
z. Intellectual
Property. The Company and its Subsidiaries own or possess
adequate enforceable rights to use all patents, patent
applications, trademarks (both registered and unregistered), trade
names, trademark registrations, service marks, service xxxx
registrations, Internet domain name registrations, copyrights,
copyright registrations, licenses and know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) (collectively, the
“Intellectual
Property”), necessary for the conduct of their
respective businesses as conducted as of the date hereof, except to
the extent that the failure to own or possess adequate rights to
use such Intellectual Property would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect. The Company and the Subsidiaries have not received any
written notice of any claim of infringement or conflict which
asserted Intellectual Property rights of others, which infringement
or conflict, if the subject of an unfavorable decision, would
result in a Material Adverse Effect. There are no pending, or to
the Company’s knowledge, threatened judicial proceedings or
interference proceedings challenging the Company’s or any
Subsidiary’s rights in or to or the validity of the scope of
any of the Company’s or its Subsidiaries’ patents,
patent applications or proprietary information. No other entity or
individual has any right or claim in any of the Company’s or
any of its Subsidiary’s patents, patent applications or any
patent to be issued therefrom by virtue of any contract, license or
other agreement entered into between such entity or individual and
the Company or any Subsidiary or by any non-contractual obligation,
other than by written licenses granted by the Company or any
Subsidiary, except for such right or claim that would not,
individually or in the aggregate, have a Material Adverse Effect.
The Company has not received any written notice of any claim
challenging the rights of the Company or its Subsidiaries in or to
any Intellectual Property owned, licensed or optioned by the
Company or any Subsidiary which claim, if the subject of an
unfavorable decision, would result in a Material Adverse
Effect.
bb. Environmental
Laws. The Company and the Subsidiaries (i) are in compliance
with any and all applicable federal, state, local and foreign laws,
rules, regulations, decisions and orders relating to the protection
of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively,
“Environmental
Laws”); (ii) have received and are in compliance
with all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective
businesses as described in the Registration Statement and the
Prospectus; and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except, in the case of any of clauses
(i), (ii) or (iii) above, for any such failure to comply or failure
to receive required permits, licenses, other approvals or liability
as would not, individually or in the aggregate, have a Material
Adverse Effect.
hh. Operations.
The operations of the Company and the Subsidiaries are and have
been conducted at all times in compliance with applicable financial
record keeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions to which the Company or
the Subsidiaries are subject, the rules and regulations thereunder
and any related or similar rules, regulations or guidelines,
issued, administered or enforced by any governmental agency having
jurisdiction over the Company (collectively, the
“Money Laundering
Laws”), except where the failure to be in such
compliance would not result in a Material Adverse Effect; and no
action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company
or any Subsidiary with respect to the Money Laundering Laws is
pending or, to the knowledge of the Company,
threatened.
ii. Off-Balance
Sheet Arrangements. There are no transactions, arrangements
and other relationships between and/or among the Company, and/or,
to the knowledge of the Company, any of its affiliates and any
unconsolidated entity, including, but not limited to, any
structured finance, special purpose or limited purpose entity
(each, an “Off
Balance Sheet Transaction”) that would reasonably be
expected to affect materially the Company’s liquidity or the
availability of or requirements for its capital resources,
including those Off Balance Sheet Transactions described in the
Commission’s Statement about Management’s Discussion
and Analysis of Financial Conditions and Results of Operations
(Release Nos. 33-8056; 34-45321; FR-61), required to be described
in the Registration Statement or the Prospectus which have not been
described as required.
kk. ERISA.
To the knowledge of the Company, (i) each material employee benefit
plan, within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”) that is
maintained, administered or contributed to by the Company or any of
its affiliates for employees or former employees of the Company and
the Subsidiaries has been maintained in material compliance with
its terms and the requirements of any applicable statutes, orders,
rules and regulations, including but not limited to ERISA and the
Internal Revenue Code of 1986, as amended (the “Code”); (ii) no
prohibited transaction, within the meaning of Section 406 of ERISA
or Section 4975 of the Code, has occurred which would result in a
material liability to the Company with respect to any such plan
excluding transactions effected pursuant to a statutory or
administrative exemption; and (iii) for each such plan that is
subject to the funding rules of Section 412 of the Code or Section
302 of ERISA, no “accumulated funding deficiency” as
defined in Section 412 of the Code has been incurred, whether or
not waived, and the fair market value of the assets of each such
plan (excluding for these purposes accrued but unpaid
contributions) equals or exceeds the present value of all benefits
accrued under such plan determined using reasonable actuarial
assumptions, other than, in the case of (i), (ii) and (iii) above,
as would not have a Material Adverse Effect.
ll. [Reserved]
oo. No
Improper Practices. (i) Neither the Company nor, to the
Company’s knowledge, the Subsidiaries, nor to the
Company’s knowledge, any of their respective executive
officers has, in the past five years, made any unlawful
contributions to any candidate for any political office (or failed
fully to disclose any contribution in violation of law) or made any
contribution or other payment to any official of, or candidate for,
any federal, state, municipal, or foreign office or other person
charged with similar public or quasi-public duty in violation of
any law or of the character required to be disclosed in the
Prospectus; (ii) no relationship, direct or indirect, exists
between or among the Company or, to the Company’s knowledge,
the Subsidiaries or any affiliate of any of them, on the one hand,
and the directors, officers and stockholders of the Company or, to
the Company’s knowledge, the Subsidiaries, on the other hand,
that is required by the Securities Act to be described in the
Registration Statement and the Prospectus that is not so described;
(iii) no relationship, direct or indirect, exists between or among
the Company or the Subsidiaries or any affiliate of them, on the
one hand, and the directors, officers, stockholders or directors of
the Company or, to the Company’s knowledge, the Subsidiaries,
on the other hand, that is required by the rules of FINRA to be
described in the Registration Statement and the Prospectus that is
not so described; (iv) there are no material outstanding loans or
advances or material guarantees of indebtedness by the Company or,
to the Company’s knowledge, the Subsidiaries to or for the
benefit of any of their respective officers or directors or any of
the members of the families of any of them; and (v) the Company has
not offered, or caused any placement agent to offer, Common Stock
to any person with the intent to influence unlawfully (A) a
customer or supplier of the Company or the Subsidiaries to alter
the customer’s or supplier’s level or type of business
with the Company or the Subsidiaries or (B) a trade journalist or
publication to write or publish favorable information about the
Company or the Subsidiaries or any of their respective products or
services, and, (vi) neither the Company nor the Subsidiaries nor,
to the Company’s knowledge, any employee or agent of the
Company or the Subsidiaries has made any payment of funds of the
Company or the Subsidiaries or received or retained any funds in
violation of any law, rule or regulation (including, without
limitation, the Foreign Corrupt Practices Act of 1977), which
payment, receipt or retention of funds is of a character required
to be disclosed in the Registration Statement or the
Prospectus.
rr. No
Conflicts. Neither the execution of this Agreement, nor the
issuance, offering or sale of the Placement Shares, nor the
consummation of any of the transactions contemplated herein, nor
the compliance by the Company with the terms and provisions hereof
will conflict with, or will result in a breach of, any of the terms
and provisions of, or has constituted or will constitute a default
under, or has resulted in or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to the terms of any contract or
other agreement to which the Company may be bound or to which any
of the property or assets of the Company is subject, except
(i) such conflicts, breaches or defaults as may have been
waived and (ii) such conflicts, breaches and defaults that would
not have a Material Adverse Effect; nor will such action result (x)
in any violation of the provisions of the organizational or
governing documents of the Company, or (y) in any material
violation of the provisions of any statute or any order, rule or
regulation applicable to the Company or of any court or of any
federal, state or other regulatory authority or other government
body having jurisdiction over the Company, except where such
violation would not have a Material Adverse Effect.
(i) Neither
the Company nor any Subsidiary (collectively, the
“Entity”) nor, to the
Company’s knowledge, any director, officer, employee, agent,
affiliate or representative of the Entity, is a government,
individual, or entity (in this paragraph (uu), “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
(“OFAC”), the United
Nations Security Council (“UNSC”), the European
Union (“EU”), Her Majesty’s
Treasury (“HMT”), or other relevant
sanctions authority (collectively, “Sanctions”),
nor
(b) located,
organized or resident in a country or territory that is the subject
of Sanctions.
(ii) The
Entity will not, directly or indirectly, knowingly 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,
whether as underwriter, advisor, investor or
otherwise).
(iii) Except
as detailed in the Registration Statement and the Prospectus, for
the past 5 years, the Entity has not knowingly engaged in and is
not now knowingly engaged in any dealing 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.
uu. IT
Systems. (i)(x) To the knowledge of the Company, there has
been no security breach or other compromise of any of the
Company’s information technology and computer systems,
networks, hardware, software, data (including the data of its
respective customers, employees, suppliers, vendors and any third
party data maintained by or on behalf of the Company), equipment or
technology (collectively, “IT Systems and Data”) and
(y) the Company has not been notified of, and has no knowledge of
any event or condition that would reasonably be expected to result
in, any security breach or other compromise to its IT Systems and
Data; (ii) the Company is presently in material compliance with all
applicable laws or statutes and all judgments, orders, rules and
regulations of any court or arbitrator or governmental or
regulatory authority, internal policies and contractual obligations
relating to the privacy and security of IT Systems and Data and to
the protection of such IT Systems and Data from unauthorized use,
access, misappropriation or modification, except as would not, in
the case of this clause (ii), individually or in the aggregate,
have a Material Adverse Effect; and (iii) the Company has
implemented backup and disaster recovery technology consistent with
industry standards and practices.
Any
certificate signed by an officer of the Company and delivered to
the Agents or to counsel for the Agents pursuant to or in
connection with this Agreement shall be deemed to be a
representation and warranty by the Company, as applicable, to the
Agents as to the matters set forth therein.
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 Agents under the
Securities Act (including in circumstances where such requirement
may be satisfied pursuant to Rule 172 under the Securities Act)
(the “Prospectus
Delivery Period”) (i) the Company will notify the
Agents promptly of the time when any subsequent amendment to the
Registration Statement, other than documents incorporated by
reference or amendments not related to any Placement, has been
filed with the Commission and/or has become effective or any
subsequent supplement to the Prospectus, other than documents
incorporated by reference, has been filed and of any request by the
Commission for any amendment or supplement to the Registration
Statement or Prospectus related to the Placement or for additional
information related to the Placement, (ii) the Company will not
file any amendment or supplement to the Registration Statement or
Prospectus relating to the Placement Shares or a security
convertible into the Placement Shares (other than an Incorporated
Document) unless a copy thereof has been submitted to the Agents
within a reasonable period of time before the filing and the Agents
have not reasonably objected thereto (provided, however, that (A) the failure
of the Agents to make such objection shall not relieve the Company
of any obligation or liability hereunder, or affect the
Agents’ right to rely on the representations and warranties
made by the Company in this Agreement and (B) the Company has no
obligation to provide the Agents any advance copy of such filing or
to provide the Agents an opportunity to object to such filing if
the filing does not name the Agents or does not relate to the
transaction herein provided; and provided, further, that the only
remedy the Agents shall have with respect to the failure by the
Company to obtain such consent shall be to cease making sales under
this Agreement) and the Company will furnish to the Agents at the
time of filing thereof a copy of any document that upon filing is
deemed to be incorporated by reference into the Registration
Statement or Prospectus, except for those documents available via
XXXXX; and (iii) the Company will cause each amendment or
supplement to the Prospectus to be filed with the Commission as
required pursuant to the applicable paragraph of Rule 424(b) of the
Securities Act or, in the case of any document to be incorporated
therein by reference, to be filed with the Commission as required
pursuant to the Exchange Act, within the time period prescribed
(the determination to file or not file any amendment or supplement
with the Commission under this Section 7(a), based on the
Company’s reasonable opinion or reasonable objections, shall
be made exclusively by the Company).
c. Delivery
of Prospectus; Subsequent Changes. During the Prospectus
Delivery Period, the Company will use its commercially reasonable
efforts to 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 the Company
has omitted any information from the Registration Statement
pursuant to Rule 430A under the Securities Act, it will use its
commercially reasonable efforts to comply with the provisions of
and make all requisite filings with the Commission pursuant to said
Rule 430A and to notify the Agents promptly of all such filings if
not available on XXXXX. If during the Prospectus Delivery 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 Prospectus Delivery
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 Designated 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) so as to correct such
statement or omission or effect such compliance; provided, however, that the Company may
delay the filing of any amendment or supplement, if in the judgment
of the Company, it is in the best interest of the
Company.
h. Notice
of Other Sales. Without the prior written consent of the
Agents, the Company will not, directly or indirectly, offer to
sell, sell, contract to sell, grant any option to sell or otherwise
dispose of any Common Stock (other than the Placement Shares
offered pursuant to this Agreement) or securities convertible into
or exchangeable for Common Stock, warrants or any rights to
purchase or acquire, Common Stock during the period beginning on
the date on which any Placement Notice is delivered to the Agents
hereunder and ending on the third (3rd) Trading Day immediately
following the final Settlement Date with respect to Placement
Shares sold pursuant to such Placement Notice (or, if the Placement
Notice has been terminated or suspended prior to the sale of all
Placement Shares covered by a Placement Notice, the date of such
suspension or termination); and will not directly or indirectly in
any other “at the market” or continuous equity
transaction offer to sell, sell, contract to sell, grant any option
to sell or otherwise dispose of any Common Stock (other than the
Placement Shares offered pursuant to this Agreement) or securities
convertible into or exchangeable for Common Stock, warrants or any
rights to purchase or acquire, Common Stock prior to the
termination of this Agreement; provided, however, that such
restrictions will not apply in connection with the Company’s
issuance or sale of (i) Common Stock (including restricted stock
and units), options to purchase Common Stock or Common Stock
issuable upon the exercise of options, pursuant to any stock
option, or benefits plan, stock ownership plan or dividend
reinvestment plan (but not Common Stock subject to a waiver to
exceed plan limits in its dividend reinvestment plan) of the
Company whether now in effect or hereafter implemented; (ii) Common
Stock issuable upon conversion of securities or the exercise of
warrants, options or other rights in effect or outstanding, and
disclosed in filings by the Company available on XXXXX or otherwise
in writing to the Agents, (iii) Common Stock, or securities
convertible into or exercisable for Common Stock, offered and sold
in a privately negotiated transaction to vendors, customers,
strategic partners or potential strategic partners or other
investors conducted in a manner so as not to be integrated with the
offering of Common Stock hereby and (iv) Common Stock, or
securities convertible into or exercisable for Common Stock, in
connection with any acquisition, strategic investment or other
similar transaction (including any joint venture, strategic
alliance or partnership). Notwithstanding the foregoing provisions,
nothing herein shall be construed to restrict the Company’s
ability, or require the consent of the Agents, to file a
registration statement under the Securities Act.
(i) 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 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 amended audited 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 amended financial
information (other than information “furnished”
pursuant to Items 2.02 or 7.01 of Form 8-K or to provide disclosure
pursuant to Item 8.01 of Form 8-K relating to the reclassification
of certain properties as discontinued operations in accordance with
Statement of Financial Accounting Standards No. 144) 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 Agents (but in the case of clause (iv)
above only if any Agent reasonably determines that the information
contained in such Form 8-K is material) with a certificate, in the
form attached hereto as Exhibit 7(1). The requirement
to provide a certificate under this Section 7(1) 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 on which the Company files its annual report on
Form 10-K. Notwithstanding the foregoing, (i) upon the delivery of
the first Placement Notice hereunder and (ii) 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 Agents with a certificate under this Section 7(1), then before the
Agents sell any Placement Shares, the Company shall provide the
Agents with a certificate, in the form attached hereto as
Exhibit 7(1), dated
the date of the Placement Notice.
9. Payment
of 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 and each Free Writing Prospectus,
in such number as the Agents shall deem reasonably necessary, (ii)
the printing and delivery to the Agents 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 the Agents, 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 the Agents, (iv) the fees and disbursements of
the counsel, accountants and other advisors to the Company, (v) the
actual and reasonable and documented out-of-pocket fees and
disbursements of counsel to the Agents not to exceed $40,000 in
connection with the filing of this Agreement; (vi) the fees and
expenses of the transfer agent and registrar for the Common Stock,
(vii) the filing fees incident to any review by FINRA of the terms
of the sale of the Placement Shares, and (viii) the fees and
expenses incurred in connection with the listing of the Placement
Shares on the Exchange.
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 receipt by the Company of notification of 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 receipt by the
Company of notification of the initiation of, or a threat to
initiate, 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
Incorporated Document untrue in any material respect or that
requires the making of any changes in the Registration Statement,
the Prospectus or any material Incorporated Document 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 or any material Incorporated Document, 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.
d. Material
Changes. Except as contemplated in the Registration
Statement, Prospectus, or disclosed in the Company’s reports
filed with the Commission, there shall not have been any Material
Adverse Effect, or any development that would reasonably be
expected to result in a Material Adverse Effect, or a downgrading
in or withdrawal of the rating assigned to any of the
Company’s securities (other than asset backed securities) by
any “nationally recognized statistical rating
organization,” as such term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act (a
“Rating
Organization”), or a public announcement by any Rating
Organization that it has under surveillance or review its rating of
any of the Company’s securities (other than asset backed
securities), the effect of which, in the case of any such action by
a Rating Organization described above, in the reasonable judgment
of the Agents (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.
(i) against
any and all loss, liability, claim, damage and expense whatsoever,
as incurred, joint or several, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto),
or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or arising out of any untrue statement or
alleged untrue statement of a material fact included in any related
Issuer Free Writing Prospectus or the Prospectus (or any amendment
or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading;
(ii) against
any and all loss, liability, claim, damage and expense whatsoever,
as incurred, joint or several, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 11(d) below) any
such settlement is effected with the written consent of the
Company, which consent shall not unreasonably be delayed or
withheld; and
(iii) against
any and all expense whatsoever, as incurred (including the
reasonable and documented out-of-pocket fees and disbursements of
counsel), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i)
or (ii) above,
provided, however, that this indemnity agreement shall not
apply to any loss, liability, claim, damage or expense to the
extent arising out of any untrue statement or omission or alleged
untrue statement or omission made solely in reliance upon and in
conformity with written information furnished to the Company by or
on behalf of any Agent expressly for use in the Registration
Statement (or any amendment thereto), or in any related Issuer Free
Writing Prospectus or the Prospectus (or any amendment or
supplement thereto).
(b) Indemnification
by the Agents. Each Agent agrees to indemnify and hold
harmless the Company and its directors and officers, 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 against any and all loss, liability, claim, damage and
expense described in the indemnity contained in Section 11(a), as incurred, but
only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement
(or any amendments thereto) or in any related Issuer Free Writing
Prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with information
relating to the Agents and furnished to the Company by or on behalf
of such Agent for inclusion in any document in writing by such
Agent expressly for use therein.
(c) Procedure.
Any party that proposes to assert the right to be indemnified under
this Section 11
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 11, 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
11 and (ii) any liability that it may have to any
indemnified party under the foregoing provisions of this
Section 11 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 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 of interest exists (based on 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 and documented
out-of-pocket 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 and documented
out-of-pocket 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
actual, reasonable and documented out-of-pocket fees, disbursements
and other charges will be reimbursed by the indemnifying party
promptly after the indemnifying party receives a written invoice
relating to fees, disbursements and other charges in reasonable
detail. An indemnifying party will not, in any event, be liable for
any settlement of any action or claim effected without its written
consent. 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 11 (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 out of such
litigation, investigation, proceeding or claim.
(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 11 is applicable in
accordance with its terms but for any reason is held to be
unavailable from the Company or an Agent, the Company and such
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, such as persons who
control the Company within the meaning of the Securities Act or the
Exchange Act, officers of the Company who signed the Registration
Statement and directors of the Company, who also may be liable for
contribution) to which the Company and the Agents may be subject in
such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and the Agents on
the other hand. The relative benefits received by the Company on
the one hand and the Agents on the other hand 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 Agents
(before deducting expenses) 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, on the one hand, and such Agent, on the other hand, 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 such Agent, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and each Agent
agree that it would not be just and equitable if contributions
pursuant to this Section
11(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 11(d) shall be deemed
to include, for the purpose of this Section 11(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 11(c) hereof.
Notwithstanding the foregoing provisions of this Section 11(d), except in the
case of gross negligence or willful misconduct, an 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
11(d), any person who controls a party to this Agreement
within the meaning of the Securities Act or the Exchange Act, and
any officers, directors, partners, employees or agents of an Agent,
will have the same rights to contribution as that party, and each
officer who signed the Registration Statement and director of the
Company 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 11(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 11(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 11(c) hereof, no party
will be liable for contribution with respect to any action or claim
settled without its written consent if such consent is required
pursuant to Section
11(c) hereof.
a. An
Agent may terminate this Agreement, with respect to itself, 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 Material Adverse Effect, or any development that would have a
Material Adverse Effect that, in the reasonable judgment of such
Agent, is material and adverse 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 reasonable judgment of such 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 Common
Stock has been suspended or limited by the Commission or the
Exchange, or if trading generally on the Exchange has been
suspended or limited, or minimum prices for trading have been fixed
on the Exchange, (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. Any such termination shall be without liability of any
party to any other party except that the provisions of Section 9 (Payment of
Expenses), Section
11 (Indemnification and Contribution), Section 12 (Representations and
Agreements to Survive Delivery), Section 18 (Governing Law and
Time; Waiver of Jury Trial) and Section 19 (Consent to
Jurisdiction) hereof shall remain in full force and effect
notwithstanding such termination. If an Agent elects to terminate
this Agreement as provided in this Section 13(a), such Agent shall
provide the required notice as specified in Section 14
(Notices).
b. The
Company shall have the right, by giving five (5) days’ notice
as hereinafter specified to terminate this Agreement in its sole
discretion at any time after the date of this Agreement. Any such
termination shall be without liability of any party to any other
party except that the provisions of Section 9 (Payment of
Expenses), Section
11 (Indemnification and Contribution), Section 12 (Representations and
Agreements to Survive Delivery), Section 18 (Governing Law and
Time; Waiver of Jury Trial) and Section 19 (Consent to
Jurisdiction) hereof shall remain in full force and effect
notwithstanding such termination.
c. Each
Agent shall have the right, by giving five (5) days’ notice
as hereinafter specified to terminate this Agreement with respect
to itself in its sole discretion at any time after the date of this
Agreement. Any such termination shall be without liability of any
party to any other party except that the provisions of Section 9 (Payment of
Expenses), Section 11
(Indemnification and Contribution), Section 12 (Representations and
Agreements to Survive Delivery), Section 18 (Governing Law and
Time; Waiver of Jury Trial) and Section 19 (Consent to
Jurisdiction) hereof shall remain in full force and effect
notwithstanding such termination.
d. Unless
earlier terminated pursuant to this Section 13, this Agreement
shall automatically terminate upon the issuance and sale of all of
the Placement Shares through the Agents on the terms and subject to
the conditions set forth herein except that the provisions of
Section 9 (Payment
of Expenses), Section
11 (Indemnification and Contribution), Section 12 (Representations and
Agreements to Survive Delivery), Section 18 (Governing Law and
Time; Waiver of Jury Trial) and Section 19 (Consent to
Jurisdiction) hereof shall remain in full force and effect
notwithstanding such termination.
e. This
Agreement shall remain in full force and effect unless terminated
pursuant to Sections
13(a), (b),
(c), or
(d) above or
otherwise by mutual agreement of the parties; provided, however, that any such
termination by mutual agreement shall in all cases be deemed to
provide that Section
9 (Payment of Expenses), Section 11 (Indemnification and
Contribution), Section
12 (Representations and Agreements to Survive Delivery),
Section 18
(Governing Law and Time; Waiver of Jury Trial) and Section 19 (Consent to
Jurisdiction) shall remain in full force and effect. Upon
termination of this Agreement, the Company shall not have any
liability to an Agent for any discount, commission or other
compensation with respect to any Placement Shares not otherwise
sold by an Agent under this Agreement. To the extent this Agreement
is terminated by one Agent or by the Company with respect to one
Agent pursuant to Sections 13(a) (b) or (c) above, this Agreement
shall terminate only with respect to such Agent and shall remain in
full force and effect with respect to the Company and the other
Agents, unless and until terminated pursuant to Sections 13(a),
(b), (c), or (d) above.
f. 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 of receipt of such notice by an 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.
X.
Xxxxx Securities, Inc.
000
Xxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX 00000
Attention:General
Counsel
Telephone:
(000) 000-0000
Email:
xxxxxxx@xxxxxxxxx.xxx
The
Benchmark Company, LLC
000
Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX 00000
Attention: Xxxxxxx
Xxxxxx
Telephone: (000)
000-0000
Email:
xxxxxxx@xxxxxxxxxxxxxxxx.xxx
Spartan
Capital Securities, LLC
00
Xxxxxxxx - 00xx Xxxxx
Xxx
Xxxx, XX 00000
Attention: Xxxxx
Xxxxxxx
Telephone: (000)
000-0000
Email:
xxxxxxxx@xxxxxxxxxxxxxx.xxx
with a
copy to:
Xxxxx Xxxxxx
LLP
0000
Xxxxxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxxx X. Xxxxxxx
Telephone:
(000) 000-0000
Email:
xxxxxxxxx@xxxxxxxxxxx.xxx
and if
to the Company, shall be delivered to:
00000
Xxxxxx Xxxx Xxxx, Xxxxx Xxxxx 000
Xxxxxxx, Xxxxxxxx
00000
Attention:
Xxx Xxxx - Chief Executive Officer
Telephone:
703-349-5644
Email:
xxxxx@xxxxxxxxx.xxx
with a
copy to:
Xxxxx
& Lardner LLP
Xxx
Xxxxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxxxxx,
Xxxxxxx 00000
Attention:
Xxxx X. Xxxxxx, Esq.
Telephone:
(000) 000-0000
Email:
xxxxxxx@xxxxx.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, by email, or
by verifiable facsimile transmission 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.
17.
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. Neither this Agreement nor any term hereof
may be amended except pursuant to a written instrument executed by
the Company and the Agents. 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.
19. CONSENT
TO JURISDICTION. 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.
23. Permitted
Free Writing Prospectuses. The Company represents, warrants
and agrees that, unless it obtains the prior consent of each Agent,
which consent shall not be unreasonably withheld, conditioned or
delayed, and each Agent represents, warrants and agrees that,
unless it obtains the prior consent of the Company, which consent
shall not be unreasonably withheld, conditioned or delayed, it has
not made and will not make any offer relating to the Placement
Shares that would constitute an Issuer Free Writing Prospectus, or
that would otherwise constitute a “free writing
prospectus,” as defined in Rule 405, required to be filed
with the Commission. Any such free writing prospectus consented to
by the Agents or by the Company, as the case may be, is hereinafter
referred to as a “Permitted Free Writing Prospectus.”
The Company represents and warrants that it has treated and agrees
that it will treat each Permitted Free Writing Prospectus as an
“issuer free writing prospectus,” as defined in Rule
433, and has complied and will comply with the requirements of Rule
433 applicable to any Permitted Free Writing Prospectus, including
timely filing with the Commission where required, legending and
record keeping. For the purposes of clarity, the parties hereto
agree that all free writing prospectuses, if any, listed in
Exhibit 23 hereto
are Permitted Free Writing Prospectuses.
a. Each
Agent is acting solely as agent in connection with the public
offering of the Placement Shares and in connection with each
transaction contemplated by this Agreement and the process leading
to such transactions, and no fiduciary or advisory relationship
between the Company or any of its respective affiliates,
stockholders (or other equity holders), creditors or employees or
any other party, on the one hand, and the Agents, on the other
hand, has been or will be created in respect of any of the
transactions contemplated by this Agreement, irrespective of
whether or not any Agent has advised or is advising the Company on
other matters, and the Agents have no obligation to the Company
with respect to the transactions contemplated by this Agreement
except the obligations expressly set forth in this
Agreement;
b. it
is capable of evaluating and understanding, and understands and
accepts, the terms, risks and conditions of the transactions
contemplated by this Agreement;
c. the
Agents have not provided any legal, accounting, regulatory or tax
advice with respect to the transactions contemplated by this
Agreement and it has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed
appropriate;
d. it
is aware that the Agents and their affiliates are engaged in a
broad range of transactions which may involve interests that differ
from those of the Company and such Agent have no obligation to
disclose such interests and transactions to the Company by virtue
of any fiduciary, advisory or agency relationship or otherwise;
and
e. it
waives, to the fullest extent permitted by law, any claims it may
have against the Agents for breach of fiduciary duty or alleged
breach of fiduciary duty in connection with the sale of Placement
Shares under this Agreement and agrees that the Agents shall not
have any liability (whether direct or indirect, in contract, tort
or otherwise) to it in respect of such a fiduciary duty claim or to
any person asserting a fiduciary duty claim on its behalf or in
right of it or the Company, employees or creditors of Company,
other than in respect of the Agents’ obligations under this
Agreement and to keep information provided by the Company to the
Agents and their counsel confidential to the extent not otherwise
publicly-available.
“Applicable Time” means
(i) each Representation Date and (ii) the time of each sale of any
Placement Shares pursuant to this Agreement.
“Issuer Free Writing
Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433, relating to the
Placement Shares that (1) is required to be filed with the
Commission by the Company, (2) is a “road show” that is
a “written communication” within the meaning of Rule
433(d)(8)(i) whether or not required to be filed with the
Commission, or (3) is exempt from filing pursuant to Rule
433(d)(5)(i) because it contains a description of the Placement
Shares or of the offering that does not reflect the final terms, 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) under the
Securities Act.
“Rule
172,” “Rule 405,”
“Rule
415,” “Rule 424,”
“Rule
424(b),” “Rule 430B,” and
“Rule
433” refer to such rules under the Securities
Act.
All
references in this Agreement to financial statements and schedules
and other information that is “contained,”
“included” or “stated” in the Registration
Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial
statements and schedules and other information that is incorporated
by reference in the Registration Statement or the Prospectus, as
the case may be.
All
references in this Agreement to the Registration Statement, the
Prospectus or any amendment or supplement to any of the foregoing
shall be deemed to include the copy filed with the Commission
pursuant to XXXXX; all references in this Agreement to any Issuer
Free Writing Prospectus (other than any Issuer Free Writing
Prospectuses that, pursuant to Rule 433, are not required to be
filed with the Commission) shall be deemed to include the copy
thereof filed with the Commission pursuant to XXXXX; and all
references in this Agreement to “supplements” to the
Prospectus shall include, without limitation, any supplements,
“wrappers” or similar materials prepared in connection
with any offering, sale or private placement of any Placement
Shares by the Agents outside of the United States.
[Remainder
of the page intentionally left blank]
If the
foregoing correctly sets forth the understanding between the
Company and each of the Agents, please so indicate in the space
provided below for that purpose, whereupon this letter shall
constitute a binding agreement between the Company and each of the
Agents.
Very
truly yours,
By:
/s/ Xxx
Xxxx
Name:
Xxx Xxxx
Title:
CEO
ACCEPTED
as of the date first-above written:
X.
XXXXX SECURITIES, INC.
By:
/s/Xxxxxxx XxXxxxxx
Name:
Xxxxxxx XxXxxxxx
Title:
Co-Head of Investment Banking
THE
BENCHMARK COMPANY, LLC
By:
/s/ Xxxx Xxxxx
Name:
Xxxx Xxxxx
Title:
Sr. Managing Director
SPARTAN
CAPITAL SECURITIES, LLC
By:
/s/ Xxxxx Xxxxxxx
Name:
Xxxxx Xxxxxxx
Title:
MD, Head of Investment Banking
SCHEDULE 1
FORM OF
PLACEMENT NOTICE
To:
[X. Xxxxx Securities, Inc.][The Benchmark Company, LLC][Spartan
Capital Securities, LLC]
Attention:
[●]
Subject:
At Market Issuance--Placement Notice
Ladies
and Gentlemen:
Pursuant to the
terms and subject to the conditions contained in the At Market
Issuance Sales Agreement between WidePoint Corporation, a Delaware
corporation (the “Company”), and X. Xxxxx
Securities, Inc. (“X. Xxxxx FBR”), The
Benchmark Company, LLC (“Benchmark”) and Spartan
Capital Securities, LLC (“Spartan”), dated August
18, 2020, the Company hereby requests that [identify Designated Agent] sell up to
[____] of the Company’s Common Stock, par value $0.001 per
share, at a minimum market price of $per share, during the time
period beginning [month, day, time] and ending [month, day,
time].
SCHEDULE 2
________________________
Compensation
________________________
The
Company shall pay to the Designated Agent in cash, upon each sale
of Placement Shares pursuant to this Agreement, an amount equal to
up to 4.0% of the gross proceeds from each sale of Placement
Shares.
SCHEDULE 3
________________________
Notice Parties
________________________
The Company
|
Xxx
Xxxx
|
xxxxx@xxxxxxxxx.xxx
|
|
|
|
|
Xxxxxx
Xxx
|
xxxxxxx@xxxxxxxxx.xxx
|
|
|
|
|
X. Xxxxx
FBR
|
|
|
|
|
|
|
|
|
Xxxxxxx
XxXxxxxx
|
xxxxxxxxx@xxxxxxxxx.xxx
|
|
|
|
|
Xxxxx
Xxxxxxxxx
|
xxxxxxxxxx@xxxxxxxxx.xxx
|
|
|
|
|
Xxxxx
Xxxxxxxx
|
xxxxxxxxx@xxxxxxxxx.xxx
|
|
|
|
|
with a
copy to xxxxxxx@xxxxxxxxx.xxx
|
|
|
|
|
Benchmark
|
|
|
|
|
|
Xxxxxxx
Xxxxxx
|
xxxxxxx@xxxxxxxxxxxxxxxx.xxx
|
|
|
|
|
|
|
|
Spartan
|
|
|
|
|
|
Xxxxx
Xxxxxxx
|
xxxxxxxx@xxxxxxxxxxxxxx.xxx
|
|
|
|
|
Xxxxxx
Xxxxx
|
xxxxxx@xxxxxxxxxxxxxx.xxx
|
SCHEDULE 6(g)
________________________
Significant Subsidiaries
________________________
|
Name
|
State of Incorporation
|
|
WidePoint
Integrated Solutions Corp.
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Virginia
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WidePoint
Cybersecurity Solutions Corporation
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Virginia
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EXHIBIT 7(1)
Form of Representation Date Certificate
___________, 20___
This
Representation Date Certificate (this “Certificate”) is executed
and delivered in connection with Section 7(1) of the At Market
Issuance Sales Agreement (the “Agreement”), dated August
18, 2020, and entered into between WidePoint Corporation (the
“Company”) and X. Xxxxx
Securities, Inc., The Benchmark Company, LLC and Spartan Capital
Securities, LLC. All capitalized terms used but not defined herein
shall have the meanings given to such terms in the
Agreement.
The
Company hereby certifies as follows:
1. As
of the date of this Certificate (i) the Registration Statement does
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading and (ii)
neither the Registration Statement nor the Prospectus contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which
they were made, not misleading and (iii) no event has occurred as a
result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein not untrue or
misleading for this paragraph 1 to be true.
2. Each
of the representations and warranties of the Company contained in
the Agreement were, when originally made, and are, as of the date
of this Certificate, true and correct in all material
respects.
3. Except
as waived by the Agents in writing, each of the covenants required
to be performed by the Company in the Agreement on or prior to the
date of the Agreement, this Representation Date, and each such
other date prior to the date hereof as set forth in the Agreement,
has been duly, timely and fully performed in all material respects
and each condition required to be complied with by the Company on
or prior to the date of the Agreement, this Representation Date,
and each such other date prior to the date hereof as set forth in
the Agreement has been duly, timely and fully complied with in all
material respects.
4. Subsequent
to the date of the most recent financial statements in the
Prospectus, and except as described in the Prospectus, including
Incorporated Documents, there has been no Material Adverse
Effect.
5. No
stop order suspending (a) the effectiveness of the Registration
Statement or of any part thereof or (b) the qualification or
registration of the Placement Shares under the securities or Blue
Sky laws of any jurisdiction has been issued, and, to the
Company’s knowledge, no proceedings for that purpose have
been instituted or are pending or threatened by any securities or
other governmental authority (including, without limitation, the
Commission).
The
undersigned has executed this Representation Date Certificate as of
the date first written above.
By:
Name:
Title:
EXHIBIT 7(m)
Form
of Legal Opinion and Negative Assurance Letter
EXHIBIT 23
Permitted Issuer Free Writing Prospectuses
None.
