UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Date of Report (Date of Earliest Event Reported):
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May 22, 2015
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Ladenburg Thalmann Financial Services Inc.
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(Exact name of registrant as specified in its charter)
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Florida
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001-15799
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650701248
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(State or other jurisdiction
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(Commission
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(I.R.S. Employer
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of incorporation)
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File Number)
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Identification No.)
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4400 Biscayne Blvd., 12th Floor, Miami, Florida
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33137
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(Address of principal executive offices)
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(Zip Code)
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Registrants telephone number, including area code:
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(305) 572-4100
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Not Applicable
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Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On May 22, 2015, Ladenburg Thalmann Financial Services Inc. (the "Company") entered into an Equity Distribution Agreement (the "Distribution Agreement") with Jefferies LLC ("Jefferies"), as representative of the sales agents listed in Schedule I thereto (the "Sales Agents"), pursuant to which the Company may issue and sell over time and from time to time, to or through Jefferies, up to 3,000,000 shares (the "Shares") of its 8.00% Series A Cumulative Redeemable Preferred Stock, $0.0001 par value per share ("Series A Preferred Stock").
Sales of the Shares pursuant to the Distribution Agreement, if any, may be effected by any method permitted by law deemed to be an "at-the-market" offering as defined in Rule 415 of the Securities Act of 1933, as amended, including, without limitation, directly on the NYSE MKT LLC or any other existing trading market for the Series A Preferred Stock or through a market maker, up to the amount specified, and otherwise to or through Jefferies in accordance with the placement notice delivered by the Company to Jefferies. Also, with the prior consent of the Company, some or all of the Shares issued pursuant to the Distribution Agreement may be sold in privately negotiated transactions. Under the Distribution Agreement, the Sales Agents will be entitled to compensation of up to 2.0% of the gross proceeds from the sale of all of the Shares sold through Jefferies, as sales agent.
The Shares sold pursuant to the Distribution Agreement will be issued pursuant to a prospectus dated December 20, 2013, as supplemented by a prospectus supplement dated May 22, 2015, in each case filed with the Securities and Exchange Commission (the "Commission") pursuant to the Company’s effective Registration Statement on Form S-3 (File No. 333-192712) (the "Registration Statement") which was initially filed with the Commission on December 6, 2013 and declared effective on December 20, 2013. Interested investors should read the Registration Statement and all documents incorporated therein by reference. The Distribution Agreement is filed as Exhibit 1.1 to this Current Report on Form 8-K and is incorporated herein by reference. The foregoing description of the material terms of the Distribution Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to such exhibit.
The Distribution Agreement has been included to provide investors and security holders with information regarding its terms and conditions. The representations, warranties and covenants contained in the Distribution Agreement were made only for purposes of that agreement and as of specific dates, and were solely for the benefit of the parties to the Distribution Agreement. Investors should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of the Company or any of its subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Distribution Agreement, which subsequent information may or may not be fully reflected in public disclosures by the Company.
This Current Report on Form 8-K does not constitute an offer to sell or a solicitation of an offer to buy any securities. The Registration Statement relating to these securities has been filed with the Commission and is effective. Copies of the prospectus supplement and accompanying prospectus relating to the offering may be obtained when available by contacting Jefferies LLC, Attn: Prospectus Department, 520 Madison Ave., 12th Floor, New York, New York 10022, Telephone: 1-877-547-6340, or by visiting EDGAR on the Commission’s website at www.sec.gov.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
In connection with the issuances and sales of the Shares to be made pursuant to the Distribution Agreement, the Company caused Articles of Amendment to its Articles of Incorporation (the "Articles of Amendment") to be filed with the Department of State of the State of Florida on May 21, 2015, to designate the Shares as additional shares of Series A Preferred Stock. The Articles of Amendment became effective on May 22, 2015.
The Articles of Amendment provide that the Company will pay monthly cumulative dividends on the Shares on the 28th day of each month (provided that if any dividend payment date is not a business day, then the dividend which would otherwise have been payable on that dividend payment date may be paid on the next succeeding business day without adjustment in the amount of the dividend) at 8.00% of the $25.00 per share liquidation preference per annum (equivalent to $2.00 per annum per share). The Articles of Amendment further provide that dividends will be payable to holders of record as they appear in the stock records of the Company for the Shares at the close of business on the applicable record date, which shall be the 15th day of each month, whether or not a business day, in which the applicable dividend payment date falls.
The Shares will not be redeemable before May 24, 2018, except upon the occurrence of a Change of Control (as defined in the Articles of Amendment). On or after May 24, 2018 the Company may, at its option, redeem any or all the Shares at $25.00 per share plus any accumulated and unpaid dividends to, but not including, the redemption date. Also, upon the occurrence of a Change of Control, the Company may, at its option, redeem any or all of the Shares within 120 days after the first date on which such Change of Control occurred at $25.00 per share plus any accumulated and unpaid dividends to, but not including, the redemption date. The Shares have no stated maturity, are not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless repurchased or redeemed by the Company or converted into the Company’s common stock in connection with a Change of Control by the holders of the Shares.
Upon the occurrence of a Change of Control, each holder of the Shares will have the right (subject to the Company’s election to redeem the Shares in whole or in part, as described above, prior to the Change of Control Conversion Date (as defined in the Articles of Amendment)) to convert some or all of the Shares held by such holder on the Change of Control Conversion Date into a number of shares of the Company’s common stock per share determined by formula, in each case, on the terms and subject to the conditions described in the Articles of Amendment, including provisions for the receipt, under specified circumstances, of alternative consideration as described in the Articles of Amendment.
Except under limited circumstances, holders of the Shares generally do not have any voting rights.
The foregoing description of the Articles of Amendment is a summary only, does not purport to be complete and is qualified in its entirety by reference to the full text of the Articles of Amendment, a copy of which is filed as Exhibit 3.1 hereto and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
On May 22, 2015, Akerman LLP delivered to the Company an opinion with respect to the validity of the Shares (the "Opinion"). The Opinion and consent of Akerman LLP are being filed herewith as Exhibit 5.1 and Exhibit 23.1, respectively, to this Current Report on Form 8-K, and are thereby automatically incorporated by reference into the Company’s Registration Statement on Form S-3 (No. 333-192712), in accordance with the requirements of Item 601(b)(5) and Item 601(b)(23), respectively, of Regulation S-K.
(d) Exhibits.
Exhibit No. Exhibit Description
1.1 Equity Distribution Agreement, dated May 22, 2015, between Ladenburg
Thalmann Financial Services Inc. and Jefferies LLC,
as representative of the Sales Agents listed on Schedule I thereto.
3.1 Articles of Amendment to Articles of Incorporation designating 3,000,000
additional shares of Ladenburg Thalmann Financial Services Inc.'s 8.00%
Series A Cumulative Redeemable Preferred Stock.
5.1 Opinion of Akerman LLP, regarding validity of the securities to be
issued.
23.1 Consent of Akerman LLP (included in Exhibit 5.1).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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Ladenburg Thalmann Financial Services Inc.
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May 22, 2015
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By:
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/s/ Brett H. Kaufman
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Name: Brett H. Kaufman
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Title: Senior Vice President and Chief Financial Officer
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Exhibit Index
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Exhibit No.
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Description
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1.1
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Equity Distribution Agreement, dated May 22, 2015, between Ladenburg Thalmann Financial Services Inc. and Jefferies LLC, as representative of the Sales Agents listed on Schedule I thereto.
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3.1
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Articles of Amendment to Articles of Incorporation designating 3,000,000 additional shares of Ladenburg Thalmann Financial Services Inc.'s 8.00% Series A Cumulative Redeemable Preferred Stock.
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5.1
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Opinion of Akerman LLP, regarding validity of the securities to be issued.
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LADENBURG THALMANN FINANCIAL SERVICES INC.
Up to 3,000,000 Shares of
8.00% Series A Cumulative Redeemable Preferred Stock
(Liquidation Preference $25.00 Per Share)
EQUITY DISTRIBUTION AGREEMENT
Dated: May 22, 2015
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SECTION 1. DESCRIP |
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TION OF SECURITIES 1
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SECTION 2. |
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PLACEMENTS |
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SECTION 3. |
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SALE OF PLACEMENT SECURITIES BY THE SALES AGENTS |
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3 |
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SECTION 4. |
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SUSPENSION OF SALES |
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3 |
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SECTION 5. |
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REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
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SECTION 6. |
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SALE AND DELIVERY TO THE SALES AGENTS; SETTLEMENT |
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17 |
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SECTION 7. |
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COVENANTS OF THE COMPANY |
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19 |
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SECTION 8. |
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PAYMENT OF EXPENSES |
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26 |
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SECTION 9. |
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CONDITIONS OF THE SALES AGENTS OBLIGATIONS |
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26 |
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SECTION 10. |
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INDEMNITY AND CONTRIBUTION BY THE COMPANY AND THE MANAGER AND THE
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28 |
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SALES AGENTS
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SECTION 11. |
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REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY |
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32 |
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SECTION 12. |
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TERMINATION OF AGREEMENT |
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32 |
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SECTION 13. |
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NOTICES |
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33 |
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SECTION 14. |
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PARTIES |
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33 |
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SECTION 15. |
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ADJUSTMENTS FOR STOCK SPLITS |
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34 |
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SECTION 16. |
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GOVERNING LAW AND JURISDICTION; WAIVER OF JURY TRIAL; TIME |
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SECTION 17. |
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EFFECT OF HEADINGS |
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34 |
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SECTION 18. |
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PERMITTED FREE WRITING PROSPECTUSES |
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34 |
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SECTION 19. |
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ABSENCE OF FIDUCIARY RELATIONSHIP |
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35 |
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EXHIBITS
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
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Form of Proposed Placement Notice
Authorized Individuals for Placement Notices and Acceptances
Compensation
Issuer Free Writing Prospectus
Form of Opinion of Counsel to the Company
Form of Company Officers Certificate
Information Provided by Sales Agents |
LADENBURG THALMANN FINANCIAL SERVICES INC.
Up to 3,000,000 Shares of
8.00% Series A Cumulative Redeemable Preferred Stock
(Liquidation Preference $25.00 Per Share)
EQUITY DISTRIBUTION AGREEMENT
May 22, 2015
Jefferies LLC
520 Madison Ave
New York, NY 10022
Ladies and Gentlemen:
Ladenburg Thalmann Financial Services Inc., a corporation organized under the laws of the
State of Florida (the Company), proposes, subject to the terms and conditions stated in
this equity distribution agreement (this Agreement), to issue and sell through or to
Jefferies LLC (Jefferies), as representative of the sales agents listed on Schedule I
hereto (the Sales Agents), an aggregate of up to 3,000,000 shares of its 8.00% Series A
Cumulative Redeemable Preferred Stock (Liquidation Preference $25.00 Per Share) (the Preferred
Stock). The Preferred Stock shall have the rights, powers and preferences set forth in the
articles of amendment to the Companys Articles of Incorporation dated May 21, 2013 relating
thereto, as amended and restated on May 22, 2015 (the Articles of Amendment).
SECTION 1. DESCRIPTION OF SECURITIES.
The Company agrees that, from time to time during the term of this Agreement, on the basis of
the representations and warranties contained herein and on the terms and subject to the conditions
set forth herein, it may issue and sell through or to Jefferies, acting as agent or principal, up
to 3,000,000 shares of Preferred Stock (the Securities). Notwithstanding anything to the
contrary contained herein, except as set forth in a Placement Notice (as defined below) the parties
hereto agree that compliance with the limitations set forth in this Section 1 on the number of the
Securities issued and sold under this Agreement shall be the sole responsibility of the Company,
and the Sales Agents shall have no obligation in connection with such compliance. The issuance and
sale of the Securities through or to Jefferies will be effected pursuant to the Registration
Statement (as defined below) filed by the Company and declared effective by the Securities and
Exchange Commission (the Commission), although nothing in this Agreement shall be
construed as requiring the Company to use the Registration Statement to offer, sell or issue the
Securities.
The Company has filed with the Commission, in accordance with the provisions of the Securities
Act of 1933, as amended (the 1933 Act), and the rules and regulations thereunder (the
1933 Act Regulations), a registration statement on Form S-3 (File No. 333-192712)
relating to the Securities and other debt and equity securities of the Company (collectively, the
Shelf Securities) to be issued from time to time by the Company that incorporates by
reference documents that the Company has filed or will file (the Incorporated Documents)
in accordance with the provisions of the Securities Exchange Act of 1934, as amended (the 1934
Act), and the rules and regulations thereunder (the 1934 Act Regulations). Except
where the context otherwise requires, Registration Statement means the Registration
Statement on Form S-3 (No. 333-192712) as of its most recent effective date, including any
information contained in a Prospectus (as defined below) subsequently filed with the Commission
pursuant to Rule 424(b) under the 1933 Act as part of the Registration Statement or deemed to be
part of the Registration Statement at the time of effectiveness pursuant to Rule 430A or 430B under
the 1933 Act. As used herein, Effective Date means any date of such Registration
Statements effectiveness for purposes of Section 11 of the 1933 Act, as such section applies to
the Company for the Securities pursuant to Rule 430B(f)(2) under the 1933 Act. Unless the context
otherwise requires, the Base Prospectus means the base prospectus covering the Shelf
Securities dated December 20, 2013 and filed with the Commission on June 13, 2014, together with
any amendments or supplements thereto as of the most recent Effective Date of the Registration
Statement and Prospectus Supplement means the prospectus supplement relating to the
Securities, in the form filed with the Commission pursuant to Rule 424(b) under the 1933 Act on or
before the second Business Day (as defined below) after the date hereof, in the form furnished by
the Company to Jefferies in connection with the offering of the Securities. Except where the
context otherwise requires, Prospectus means the Base Prospectus, as supplemented by the
Prospectus Supplement. As used herein, free writing prospectus has the meaning set forth
in Rule 405 under the 1933 Act. The Company will furnish, upon request, to Jefferies, for use by
the Sales Agents, copies of the Prospectus relating to the Securities. Any reference herein to the
Registration Statement, the Base Prospectus, the Prospectus Supplement, the Prospectus or any
Permitted Free Writing Prospectus (as defined below) shall be deemed to refer to and include all
Incorporated Documents, or any amendment or supplement thereto shall be deemed to refer to and
include the Incorporated Documents, and any reference herein to the terms amend, amendment or
supplement with respect to the Registration Statement, the Base Prospectus, the Prospectus
Supplement or the Prospectus shall be deemed to refer to and include the filing after the execution
hereof of any Incorporated Documents. Any reference herein to financial statements and schedules
and other information that is contained, included or stated in the Registration Statement,
the Base Prospectus, the Prospectus Supplement 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, the Base Prospectus,
the Prospectus Supplement or the Prospectus, as the case may be.
SECTION 2. PLACEMENTS.
Each time that the Company wishes to issue and sell the Securities hereunder (each, a
Placement), it will notify Jefferies by email notice (or other method mutually agreed to
in writing by the parties) containing the parameters in accordance with which it desires the
Securities to be sold, which shall at a minimum include the number of Securities to be issued (the
Placement Securities), the time period during which sales are requested to be made, any
limitation on the number of Securities that may be sold in any one Trading Day (as defined below)
and any minimum price below which sales may not be made (a Placement Notice), a form of
which is attached hereto as Exhibit A. The Placement Notice shall originate from any of
the individuals from the Company set forth on Exhibit B, and shall be addressed to each of
the individuals from Jefferies set forth on Exhibit B, as such Exhibit B may be
amended from time to time. If Jefferies wishes to accept such proposed terms included in the
Placement Notice (which it may decline to do so for any reason in its sole discretion), or,
following discussions with the Company wishes to accept amended terms, Jefferies shall confirm such
Placement Notice by email notice (or other method mutually agreed to in writing by the parties)
addressed to the person from whom such Placement Notice was received. The amount of any discount,
commission or other compensation to be paid by the Company to the Sales Agents in connection with
the sale of the Placement Securities shall be calculated in accordance with the terms set forth in
Exhibit C. If the Company wishes to issue and sell the Placement Securities to Jefferies
as principal, it will notify Jefferies of the proposed terms of such Placement in the Placement
Notice. In the event of a conflict between the terms of this Agreement and the terms of a
Placement Notice, the terms of the Placement Notice will control.
The term Business Day means each Monday, Tuesday, Wednesday, Thursday or Friday that
is not a day on which banking institutions in New York are generally authorized or obligated by law
or executive order to close.
SECTION 3. SALE OF PLACEMENT SECURITIES BY THE SALES AGENTS.
Subject to the provisions of Section 6(a), Jefferies, for the period specified in the
Placement Notice, will use its commercially reasonable efforts consistent with its normal trading
and sales practices to sell the Placement Securities up to the amount specified, and otherwise in
accordance with the terms of such Placement Notice. Jefferies will provide written confirmation to
the Company no later than the opening of the Trading Day immediately following the Trading Day on
which it has made sales of Placement Securities hereunder setting forth the number of Placement
Securities sold on such day, the compensation payable by the Company to the Sales Agents 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 Jefferies (as set forth in Section 6(b))
from the gross proceeds that it receives from such sales. Subject to the terms of the Placement
Notice (as amended, if applicable), Jefferies may sell Placement Securities by any method permitted
by law deemed to be an at the market offering as defined in Rule 415 of the 1933 Act, including
without limitation sales made directly on the NYSE MKT, on any other existing trading market for
the Preferred Stock or to or through a market maker. If specified in a Placement Notice (as
amended, if applicable), Jefferies may also sell Placement Securities by any other method permitted
by law, including but not limited to in privately negotiated transactions. For the purposes
hereof, the term Trading Day means any day on which shares of Preferred Stock are
purchased and sold on the principal market on which the Preferred Stock is listed or quoted and
during which there has been no market disruption of, unscheduled closing of or suspension of
trading on such principal market.
SECTION 4. SUSPENSION OF SALES.
The Company or Jefferies 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 Exhibit B, 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 Exhibit B), suspend any sale of Placement Securities; provided, however, that such
suspension shall not affect or impair either partys obligations with respect to any Placement
Securities sold hereunder prior to the receipt of such notice. Each of the parties agrees that no
such notice under this Section 4 shall be effective against the other unless it is made to one of
the individuals named on Exhibit B hereto (confirmed as soon as reasonably practicable by
verifiable facsimile transmission or email correspondence to each of the individuals of the other
party set forth on Exhibit B), as such exhibit may be amended from time to time. The
Company may, upon notice to Jefferies in writing, suspend sales of Securities for the time
specified in such notice.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Sales Agents as of the date hereof and as of each
Representation Date (as defined herein), as of the time of each sale of any Securities pursuant to
this Agreement (the Time of Sale) and on each Settlement Date (as defined below), and
agrees with the Sales Agents, as follows:
(a) The Company meets the requirements for the use of, and has prepared and filed with the
Commission, the Registration Statement, including a prospectus relating to the Shelf Securities,
including the Securities, to be issued from time to time by the Company.
(b) The Registration Statement and each amendment thereto has become effective under the 1933
Act; no stop order suspending the effectiveness of the Registration Statement is in effect; and no
proceedings for such purpose are pending before or threatened by the Commission. The Company was
not an ineligible issuer (as defined in Rule 405 under the 1933 Act) as of the eligibility
determination date for purposes of Rules 164 and 433 under the 1933 Act with respect to any sale of
the Securities contemplated hereby.
(c) (i) At each Effective Date of the Registration Statement and each amendment thereto, as of
each Time of Sale and at all times during which a Prospectus is required to be delivered by the
Sales Agents under the 1933 Act (whether physically or through compliance with Rule 172 under the
1933 Act or any similar rule) in connection with any sale of Securities (the Delivery
Period), the Registration Statement complied and will comply in all material respects with the
applicable provisions of the 1933 Act and the 1933 Act Regulations, (ii) the Prospectus will
comply, as of the date that such document is filed with the Commission, as of each Time of Sale, at
each Settlement Date and at all times during the Delivery Period, in all material respects with the
1933 Act and the 1933 Act Regulations; and (iii) the Incorporated Documents, when they were or will
be filed with the Commission, conformed or will conform in all material respects with the
requirements of the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations,
as the case may be.
(d) (i) As of the date hereof, at each Effective Date of the Registration Statement and each
amendment thereto, the Registration Statement 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; (ii) as of each Time of Sale, the Prospectus (as amended and
supplemented at such Time of Sale), together with any Permitted Free Writing Prospectus (as defined
below) then in use (collectively, the General Disclosure Package), did not and will not
contain any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under which they were made,
not misleading; (iii) as of its date, the Prospectus did not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading; and (iv) at any
Settlement Date, the Prospectus (as amended and supplemented at such Settlement Date) did not and
will not contain an untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and warranty shall not apply to
any statement or omission made in reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of any Sales Agent through Jefferies expressly for use in
the Prospectus or in the General Disclosure Package. The parties hereto agree that the information
provided in writing by or on behalf of any Sales Agent expressly for use in the Prospectus or in
the General Disclosure Package consists solely of the material referred to in Exhibit G
hereto, as updated from time to time.
(e) Other than the Prospectus Supplement and any document not constituting a prospectus
pursuant to Section 2(a)(10)(a) of the 1933 Act, the Company (including its agents and
representatives, other than the Sales Agents) has not prepared, made, used, authorized, approved or
referred to and will not prepare, make, use, authorize, approve or refer to any written
communication (as defined in Rule 405 under the 1933 Act) that constitutes an offer to sell or a
solicitation of an offer to buy any Securities required to be filed with the Commission without
Jefferies consent, other than any Permitted Free Writing Prospectus (each such communication by
the Company or its agents and representatives being referred to herein as an Issuer Free
Writing Prospectus).
(f) The Company has complied and will comply with the requirements of Rule 433 under the 1933
Act with respect to each Issuer Free Writing Prospectus including, without limitation, all
prospectus delivery, filing, record retention and legending requirements applicable to any such
Issuer Free Writing Prospectus. Each Issuer Free Writing Prospectus, as of its issue date and at
all subsequent times through the completion of the offering and sale of the Securities or until any
earlier date that the Company notified or notifies Jefferies, did not, does not and will not
include any material information that conflicted, conflicts or will conflict with the information
contained in the Registration Statement, including any Incorporated Document, or any prospectus
supplement relating to this offering deemed to be part thereof that has not been superseded or
modified, the General Disclosure Package or the Prospectus; provided, however, that this
representation and warranty shall not apply to any statement or omission in any Issuer Free Writing
Prospectus made in reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Sales Agent through Jefferies expressly for use in such Issuer Free
Writing Prospectus. The parties hereto agree that the information provided in writing by or on
behalf of any Sales Agent expressly for use in the Issuer Free Writing Prospectus consists solely
of the material referred to in Exhibit G hereto, as updated from time to time.
(g) This Agreement has been duly authorized, executed and delivered by the Company. The
Articles of Amendment have been duly and validly authorized by the Company. The Company has full
right, power and authority to execute and deliver this Agreement and to perform its obligations
hereunder; and all action required to be taken for the due and proper authorization, execution and
delivery by it of this Agreement and the consummation by it of the transactions contemplated hereby
has been duly and validly taken.
(h) The outstanding shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable; the Securities to be issued and sold by the
Company have been duly authorized and, when issued and delivered to and paid for pursuant to this
Agreement, will be validly issued, fully paid and nonassessable; the shares of the Companys common
stock, par value $0.0001 per share (Common Stock), issuable upon conversion of the
Securities, have been duly authorized, and when issued upon conversion of the Securities in
accordance with the terms of the Articles of Amendment, will be validly issued, fully paid and
nonassessable. The issuance of the Securities and, upon conversion of the Securities, Common Stock
will not be subject to any preemptive, rights of refusal or other similar rights of any
securityholder of the Company. The Common Stock and the Securities conform to all statements
relating thereto contained in the Registration Statement, the General Disclosure Package and the
Prospectus, and such description conforms to the rights set forth in the instruments defining the
same. The Company has reserved for future issuance the full number of shares of Common Stock to be
issued upon conversion of the Securities. No holder of Common Stock or the Securities will be
subject to personal liability by reason of being such a holder.
(i) Except as otherwise stated therein, since the respective dates as of which information is
given in the Registration Statement, the General Disclosure Package or the Prospectus, (i) there
has been no material adverse change in the condition, financial or otherwise, or in the earnings,
business affairs, properties or business prospects of the Company and its subsidiaries listed on
Exhibit 21 to the Companys Annual Report on Form 10-K for its most recently completed fiscal year
(the 10-K and, such subsidiaries, its Subsidiaries), considered as one
enterprise, whether or not arising in the ordinary course of business (a Material Adverse
Effect), (ii) there have been no transactions entered into by the Company or any of its
Subsidiaries, other than those in the ordinary course of business, which are material with respect
to the Company and its Subsidiaries considered as one enterprise, and (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Company on any class of its
capital stock.
(j) The Company and its Subsidiaries do not own any real property. All of the leases and
subleases material to the business of the Company and its Subsidiaries, considered as one
enterprise, and under which the Company or any of its Subsidiaries hold interests in properties
described in the Registration Statement, the General Disclosure Package or the Prospectus, are in
full force and effect, and neither the Company nor any such Subsidiary has any notice of any
material claim of any sort that has been asserted by anyone adverse to the rights of the Company or
any such Subsidiary under any of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company or any such Subsidiary to the continued possession of the
leased or subleased premises under any such lease or sublease.
(k) The Company and its Subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights, know how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks, trade names or other intellectual property necessary to
carry on the business now operated by them (collectively, Intellectual Property), and
neither the Company nor any of its Subsidiaries has received any notice or is otherwise aware of
any infringement of or conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its Subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect.
(l) The Company has paid or shall pay the fees required by the Commission relating to the
Securities within the time required by Rule 456(b)(1) without regard to the proviso therein and
otherwise in accordance with Rules 456(b) and 457(r).
(m) There is no franchise, contract or other document of a character required to be described
in the Registration Statement, the General Disclosure Package or Prospectus, or to be filed as an
exhibit to the Registration Statement, which is not described or filed as required; and the
statements in the Prospectus under the headings Description of the Series A Preferred Stock,
Description of Capital Stock and U.S. Federal Income Tax Considerations and in the 10-K under
the headings Legal Proceedings and Business-Government Regulation, insofar as such statements
summarize legal matters, agreements, documents, proceedings or regulations discussed therein, are
accurate and fair summaries of such legal matters, agreements, documents, proceedings or
regulations in all material respects.
(n) Each of the Company and its Subsidiaries has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction in which it is
chartered or organized with full corporate power and authority to own or lease, as the case may be,
and to operate its properties and conduct its business as described in the General Disclosure
Package and the Prospectus, and is duly qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction which requires such qualification.
(o) All the outstanding shares of capital stock of each Subsidiary have been duly and validly
authorized and issued and are fully paid and nonassessable, and, except as otherwise set forth in
the General Disclosure Package and the Prospectus, all outstanding shares of capital stock of the
Subsidiaries are owned by the Company either directly or through wholly-owned Subsidiaries free and
clear of any perfected security interest or any other security interests, claims, liens or
encumbrances.
(p) The Company is not and, after giving effect to the offering and sale of the Securities and
the application of the proceeds thereof as described in the General Disclosure Package and the
Prospectus, will not be an investment company as defined in the Investment Company Act of 1940,
as amended (the 1940 Act).
(q) No consent, approval, authorization, filing with or order of any court or governmental
agency or body is required in connection with the transactions contemplated herein and in the
General Disclosure Package and the Prospectus, except such as have been obtained under the 1933
Act, the 1933 Act Regulations, the rules of the NYSE MKT and such as may be required under blue sky
laws of any jurisdiction.
(r) Neither the issuance and sale of the Securities nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms hereof, including the issuance of
Common Stock upon the conversion of the Securities, will conflict with, result in a breach or
violation of, or imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its Subsidiaries pursuant to, (x) the charter or by-laws of the Company or any of
its Subsidiaries, (y) the terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to
which the Company or any of its Subsidiaries is a party or bound or to which its or their property
is subject, or (z) any statute, law, rule, regulation, judgment, order or decree applicable to the
Company or any of its Subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the Company or any of its
Subsidiaries or any of its or their properties.
(s) There are no persons with registration rights or other similar rights to have any
securities registered for sale pursuant to the Registration Statement or otherwise registered for
sale or sold by the Company under the 1933 Act pursuant to this Agreement.
(t) The consolidated historical financial statements and schedules of the Company and its
consolidated subsidiaries included in the Registration Statement, the General Disclosure Package
and the Prospectus present fairly in all material respects the financial condition, results of
operations and cash flows of the Company as of the dates and for the periods indicated, comply as
to form with the applicable accounting requirements of the 1933 Act and have been prepared in
conformity with generally accepted accounting principles applied on a consistent basis throughout
the periods involved (except as otherwise noted therein). The selected financial data and the
summary financial information included in the Registration Statement, the General Disclosure
Package and the Prospectus present fairly in all material respects the information shown therein
and have been compiled on a basis consistent with that of the audited financial statements included
therein.
(u) No action, suit or proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of its Subsidiaries or its or their property is
pending or, to the knowledge of the Company, threatened that could reasonably be expected to result
in a Material Adverse Effect, or which might materially and adversely affect their respective
properties or assets or the consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations hereunder, except as set forth in or contemplated in
the General Disclosure Package or the Prospectus (exclusive of any supplement thereto); and the
aggregate of all pending legal or governmental proceedings to which the Company or any of its
Subsidiaries is a party or of which any of their respective properties or assets is the subject
which are not described in the Registration Statement, the General Disclosure Package and the
Prospectus, including ordinary routine litigation incidental to the business, could not reasonably
be expected to result in a Material Adverse Effect.
(v) Neither the Company nor any Subsidiary is in violation or default of (i) any provision of
its charter or by-laws, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to
which it is a party or bound or to which its property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the Company or such
Subsidiary or any of its properties, as applicable, except for such violation or default that could
not, individually or in the aggregate, reasonably be expected to result in a Material Adverse
Effect.
(w) EisnerAmper LLP, who have certified certain financial statements of the Company and its
consolidated subsidiaries and delivered their report with respect to the audited consolidated
financial statements and schedules included in the Registration Statement, the General Disclosure
Package and the Prospectus, are independent public accountants with respect to the Company within
the meaning of the 1933 Act and the 1933 Act Regulations.
(x) There are no transfer taxes or other similar fees or charges under Federal law or the laws
of any state, or any political subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance by the Company or sale by the Company of
the Securities.
(y) The Company has filed all tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to file could not reasonably be
expected to result in a Material Adverse Effect, except as set forth in or contemplated in the
General Disclosure Package and the Prospectus (exclusive of any supplement thereto)) and has paid
all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to
the extent that any of the foregoing is due and payable, except for any such assessment, fine or
penalty that is currently being contested in good faith or as could not reasonably be expected to
result in a Material Adverse Effect, except as set forth in or contemplated in the General
Disclosure Package and the Prospectus (exclusive of any supplement thereto).
(z) No labor problem or dispute with the employees of the Company or any of its Subsidiaries
exists or is threatened or imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or its Subsidiaries principal suppliers, contractors or
customers, that could reasonably be expected to result in a Material Adverse Effect, except as set
forth in or contemplated in the General Disclosure Package and the Prospectus (exclusive of any
supplement thereto).
(aa) The Company and each of its Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are reasonably prudent and
customary in the businesses in which they are engaged; all policies of insurance and fidelity bonds
insuring the Company or any of its Subsidiaries or their respective businesses, assets, employees,
officers and directors are in full force and effect; the Company and its subsidiaries are in
compliance with the terms of such policies and instruments in all material respects; and there are
no claims by the Company or any of its Subsidiaries under any such policy or instruments as to
which any insurance company is denying liability or defending under a reservation of rights clause
except as could not reasonably be expected to result in a Material Adverse Effect; neither the
Company nor any such Subsidiary has been refused any insurance coverage sought or applied for; and
neither the Company nor any such Subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business at a cost that could
not be reasonably expected to result in a Material Adverse Effect, except as set forth in or
contemplated in the General Disclosure Package and the Prospectus (exclusive of any supplement
thereto).
(bb) No Subsidiary is currently prohibited, directly or indirectly, from paying any dividends
to the Company, from making any other distribution on such Subsidiarys capital stock, from
repaying to the Company any loans or advances to such Subsidiary from the Company or from
transferring any of such Subsidiarys property or assets to the Company or any other Subsidiary,
except as described in or contemplated by the General Disclosure Package and the Prospectus
(exclusive of any supplement thereto).
(cc) The Company, its Subsidiaries and each officer or director of the Company or such
Subsidiaries possess all registrations, licenses, certificates, permits and other authorizations
issued by all applicable authorities necessary to conduct their respective businesses (including,
but not limited to, as an investment advisor, a futures commission merchant or a broker-dealer, as
applicable), and are in compliance with all applicable laws, rules and regulations requiring any
such registrations, licenses, certificates, permits and other authorizations, including those rules
and regulations listed under the heading Business-Government Regulation in the 10-K, except where
non-possession or non-compliance could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect; and neither the Company nor any such Subsidiaries
or, to the knowledge of the Company, any officer or director of the Company or such Subsidiaries,
has received any notice of proceedings relating to the revocation or modification of any such
registrations, licenses, certificates, permits or authorizations, which, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, could reasonably be
expected to result in a Material Adverse Effect.
(dd) The Company and each of its Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with managements general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to assets is permitted
only in accordance with managements general or specific authorization; (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences; and (v) the interactive data in
eXtensible Business Reporting Language included or incorporated by reference in the Registration
Statement, the General Disclosure Package and the Prospectus fairly presents the information called
for in all material respects and is prepared in accordance with the Commissions rules, regulations
and guidelines applicable thereto.
(ee) The Company and its Subsidiaries internal controls over financial reporting are
effective and the Company and its Subsidiaries are not aware of any material weakness in their
internal controls over financial reporting, except that no representation or warranty is provided
with respect to the effectiveness of internal control over financial reporting at any Subsidiary to
the extent the Commission permits the Company to exclude such Subsidiaries in its assessment of
internal control, provided that the Company has taken, or intends to take, all necessary actions to
ensure that, within the time period required, the Company and the Subsidiaries will maintain
effective internal control over financial reporting (as defined under Rule 13a-15 and 15d-15 of the
1934 Act Regulations) at any such Subsidiaries. The Company and each of its Subsidiaries maintain
disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the 1934 Act
Regulations); such disclosure controls and procedures are effective.
(ff) The Company has not taken, directly or indirectly, any action designed to or that would
constitute or that might reasonably be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(gg) The Company and its Subsidiaries are (i) in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants
(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 and (iii) have not received notice of any actual or potential liability under any
environmental law, except where such non-compliance with Environmental Laws, failure to receive
required permits, licenses or other approvals, or liability could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect, except as set forth in or
contemplated in the General Disclosure Package and the Prospectus (exclusive of any supplement
thereto). Except as set forth in the General Disclosure Package and the Prospectus, neither the
Company nor any of the Subsidiaries has been named as a potentially responsible party under the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended.
(hh) None of the following events has occurred or exists: (i) a failure to fulfill the
obligations, if any, under the minimum funding standards of Section 302 of the United States
Employee Retirement Income Security Act of 1974, as amended (ERISA), and the regulations
and published interpretations thereunder with respect to a Plan, determined without regard to any
waiver of such obligations or extension of any amortization period; (ii) an audit or investigation
by the Internal Revenue Service, the U.S. Department of Labor, the Pension Benefit Guaranty
Corporation or any other federal or state governmental agency or any foreign regulatory agency with
respect to the employment or compensation of employees by any of the Company or any of its
subsidiaries that could reasonably be expected to result in a Material Adverse Effect; or (iii) any
breach of any contractual obligation, or any violation of law or applicable qualification
standards, with respect to the employment or compensation of employees by the Company or any of its
subsidiaries that could reasonably be expected to result in a Material Adverse Effect. None of the
following events has occurred or is reasonably likely to occur: (i) a material increase in the
aggregate amount of contributions required to be made to all Plans in the current fiscal year of
the Company and its Subsidiaries compared to the amount of such contributions made in the most
recently completed fiscal year of the Company and its Subsidiaries; (ii) a material increase in the
accumulated post-retirement benefit obligations (within the meaning of Statement of Financial
Accounting Standards 106) of the Company and its Subsidiaries compared to the amount of such
obligations in the most recently completed fiscal year of the Company and its Subsidiaries; (iii)
any event or condition giving rise to a liability under Title IV of ERISA that could reasonably be
expected to result in a Material Adverse Effect; or (iv) the filing of a claim by one or more
employees or former employees of the Company or any of its Subsidiaries related to their employment
that could reasonably be expected to result in a Material Adverse Effect. For purposes of this
paragraph, the term Plan means a plan (within the meaning of Section 3(3) of ERISA)
subject to Title IV of ERISA with respect to which the Company or any of its Subsidiaries may have
any liability.
(ii) There is and has been no failure on the part of the Company or any of the Companys
directors or officers, in their capacities as such, to comply with any provision of the Sarbanes
Oxley Act of 2002 and the rules and regulations promulgated in connection therewith, including
Section 402 related to loans and Sections 302 and 906 related to certifications.
(jj) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is aware
of or has taken any action, directly or indirectly, that would result in a violation by such
persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (the FCPA), including, without limitation, making use of the mails or any
means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment,
promise to pay or authorization of the payment of any money, or other property, gift, promise to
give, or authorization of the giving of anything of value to any foreign official (as such term
is defined in the FCPA) or any foreign political party or official thereof or any candidate for
foreign political office, in contravention of the FCPA; and the Company, its subsidiaries and, to
the knowledge of the Company, its affiliates have conducted their businesses in compliance with the
FCPA and have instituted and maintain policies and procedures designed to ensure, and which are
reasonably expected to continue to ensure, continued compliance therewith.
(kk) The operations of the Company and its subsidiaries are and have been conducted at all
times in compliance with applicable financial recordkeeping and reporting requirements and the
money laundering statutes and the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any governmental agency
(collectively, the Money Laundering Laws) and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any arbitrator involving the Company or any
of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of
the Company, threatened.
(ll) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is
currently subject to any sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (OFAC); and the Company will not directly or indirectly use the
proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other person or entity, for the purpose of financing the
activities of any person currently subject to any sanctions administered by OFAC.
(mm) The interactive data in the eXtensible Business Reporting Language incorporated by
reference in the Registration Statement, the General Disclosure Package and the Prospectus fairly
presents the information called for in all material respects and has been prepared in accordance
with the Commissions rules, regulations and guidelines applicable thereto.
(nn) Except as disclosed in the Registration Statement, the General Disclosure Package and the
Prospectus, the Company (i) does not have any material lending or other relationship with any bank
or lending affiliate of the Sales Agents and (ii) does not intend to use any of the proceeds from
the sale of the Securities to repay any outstanding debt owed to any affiliate of any Sales Agents.
(oo) Any statistical and market-related data included in the Registration Statement, the
General Disclosure Package or the Prospectus are based on or derived from sources that the Company
believes, after reasonable inquiry, to be reliable and accurate and, to the extent required, the
Company has obtained the consent to the use of such data from such sources.
(pp) The Company shall have filed an application for listing of the Securities on the NYSE MKT
prior to the date of this Agreement.
(qq) Except for this Agreement, the Company is not party to any other equity distribution or
sales agency agreements or other similar arrangements with any other agent or any other
representative in respect of at the market offerings of the Securities in accordance with Rule
415(a)(4) of the 1933 Act.
Any certificate signed by or on behalf of the Company and delivered to Jefferies or to counsel
for the Sales Agents shall be deemed to be a representation and warranty by the Company to the
Sales Agents as to the matters covered thereby.
SECTION 6. SALE AND DELIVERY TO THE SALES AGENTS; SETTLEMENT.
(a) Sale of Placement Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, unless the sale of the
Placement Securities described therein has been declined, suspended, or otherwise terminated in
accordance with the terms of this Agreement, Jefferies, for the period specified in the Placement
Notice, will use its commercially reasonable efforts consistent with its normal trading and sales
practices to sell such Placement Securities up to the amount specified, and otherwise in accordance
with the terms of such Placement Notice. The Company acknowledges and agrees that (i) no assurance
can be given that Jefferies will be successful in selling Placement Securities, (ii) Jefferies will
incur no liability or obligation to the Company or any other person or entity if it does not sell
Placement Securities for any reason other than a failure by Jefferies to use its commercially
reasonable efforts consistent with its normal trading and sales practices to sell such Placement
Securities as required under this Section 6, and (iii) Jefferies shall be under no obligation to
purchase Securities on a principal basis pursuant to this Agreement, except as otherwise agreed by
Jefferies in the Placement Notice. The Company also acknowledges and agrees that Jefferies shall
have no obligation to offer or sell any Securities in the event such an offer or sale of the
Securities as agent on behalf of the Company may, in the judgment of Jefferies, constitute the sale
of a block under Rule 10b-18(a)(5) under the 1934 Act or a distribution within the meaning of
Rule 100 of Regulation M or Jefferies reasonably believes it may be deemed an underwriter under
the 1933 Act in a transaction that is other than by means of ordinary brokers transactions between
members of the NYSE MKT that qualify for delivery of a Prospectus to the NYSE MKT in accordance
with Rule 153 under the 1933 Act.
The Company acknowledges and agrees that Jefferies has informed the Company that the Sales
Agents may, to the extent permitted under the 1933 Act and the 1934 Act, purchase and sell shares
of Preferred Stock for their own accounts while this Agreement is in effect, and shall be under no
obligation to purchase Securities on a principal basis pursuant to this Agreement, except as
otherwise agreed by Jefferies in the Placement Notice; provided, that no such purchase or sales
shall take place while a Placement Notice is in effect (except (i) as agreed by the Company and
Jefferies in the Placement Notice or (ii) to the extent Jefferies may engage in sales of Placement
Securities purchased or deemed purchased from the Company as a riskless principal or in a similar
capacity).
(b) Settlement of Placement Securities. Unless otherwise specified in the applicable
Placement Notice, settlement for sales of Placement Securities will occur on the third (3rd)
Trading Day (or such earlier day as is industry practice for regular-way trading) following the
date on which such sales are made (each, a Settlement Date). The amount of proceeds to
be delivered to the Company on a Settlement Date against receipt of the Placement Securities sold
(the Net Proceeds) will be equal to the aggregate sales price received by Jefferies at
which such Placement Securities were sold, after deduction for the Sales Agents commission,
discount or other compensation for such sales payable by the Company pursuant to Section 2 hereof
and any transaction fees imposed by any governmental or self-regulatory organization in respect of
such sales.
(c) Delivery of Placement Securities. On or before each Settlement Date, concurrently
with the receipt by the Company of the Net Proceeds due to the Company in respect of such
Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the
Placement Securities being sold by crediting Jefferies or its designees account (provided
Jefferies shall have given the Company written notice of such designee 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, Jefferies will deliver the related Net Proceeds in same day funds to an account
designated by the Company on, or prior to, the Settlement Date. The Company agrees that if the
Company defaults in its obligation to deliver Placement Securities on a Settlement Date, in
addition to and in no way limiting the rights and obligations set forth in Section 10(a), the
Company will (i) hold the Sales Agents harmless against any loss, claim, damage or expense
(including reasonable legal fees and expenses), as incurred, arising out of or in connection with
such default by the Company and (ii) pay to Jefferies any commission, discount or other
compensation to which the Sales Agents would otherwise have been entitled absent such default.
(d) Denominations; Registration. If requested by Jefferies at least two (2) Business
Days prior to the Settlement Date, then in lieu of electronic transfer, certificates for the
Securities shall be in such denominations and registered in such names as Jefferies shall have
specified in such request. The certificates for the Securities will be made available for
examination and packaging by Jefferies in The City of New York not later than noon (New York time)
on the Business Day prior to the Settlement Date.
(e) Limitations on Offering Size. The Company shall not cause or request the offer or
sale of any Securities if, after giving effect to the sale of such Securities, the aggregate
Securities sold pursuant to this Agreement would exceed the lesser of (i) the amount available for
offer and sale under the currently effective Registration Statement and (ii) the amount authorized
from time to time to be issued and sold under this Agreement by the Companys board of directors
and notified to Jefferies in writing (such lesser amount, the Maximum Amount). The
Company shall not cause or request the offer or sale of any Securities at a price lower than the
minimum price authorized from time to time by the Companys board of directors and notified to
Jefferies in writing, by a Placement Notice or otherwise. Further, under no circumstances shall
the aggregate offering amount of Securities sold pursuant to this Agreement exceed the Maximum
Amount.
(f) One Agent on a Given Day. The Company agrees that any offer to sell, any
solicitation of any offer to buy, or any sales of Securities shall only be effected by or through
one sales agent on any single day, but in no event by more than one, and the Company shall in no
event request that more than one sales agent sell Securities on the same day.
SECTION 7. COVENANTS OF THE COMPANY.
The Company covenants with the Sales Agents as follows:
(a) Registration Statement Amendment. After the date of this Agreement and during the
Delivery Period, (i) the Company will notify Jefferies promptly of the time when any subsequent
amendment to the Registration Statement, other than documents incorporated by reference, has been
filed with the Commission and/or has become effective or any subsequent supplement to the
Prospectus has been filed and of any comment letter from the Commission or any request by the
Commission for any amendment or supplement to the Registration Statement or Prospectus or for
additional information; (ii) the Company will prepare and file with the Commission, promptly upon
Jefferies request, any amendments or supplements to the Registration Statement or Prospectus that,
in Jefferies reasonable opinion, may be necessary or advisable in connection with the distribution
of the Securities by Jefferies (provided, however, that the failure of Jefferies to make such
request shall not relieve the Company of any obligation or liability hereunder, or affect the Sales
Agents right to rely on the representations and warranties made by the Company in this Agreement);
(iii) the Company will not file any amendment or supplement to the Registration Statement or
Prospectus, other than documents incorporated by reference, relating to the Securities unless a
copy thereof has been submitted to Jefferies and counsel for the Sales Agents within a reasonable
period of time before the filing and Jefferies has not reasonably objected thereto (provided,
however, that the failure of Jefferies to make such objection shall not relieve the Company of any
obligation or liability hereunder, or affect the Sales Agents right to rely on the representations
and warranties made by the Company in this Agreement) and the Company will furnish to Jefferies 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
the Commissions Electronic Data Gathering Analysis and Retrieval system (EDGAR); and
(iv) the Company will cause each amendment or supplement to the Prospectus, other than documents
incorporated by reference, to be filed with the Commission as required pursuant to the applicable
paragraph of Rule 424(b) of the 1933 Act (without reliance on Rule 424(b)(8) of the 1933 Act).
(b) Notice of Commission Stop Orders. The Company will advise Jefferies, promptly
after it receives notice or obtains knowledge thereof, of the issuance or threatened issuance by
the Commission of any stop order suspending the effectiveness of the Registration Statement or of
any other order preventing or suspending the use of the Prospectus or any Issuer Free Writing
Prospectus, or of the suspension of the qualification of the Securities for offering or sale in any
jurisdiction or of the loss or suspension of any exemption from any such qualification, or of the
initiation or threatening of any proceedings for any of such purposes, or of any examination
pursuant to Section 8(e) of the 1933 Act concerning the Registration Statement or if the Company
becomes the subject of a proceeding under Section 8A of the 1933 Act in connection with the
offering of the Securities. The Company will make every reasonable effort to prevent the issuance
of any stop order, the suspension of any qualification of the Securities for offering or sale and
any loss or suspension of any exemption from any such qualification, and if any such stop order is
issued or any such suspension or loss occurs, to obtain the lifting thereof at the earliest
possible moment.
(c) Delivery of Registration Statement and Prospectus. The Company will furnish to
Jefferies and counsel to the Sales Agents (at the expense of the Company) copies of the
Registration Statement, the Prospectus (including all documents incorporated by reference therein)
and all amendments and supplements to the Registration Statement or Prospectus, and any Issuer Free
Writing Prospectuses, that are filed with the Commission during the term of this Agreement and the
Delivery Period (including all documents filed with the Commission during such period that are
deemed to be incorporated by reference therein), in each case as soon as reasonably practicable and
in such quantities and at such locations as Jefferies may from time to time reasonably request.
Such delivery shall be satisfied to the extent such documents have been publicly filed with the
Commission and available via EDGAR.
(d) Continued Compliance with Securities Laws. If at any time during the Delivery
Period, any event shall occur or condition shall exist as a result of which it is necessary to
amend the Registration Statement together with the Prospectus in order that the Prospectus and the
General Disclosure Package will not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it shall be necessary at any such
time to amend the Registration Statement together with the Prospectus in order to comply with the
requirements of the 1933 Act, the Company will (i) subject to Section 7(a), promptly prepare and
file with the Commission such amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement, the Prospectus and the General Disclosure
Package comply with such requirements and (ii) promptly notify Jefferies to suspend the offering of
Placement Securities until such amendment or supplement is filed with the Commission. The Company
shall furnish to Jefferies such number of copies of such amendment or supplement as Jefferies may
reasonably request. If at any time following the issuance of an Issuer Free Writing Prospectus
there occurred or occurs an event or development as a result of which such Issuer Free Writing
Prospectus conflicted, conflicts or would conflict with the information contained in the
Registration Statement, the Prospectus or the General Disclosure Package or included, includes or
would include an untrue statement of a material fact or together with the Prospectus and the
General Disclosure Package omitted, omits or would omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were made, not
misleading, the Company will (i) subject to Section 7(a), promptly amend or supplement such Issuer
Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission and
(ii) promptly notify Jefferies to suspend the offering of Placement Securities until such conflict,
untrue statement or omission is eliminated or corrected.
(e) Blue Sky and Other Qualifications. The Company will use its commercially
reasonable efforts, in cooperation with Jefferies, to qualify the Securities for offering and sale,
or to obtain an exemption for the Securities to be offered and sold, under the applicable
securities laws of such states and other jurisdictions (domestic or foreign) as Jefferies may
designate and to maintain such qualifications and exemptions in effect for so long as required for
the distribution of the Securities (but in no event for less than one year from the date of this
Agreement); provided, however, that the Company shall not be obligated to file any general consent
to service of process or to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each jurisdiction in
which the Securities have been so qualified or exempt, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue such qualification or
exemption, as the case may be, in effect, for so long as required for the distribution of the
Securities (but in no event for less than one year from the date of this Agreement).
(f) Rule 158. The Company will timely file such reports pursuant to the 1934 Act as
are necessary in order to make generally available to its securityholders as soon as practicable an
earnings statement for the purposes of, and to provide to the Sales Agents the benefits
contemplated by, the last paragraph of Section 11 (a) of the 1933 Act.
(g) Use of Proceeds. The Company will use the net proceeds received by it from the
sale of the Securities in the manner specified in the Prospectus under Use of Proceeds.
(h) Listing. The Company will use its best efforts to effect and maintain the listing
of the Preferred Stock on the NYSE MKT.
(i) Filings with the NYSE MKT. The Company will timely file with the NYSE MKT all
material documents and notices required by the NYSE MKT of companies that have securities traded on
the NYSE MKT.
(j) Reporting Requirements. The Company, during the Delivery Period, will file all
documents required to be filed with the Commission pursuant to the 1934 Act within the time periods
required by the 1934 Act.
(k) Reservation of Common Stock. The Company will reserve and keep available at all
times, free of preemptive rights, rights of refusal or other similar rights, the full number of
shares of Common Stock issuable upon conversion of the Securities.
(l) Notice of Other Sales. During the pendency of any Placement Notice given
hereunder, the Company shall provide Jefferies notice as promptly as reasonably possible before it
offers to sell, contracts to sell, sells, grants any option to sell or otherwise disposes of any
shares of Preferred Stock (other than Placement Securities offered pursuant to the provisions of
this Agreement) or securities convertible into or exchangeable for Preferred Stock, warrants or any
rights to purchase or acquire Preferred Stock; provided, that such notice shall not be required in
connection with the (i) issuance, grant or sale of Preferred Stock, options to purchase Preferred
Stock, or Preferred Stock issuable upon the exercise of options or other equity awards pursuant to
any stock option, stock bonus or other stock or compensatory plan or arrangement described in the
Prospectus and (ii) the issuance or sale of Preferred Stock pursuant to any dividend reinvestment
and stock purchase plan that the Company has in effect or may adopt from time to time, provided
that the implementation of such new plan is disclosed to Jefferies in advance. If the Company
notifies Jefferies under this Section 7(l) of a proposed sale of shares of Preferred Stock or
Preferred Stock equivalents, Jefferies may suspend any offers and sales of Securities under this
Agreement for a period of time deemed appropriate by Jefferies.
(m) Change of Circumstances. The Company will advise Jefferies promptly after it
shall have received notice or obtained knowledge thereof, of any information or fact that would
alter or affect in any material respect any opinion, certificate, letter or other document provided
to Jefferies pursuant to this Agreement.
(n) Due Diligence Cooperation. The Company will cooperate with any reasonable due
diligence review conducted by the Sales Agents or its agents in connection with the transactions
contemplated hereby, including, without limitation, providing information and making available
documents and senior officers, during regular business hours and at the Companys principal
offices, as Jefferies may reasonably request.
(o) Representation Dates; Officers Certificate. On the date of execution of this
Agreement and (i) upon recommencement of the offering of the Securities under this Agreement
following the temporary suspension of sales hereunder; (ii) each time the Company files a
Prospectus relating to the Securities or amends or supplements the Registration Statement or the
Prospectus relating to the Securities by means of a post-effective amendment, sticker, or
supplement, other than (A) by means of incorporation of documents by reference into the
Registration Statement or the Prospectus relating to the Securities, which shall be subject to the
provisions of clauses (iii) through (v) below, or (B) a prospectus supplement filed pursuant to
Rule 424(b) under the 1933 Act relating solely to an offering of securities (including, without
limitation, Preferred Stock) other than the Securities pursuant to this Agreement; (iii) each time
the Company files an Annual Report on Form 10-K under the 1934 Act; (iv) each time the Company
files its Quarterly Reports on Form 10-Q under the 1934 Act; (v) each time the Company 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) under the 1934 Act; or (vi) the Securities
are delivered to Jefferies as principal at the Time of Sale pursuant to the applicable Placement
Notice (such recommencement date and each filing or other dates referred to in clauses (i) through
(vi) shall be a Representation Date); the Company shall furnish Jefferies with a
certificate, substantially in the form attached hereto as Exhibit F, within three (3)
Trading Days of any Representation Date. The requirement to provide deliverables under Sections
7(o) through 7(r) 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 shall be considered a Representation Date) and
the next occurring Representation Date. No new Placement Notice shall be delivered until the
deliverables in Sections 7(o) through 7(r), as may be required with respect to a Representation
Date, shall have been delivered and such deliverables shall all be delivered and dated the same
day.
(p) Secretarys Certificate. On the date of execution of this Agreement and within
three (3) Trading Days after each Representation Date on which there has been a change to the
resolutions referred to below in this Section 7(p), the Company shall deliver to Jefferies a
certificate executed by the Secretary of the Company, signing in such capacity, dated as of such
date (i) certifying that attached thereto are true and complete copies of the resolutions duly
adopted by the Board of Directors or a duly authorized committee thereof of the Company authorizing
the execution and delivery of this Agreement and the consummation of the transactions contemplated
hereby (including, without limitation, the issuance of the Securities pursuant to this Agreement),
which authorization shall be in full force and effect on and as of the date of such certificate and
(ii) certifying and attesting to the office, incumbency, due authority and specimen signatures of
each person who executed this Agreement for or on behalf of the Company.
(q) Legal Opinions. On the date of execution of this Agreement and within three (3)
Trading Days after each Representation Date, (A) the Company shall cause to be furnished to
Jefferies the written opinion of Akerman LLP, counsel to the Company, substantially in the form
attached hereto as Exhibit E and (B) Cleary Gottlieb Steen & Hamilton LLP, counsel to the
Sales Agents, shall furnish to Jefferies a written opinion in form and substance reasonably
satisfactory to Jefferies; provided, however, that in lieu of such opinions, counsel may furnish
Jefferies with a letter to the effect that the Sales Agents may rely on a prior opinion delivered
under this Section 7(q) to the same extent as if it were dated the date of such letter.
(r) Comfort Letter. On the date of execution of this Agreement and within three (3)
Trading Days after each Representation Date, the Company shall cause EisnerAmper LLP (and/or any
other independent accountants whose report is included in the Registration Statement or the
Prospectus) to furnish Jefferies letters (the Comfort Letters), dated the date the
Comfort Letter is delivered, in form and substance satisfactory to Jefferies, (i) confirming that
they are an independent registered public accounting firm within the meaning of the 1933 Act, the
1934 Act and the PCAOB and (ii) stating, as of such date, the conclusions and findings of such firm
with respect to the financial information and other matters ordinarily covered by accountants
comfort letters to underwriters in connection with registered public offerings.
(s) Market Activities. The Company will not, directly or indirectly, (i) take any
action designed to cause or result in, or that constitutes or might reasonably be expected to
constitute, the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities or (ii) sell, bid for, or purchase the Securities
to be issued and sold pursuant to this Agreement, or pay anyone any compensation for soliciting
purchases of the Securities to be issued and sold pursuant to this Agreement other than Jefferies;
provided, however, that with the consent of Jefferies, the Company may bid for and purchase Company
securities in accordance with Rule 10b-18 under the 1934 Act.
(t) Investment Company Act. The Company will conduct its affairs in such a manner so
as to reasonably ensure that it will not be or become, at any time prior to the termination of this
Agreement, an investment company, as such term is defined in the 1940 Act, assuming no change in
the Commissions current interpretation as to entities that are not considered an investment
company.
(u) 1933 Act and 1934 Act. The Company will comply with all requirements imposed upon
it by the 1933 Act and the 1934 Act as from time to time in force, so far as necessary to permit
the continuance of sales of, or dealings in, the Securities as contemplated by the provisions
hereof and the Prospectus.
(v) Sarbanes-Oxley Act. The Company will comply with all effective applicable
provisions of the Sarbanes-Oxley Act of 2002.
(w) Disclosure of Sales. The Company will, if applicable, disclose in its Quarterly
Reports on Form 10-Q and in its Annual Report on Form 10-K the number of Placement Securities sold
through Jefferies during the most recent fiscal quarter and the Net Proceeds to the Company with
respect to such Placement Securities.
SECTION 8. PAYMENT OF EXPENSES.
(a) Expenses. The Company will pay all of the expenses it incurs that are incident to
the performance of its obligations under this Agreement, including (i) the preparation, printing
and filing of the Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment and supplement thereto, (ii) the printing and delivery to
the Sales Agents of such documents as may be required in connection with the offering, purchase,
sale, issuance or delivery of the Placement Securities, (iii) the preparation, issuance and
delivery of the certificates for the Placement Securities to Jefferies, 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 Securities to Jefferies, (iv) the fees and
disbursements of the counsel, accountants and other advisors to the Company, (v) the qualification
or exemption of the Placement Securities under securities laws in accordance with the provisions of
Section 7(e) hereof (including filing fees and the reasonable fees and expenses of counsel to the
Sales Agents relating to such filings), (vi) the printing and delivery to the Sales Agents of
copies of any permitted Free Writing Prospectus and the Prospectus and any amendments or
supplements thereto and any reasonable costs associated with electronic delivery of any of the
foregoing by the Sales Agents to investors, (vii) the fees and expenses of the transfer agent and
registrar for the Securities, (viii) any filing fees incident to the review by FINRA of the terms
of the sale of the Securities, and (ix) the fees and expenses incurred in connection with the
listing of the Placement Securities on the NYSE MKT. The Sales Agents will pay all of the expenses
they incur that are incident to the performance of their obligations under this Agreement, other
than those set forth in the preceding sentence.
(b) Termination of Agreement. If this Agreement is terminated by Jefferies in
accordance with the provisions of Sections 9(l) or 12(a)(i), or by the Company pursuant to Section
12(b) hereof, the Company shall reimburse the Sales Agents for all of its out-of-pocket expenses,
including reasonable fees and disbursements of counsel to the Sales Agents incurred by them in
connection with the offering contemplated by this Agreement. Following a termination of this
Agreement for any other reason, each of the Company and the Sales Agents shall be responsible for
their own respective out-of-pocket expenses, including fees and disbursements of their respective
counsels.
SECTION 9. CONDITIONS OF THE SALES AGENTS OBLIGATIONS.
The obligations of the Sales Agents hereunder with respect to a Placement will be subject to
the continuing accuracy and completeness of the representations and warranties of the Company
contained in this Agreement or in certificates of any officer of the Company delivered pursuant to
the provisions hereof, to the performance by the Company of its covenants and other obligations
hereunder, and to the following further conditions:
(a) Opinions of Counsel to the Company and Counsel to the Sales Agents. Jefferies
shall have received the opinions of counsel to the Company and counsel to the Sales Agents required
to be delivered pursuant to Section 7(r) on or before the date on which such delivery of such
opinions are required.
(b) Effectiveness of Registration Statement. The Registration Statement shall have
become effective and shall be available for (i) all sales of Placement Securities issued pursuant
to all prior Placement Notices and (ii) the sale of all Placement Securities contemplated to be
issued by any Placement Notice.
(c) No Material Notices. None of the following events shall have occurred and be
continuing: (i) receipt by the Company of any request for additional information from the
Commission or any other federal or state governmental authority during the period of effectiveness
of the Registration Statement, the response to which would require any post-effective amendments or
supplements to the Registration Statement or the Prospectus; (ii) the issuance by the Commission or
any other federal or state governmental authority of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt by
the Company of any notification with respect to the suspension of the qualification or exemption
from qualification of any of the Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; (iv) the occurrence of any event that makes any
material statement made in the Registration Statement or the Prospectus, or any Issuer Free Writing
Prospectus, or any material document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any changes in the Registration
Statement, the Prospectus or any Issuer Free Writing Prospectus, or such documents so that, in the
case of the Registration Statement, it will not contain any materially untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary to make
the statements therein not misleading and, that in the case of the Prospectus and any Issuer Free
Writing Prospectus, it will not contain any materially untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
(d) No Misstatement or Material Omission. Jefferies shall not have advised the
Company that the Registration Statement or Prospectus, or any Issuer Free Writing Prospectus, or
any amendment or supplement thereto, contains an untrue statement of fact that in Jefferies
reasonable opinion is material, or omits to state a fact that in the Jefferies opinion is material
and is required to be stated therein or is necessary to make the statements therein not misleading.
(e) Material Changes. Except as contemplated in the Prospectus, or disclosed in the
Companys reports filed with the Commission under the 1934 Act, there shall not have been any
Material Adverse Effect.
(f) Certificates. Jefferies shall have received the certificates required to be
delivered pursuant to Sections 7(p), 7(q) and 7(r) on or before the date on which delivery of such
certificate is required.
(g) Accountants Comfort Letter. Jefferies shall have received the Comfort Letter
required to be delivered pursuant to Section 7(q) on or before the date on which such delivery of
such letter is required.
(h) Approval for Listing. The Placement Securities shall either have been
(i) approved for listing on the NYSE MKT, subject only to notice of issuance, or (ii) the Company
shall have filed an application for listing of the Placement Securities on the NYSE MKT at, or
prior to, the issuance of any Placement Notice.
(i) No Suspension. Trading in the Securities shall not have been suspended on the
NYSE MKT.
(j) Additional Documents. On the date of execution of this Agreement and on each
Representation Date, counsel to the Sales Agents shall have been furnished with such documents as
they may require for the purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions, contained in this
Agreement.
(k) 1933 Act Filings Made. All filings with the Commission required by Rule 424 under
the 1933 Act to have been filed prior to the issuance of any Placement Notice hereunder shall have
been made within the applicable time period prescribed for such filing by Rule 424 under the 1933
Act.
(l) Termination of Agreement. If any condition specified in this Section 9 shall not
have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by
Jefferies by notice to the Company, and Sections 5, 8, 10, 11 and 19 hereof shall survive such
termination and remain in full force and effect.
SECTION 10. INDEMNITY AND CONTRIBUTION BY THE COMPANY AND THE SALES AGENTS.
(a) The Company agrees to indemnify and hold harmless each Sales Agent, the directors,
officers, employees and agents of each Sales Agent and each person who controls any Sales Agent
within the meaning of either the 1933 Act or the 1934 Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may become subject under the
1933 Act, the 1934 Act or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement of a material fact
contained in the registration statement for the registration of the Securities as originally filed
or in any amendment thereof, or in the Base Prospectus, the Prospectus or any other prospectus
supplement relating to the Securities or any Issuer Free Writing Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to make the statements
therein not misleading, and agrees to reimburse each such indemnified party, as incurred, for any
legal or other expenses reasonably incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or liability arises out of
or is based upon any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Sales Agent through Jefferies specifically for inclusion therein, it
being understood and agreed that the only such information furnished by or on behalf of any Sales
Agent consists of the information referred to in Exhibit G hereto. This indemnity
agreement will be in addition to any liability which the Company may .otherwise have
(b) Each Sales Agent severally and not jointly agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs the Registration Statement, and each
person who controls the Company within the meaning of either the 1933 Act or the 1934 Act, to the
same extent as the foregoing indemnity from the Company to each Sales Agent, but only with
reference to written information relating to such Sales Agent furnished to the Company by or on
behalf of such Sales Agent through Mtisubishi specifically for inclusion in the documents referred
to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which
any Sales Agent may otherwise have. The Company acknowledges that the information referred to in
Exhibit G hereto constitute the only information furnished in writing by or on behalf of
the several Sales Agents for inclusion in the Registration Statement, the Final Prospectus or any
Issuer Free Writing Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 10 of notice of the
commencement of any action, such indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this Section 10, notify the indemnifying party in writing
of the commencement thereof; but the failure to so notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the indemnifying party
of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party
from any obligations to any indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying partys choice at the indemnifying partys expense to represent the indemnified party
in any action for which indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel retained by the
indemnified party or parties except as set forth below); provided, however, that such counsel shall
be satisfactory to the indemnified party. Notwithstanding the indemnifying partys election to
appoint counsel to represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party would present such counsel with
a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action
include both the indemnified party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the indemnifying party, (iii)
the indemnifying party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of the institution of such
action or (iv) the indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or consent to the entry of
any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect
of which indemnification or contribution may be sought hereunder (whether or not the indemnified
parties are actual or potential parties to such claim or action) unless such settlement, compromise
or consent includes an unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a), (b) or (c) of this Section 10
is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company
and the Sales Agents severally agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection with investigating
or defending the same) (collectively Losses) to which the Company and one or more of the
Sales Agents may be subject in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and by the Sales Agents on the other from the offering of
the Securities; provided, however, that in no case shall any Sales Agent (except as may be provided
in any agreement among the Sales Agents relating to the offering of the Securities) be responsible
for any amount in excess of the discount, commission or other compensation actually received by it
in connection with the Securities distributed pursuant to this Agreement. If the allocation
provided by the immediately preceding sentence is unavailable for any reason, the Company and the
Sales Agents severally shall contribute in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the one hand and of the Sales
Agents on the other in connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the Company shall be
deemed to be equal to the total net proceeds from the offering (before deducting expenses) received
by it, and benefits received by the Sales Agents shall be deemed to be equal to the total discount,
commission or other compensation received by the Sales Agents, in each case as determined by this
Agreement or any applicable Placement Notice. Relative fault shall be determined by reference to,
among other things, whether any untrue or any alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information provided by the
Company on the one hand or the Sales Agents on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent such untrue
statement or omission. The Company and the Sales Agents agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any other method of allocation
which does not take account of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section 10, each person who
controls a Sales Agent within the meaning of either the 1933 Act or the 1934 Act and each director,
officer, employee and agent of a Sales Agent shall have the same rights to contribution as such
Sales Agent, and each person who controls the Company within the meaning of either the 1933 Act or
the 1934 Act, each officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the Company, subject in each
case to the applicable terms and conditions of this paragraph (d).
SECTION 11. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement or in certificates
of officers of the Company submitted pursuant hereto, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of the Sales Agents or the Company or
any of the officers, directors, employees, agents or controlling persons referred to in Section 10
hereof, and shall survive delivery of and payment for the Securities.
SECTION 12. TERMINATION OF AGREEMENT.
(a) Termination; General. Jefferies may terminate this Agreement, by notice to the
Company, as hereinafter specified at any time (i) 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 (ii) if there has occurred any material adverse change in the financial markets
in the United States or the international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development involving a prospective
change in national or international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of Jefferies, impracticable or inadvisable
to market the Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading in the Securities has been suspended or limited by the Commission or the NYSE MKT, or if
trading generally on the New York Stock Exchange, the NYSE MKT or the Nasdaq Global Market has been
suspended or limited, or minimum or maximum prices for trading have been fixed, or maximum ranges
for prices have been required, by any of said exchanges or by order of the Commission, the FINRA or
any other governmental authority, or a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States or in Europe, or (iv) if a banking
moratorium has been declared by either Federal or New York authorities.
(b) Termination by the Company. The Company shall have the right, by giving one (1)
day notice as hereinafter specified to terminate this Agreement in its sole discretion at any time
after the date of this Agreement. Upon termination of this Agreement pursuant to this Section
12(b), any outstanding Placement Notices shall also be terminated.
(c) Termination by the Sales Agents. Jefferies shall have the right, by giving one
(1) day notice as hereinafter specified to terminate this Agreement in its sole discretion at any
time after the date of this Agreement. Upon termination of this Agreement pursuant to this Section
12(c), any outstanding Placement Notices shall also be terminated.
(d) Automatic Termination. Unless earlier terminated pursuant to this Section 12,
this Agreement shall automatically terminate upon the issuance and sale of all of the Securities
through or to Jefferies on the terms and subject to the conditions set forth herein.
(e) Continued Force and Effect. This Agreement shall remain in full force and effect
unless terminated pursuant to Sections 9(l) or 12(a), (b), (c), or (d) above or otherwise by mutual
agreement of the parties.
(f) Effectiveness of Termination. Any termination of this Agreement shall be
effective on the date specified in such notice of termination; provided, however, that such
termination shall not be effective until the close of business on the date of receipt of such
notice by Jefferies or the Company, as the case may be. If such termination shall occur prior to
the Settlement Date for any sale of Placement Securities, such Placement Securities shall settle in
accordance with the provisions of this Agreement.
(g) Liabilities. If this Agreement is terminated pursuant to this Section 12, such
termination shall be without liability of any party to any other party except as provided in
Section 8, and except that, in the case of any termination of this Agreement, Sections 5, 8 10, 11
and 19 hereof shall survive such termination and remain in full force and effect.
SECTION 13. NOTICES.
Except as otherwise provided in this Agreement, all notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any
standard form of telecommunication. Notices to the Sales Agents shall be directed to Jefferies at
Jefferies LLC, 520 Madison Ave, New York, NY 10022, Attention: General Counsel. Notices to the
Company shall be directed to it at the offices of the Company at Ladenburg Thalmann Financial
Services Inc., 4400 Biscayne Blvd., 12th Floor, Miami, Florida 33137, Attention: Brian Heller,
Senior Vice PresidentBusiness & Legal Affairs, with a copy to the counsel to the Company at
Akerman LLP, One Southeast Third Avenue, 25th Floor, Miami, FL 33131, Attention: Bradley D. Houser.
SECTION 14. PARTIES.
This Agreement shall inure to the benefit of and be binding upon the Sales Agents, the Company
and their respective successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the Sales Agents, the
Company and their respective successors and the controlling persons and officers and directors
referred to in Section 10 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive
benefit of the Sales Agents, the Company and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives, and for the benefit
of no other person, firm or corporation. No purchaser of Securities from Jefferies shall be deemed
to be a successor by reason merely of such purchase.
SECTION 15. ADJUSTMENTS FOR STOCK SPLITS.
The parties acknowledge and agree that all stock-related numbers contained in this Agreement
shall be adjusted to take into account any stock split, stock dividend or similar event effected
with respect to the Securities.
SECTION 16. GOVERNING LAW AND JURISDICTION; WAIVER OF JURY TRIAL; TIME.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK. EACH OF THE COMPANY AND THE SALE AGENT IRREVOCABLY (A) SUBMITS TO THE JURISDICTION OF
ANY COURT OF THE STATE OF NEW YORK OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
THE STATE OF NEW YORK FOR THE PURPOSE OF ANY SUIT, ACTION, OR OTHER PROCEEDING ARISING OUT OF THIS
AGREEMENT, OR ANY OF THE AGREEMENTS OR TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE
REGISTRATION STATEMENT AND THE PROSPECTUS (EACH, A PROCEEDING), (B) AGREES THAT ALL
CLAIMS IN RESPECT OF ANY PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT, (C) WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY IMMUNITY FROM JURISDICTION OF ANY SUCH COURT OR FROM ANY
LEGAL PROCESS THEREIN, (D) AGREES NOT TO COMMENCE ANY PROCEEDING OTHER THAN IN SUCH COURTS AND (E)
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY CLAIM THAT SUCH PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM. EACH OF THE COMPANY (ON ITS BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ON BEHALF OF ITS STOCKHOLDERS AND AFFILIATES) AND THE SALES AGENT HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, AND ANY ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 17. EFFECT OF HEADINGS.
The Section and Exhibit headings herein are for convenience only and shall not affect the
construction hereof.
SECTION 18. PERMITTED FREE WRITING PROSPECTUSES.
The Company represents, warrants and agrees that, unless it obtains the prior consent of
Jefferies, and the Sales Agents represent, warrant and agree that, unless Jefferies obtains the
prior consent of the Company, they have not made and will not make any offer relating to the
Securities that would constitute an Issuer Free Writing Prospectus, or that would otherwise
constitute a free writing prospectus, as defined in Rule 405 under the 1933 Act, required to be
filed with the Commission. Any such free writing prospectus consented to by Jefferies 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 under the 1933 Act, and has complied and will comply with the requirements of Rule 433
under the 1933 Act 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 D hereto
are Permitted Free Writing Prospectuses.
SECTION 19. ABSENCE OF FIDUCIARY RELATIONSHIP.
The Company acknowledges and agrees that:
(a) the Sales Agents are acting solely as agent and/or principal in connection with the public
offering of the Securities 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 their respective affiliates, stockholders (or other equityholders), creditors or
employees or any other party, on the one hand, and the Sales 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 the Sales Agents have advised or are advising the Company on other matters, and
the Sales 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) the public offering price of the Securities was not established by the Sales Agents;
(c) the Company is capable of evaluating and understanding, and understands and accepts, the
terms, risks and conditions of the transactions contemplated by this Agreement;
(d) the Sales Agents have not provided any legal, accounting, regulatory or tax advice with
respect to the transactions contemplated by this Agreement and the Company has consulted its own
legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate;
(e) the Company is aware that the Sales Agents and their respective affiliates are engaged in
a broad range of transactions which may involve interests that differ from those of the Company,
and the Sales Agents have no obligation to disclose such interests and transactions to the Company
by virtue of any fiduciary, advisory or agency relationship or otherwise; and
(f) the Company waives, to the fullest extent permitted by law, any claims it may have against
the Sales Agents for breach of fiduciary duty or alleged breach of fiduciary duty and agrees that
the Sales Agents shall not have any liability (whether direct or indirect, in contract, tort or
otherwise) to the Company in respect of such a fiduciary duty claim or to any person asserting a
fiduciary duty claim on the Companys behalf or in right of such person or the Company, employees
or creditors of the Company.
[Signature Page Follows]
If the foregoing is in accordance with your understanding of our agreement, please sign
and return to the Company a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement by and among the Sales Agents and the Company in
accordance with its terms.
Very truly yours,
LADENBURG THALMANN FINANCIAL SERVICES INC.
By: /s/ Brian L. Heller
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Name: Brian L. Heller
Title: Senior Vice President Business
and |
Legal Affairs
CONFIRMED AND ACCEPTED, as of the date first above written:
JEFFERIES LLC
By: /s/ Alexander Yavorsky
Name: Alexander Yavorsky
Title: Managing Director
For itself and the other sales agents
listed on Schedule I to the
foregoing Agreement.SCHEDULE I
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Jefferies LLC
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Lead Sales Agent |
Barrington Research Associates, Inc.
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Co-Sales Agent |
EXHIBIT A
FORM OF PROPOSED PLACEMENT NOTICE
From:
To:
Cc:
Subject: Ladenburg Thalmann Financial Services Inc.
Equity DistributionProposed Placement Notice
Ladies and Gentlemen:
Pursuant to the terms and subject to the conditions contained in the Equity Distribution
Agreement between Ladenburg Thalmann Financial Services Inc. (the Company) and Jefferies
LLC (Jefferies) dated May 22, 2015 (the Agreement), I hereby request on behalf
of the Company that Jefferies sell shares of the Companys 8.00% Series A Cumulative Redeemable
Preferred Stock (Liquidation Preference $25.00 Per Share), on the terms specified below:
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Maximum Aggregate number of Placement Securities to be sold: |
Minimum price at which Placement Securities may be sold: |
Date(s) on which Placement Securities may be sold: |
Compensation to the Sales Agents (if different from the Agreement): |
[ADDITIONAL SALES PARAMETERS MAY BE ADDED, SUCH AS THE MAXIMUM AGGREGATE OFFERING PRICE,
THE TIME PERIOD IN WHICH SALES ARE REQUESTED TO BE MADE, SPECIFIC DATES ON WHICH THE SHARES MAY NOT
BE SOLD ON, THE MANNER IN WHICH SALES ARE TO BE MADE BY JEFFERIES, AND/OR THE CAPACITY IN WHICH
JEFFERIES MAY ACT IN SELLING SHARES (AS PRINCIPAL, AGENT, OR BOTH)]
Capitalized terms used herein without definition shall have the meanings given to such terms
in the Equity Distribution Agreement.
Ladenburg Thalmann Financial Services Inc.
By:
Name:
Title:
EXHIBIT B
AUTHORIZED INDIVIDUALS FOR PLACEMENT NOTICES AND ACCEPTANCES
Jefferies LLC
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Name
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Title
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Email Address |
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Stephen Goll
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Managing Director
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Adam Aguilera
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Analyst
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Ladenburg Thalmann Financial Services Inc.
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Name
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Title
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Email Address |
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Richard Lampen
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President and Chief Executive Officer
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Mark Zeitchick
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Executive Vice President
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EXHIBIT C
COMPENSATION
The Sales Agents shall be paid compensation up to 2.00% of the gross proceeds from the sale of
Securities pursuant to the terms of this Agreement.
The foregoing rate of compensation shall not apply when Jefferies acts as principal, in which
case the Company may sell the Securities to Jefferies as principal at a price agreed upon at the
relevant Time of Sale pursuant to the applicable Placement Notice.
EXHIBIT D
ISSUER FREE WRITING PROSPECTUSES
None
EXHIBIT E
FORM OF OPINION OF COUNSEL TO THE COMPANY
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The Registration Statement has become effective under the 1933 Act; any required filing
of the Base Prospectus, the Prospectus Supplement and the Prospectus, and any supplements
thereto, pursuant to Rule 424(b), has been made in the manner and within the time period
required by Rule 424(b); to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any notice objecting to its use has been
issued, no proceedings for that purpose have been instituted or are pending or, to the
knowledge of such counsel, contemplated or threatened, and the Registration Statement and
the Prospectus (other than the financial statements and other financial information
contained therein, as to which such counsel need express no opinion) comply as to form in
all material respects with the applicable requirements of the 1933 Act and the 1934 Act and
the respective rules thereunder; and the documents incorporated or deemed to be
incorporated by reference in the Registration Statement and the Prospectus (other than the
financial statements and other financial information contained therein, as to which such
counsel need express no opinion), when they became effective or at the time they were filed
with the Commission, complied in all material respects with the requirements of the 1934
Act; |
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2. |
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Each of the Company and its Subsidiaries has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction in which it
is chartered or organized, with full corporate power and authority to own or lease, as the
case may be, and to operate its properties and conduct its business as described in the
General Disclosure Package and the Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each jurisdiction which
requires such qualification; except where the failure to be so qualified could not
reasonably be expected to have a Material Adverse Effect. |
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All the outstanding shares of capital stock of each Subsidiary have been duly and
validly authorized and issued and are fully paid and nonassessable, and, except as
otherwise set forth in the General Disclosure Package and the Prospectus, all outstanding
shares of capital stock of the subsidiaries are owned by the Company either directly or
through wholly-owned subsidiaries free and clear of any perfected security interest and, to
the knowledge of such counsel after due inquiry, any other security interest, claim, lien
or encumbrance; |
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The Companys authorized equity capitalization is as set forth in the General
Disclosure Package and the Prospectus; the capital stock of the Company conforms to the
description thereof contained in the Registration Statement, the General Disclosure Package
and the Prospectus; the outstanding shares of the capital stock of the Company have been
duly authorized and were validly issued and are fully paid and nonassessable; the
Securities have been duly authorized and, when issued and delivered to and paid for
pursuant to this Agreement, will be validly issued, fully paid and nonassessable; and the
shares of Common Stock issuable upon conversion of the Securities have been duly
authorized, and when issued upon conversion of the Securities in accordance with the terms
of the Articles of Amendment, will be validly issued, fully paid and nonassessable; the
Securities and the shares of Common Stock issuable upon conversion thereof are duly listed
and admitted and authorized for trading, subject to official notice of issuance and
evidence of satisfactory distribution, on the NYSE MKT; the certificates for the Securities
are in valid and sufficient form; and the issuance of the Securities and, upon conversion
of the Securities, Common Stock will not be subject to any preemptive, rights of refusal or
other similar rights of any securityholder of the Company; |
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There is no pending or, to the knowledge of such counsel, threatened action, suit or
proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries or its or their property, of a
character required to be disclosed in the Registration Statement which is not adequately
disclosed in the Prospectus, and there is no franchise, contract or other document known to
such counsel, of a character required to be described in the Registration Statement, the
General Disclosure Package or the Prospectus, or to be filed as an exhibit to the
Registration Statement, which is not described or filed as required; and the statements
included or incorporated by reference in the Prospectus under the headings Description of
the Series A Preferred Stock, Description of Capital Stock and U.S. Federal Income Tax
Considerations and in the 10-K under the headings Legal Proceedings and
BusinessGovernment Regulation, insofar as such statements summarize legal matters,
agreements, documents, proceedings or regulations discussed therein, are accurate and fair
summaries of such legal matters, agreements, documents, proceedings or regulations in all
material respects; |
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This Agreement has been duly authorized, executed and delivered by the Company. The
Articles of Amendment have been duly and validly authorized by the Company. The Company
has full right, power and authority to execute and deliver this Agreement and to perform
its obligations hereunder; and all action required to be taken for the due and proper
authorization, execution and delivery by it of this Agreement and the consummation by it of
the transactions contemplated hereby has been duly and validly taken. |
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The Company is not and, after giving effect to the offering and sale of the Securities
and the application of the proceeds thereof as described in the Final Prospectus, will not
be an investment company as defined in the 1940 Act; |
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To such counsels knowledge, neither the Company nor any of its subsidiaries owns any
real property. All of the leases and subleases material to the business of the Company and
its subsidiaries, considered as one enterprise, and under which the Company or any of its
subsidiaries hold interests in properties described in the Registration Statement, the
General Disclosure Package or the Prospectus, are in full force and effect, and neither the
Company nor any such subsidiary has any notice of any material claim of any sort that has
been asserted by anyone adverse to the rights of the Company or any subsidiary under any of
the leases or subleases mentioned above, or affecting or questioning the rights of the
Company or such subsidiary to the continued possession of the leased or subleased premises
under any such lease or sublease; |
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No consent, approval, authorization, filing with or order of any court or governmental
agency or body is required in connection with the transactions contemplated herein and in
the General Disclosure Package and the Prospectus, except such as have been obtained under
the 1933 Act and such as may be required under the blue sky laws of any jurisdiction and
such other approvals (specified in such opinion) as have been obtained; |
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Neither the issue and sale of the Securities, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms hereof, including the
issuance of the Common Stock upon the conversion of the Securities, will conflict with,
result in a breach or violation of, or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or its subsidiaries pursuant to, (i) the charter or
by-laws of the Company or its subsidiaries, (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument known to such counsel, to which the Company
or its subsidiaries is a party or bound or to which its or their property is subject, or
(iii) any statute, law, rule, regulation, judgment, order or decree applicable to the
Company or its subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the Company or
its subsidiaries or any of its or their properties; and |
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To such counsels knowledge, there are no persons with registration rights or other
similar rights to have any securities registered for sale pursuant to the Registration
Statement or otherwise registered for sale or sold by the Company under the 1933 Act
pursuant to this Agreement. |
In addition to the matters set forth above, nothing has come to such counsels attention which
leads it to believe that on the Effective Date the Registration Statement contained any untrue
statement of a material fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Prospectus as of its date and
on the date of the such counsels opinion included or includes any untrue statement of a material
fact or omitted or omits to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading (in each case, other than the
financial statements and other financial information contained therein, as to which such counsel
need express no opinion);
In rendering such opinion, such counsel may rely (A) as to matters involving the application
of laws of any jurisdiction other than the State of Florida or the Federal laws of the United
States, to the extent they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are satisfactory to counsel for
the Sales Agents and (B) as to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. References to the Prospectus in this
Exhibit E shall also include any supplements thereto at the date of the such counsels opinion.
EXHIBIT F
FORM OF COMPANY OFFICERS CERTIFICATE
__________, 20__
The undersigned are the duly elected or duly appointed Senior Vice President Business and
Legal Affairs and the duly elected or duly appointed Senior Vice President and Chief Financial
Officer of Ladenburg Thalmann Financial Services Inc., a Florida corporation (the
Company). The undersigned hereby execute this Officers Certificate as of the date
hereof [in connection with the Representation Date], pursuant to the terms of that certain Equity
Distribution Agreement, dated May 22, 2015 (the Equity Distribution Agreement), by and
between the Company and Jefferies LLC. Capitalized terms used herein without definition shall have
the meanings given to such terms in the Equity Distribution Agreement.
Each of the undersigned hereby further certifies, in his capacity as an officer of the Company
and not in any individual capacity, that:
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The representations and warranties of the Company in the Equity Distribution
Agreement are true and correct with the same force and effect as though expressly made
as of the date hereof; |
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The Company has complied with all of its obligations and satisfied all of the
conditions on its part to be performed or satisfied under the Equity Distribution
Agreement at or prior to the date hereof; |
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No stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto has been issued and no proceedings for that purpose
have been instituted or are pending or threatened under the Securities Act of 1933, as
amended; and |
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Subsequent to the respective dates as of which information is given in the
Registration Statement or the Prospectus, there has not been (A) any Material Adverse
Effect, (B) any transaction that is material to the Company, (C) any obligation, direct
or contingent, that is material to the Company incurred by the Company, or (D) any
change in the capital stock or outstanding indebtedness of the Company that is material
to the Company, except as set forth in the Companys filings with the Securities and
Exchange Commission. |
Each of Akerman LLP, counsel to the Company, and Cleary Gottlieb Steen & Hamilton LLP, counsel
to the Sales Agents, is entitled to rely upon this Officers Certificate in connection with the
respective opinions given by such firms pursuant to the Equity Distribution Agreement.
[Signature Page Follows]
1
IN WITNESS WHEREOF, the undersigned have signed their names as of the date first written
above.
By:
Name: Brian Heller
Title: Senior Vice President Business and
Legal Affairs
By:
Name: Brett H. Kaufman
Title: Senior Vice President and
Chief Financial Officer
EXHIBIT G
INFORMATION PROVIDED BY SALES AGENTS
The parties acknowledge and agree that, for purposes of Sections 5(d), 5(f) and 10 hereof,
there is no information provided by or on behalf of the Sales Agent.
The information in this Exhibit shall be updated from time to time in connection with the
filing of a new Prospectus or otherwise as necessary.
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ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION
OF
LADENBURG THALMANN FINANCIAL SERVICES INC.
DESIGNATION OF PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF 8.00% SERIES A CUMULATIVE REDEEMABLE
PREFERRED STOCK
($25.00 LIQUIDATION PREFERENCE PER SHARE)
FIRST: This Corporation is named Ladenburg Thalmann Financial Services Inc. (the
Corporation). The Articles of Incorporation of the Corporation were originally filed with the
Secretary of State of the State of Florida and became effective on February 2, 1996. Articles of
Amendment to the Articles of Incorporation were filed and became effective on October 2, 1996,
August 24, 1999, May 8, 2001, November 6, 2002, April 3, 2006, May 9, 2013, May 24, 2013, June 24,
2013, June 13, 2014, June 25, 2014 and November 21, 2014.
SECOND: Under a power contained in Article III of the Articles of Incorporation of the
Corporation, as amended (the Articles of Incorporation), and Section 607.0602 of the Florida
Business Corporation Act, the board of directors of the Corporation (the Board of Directors),
pursuant to a written consent of the Board of Directors dated May 19, 2015, and in accordance with
Section 607.0821 of the Florida Business Corporation Act, has duly adopted an amendment to the
Articles of Incorporation to (i) designate additional shares of preferred stock, par value $0.0001,
of the Corporation as 8.00% Series A Cumulative Redeemable Preferred Stock (as defined in the
Articles of Incorporation, specifically in the Articles of Amendment relating to the 8.00% Series A
Cumulative Redeemable Preferred Stock of the Corporation, filed with the Division of Corporations
of the Florida Department of State on November 21, 2014 (the November 2014 Articles of
Amendment)), consisting of 3,000,000 shares of the Corporations authorized but unissued preferred
stock, (ii) authorize the issuance of an additional 3,000,000 shares of 8.00% Series A Cumulative
Redeemable Preferred Stock, and (iii) classify the additional shares of 8.00% Series A Cumulative
Redeemable Preferred Stock with the preferences, limitations and relative rights of the 8.00%
Series A Cumulative Redeemable Preferred Stock set forth in the November 2014 Articles of
Amendment. Approval of the shareholders of the Corporation was not required.
THIRD: After giving effect to the designation and classification of the additional 3,000,000
shares of Series A Preferred Stock set forth herein, the Corporation has authority to issue a total
of 17,290,000 shares of Series A Preferred Stock.
FOURTH: Article III of the Articles of Incorporation is hereby partially amended and restated
by replacing the preferences, limitations and relative rights of the 8.00% Series A Cumulative
Redeemable Preferred Stock after the first full paragraph of Article III with the following
preferences, limitations and relative rights of the 8.00% Series A Cumulative Redeemable Preferred
Stock:
Series A Preferred Stock
1. Designation and Amount. The shares of such series shall be designated as 8.00%
Series A Cumulative Redeemable Preferred Stock (the Series A Preferred Stock) and the number of
shares constituting such series shall be 17,290,000 shares.
2. No Maturity, Sinking Fund, Mandatory Redemption. The Series A Preferred Stock has
no stated maturity and will not be subject to any sinking fund or mandatory redemption, and will
remain outstanding indefinitely unless (i) the Corporation decides to redeem or otherwise
repurchase the Series A Preferred Stock or (ii) the Series A Preferred Stock becomes convertible
and is actually converted pursuant to Section 7 hereof. The Corporation is not required to set
aside funds to redeem the Series A Preferred Stock.
3. Ranking. The Series A Preferred Stock will rank, with respect to rights to the
payment of dividends and the distribution of assets in the event of any liquidation, dissolution or
winding up of the Corporation, (i) senior to all classes or series of the Corporations Common
Stock, par value $0.0001 per share and to all other equity securities issued by the Corporation
other than equity securities referred to in clauses (ii) and (iii) of this Section 3; (ii) on a
parity with all equity securities issued by the Corporation with terms specifically providing that
those equity securities rank on a parity with the Series A Preferred Stock with respect to rights
to the payment of dividends and the distribution of assets upon any liquidation, dissolution or
winding up of the Corporation; (iii) junior to all equity securities issued by the Corporation with
terms specifically providing that those equity securities rank senior to the Series A Preferred
Stock with respect to rights to the payment of dividends and the distribution of assets upon any
liquidation, dissolution or winding up of the Corporation; and (iv) effectively junior to all
existing and future indebtedness (including indebtedness convertible to our Common Stock or
Preferred Stock) of the Corporation and to any indebtedness and other liabilities of (as well as
any preferred equity interest held by others in) existing subsidiaries of the Corporation. The term
equity securities shall not include convertible debt securities.
4. Dividends.
(a) Holders of shares of the Series A Preferred Stock are entitled to receive, when, as and if
declared by the Board of Directors, out of funds of the Corporation legally available for the
payment of dividends, cumulative cash dividends at the rate of 8.00% of the $25.00 per share
liquidation preference per annum (equivalent to $2.00 per annum per share). Dividends on the
Series A Preferred Stock shall be payable monthly on the 28th day of each month of each year (each,
a Dividend Payment Date); provided, that if any Dividend Payment Date is not a Business Day (as
defined below), then the dividend which would otherwise have been payable on that Dividend Payment
Date may be paid on the next succeeding Business Day with the same force and effect as if paid on
such Dividend Payment Date and no interest, additional dividends or other sums will accumulate on
the amount so payable for the period from and after such Dividend Payment Date to such next
succeeding Business Day. Any dividend payable on the Series A Preferred Stock, including dividends
payable for any partial dividend period, will be computed on the basis of a 360-day year consisting
of twelve 30-day months. Dividends will be payable to holders of record as they appear in the
stock records of the Corporation for the Series A Preferred Stock at the close of business on the
applicable record date, which shall be the 15th day of each calendar month, whether or not a
Business Day, in which the applicable Dividend Payment Date falls (each, a Dividend Record Date).
The dividends payable on any Dividend Payment Date shall include dividends accumulated to, but not
including, such Dividend Payment Date.
(b) No dividends on shares of Series A Preferred Stock shall be authorized by the Board of
Directors, or paid or set apart for payment by the Corporation at any time when the terms and
provisions of any agreement of the Corporation, including any agreement relating to any
indebtedness of the Corporation, prohibit the authorization, payment or setting apart for payment
thereof or provide that the authorization, payment or setting apart for payment thereof would
constitute a breach of the agreement or a default under the agreement, or if the authorization,
payment or setting apart for payment shall be restricted or prohibited by law.
(c) Notwithstanding anything to the contrary contained herein, dividends on the Series A
Preferred Stock will accumulate whether or not the Corporation has earnings, whether or not there
are funds legally available for the payment of those dividends and whether or not those dividends
are declared by the Board of Directors. No interest, or sum in lieu of interest, will be payable
in respect of any dividend payment or payments on the Series A Preferred Stock which may be in
arrears, and holders of the Series A Preferred Stock will not be entitled to any dividends in
excess of full cumulative dividends described in Section 4(a). Any dividend payment made on the
Series A Preferred Stock shall first be credited against the earliest accumulated but unpaid
dividend due with respect to the Series A Preferred Stock.
(d) Except as provided in Section 4(e), unless full cumulative dividends on the Series A
Preferred Stock have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof has been or contemporaneously is set apart for payment for all
past dividend periods, (i) no dividends (other than in shares of Common Stock or in shares of any
series of Preferred Stock that the Corporation may issue ranking junior to the Series A Preferred
Stock as to the payment of dividends and the distribution of assets upon liquidation, dissolution,
or winding up) shall be declared or paid or set aside for payment upon shares of Common Stock or
Preferred Stock that the Corporation may issue ranking junior to or on a parity with the Series A
Preferred Stock as to the payment of dividends, or upon liquidation, dissolution, or winding up,
(ii) no other distribution shall be declared or made upon shares of Common Stock or Preferred Stock
that the Corporation may issue ranking junior to or on a parity with the Series A Preferred Stock
as to the payment of dividends, or the distribution of assets upon liquidation, dissolution, or
winding up, and (iii) any shares of Common Stock and Preferred Stock that the Corporation may issue
ranking junior to, or on a parity with the Series A Preferred Stock as to the payment of dividends,
or the distribution of assets upon liquidation, dissolution, or winding up, shall not be redeemed,
purchased or otherwise acquired for any consideration (or any moneys be paid to or made available
for a sinking fund for the redemption of any such shares) by the Corporation (except by conversion
into or exchange for other capital stock of the Corporation that it may issue ranking junior to the
Series A Preferred Stock as to the payment of dividends, or the distribution of assets upon
liquidation, dissolution, or winding up).
(e) When dividends are not paid in full (or a sum sufficient for such full payment is not so
set apart) upon the Series A Preferred Stock and upon the shares of any other series of Preferred
Stock that the Corporation may issue ranking on a parity as to the payment of dividends with the
Series A Preferred Stock, all dividends declared upon the Series A Preferred Stock and any other
series of Preferred Stock that the Corporation may issue ranking on parity as to the payment of
dividends with the Series A Preferred Stock shall be declared pro rata so that the amount of
dividends declared per share of Series A Preferred Stock and such other series of Preferred Stock
that the Corporation may issue shall in all cases bear to each other the same ratio that accrued
dividends per share on the Series A Preferred Stock and such other series of Preferred Stock that
the Corporation may issue (which shall not include any accrual in respect of unpaid dividends for
prior dividend periods if such Preferred Stock does not have a cumulative dividend) bear to each
other. No interest, or sum of money in lieu of interest, shall be payable in respect of any
dividend payment or payments on the Series A Preferred Stock that may be in arrears.
(f) Business Day shall mean any day, other than a Saturday or Sunday, that is neither a
legal holiday nor a day on which banking institutions in New York, New York are authorized or
required by law, regulation or executive order to close.
5. Liquidation Preference.
(a) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the holders of shares of Series A Preferred Stock will be entitled to be paid out of
the assets the Corporation has legally available for distribution to its shareholders, subject to
the preferential rights of the holders of any class or series of capital stock of the Corporation
it may issue ranking senior to the Series A Preferred Stock with respect to the distribution of
assets upon liquidation, dissolution or winding up, a liquidation preference of Twenty-Five Dollars
($25.00) per share, plus an amount equal to any accumulated and unpaid dividends to, but not
including, the date of payment, before any distribution of assets is made to holders of Common
Stock or any other class or series of capital stock of the Corporation that it may issue that ranks
junior to the Series A Preferred Stock as to liquidation rights.
(b) In the event that, upon any such voluntary or involuntary liquidation, dissolution or
winding up, the available assets of the Corporation are insufficient to pay the amount of the
liquidating distributions on all outstanding shares of Series A Preferred Stock and the
corresponding amounts payable on all shares of other classes or series of capital stock of the
Corporation that it may issue ranking on a parity with the Series A Preferred Stock in the
distribution of assets, then the holders of the Series A Preferred Stock and all other such classes
or series of capital stock shall share ratably in any such distribution of assets in proportion to
the full liquidating distributions to which they would otherwise be respectively entitled.
(c) Holders of Series A Preferred Stock will be entitled to written notice of any such
liquidation, dissolution or winding up no fewer than 30 days and no more than 60 days prior to the
payment date. After payment of the full amount of the liquidating distributions to which they are
entitled, the holders of Series A Preferred Stock will have no right or claim to any of the
remaining assets of the Corporation. The consolidation or merger of the Corporation with or into
any other corporation, trust or entity or of any other entity with or into the Corporation, or the
sale, lease, transfer or conveyance of all or substantially all of the property or business the
Corporation, shall not be deemed a liquidation, dissolution or winding up of the Corporation.
6. Redemption.
(a) The Series A Preferred Stock is not redeemable by the Corporation prior to May 24, 2018
except as described in this Section 6.
(b) Optional Redemption Right. On and after May 24, 2018, the Corporation may, at its
option, upon not less than 30 nor more than 60 days written notice, redeem the Series A Preferred
Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of
Twenty-Five Dollars ($25.00) per share, plus any accumulated and unpaid dividends thereon to, but
not including, the date fixed for redemption. If the Corporation elects to redeem any shares of
Series A Preferred Stock as described in this Section 6(b), it may use any available cash to pay
the redemption price, and it will not be required to pay the redemption price only out of the
proceeds from the issuance of other equity securities or any other specific source.
(c) Special Optional Redemption Right. Notwithstanding anything to the contrary
contained in Section 6(a), upon the occurrence of a Change of Control, the Corporation may, at its
option, upon not less than 30 nor more than 60 days written notice, redeem the Series A Preferred
Stock, in whole or in part, within 120 days after the first date on which such Change of Control
occurred, for cash at a redemption price of Twenty-Five Dollars ($25.00) per share, plus any
accumulated and unpaid dividends thereon to, but not including, the redemption date. If, prior to
the Change of Control Conversion Date (as hereinafter defined), the Corporation has provided notice
of its election to redeem some or all of the shares of Series A Preferred Stock pursuant to this
Section 6, the holders of Series A Preferred Stock will not have the Change of Control Conversion
Right (as hereinafter defined) with respect to the shares called for redemption. If the
Corporation elects to redeem any shares of Series A Preferred Stock as described in this Section
6(c), it may use any available cash to pay the redemption price, and it will not be required to pay
the redemption price only out of the proceeds from the issuance of other equity securities or any
other specific source.
(d) A Change of Control is deemed to occur when, after May 24, 2013, the following have
occurred and are continuing: (i) the acquisition by any person, including any syndicate or group
deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the Exchange Act) (other than Phillip Frost, M.D., any member of his immediate family, and any
person or group under Section 13(d)(3) of the Exchange Act, that is controlled by Dr. Frost or
any member of his immediate family, any beneficiary of the estate of Dr. Frost, or any trust,
partnership, corporate or other entity controlled by any of the foregoing), of beneficial
ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or
series of purchases, mergers or other acquisition transactions of stock of the Corporation
entitling that person to exercise more than 50% of the total voting power of all stock of the
Corporation entitled to vote generally in the election of directors of the Corporation (except that
such person will be deemed to have beneficial ownership of all securities that such person has the
right to acquire, whether such right is currently exercisable or is exercisable only upon the
occurrence of a subsequent condition); and (ii) following the closing of any transaction referred
to in clause (i), neither the Corporation nor the acquiring or surviving entity has a class of
common securities (or American Depositary Receipts representing such securities) listed on the New
York Stock Exchange (the NYSE), the NYSE MKT LLC (the NYSE MKT) or the Nasdaq Stock Market
(Nasdaq), or listed or quoted on an exchange or quotation system that is a successor to the NYSE,
the NYSE MKT or Nasdaq.
(e) In the event the Corporation elects to redeem Series A Preferred Stock, the notice of
redemption will be mailed by the Corporation, postage prepaid, not less than 30 nor more than 60
days prior to the redemption date, to each holder of record of Series A Preferred Stock called for
redemption at such holders address as it appears on the stock transfer records of the Corporation
and shall state: (i) the redemption date; (ii) the number of shares of Series A Preferred Stock to
be redeemed; (iii) the redemption price; (iv) the place or places where certificates (if any) for
the Series A Preferred Stock are to be surrendered for payment of the redemption price; (v) that
dividends on the shares to be redeemed will cease to accumulate on the redemption date; (vi)
whether such redemption is being made pursuant to Section 6(b) or Section 6(c); (vii) if
applicable, that such redemption is being made in connection with a Change of Control and, in that
case, a brief description of the transaction or transactions constituting such Change of Control;
and (viii) if such redemption is being made in connection with a Change of Control, that the
holders of the shares of Series A Preferred Stock being so called for redemption will not be able
to tender such shares of Series A Preferred Stock for conversion in connection with the Change of
Control and that each share of Series A Preferred Stock tendered for conversion that is called,
prior to the Change of Control Conversion Date (as defined below), for redemption will be redeemed
on the related date of redemption instead of converted on the Change of Control Conversion Date.
If less than all of the shares of Series A Preferred Stock held by any holder are to be redeemed,
the notice mailed to such holder shall also specify the number of shares of Series A Preferred
Stock held by such holder to be redeemed. No failure to give such notice or any defect thereto or
in the mailing thereof shall affect the validity of the proceedings for the redemption of any
shares of Series A Preferred Stock except as to the holder to whom notice was defective or not
given.
(f) Holders of Series A Preferred Stock to be redeemed shall surrender the Series A Preferred
Stock at the place designated in the notice of redemption and shall be entitled to the redemption
price and any accumulated and unpaid dividends payable upon the redemption following the
surrender.
(g) If notice of redemption of any shares of Series A Preferred Stock has been given and if
the Corporation irrevocably sets aside the funds necessary for redemption in trust for the benefit
of the holders of the shares of Series A Preferred Stock so called for redemption, then from and
after the redemption date (unless the Corporation shall default in providing for the payment of the
redemption price plus accumulated and unpaid dividends, if any), dividends will cease to accumulate
on those shares of Series A Preferred Stock, those shares of Series A Preferred Stock shall no
longer be deemed outstanding and all rights of the holders of those shares will terminate, except
the right to receive the redemption price plus accumulated and unpaid dividends, if any, payable
upon redemption.
(h) If any redemption date is not a Business Day, then the redemption price and accumulated
and unpaid dividends, if any, payable upon redemption may be paid on the next Business Day and no
interest, additional dividends or other sums will accumulate on the amount payable for the period
from and after that redemption date to that next Business Day.
(i) If less than all of the outstanding Series A Preferred Stock is to be redeemed, the Series
A Preferred Stock to be redeemed shall be selected pro rata (as nearly as may be practicable
without creating fractional shares) or by any other equitable method the Corporation shall
determine.
(j) In connection with any redemption of Series A Preferred Stock, the Corporation shall pay,
in cash, any accumulated and unpaid dividends to, but not including, the redemption date, unless a
redemption date falls after a Dividend Record Date and prior to the corresponding Dividend Payment
Date, in which case each holder of Series A Preferred Stock at the close of business on such
Dividend Record Date shall be entitled to the dividend payable on such shares on the corresponding
Dividend Payment Date notwithstanding the redemption of such shares before such Dividend Payment
Date. Except as provided in this Section 6(j), the Corporation will make no payment or allowance
for unpaid dividends, whether or not in arrears, on shares of the Series A Preferred Stock to be
redeemed.
(k) Unless full cumulative dividends on all shares of Series A Preferred Stock shall have been
or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof
has been or contemporaneously is set apart for payment for all past dividend periods, no shares of
Series A Preferred Stock shall be redeemed unless all outstanding shares of Series A Preferred
Stock are simultaneously redeemed and the Corporation shall not purchase or otherwise acquire
directly or indirectly any shares of Series A Preferred Stock (except by exchanging it for its
capital stock ranking junior to the Series A Preferred Stock as to the payment of dividends, or the
distribution of assets upon liquidation, dissolution, or winding up); provided, however, that the
foregoing shall not prevent the purchase or acquisition by the Corporation of shares of Series A
Preferred Stock pursuant to a purchase or exchange offer made on the same terms to holders of all
outstanding shares of Series A Preferred Stock.
(l) Subject to applicable law, the Corporation may purchase shares of Series A Preferred Stock
in the open market, by tender or by private agreement. Any shares of Series A Preferred Stock that
the Corporation acquires may be retired and re-classified as authorized but unissued shares of
Preferred Stock, without designation as to class or series, and may thereafter be reissued as any
class or series of Preferred Stock.
7. Conversion Rights. Shares of Series A Preferred Stock are not convertible into or
exchangeable for any other property or securities of the Corporation, except as provided in this
Section 7.
(a) Upon the occurrence of a Change of Control, each holder of Series A Preferred Stock will
have the right (unless, prior to the Change of Control Conversion Date, the Corporation has
provided notice of its election to redeem some or all of the shares of Series A Preferred Stock
held by such holder pursuant to Section 6, in which case such holder will have the right only with
respect to shares of Series A Preferred Stock that are not called for redemption) to convert some
or all of the shares of Series A Preferred Stock held by such holder (the Change of Control
Conversion Right) on the Change of Control Conversion Date into a number of shares of Common Stock
per share of Series A Preferred Stock (the Common Stock Conversion Consideration) equal to the
lesser of: (i) the quotient obtained by dividing (x) the sum of the $25.00 liquidation preference
per share of Series A Preferred Stock plus the amount of any accumulated and unpaid dividends
thereon to, but not including, the Change of Control Conversion Date (unless the Change of Control
Conversion Date is after a Dividend Record Date and prior to the corresponding Dividend Payment
Date for the Series A Preferred Stock, in which case no additional amount for such accumulated and
unpaid dividends will be included in this sum) by (y) the Common Stock Price (as defined below)
(such quotient, the Conversion Rate); and (ii) 25.00, which we refer to as the Share Cap,
subject to adjustments provided in Section 7(b) below.
(b) The Share Cap is subject to pro rata adjustments for any share splits (including those
effected pursuant to a distribution of Common Stock to existing holders of Common Stock),
subdivisions or combinations (in each case, a Share Split) with respect to Common Stock as
follows: the adjusted Share Cap as the result of a Share Split will be the number of shares of
Common Stock that is equivalent to the product obtained by multiplying (i) the Share Cap in effect
immediately prior to such Share Split by (ii) a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after giving effect to such Share Split and the
denominator of which is the number of shares of Common Stock outstanding immediately prior to such
Share Split. For the avoidance of doubt, subject to the immediately succeeding sentence, the
aggregate number of shares of Common Stock (or equivalent Alternative Conversion Consideration (as
defined below), as applicable) issuable or deliverable, as applicable, in connection with the
exercise of the Change of Control Conversion Right will not exceed 432,250,000 shares of Common
Stock (or equivalent Alternative Consideration, as applicable) (the Exchange Cap). The Exchange
Cap is subject to pro rata adjustments for any Share Splits on the same basis as the corresponding
adjustment to the Share Cap.
(c) The Change of Control Conversion Date is the date the Series A Preferred Stock is to be
converted, which will be a Business Day selected by the Corporation that is no fewer than 20 days
nor more than 35 days after the date on which it provides the notice described in Section 7(h) to
the holders of Series A Preferred Stock.
(d) The Common Stock Price is (i) if the consideration to be received in the Change of
Control by the holders of Common Stock is solely cash, the amount of cash consideration per share
of Common Stock, or (ii) if the consideration to be received in the Change of Control by holders of
Common Stock is other than solely cash (x) the average of the closing sale prices per share of
Common Stock (or, if no closing sale price is reported, the average of the closing bid and ask
prices per share or, if more than one in either case, the average of the average closing bid and
the average closing ask prices per share) for the ten consecutive trading days immediately
preceding, but not including, the date on which such Change of Control occurred as reported on the
principal U.S. securities exchange on which Common Stock is then traded, or (y) the average of the
last quoted bid prices for Common Stock in the over-the-counter market as reported by Pink OTC
Markets Group Inc. or similar organization for the ten consecutive trading days immediately
preceding, but not including, the date on which such Change of Control occurred, if Common Stock is
not then listed for trading on a U.S. securities exchange.
(e) In the case of a Change of Control where Common Stock is or will be converted into cash,
securities or other property or assets (including any combination thereof) (the Alternative Form
Consideration), a holder of Series A Preferred Stock will receive upon conversion of such Series A
Preferred Stock the kind and amount of Alternative Form Consideration which such holder would have
owned or been entitled to receive upon the Change of Control had such holder held a number of
shares of Common Stock equal to the Common Stock Conversion Consideration immediately prior to the
effective time of the Change of Control (the Alternative Conversion Consideration). The Common
Stock Conversion Consideration or the Alternative Conversion Consideration, whichever shall be
applicable to a Change of Control, is referred to as the Conversion Consideration.
(f) If the holders of Common Stock have the opportunity to elect the form of consideration to
be received in the Change of Control, the Conversion Consideration in respect of such Change of
Control will be deemed to be the kind and amount of consideration actually received by holders of a
majority of the outstanding shares of Common Stock that made or voted for such an election (if
electing between two types of consideration) or holders of a plurality of the outstanding shares of
Common Stock that made or voted for such an election (if electing between more than two types of
consideration), as the case may be, and will be subject to any limitations to which all holders of
Common Stock are subject, including, without limitation, pro rata reductions applicable to any
portion of the consideration payable in such Change of Control.
(g) No fractional shares of Common Stock upon the conversion of the Series A Preferred Stock
in connection with a Change of Control will be issued. Instead, the Corporation will make a cash
payment equal to the value of such fractional shares based upon the Common Stock Price used in
determining the Common Stock Conversion Consideration for such Change of Control.
(h) Within 15 days following the occurrence of a Change of Control, provided that the
Corporation has not then exercised its right to redeem all shares of Series A Preferred Stock under
Section 6, the Corporation will provide to holders of Series A Preferred Stock a notice of
occurrence of the Change of Control that describes the resulting Change of Control Conversion
Right, which notice shall be delivered to the holders of record of the shares of the Series A
Preferred Stock in their addresses as they appear on the stock transfer records of the Corporation
and shall state: (i) the events constituting the Change of Control; (ii) the date of the Change of
Control; (iii) the last date on which the holders of Series A Preferred Stock may exercise their
Change of Control Conversion Right; (iv) the method and period for calculating the Common Stock
Price; (v) the Change of Control Conversion Date; (vi) that if, prior to the Change of Control
Conversion Date, the Corporation has provided notice of its election to redeem all or any shares of
Series A Preferred Stock, holders will not be able to convert the shares of Series A Preferred
Stock called for redemption and such shares will be redeemed on the related redemption date, even
if such shares have already been tendered for conversion pursuant to the Change of Control
Conversion Right; (vii) if applicable, the type and amount of Alternative Conversion Consideration
entitled to be received per share of Series A Preferred Stock; (viii) the name and address of the
paying agent, transfer agent and conversion agent for the Series A Preferred Stock; (ix) the
procedures that the holders of Series A Preferred Stock must follow to exercise the Change of
Control Conversion Right (including procedures for surrendering shares for conversion through the
facilities of a Depositary (as defined below)), including the form of conversion notice to be
delivered by such holders as described below; and (x) the last date on which holders of Series A
Preferred Stock may withdraw shares surrendered for conversion and the procedures that such holders
must follow to effect such a withdrawal.
(i) The Corporation shall also issue a press release containing such notice provided for in
Section 7(h) for publication on any of Dow Jones & Company, Inc., Business Wire, PR Newswire or
Bloomberg Business News (or, if these organizations are not in existence at the time of issuance of
the press release, such other news or press organization as is reasonably calculated to broadly
disseminate the relevant information to the public), and post a notice on its website, in any event
prior to the opening of business on the first Business Day following any date on which it provides
the notice provided for in Section 7(h) to the holders of Series A Preferred Stock.
(j) To exercise the Change of Control Conversion Right, the holders of Series A Preferred
Stock will be required to deliver, on or before the close of business on the Change of Control
Conversion Date, the certificates (if any) representing the shares of Series A Preferred Stock to
be converted, duly endorsed for transfer (or, in the case of any shares of Series A Preferred Stock
held in book-entry form through a Depositary (as defined below) to deliver, on or before the close
of business on the Change of Control Conversion Date, the shares of Series A Preferred Stock to be
converted through the facilities of such Depositary), together with a written conversion notice in
the form provided by the Corporation, duly completed, to its transfer agent. The conversion notice
must state: (i) the relevant Change of Control Conversion Date; (ii) the number of shares of Series
A Preferred Stock to be converted; and (iii) that the Series A Preferred Stock is to be converted
pursuant to the applicable provisions of the Series A Preferred Stock.
(k) Holders of Series A Preferred Stock may withdraw any notice of exercise of a Change of
Control Conversion Right (in whole or in part) by a written notice of withdrawal delivered to the
transfer agent of the Corporation prior to the close of business on the Business Day prior to the
Change of Control Conversion Date. The notice of withdrawal delivered by any holder must state:
(i) the number of withdrawn shares of Series A Preferred Stock; (ii) if certificated Series A
Preferred Stock has been surrendered for conversion, the certificate numbers of the withdrawn
shares of Series A Preferred Stock; and (iii) the number of shares of Series A Preferred Stock, if
any, which remain subject to the holders conversion notice.
(l) Notwithstanding anything to the contrary contained in Sections 7(j) and (k), if any shares
of Series A Preferred Stock are held in book-entry form through The Depository Trust Company
(DTC) or a similar depositary (each, a Depositary), the conversion notice and/or the notice of
withdrawal, as applicable, must comply with applicable procedures, if any, of the applicable
Depositary.
(m) Series A Preferred Stock as to which the Change of Control Conversion Right has been
properly exercised and for which the conversion notice has not been properly withdrawn will be
converted into the applicable Conversion Consideration in accordance with the Change of Control
Conversion Right on the Change of Control Conversion Date, unless prior to the Change of Control
Conversion Date the Corporation has provided notice of its election to redeem some or all of the
shares of Series A Preferred Stock pursuant to Section 6, in which case only the shares of Series A
Preferred Stock properly surrendered for conversion and not properly withdrawn that are not called
for redemption will be converted. If the Corporation elects to redeem shares of Series A Preferred
Stock that would otherwise be converted into the applicable Conversion Consideration on a Change of
Control Conversion Date, such shares of Series A Preferred Stock will not be so converted and the
holders of such shares will be entitled to receive on the applicable redemption date the redemption
price as provided in Section 6.
(n) The Corporation shall deliver all securities, cash and any other property owing upon
conversion no later than the third Business Day following the Change of Control Conversion Date.
Notwithstanding the foregoing, the persons entitled to receive any shares of Common Stock or other
securities delivered on conversion will be deemed to have become the holders of record thereof as
of the Change of Control Conversion Date.
(o) In connection with the exercise of any Change of Control Conversion Right, the Corporation
shall comply with all federal and state securities laws and stock exchange rules in connection with
any conversion of Series A Preferred Stock into shares of Common Stock or other property.
(p) Notwithstanding anything to the contrary herein and except as otherwise required by law,
the holders of record of shares of Series A Preferred Stock at the close of business on a Dividend
Record Date will be entitled to receive the dividend payable on the corresponding Dividend Payment
Date notwithstanding the conversion of those shares after such Dividend Record Date and on or prior
to such Dividend Payment Date and, in such case, the full amount of such dividend shall be paid on
such Dividend Payment Date to the persons who were the holders of record at the close of business
on such Dividend Record Date. Except as provided in this Section 7(p), the Corporation will make
no allowance for unpaid dividends that are not in arrears on the shares of Series A Preferred Stock
to be converted.
(a) Holders of the Series A Preferred Stock will not have any voting rights, except as set
forth in this Section 8 or as otherwise required by law. On each matter on which holders of Series
A Preferred Stock are entitled to vote, each share of Series A Preferred Stock will be entitled to
one vote, except that when shares of any other class or series of Preferred Stock the Corporation
may issue have the right to vote with the Series A Preferred Stock as a single class on any matter,
the Series A Preferred Stock and the shares of each such other class or series will have one vote
for each $25.00 of liquidation preference (excluding accumulated dividends).
(b) Whenever dividends on any shares of Series A Preferred Stock are in arrears for eighteen
or more monthly dividend periods, whether or not consecutive, the number of directors constituting
the Board of Directors will be automatically increased by two (if not already increased by two by
reason of the election of directors by the holders of any other class or series of Preferred Stock
the Corporation may issue upon which like voting rights have been conferred and are exercisable and
with which the Series A Preferred Stock is entitled to vote as a class with respect to the election
of those two directors) and the holders of Series A Preferred Stock (voting separately as a class
with all other classes or series of Preferred Stock the Corporation may issue upon which like
voting rights have been conferred and are exercisable and which are entitled to vote as a class
with the Series A Preferred Stock in the election of those two directors) will be entitled to vote
for the election of those two additional directors (the preferred stock directors) at a special
meeting called by the Corporation at the request of the holders of record of at least 25% of the
outstanding shares of Series A Preferred Stock or by the holders of any other class or series of
Preferred Stock upon which like voting rights have been conferred and are exercisable and which are
entitled to vote as a class with the Series A Preferred Stock in the election of those two
preferred stock directors (unless the request is received less than 90 days before the date fixed
for the next annual or special meeting of shareholders of the Corporation, in which case, such vote
will be held at the earlier of the next annual or special meeting of shareholders of the
Corporation), and at each subsequent annual meeting until all dividends accumulated on the Series A
Preferred Stock for all past dividend periods and the then current dividend period have been fully
paid or declared and a sum sufficient for the payment thereof set aside for payment. In that case,
the right of holders of the Series A Preferred Stock to elect any directors will cease and, unless
there are other classes or series of Preferred Stock upon which like voting rights have been
conferred and are exercisable, any directors elected by holders of the Series A Preferred Stock
shall immediately resign and the number of directors constituting the Board of Directors shall be
reduced accordingly. In no event shall the holders of Series A Preferred Stock be entitled under
the voting rights under this Section 8 to elect a preferred stock director that would cause the
Corporation to fail to satisfy a requirement relating to director independence of any national
securities exchange or quotation system on which any class or series of the capital stock of the
Corporation is listed or quoted. For the avoidance of doubt, in no event shall the total number of
preferred stock directors elected by holders of the Series A Preferred Stock (voting separately as
a class with all other classes or series of Preferred Stock the Corporation may issue upon which
like voting rights have been conferred and are exercisable and which are entitled to vote as a
class with the Series A Preferred Stock in the election of such directors) pursuant to the voting
rights under this Section 8 exceed two.
(c) If a special meeting is not called by the Corporation within 30 days after request from
the holders of Series A Preferred Stock as described in Section 8(b), then the holders of record of
at least 25% of the outstanding Series A Preferred Stock may designate a holder to call the meeting
at the expense of the Corporation and such meeting may be called by the holder so designated upon
notice similar to that required for annual meetings of stockholders and shall be held at the place
designated by the holder calling such meeting. The Corporation shall pay all costs and expenses of
calling and holding any meeting and of electing directors pursuant to Section 8(b), including,
without limitation, the cost of preparing, reproducing and mailing the notice of such meeting, the
cost of renting a room for such meeting to be held, and the cost of collecting and tabulating
votes.
(d) If, at any time when the voting rights conferred upon the Series A Preferred Stock
pursuant to Section 8(b) are exercisable, any vacancy in the office of a preferred stock director
elected pursuant to Section 8(b) shall occur, then such vacancy may be filled only by a written
consent of the remaining preferred stock director, or if none remains in office, by vote of the
holders of record of the outstanding Series A Preferred Stock and any other classes or series of
Preferred Stock upon which like voting rights have been conferred and are exercisable and which are
entitled to vote as a class with the Series A Preferred Stock in the election of directors pursuant
to Section 8(b). Any director elected or appointed pursuant to Section 8(b) may be removed only by
the affirmative vote of holders of the outstanding Series A Preferred Stock and any other classes
or series of Preferred Stock upon which like voting rights have been conferred and are exercisable
and which classes or series of Preferred Stock are entitled to vote as a class with the Series A
Preferred Stock in the election of directors pursuant to Section 8(b), such removal to be effected
by the affirmative vote of a majority of the votes entitled to be cast by the holders of the
outstanding Series A Preferred Stock and any such other classes or series of Preferred Stock, and
may not be removed by the holders of the Common Stock.
(e) So long as any shares of Series A Preferred Stock remain outstanding, the Corporation will
not, without the affirmative vote or consent of the holders of at least two-thirds of the shares of
the Series A Preferred Stock outstanding at the time, given in person or by proxy, either in
writing or at a meeting (voting together as a class with all other series of parity Preferred Stock
that the Corporation may issue upon which like voting rights have been conferred and are
exercisable), (i) authorize or create, or increase the authorized or issued amount of, any class or
series of capital stock ranking senior to the Series A Preferred Stock with respect to payment of
dividends or the distribution of assets upon liquidation, dissolution or winding up or reclassify
any of the authorized capital stock of the Corporation into such shares, or create, authorize or
issue any obligation or security convertible into or evidencing the right to purchase any such
shares; or (ii) amend, alter or repeal the provisions of the Articles of Incorporation, whether by
merger, consolidation or otherwise, so as to materially and adversely affect any right, preference,
privilege or voting power of the Series A Preferred Stock (each, an Event); provided, however,
with respect to the occurrence of any Event set forth in clause (ii), so long as the Series A
Preferred Stock remains outstanding with the terms thereof materially unchanged, taking into
account that, upon an occurrence of an Event, the Corporation may not be the surviving entity, the
occurrence of any such Event shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting power of holders of the Series A Preferred Stock and, provided
further, that any increase in the amount of the authorized Preferred Stock, including the Series A
Preferred Stock, or the creation or issuance of any additional Series A Preferred Stock or other
series of Preferred Stock that the Corporation may issue, or any increase in the amount of
authorized shares of such series, in each case ranking on a parity with or junior to the Series A
Preferred Stock with respect to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding up, shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers.
(f) Notwithstanding Section 8(e)(ii) above, if any Event set forth in Section 8(e)(ii) above
materially and adversely affects any right, preference, privilege or voting power of the Series A
Preferred Stock but not all series of parity Preferred Stock that the Corporation may issue upon
which like voting rights have been conferred and are exercisable, the affirmative vote or consent
of the holders of at least two-thirds of the shares of the Series A Preferred Stock and all such
other similarly affected series, outstanding at the time (voting together as a class), given in
person or by proxy, either in writing or at a meeting, shall be required in lieu of the vote or
consent that would otherwise be required by Section 8(e)(ii).
(g) The voting rights provided for in this Section 8 will not apply if, at or prior to the
time when the act with respect to which voting by holders of the Series A Preferred Stock would
otherwise be required pursuant to this Section 8 shall be effected, all outstanding shares of
Series A Preferred Stock shall have been redeemed or called for redemption upon proper notice and
sufficient funds shall have been deposited in trust to effect such redemption pursuant to Section
6.
(h) Except as expressly stated in this Section 8 or as may be required by applicable law, the
Series A Preferred Stock will not have any relative, participating, optional or other special
voting rights or powers and the consent of the holders thereof shall not be required for the taking
of any corporate action.
9. Information Rights. During any period in which the Corporation is not subject to
Section 13 or 15(d) of the Exchange Act and any shares of Series A Preferred Stock are outstanding,
the Corporation will use its best efforts to (i) transmit by mail (or other permissible means under
the Exchange Act) to all holders of Series A Preferred Stock, as their names and addresses appear
on the record books of the Corporation and without cost to such holders, copies of the annual
reports on Form 10-K and quarterly reports on Form 10-Q that the Corporation would have been
required to file with the Securities and Exchange Commission (the SEC) pursuant to Section 13 or
15(d) of the Exchange Act if it were subject thereto (other than any exhibits that would have been
required); and (ii) promptly, upon request, supply copies of such reports to any holders or
prospective holder of Series A Preferred Stock. The Corporation will use its best efforts to mail
(or otherwise provide) the information to the holders of the Series A Preferred Stock within 15
days after the respective dates by which a periodic report on Form 10-K or Form 10-Q, as the case
may be, in respect of such information would have been required to be filed with the SEC, if the
Corporation were subject to Section 13 or 15(d) of the Exchange Act, in each case, based on the
dates on which the Corporation would be required to file such periodic reports if it were an
accelerated filer within the meaning of the Exchange Act.
10. No Preemptive Rights. No holders of the Series A Preferred Stock will, as holders
of Series A Preferred Stock, have any preemptive rights to purchase or subscribe for Common Stock
or any other security of the Corporation.
11. Record Holders. The Corporation and the transfer agent for the Series A Preferred
Stock may deem and treat the record holder of any Series A Preferred Stock as the true and lawful
owner thereof for all purposes, and neither the Corporation nor the transfer agent shall be
affected by any notice to the contrary.
12. Office or Agency. For so long as any shares of Series A Preferred Stock are
outstanding, the Corporation shall at all times maintain an office or agency in one of the 48
contiguous States of the United States of America where shares of Series A Preferred Stock may be
surrendered for payment (including upon redemption), registration of transfer or exchange.
FIFTH: These Articles of Amendment shall become effective on May 22, 2015.
SIXTH: The undersigned Senior Vice President Business and Legal Affairs of the Corporation
acknowledges these Articles of Amendment to be the corporate act of the Corporation and, as to all
matters or facts required to be verified under oath, the undersigned Senior Vice President
Business and Legal Affairs acknowledges that, to the best of his knowledge, information and belief,
these matters and facts are true in all material respects and that this statement is made under the
penalties of perjury.
[signature on following page]
1
IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be signed in its
name and on its behalf on this 20th day of May, 2015.
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LADENBURG THALMANN FINANCIAL SERVICES INC. |
By:
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/s/ Brian L. Heller |
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Name:
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Brian L. Heller |
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Title: Senior Vice President Business and Legal
Affairs |
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ATTEST:
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By:
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/s/ Brett H. Kaufman |
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Name:
Title:
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Brett H. Kaufman
Senior Vice President and Chief Financial Officer |
2
Akerman LLP
One Southeast Third Avenue
25th Floor
Miami, Florida 33131
Tel: 305.374.5600
Fax: 305.374.5095
May 22, 2015
Ladenburg Thalmann Financial Services Inc.
4400 Biscayne Blvd., 12th Floor
Miami, Florida 33137
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form S-3 (Registration No. 333-192712) (the
Registration Statement) filed with the Securities and Exchange Commission (the Commission)
on December 6, 2013 by Ladenburg Thalmann Financial Services Inc. (the Company) pursuant to the
requirements of the Securities Act of 1933, as amended (the Act). We are rendering this opinion
in connection with the prospectus supplement (the Prospectus Supplement) dated May 22, 2015. The
Prospectus Supplement relates to the offering by the Company of up to 3,000,000 shares (the
Preferred Shares) of the Companys 8.00% Series A Cumulative Redeemable Preferred Stock,
liquidation preference $25.00 per share, $0.0001 par value per share (the Series A Preferred
Stock), in an at-the-market offering, which Preferred Shares are covered by the Registration
Statement. The Prospectus Supplement also relates to the potential issuance of up to 75,000,000
shares (the Common Shares) of the Companys common stock, $0.0001 par value per share, upon the
conversion of the Preferred Shares, pursuant to the Companys Articles of Amendment to its Articles
of Incorporation governing the Preferred Shares, subject to adjustment as provided therein. We
understand that the Preferred Shares and the Common Shares are to be offered and sold in the manner
set forth in the Registration Statement and the Prospectus Supplement.
We have acted as your counsel in connection with the preparation of the Prospectus Supplement.
We are familiar with the proceedings taken by the Board of Directors of the Company in connection
with the authorization, issuance and sale of the Preferred Shares and the Common Shares. We have
examined all such documents as we have considered necessary in order to enable us to render this
opinion, including, but not limited to, (i) the Registration Statement, (ii) the Prospectus
dated December 20, 2013 included with the Registration Statement (the Prospectus), (iii) the
Prospectus Supplement, (iv) the Companys Articles of Incorporation, as amended, (v) the Companys
By-laws, (vi) certain minutes of meetings and resolutions adopted by written consent of the Board
of Directors of the Company, (vii) corporate records and instruments, and (viii) such laws and
regulations as we have deemed necessary for the purposes of rendering the opinions set forth
herein. In our examination, we have assumed the legal capacity of all natural persons, the
authenticity of originals of such documents that have been presented to us as photostatic copies,
and that the Preferred Shares and the Common Shares will be issued against payment of valid
consideration under applicable law. As to any facts material to the opinions expressed herein,
which were not independently established or verified, we have relied upon statements and
representations of officers of the Company.
Based upon the foregoing, we are of the opinion that the Preferred Shares and the Common
Shares have been duly authorized and, when issued and delivered by the Company against payment
therefor as set forth in the Prospectus Supplement, will be validly issued, fully paid and
non-assessable.
We assume no obligation to supplement this opinion if any applicable law changes after the
date hereof or if we become aware of any fact that may change the opinion expressed herein after
the date hereof.
We hereby consent to the filing of this opinion as part of the Registration Statement and to
the reference of our firm under the caption Legal Matters in the Prospectus Supplement. In giving
such consent, we do not hereby admit that we are in the category of persons whose consent is
required under Section 7 of the Act or the rules and regulations of the Commission.
Very truly yours,
/s/ Akerman LLP
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